Understanding Taxes

Lone Group Taxed Into Poverty Should Receive a Larger EITC

Policymakers have taken important steps in recent decades to prevent the federal tax code from taxing people into or deeper into poverty. This bipartisan effort has helped shape various features of the tax code including the Earned Income Tax Credit (EITC), a tax credit for low- and moderate-income working people. In addition to its other roles, such as serving as a pro-work wage subsidy, the EITC helps keep income and payroll taxes from pushing millions of low-wage workers into poverty.

But the commitment to keep the federal tax code from taxing low-income workers into poverty has fallen far short for one group of 7 million people: childless adults. Read more



Federal Income Taxes on Middle-Income Families Remain Near Historic Lows

Federal taxes on middle-income Americans are near historic lows, according to the latest available data. That’s true both for federal income taxes and total federal taxes:

  • federal income taxes have declined significantly in recent decades;
  • expiration of temporary tax breaks raised effective income tax rate;
  • expiration of payroll tax cut is the biggest tax change for most people in 2013; and
  • overall federal taxes are also at low levels.

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The Top 10 (Well, 11) Federal Tax Charts

To usher in Tax Day, we have highlighted our top 11 charts on federal taxes, which provide context for debates on issues like tax reform and deficit reduction.

One of the featured charts reminds us what taxes pay for:

  • Social Security, major health programs like Medicare and Medicaid, and national defense account for roughly two-thirds of federal spending.
  • Safety net programs (such as unemployment insurance and nutrition programs) and interest on the debt account for 12 percent and 6 percent of federal spending, respectively.
  • The remaining 18 percent goes to such other areas as roads, education, and health and science research.

View all of the featured charts



More: Federal Tax Analysis

Making Jobs a National Priority

Former U.S. Treasury Secretary Larry Summers spoke at the launch of CBPP’s and Senior Fellow Jared Bernstein’s year-long project on full employment.  Watch his keynote address, as well as the panel discussion among Bernstein and other leading economists, and find out more at www.pathtofullemployment.org.

Full Employment in the News


Issues Facing Congress

Three Reasons Congress Should Restart Emergency Jobless Benefits — Now

  1. If Congress doesn’t restart it, the number of affected workers will continue to climb each week, reaching 4.9 million by the end of the year.
  2. Labor market conditions are much better than in the depths of the Great Recession in 2008-09, but they remain much worse than when policymakers let any of those programs expire.  In particular, long-term unemployment is nearly twice as high as when any previous program expired.
  3. Unemployment insurance is one of the most cost-effective ways to help a weak economy.

Read more


Ryan Roundup: Everything You Need to Know About Chairman Ryan’s Budget Plans

The Center has compiled analyses and blog posts on the budget that House Budget Committee Chairman Paul Ryan recently proposed. We will continue to update this roundup as we issue additional analyses.

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