Issues Facing Congress

Signs of Momentum on Corporate Inversions

As the current uptick in inversions shows, corporate tax lawyers have found ways around the 2004 anti-inversion provisions. Policymakers should approve legislation that strengthens the bipartisan response from a decade ago — and soon. Waiting for corporate or international tax reform will only invite more tax avoidance-driven corporate exits. Read more

Related: Congress Should Promptly Enact Legislation to Help Close Tax-Driven Corporate “Inversions” Loophole

 

House Should Reject Backwards Child Tax Credit Bill

The full House will consider the Ways and Means Committee’s recently passed Child Tax Credit (CTC) bill. A recent Tax Policy Center (TPC) analysis confirms our previous critical assessments of the proposal, finding that it would make many relatively affluent people better off while making low-income working families poorer. Read more

 

Understanding the Safety Net

Policymakers Often Overstate Marginal Tax Rates — And Understate Trade-Offs In Reducing Them

Some Washington policymakers are increasingly focused on whether government benefits for low- and moderate-income people create disincentives to work — in particular, when these benefits phase down as the earnings of beneficiaries rise.

That phase-down rate is often called the “marginal tax rate” because it resembles a tax — benefits fall as earnings rise. The relationship between marginal tax rates and disincentives to work is an important issue, one worthy of serious debate. Some policymakers, however, often overstate the size of marginal tax rates and their impacts on work, and understate the trade-offs in trying to lower these rates. Read more

 

Why the 1996 Welfare Law Is Not a Model for Other Safety-Net Programs

House Budget Committee Chairman Paul Ryan’s upcoming poverty plan will likely showcase the 1996 welfare law, which replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF) — a block grant with fixed federal funding but broad state flexibility — as a model for reforming other safety net programs.  A careful examination of the record, however, indicates that the 1996 law’s results were mixed and that if the goal is to reduce poverty, especially among the most disadvantaged families and children, there are serious downsides to embracing the 1996 law as a model.  Read more

Related: Commentary: Ryan Report Distorts Safety Net’s Picture

More: Poverty and Income analyses

Understanding Disability Insurance

Chart Book: Social Security Disability Insurance

Disability Insurance (DI) is an integral part of Social Security. It provides modest but vital benefits to workers who can no longer support themselves on account of a serious and long-lasting medical impairment. The Social Security Administration (SSA) administers the DI program.

The following charts provide important background information about Social Security Disability Insurance.

Part I: Why Is Social Security Disability Insurance Important?
Part II: Why Have the DI Rolls Grown?
Part III: Who Receives DI?
Part IV: What Financing Issues Does DI Face?

Related: Congress Needs to Boost Disability Insurance Share of Payroll Tax by 2016

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