Tax — Federal

House Efforts to Make “Tax Extenders” Permanent Are Ill-Advised

While the Senate has pursued temporary extensions, the House has moved to make a number of largely corporate tax extenders permanent. And the House has gone still further by expanding one of the biggest extenders and making the expansion permanent, as well as by making permanent some temporary tax breaks that are not part of the traditional pool of tax extenders. The House has not offset any of these measures’ large costs.

Related: Ineffective “Bonus Depreciation” Tax Break Should Remain Expired

 

Budget and Tax Plans Should Not Rely on “Dynamic Scoring”

Congress should resist the temptation to use dynamic scoring, which would include estimates of how changes in tax and budget policy would affect the economy’s size and how that, in turn, would affect the level of federal revenues.

Estimates of the macroeconomic effects of policy changes are highly uncertain. And, dynamic scoring would damage the credibility of the budget process.

 

Basics

The income tax on individuals and the payroll tax, which is deducted from workers’ wages and used to help finance Social Security and Medicare, each made up about 40 percent of federal revenues in 2010. The federal government also collects revenue from corporate taxes, excise taxes, and other sources.

Policy Basics:
-
The Child Tax Credit
- The 2001 and 2003 Tax Cuts
- Where Do Our Federal Tax Dollars Go?
- The Estate Tax
- The Earned Income Tax Credit
- Deficits, Debt, and Interest

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The Center analyzes major tax proposals, examining their likely effects on the economy and on the government’s ability to address critical national needs, especially over the long term.  We place particular emphasis on the effects of tax proposals on households at different income levels.  In addition, we analyze trends in the level of federal revenues, income distribution, and tax burdens.

By the Numbers

Spending Through the Tax Code Skews Towards the Top
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