Who Benefits From the Dependent Exemption?
The dependent exemption reduces taxable income by a fixed amount ($3,650 in 2010) for each qualifying child in the family. Benefits depend on a family’s marginal tax rate. Low-income families receive a tax reduction of up to $365 per exemption compared to high income families that receive a tax reduction of $1,278 per exemption. Benefits flow mostly to families with relatively high incomes. In 2010, TPC estimates 1.5 percent of benefits will accrue to families in the lowest income quintile while 57.1 percent of benefits will accrue to families in the top 40 percent of the income distribution.
Tax Reform Won’t Happen in 2011 (or 2012)
Much as I hate to write these words, tax reform isn’t going to happen in the coming year, or even in the year after that. The bipartisan tax deal reached by President Obama and Congress earlier this month, along with a few kind words about closing tax loopholes from a handful of GOP lawmakers, has [...]
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The Tax Vox 2010 Lump of Coal Award, Job-Killing Edition
It’s time for Tax Vox’s fourth annual Lump of Coal Award, given to 2010′s worst moments in fiscal policy. Bad law, outrageous rhetoric, and months of inaction made it tough to choose, but here are our Top 10 nominees: 10. A GOP leadership that sees “job-killers’ everywhere. The health bill was a job killer. The [...]
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Obama-GOP Compromise Tax Plan on TPC’s Tax Calculator
In a flurry of lame-duck activity, Congress quickly passed the Obama-GOP compromise tax plan and the president signed it into law. TPC has incorporated the new law into its Tax Calculator so you can see how the act will affect individual tax bills. The Tax Calculator lets you compare tax liabilities under the new tax [...]
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How the Tax Deal Helps Manhattan Real Estate Developers In the Name of 9/11
Why is Congress continuing to subsidize lower Manhattan real estate developers nearly a decade after the 9/11 terrorist attacks on the World Trade Center? While the Senate continues to squabble about whether to provide medical care to first responders, lawmakers have had no second thoughts about continuing special tax-exempt bond financing for high-end builders. A [...]
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Johnny Depp and the New Tax Law
When the President signs the big tax deal later today, will he be cutting income taxes for most families or sparing them a tax hike? Will he be slashing the estate tax or resurrecting it? Those questions have a clear answer in the official budget world: the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation [...]
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The Obama-GOP Tax Deal May Be Bipartisan, But It Isn’t Stimulus and It Isn’t Smart
A modest thought experiment: Here is a check for $858 billion. Your job is to boost short-term economic growth. What would you do with the money? President Obama and a huge bipartisan majority of the Senate have given us their answer (and the House is likely to add its support tonight or tomorrow): They’d extend [...]
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Resurrecting the Estate Tax as a Shadow of Its Former Self
For nearly a year, we’ve had no federal estate tax. The estates of those who died in 2010—including at least five billionaires—have passed to their heirs with nothing going to Uncle Sam. Compared to the estate tax in place in 2009, the tax hiatus cost the government an estimated $14 billion in desperately needed revenue. [...]
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Obama Should Send His Fiscal Commission’s Budget Plan to Congress
If ever President Obama needed a reason to back the recommendations of his fiscal commission, the tax deal he’s just cut with congressional Republicans should be it. Not only will this massive tax bill add hundreds of billions of dollars to the deficit, but it is turning into a political catastrophe for the White House. [...]
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The Obama-GOP Deal: A Tax Hike for the Working Poor
Ever since the 2008 presidential campaign, President Obama has argued passionately for extending the Bush-era tax cuts for all but the richest 2 percent of Americans. His reasoning: the rich have fared spectacularly well over the past quarter century—incomes of the top 1 percent tripled in real terms—while incomes grew slowly or not at all [...]
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