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July 19, 2010

Former Federal Reserve vice chairman Alan Blinder makes an excellent suggestion in today’s Wall Street Journal: Congress should let the Bush tax cuts for people earning over $250,000 expire in December and use the savings to pay for jobless benefits and other programs that “put more spending into the economy than the tax hike takes out, thus creating jobs.”

July 13, 2010

Tomorrow morning the Senate Finance Committee begins debate on what to do with the Bush tax cuts, which are set to expire at the end of the year. Here’s some homework to prepare for this important hearing:

July 1, 2010

My colleagues and I have written repeatedly (for instance, here, here, and here) about the need for Congress to enact another round of stimulus legislation that would extend unemployment benefits and provide additional fiscal relief to states, both of which would help strengthen the fragile recovery.

June 18, 2010

With the country facing high unemployment and a weak economy in the short term and severe budget problems in the long term, you’d think that senators negotiating a jobs bill would be trying to maximize both its short-term economic boost and its long-term budget savings. You’d be wrong.

June 16, 2010

The House-passed tax extenders legislation, which the Senate is now considering, would partially close a loophole that allows shareholder-employees of S corporations to avoid paying payroll tax. These people receive both wages from the firm and a share of the firm’s profits, but they pay payroll tax only on their wages, which gives them a huge incentive to underreport the share of their income that consists of wages in order to reduce their payroll tax liability.

June 11, 2010

A number of policymakers and pundits — most recently House Minority Leader John Boehner — blame Obama Administration policies for the large deficits we confront.  But the numbers tell a very different story.

As my colleague Jim Horney and I have...

June 11, 2010

Policymakers would be well-advised to read a new Tax Notes piece by Douglas Holtz-Eakin, Cameron Smith, and Winston Stoody, which argues against closing a tax loophole that enables investment fund managers to pay taxes on their income – their “carried interest” – at the preferential capital gains rate rather than ordinary income tax rates.

May 26, 2010

The private equity industry has descended on Capitol Hill to preserve the lower tax rate for something known as “carried interest,” as compared to the tax rate Americans normally pay on the income they earn. While many interest groups try to convince lawmakers that they deserve special treatment, the proponents of this lower tax rate make a particularly unconvincing case.

May 20, 2010

As states cut everything from education to health care to address historic budget shortfalls, the last thing they need is for Congress to undercut an important revenue source for many of them. But that’s exactly what would happen if Congress eliminated the federal tax deduction for state-level estate and inheritance tax payments.

May 13, 2010

Commenting on Senate negotiations over cutting the estate tax below last year’s already-low level, the Wonk Room correctly noted, “We need to be looking at ways to responsibly raise revenues and find cuts in spending that won’t harm already vulnerable residents, not cut taxes for those at the very top of the income scale.”

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