Tax — Federal
While imposing harsh budget cuts on the most vulnerable Americans, House Budget Committee Chairman Tom Price’s budget plan also appears to reflect a continuing drive to cut taxes for the nation’s highest-income people. Read more
The House Ways and Means Committee is scheduled to consider a bill this week to repeal the federal estate tax on inherited wealth, just one week after the House Budget Committee approved a budget plan calling for $5 trillion in program cuts disproportionately affecting low- and moderate-income Americans. Repeal would:
- reduce revenues by more than $250 billion over the next ten years;
- do nothing for 99.8 percent of Americans; and
- exacerbate wealth inequality, which has grown significantly in recent decades.
Policymakers have made substantial progress in recent years in “making work pay” for low-income families with children by strengthening the Earned Income Tax Credit (EITC) and Child Tax Credit.
But low-income childless workers — that is, childless adults or non-custodial parents — receive little or nothing from the EITC. As a result, childless workers are the sole group that the federal tax system taxes deeper into poverty.
By making more childless workers eligible for the EITC — including those working full time at the minimum wage — and boosting the credit for workers currently eligible, these measures hold strong promise of increasing employment and reducing poverty.
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.
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.
March 27, 2015
Updated March 25, 2015
Updated March 23, 2015
Updated March 23, 2015
Updated March 11, 2015
- View All By Date