More Recent Tax Foundation News: Page 15
Attempts to reform the Alternative Minimum Tax (AMT) have led many lawmakers to suggest repealing the Bush tax cuts—which so many have accused of benefiting only "the rich"—or repealing the deduction for state-local taxes.
A new Tax Foundation Fiscal Fact, "Comparing Popular Tax Deductions to the Bush Tax Cuts," shows that both the state-local deduction and the Bush tax cuts have provided tax savings to almost exactly the same upper-income individuals. In addition, upper-income taxpayers benefit more than middle- or lower-income taxpayers from three other popular tax preferences: the municipal bond exemption, the interest paid deduction, and the charitable deduction.
Read the whole study.
Between $376 billion and $872 billion per year is fiscally transferred from middle-aged groups to the youngest and oldest Americans each year through government taxes and spending, according to a new Tax Foundation study of taxing and spending by age groups.
America's youngest households, those headed by someone 25 or less, receive $2.32 in government spending for each dollar of taxes paid, and households aged 75 and over receive $4.93 per dollar of taxes paid. Meanwhile, in the middle, households aged 45 to 54 received 73 cents per tax dollar.
"As the Baby Boom generation prepares to retire, lawmakers should be aware of the distribution of taxes and government spending across age groups," said Tax Foundation economist and co-author Andrew Chamberlain.
Read the full study. Read the news release.
IRS data show that most people filing the AMT, most of whom earn between $100,000 and $500,000, will pay nearly $2,800 less in 2007, even counting their AMT payments, than they would pay if the Bush tax cuts had never happened.
“There’s been a lot of misinformation put out about the AMT,” said Tax Foundation economist Gerald Prante, author of a new Fiscal Fact on the subject. “Many politicians have proclaimed that the AMT foists an unfair financial burden on ‘middle-class’ taxpayers who allegedly were not helped much by the Bush tax cuts, but the opposite is true. Current AMT filers benefited enormously from the Bush tax cuts.”
Click here for the full study. Click here for the data.
Arguments were heard today in the case of the North Carolina Education Lottery, which, according to an amicus brief submitted by the Tax Foundation, generates tax revenue, not "profits."
The state imposes a 35-percent assessment on the sale of each lottery ticket, and if that revenue is found to be a tax under the meaning of North Carolina law, then the lottery's enactment in 2005 did not meet the basic legislative requirements for enacting tax law.
According to the Tax Foundation brief, the lottery revenue meets all three tests for defining a tax. Current U.S. Supreme Court Justice Stephen Breyer laid out the criteria for defining a tax when he decided the San Juan Cellular case for the First Circuit Court of Appeals in 1992. Breyer argued that a judge should consider who imposes the assessment, who pays the assessment, and what the revenue is spent on.
Read the brief. Read the news release.
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