Tag: Trump healthcare

Taking Stock of Spending Through the Tax Code

Center for American Progress logoTax Expenditures Are Skewed to the Wealthy Even After TCJA

Overview

The Tax Cuts and Jobs Act, which gave the largest tax cuts to the wealthiest Americans, also failed to address the inefficiency, lack of fairness, and cost of many spending programs administered through the tax code.

Introduction and summary

Government spending through the tax code has flourished in the years since the Tax Reform Act of 1986, which significantly reduced the cost of a large number of tax breaks. In 2019, the federal government will spend roughly $1.6 trillion through special provisions of the tax code, called tax expenditures,1 up from an inflation-adjusted $600 billion in 1988—more than a trillion-dollar difference.2 Yet, as detailed later in this report, tax expenditures receive little direct oversight in the budget process, and many are poorly targeted to the goals they claim to achieve. As a result, the tax code contains many tax expenditures that do not achieve their stated claims, are unfairly skewed in favor of higher-income taxpayers, or both.

This report will review the status of individual tax expenditure policy in the aftermath of the December 2017 tax law, known as the Tax Cuts and Jobs Act (TCJA). After providing a brief review of the theory around tax expenditures, it will use specific examples to explain how the structure of individual income tax expenditures, as amended by the TCJA, affects their cost and who benefits, as well as how some tax expenditures are ineffective, with their underlying goals best not pursued through the tax code at all.

View the complete July 25 article by Alexandra Thornton and Sara Estep on the Center for American Progress website here.

New Data Show Costly Trump Tax Cut Achieved Little

The most commonly heard refrain when Donald Trump and the GOP were seeking to pass some version of corporate tax reform went something like this: There are literally trillions of dollars trapped in offshore dollar deposits which, because of America’s uncompetitive tax rates, cannot be brought back home. Cut the corporate tax rate and get those dollars repatriated, thereby unleashing a flood of new job-creating investment in the process. Or so the pitch went.

It’s not new and has never really stood up to scrutiny. Yet virtually every single figure who lobbied for corporate tax reform has made a version of this argument. In the past, Congress couldn’t or wouldn’t take up the cause, but, desperate for a political win after the loss on health care, Trump and the GOP leadership ran with a recycled version of this argument, and Congress finally passed the Tax Cuts and Jobs Act on December 22, 2017. The headline feature was a cut in the official corporate tax rate from 35 percent to 21 percent. Continue reading “New Data Show Costly Trump Tax Cut Achieved Little”

How The Super Rich Avoid Paying Taxes … And What We Can Do About It

Part 5: There’s a Simple Way to Force the 1% to Pay Up and Make the Tax System Fairer to Everyone

Our investigative series The Koch Papers illustrates many deep problems in America’s creaky, century-old income tax system, especially how our Congress has through favors to donors has transformed it into has two tax systems, separate and unequal.

These dual systems pose a threat to our nation’s social stability, to our national security and to America remaining a nation of equality under law. But there is a simple solution to this, as we shall see. It requires only that Congress stand up for honest and fair tax law enforcement, not the interests of those major campaign donors who cheat.

One of the most significant lessons applies to William Ingraham Koch and his company whether or not, as his former chief tax executive claims, the IRS failed to curb massive income tax cheating. That’s because if Koch did find a way to lawfully collect more than $100 million in tax-free profits annually it is just as much a public issue as if he did it by cheating.

View the complete July 12 article by David Cay Johnston on the DC Report website here.