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On 1099s, It’s Not So Simple

November 2, 2010

New York Times columnist David Brooks ridicules the Affordable Care Act provision tightening businesses’ reporting requirements to the IRS on payments for goods and services: “If you’re a freelancer and you buy a laptop from an Apple store, you have to file a 1099.” Brooks sees that as an “expensive interference in business life.”

More Non-Partisan Common Sense on Taxes

November 1, 2010

A new report from the non-partisan Congressional Research Service (CRS) explains that permanently extending all of President Bush’s tax cuts would be extraordinarily expensive — CRS estimates the cost at $5 trillion over the next decade alone. The report recognizes that Congress, in deciding the future of the tax cuts, will need to consider the current weak economy as well as our unsustainable long-term budget path. But, it concludes, letting the Bush tax cuts aimed at the nation’s wealthiest 2 percent of households expire on schedule at the end of December makes sense from both perspectives. Here are the key quotes:

Americans Will Notice Obama’s Middle-Class Tax Cut When It’s Gone

October 19, 2010

The most curious aspect of the feverish debate over tax cuts is that President Obama cut taxes for more than 90 percent of working Americans, yet more than 90 percent of Americans have no idea this happened.

Enough Is Enough on Tax Cuts for Wealthy

September 27, 2010

UPDATE, SEPTEMBER 30: We’ve revised some of the figures in this post. Click here for the updated numbers.

In yesterday’s New York Times, Richard Thaler, one of the nation’s top economists, neatly refuted the arguments for borrowing tens of billions of dollars each year to keep President Bush’s tax cuts flowing to the most affluent 2 percent of people in the country. He then posed a central question: “whether we want a society in which the rich take an ever-increasing share of the pie, or prefer to return to conditions that allow all classes to anticipate an increasing standard of living.”

Tax Debate Should Focus on Real Middle Class

September 20, 2010

Proponents of extending President Bush’s costly tax cuts for people making over $250,000, which the non-partisan Congressional Budget Office (CBO) has rated the worst of all options under consideration for boosting a weak economy, are resorting to increasingly dubious claims to buttress a weak case. Two examples are in today’s papers:

Inconsistency and Flawed Economics on Taxes

September 17, 2010

In the current debate over federal taxes, all eyes are focused on what to do about President Bush’s expiring tax cuts for high-income people. Proponents of these tax cuts, mainly but not solely Republicans, argue that letting the cuts expire on time amounts to a tax increase — and, with the economy still very weak, now is not the time to raise taxes on anyone, wealthy or otherwise.

“Freeloader” Charge an Insult to Low-Wage Workers

September 15, 2010

What do you call parents who work at very low-wage jobs to support their families — say, a single mother raising two children and working at a nursing home, or a construction laborer trying to support his wife and children? Until recently, policymakers have called them welfare-reform success stories: people who have chosen work over welfare. Now, however, there is a risk that it is becoming fashionable to call them “freeloaders” for whom the Internal Revenue is a “sugar daddy” dispensing tax benefits.

Reality Check on the High-Income Tax Cuts

September 9, 2010

As the debate over whether to extend the Bush tax cuts for families over $250,000 heats up, here are a few facts to keep in mind:

Inequality and the High-End Bush Tax Cuts

August 25, 2010

UPDATE, SEPTEMBER 30: We’ve revised some of the figures in this post. Click here for the updated numbers.

As I’ve said before, from the standpoint of economic efficiency there’s a clear-cut case for letting the Bush tax cuts for people over $250,000 expire on schedule in December. Sunsetting the high-income tax cuts makes just as much sense from the standpoint of equity. Recent data from the Congressional Budget Office (CBO) show a stunning shift in income away from the middle class and towards the highest-income people in the country over the last three decades:

Extending “Middle-Class” Tax Cuts Would Help Wealthy Even More

August 12, 2010

Who stands to gain the most if Congress extends the middle-class Bush tax cuts: a middle-income worker or a millionaire? The millionaire (see graph). That’s one more reason — on top of those listed here — why Congress shouldn’t add a trillion dollars in deficits and debt over the next decade by also extending the tax cuts exclusively for the richest 2 percent of families.