More Recent Tax Foundation News: Page 18
The Tax Foundation has estimated what the revenue impact of an income tax rebate of the 10% rate would be in 2008. Media reports suggest this may be one component of President Bush's plan to stimulate the economy. Taxpayers would receive a rebate check, likely based on their 2006 tax returns. The 10% rate would be set to zero when taxpayers file returns for tax year 2008. The summary of our results:
- Under a baseline assumption of no AMT patch (current law), reducing the 10% rate to zero would cost approximately $58 billion for calendar year 2008 (static score).
- Under a baseline assumption of an AMT patch, reducing the 10% rate to zero would cost approximately $96 billion for calendar year 2008.
- Reducing the 10% rate to zero would push about 11 million more returns into AMT for 2008 (under current law) and raises the price of an AMT patch for 2008 from $55 billion to $93 billion.
- Approximately 29.6% of tax returns (representing 41.2 million of the nation's projected 139 million tax returns in 2008) are scheduled to pay nothing in federal individual income taxes in 2008 and would therefore receive no savings by a mere reduction in the 10% rate.
- Currently, 41.2 million returns pay nothing in federal individual income taxes in 2008, and reducing the 10% rate to zero for 2008 would increase this number to 62.9 million.
- Due to the non-payers and because high-income individuals are more likely to be married, 21.2 percent of the tax savings from the reduction will go to those tax returns earning over $100,000, despite the fact that they make up only 13.8 percent of tax returns. (Assumes AMT patch baseline). However, ignoring the non-paying taxpayers, this reduction would make the tax code more progressive, because those making $60,000 receive greater savings as a percentage of their incomes as compared to those making $1 million.
Click here to read the full analysis. Click here for more Tax Foundation discussion of the stimulus proposals.
A new Tax Foundation Podcast examines the incidence of corporate taxation and asks the question, "Who bears the burden of corporate taxes? Workers? Consumers? Shareholders?" Tax Foundation Vice President for Economic Policy Robert Carroll discusses this topic with Dr. William Gentry, professor of economics at Williams College and author of a recent Treasury Department paper titled A Review of the Evidence on the Incidence of the Corporate Income Tax. Dr. Gentry discusses the growing academic evidence that suggests the burden of the corporate tax is increasingly falling on labor and impacting workers directly.
Click here to listen to the podcast. Click here for more on corporate taxes.
As presidential candidate Hillary Clinton unveils her economic stimulus package today, and talk of packages from Congress and the president continues to circulate, the Tax Foundation released its outlook on the best ways to shore up the economy and promote long-term growth. The proposal frowns on short-term fiscal stimulus in favor of a long-term solution: lowering the corporate tax rate, currently the second highest in the industrialized world.
"While a stimulus package might be politically popular as extraneous spending and tax provisions are added to it," said Dr. Robert Carroll, Tax Foundation Vice President for Economic Policy, "stimulus packages are often ill-timed, poorly-crafted, and do little to boost the economy. Sound monetary policy should be used in the short run to help stabilize the economy."
Click here to read Fiscal Stimulus: Missing the Big Picture?. Click here for more on corporate taxes.
The Tax Foundation announced today that Dr. Robert Carroll had joined its staff as Vice President for Economic Policy. Dr. Carroll will oversee the Tax Foundation's tax research program, with a special focus on business taxation and the need for corporate tax reform.
"As someone who has often used and always respected the Tax Foundation's work, I'm excited to now take part in that work," said Dr. Carroll. "This position is a great fit for me, as I will be able to continue doing what I've always done: making the case for sound tax policy."
Dr. Carroll most recently served as the Deputy Assistant Secretary for Tax Analysis in the Office of Tax Policy at the Department of the Treasury, a position he began in December of 2003.
Read the news release.
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