It's no secret that Congress hasn't been making the IRS's life very easy. In a time of discretionary spending caps, they are looking to reduce the agency's budget all while they add further to the complexity of the tax code.
We're seeing more stories, in recent days, floating the idea that policymakers might waive the entire fiscal cliff, at least temporarily. One piece in Reuters suggests that there could be a bipartisan agreement in Congress to couple a short term extention of the 2001/2003 tax cuts with a process to reform the tax code.
It is no secret to those following the news that the Supreme Court will soon make a decision on the constitutionality of pieces of the Affordable Care Act. There have been many discussions of the health policy implications of the decision, which are obviously very important. However, given the name of our organization, we'll discuss the budgetary implications of the possible rulings.
The IRS's Spring 2012 Bulletin has a report, as required by law, by Justin Bryan reporting that 20,752 tax returns for people with adjusted gross incomes of $200,000 or greater, or 0.5 percent of total returns for people making more than $200,000, were able to avoid paying any U.S. taxes in 2009. If you exclude people who paid taxes in foreign countries, that number is about half as much at 10,080 or less than 0.3 percent of total returns.
Go long or go prudent? These are the competing views of tax reform, according to Howard Gleckman in a Tax Policy Center blog post. He sums up the views as follows:
Last week, we wrote about American Action Forum president and former CBO director Doug Holtz-Eakin's four steps for tax reform. These involved:
A Washington Post article late last week detailed a number of current Republican members of Congress or Congressional candidates who are foregoing the "no new taxes" pledge circulated by Americans for Tax Reform. Signs that the seemingly ubiquitous pledge is fading in popularity are good for the purpose of getting a deal on deficit reduction that tackles all parts of the budget. Here's one example of a House candidate eschewing the pledge:
The Hill has an article today detailing infighting within the Democrats over what to do with the 2001/2003 tax cuts. The position expressed by President Obama and many Democrats for years has been to extend the tax cuts only for people making less than $250,000, but a growing contingent seems to favor upping that threshold to $1 million, including House Minority Leader Nancy Pelosi (D-CA).
When discussing new types of revenue or tax structures for the federal government to consider the other month, we touched on financial sector taxes as one of those options. The idea has caught on in Europe, with many countries and the European Commission proposing taxes of these sorts, although UK Prime Minister David Cameron has opposed it over concerns about its effect on growth.