Taxes and Social Programs

In a point-counterpoint with Henry Aaron, senior fellow at the Brookings Institution, Eugene Steuerle discusses five pressing fiscal problems facing America, and suggests tax and budget reform options to address these issues. This discourse includes agreement and disagreement, yet is honestly presented without the noise and confusion that often surround these issues. Steuerle's and Aaron's essays originally appear in the Journal of Policy Analysis and Management. Steuerle, C.E. (2010) "America's Related Fiscal Problems." Journal of Policy Analysis and Management, 29(4), 876-883.

Eugene Steuerle’s response Henry Aaron in a point-counterpoint debate about America’s fiscal struggles. This discourse includes agreement and disagreement, yet is honestly presented without the noise and confusion that often surround these issues. Steuerle’s and Aaron’s essays and responsesto each other originally appear in the Journal of Policy Analysis and Management. Steuerle, C.E. (2010) “Why We Must Untie Our Fiscal Straightjacket: A Response to Henry J. Aaron.” Journal of Policy Analysis and Management, 29(4), 891-893.

Policymakers should be thinking hard about low-income families with children and the tax code. In 2010, the federal income tax system will deliver substantial assistance to these families through refundable tax credits. The Tax Policy Center estimates a third fewer children would be in poverty if tax credits were counted in a person’s available resources when measuring poverty. They are among the most potent anti-poverty programs for families with children. In 2011, some aid targeted to the poorest families will disappear as the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) and the American Recovery and Reinvestment Act (ARRA).

The Wyden-Gregg tax reform proposal would represent a broad reform of the federal income tax system. This paper examines the plan's impact on individuals' effective marginal tax rates (EMTR), the incremental amount of tax owed on an additional dollar of income. We examine the impact on the EMTR for both wage income and realized capital gains against current law and current policy baselines. We find the Wyden-Gregg plan would lower the overall average EMTR on wages relative to both current law and current policy, but would raise the overall average EMTR on gains when compared with those same two baselines.

Howard Gleckman, the editor of the Tax Policy Center's TaxVox, explains what the term carried interest means, how those who earn it currently benefit from a tax loophole, and what the Congress is preparing to do about it.