Tax Policy

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Long-Term Tax Policy Outlook

Whoever claimed there’s not a “dime’s worth of difference” between the political parties clearly was not referring to American politics in 2020. For tax policy alone, the difference is in the trillions. On one hand, a Trump victory would likely mean continued divided government, possible consideration (although not adoption) of a middle-class tax cut, and a resumption of the status quo. If Trump has a fifty percent chance of winning next fall, then there’s a fifty percent chance your taxes don’t change substantially in the next few years. On the other, a Democratic victory would likely result in Democrats controlling ...

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Long-Term Tax Policy Outlook2019-11-22T18:24:45+00:00

EY on Tax Parity

EY has published a new study commissioned by the S Corporation Association entitled “Large S Corporations and the Tax Cuts and Jobs Act: The economic footprint of the pass-through sector and the impact of the TCJA.”  The study’s author, Robert Carroll, will be featured at the Main Street briefing today held in the Russell Senate Office Building.  You can read the full study here. Key takeaways from Bob’s work include: Pass-Through Tax Parity: In terms of both effective and marginal tax rates, the analysis shows that prior to TCJA, large S corporations and C corporations faced similar tax rates. Rough ...

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EY on Tax Parity2019-10-25T18:43:24+00:00

Wealth Taxes Pose Existential Threat to Private Businesses

The Peterson Institute held a “Combating Inequality” event last week that included a vigorous debate over wealth taxes.  The heavyweight match between Emmanuel Saez – the leading advocate for wealth taxes these days – and Larry Summers in particular is worth watching. One aspect missing from the debate, however, was how wealth taxes would handcuff successful private businesses.  Summer briefly touches on the challenge his family’s hardware store would have paying the tax, but there is so much more to it.  Wealth taxes: Are far larger than their headline numbers suggest; Paid on top of all existing taxes; Hit hardest ...

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Wealth Taxes Pose Existential Threat to Private Businesses2019-10-22T14:03:18+00:00

Grading the TCJA, Two Years Later

The American Enterprise Institute has a new“Trump Tax Reform Blog” series on its website.  Over the next month, tax policy folks from both sides will weigh in on the reform and whether it’s working.  You can read the current posts here. Our invitation to comment must have got lost in the mail, but no worries, it’s a brave new world and we can comment anyway.  Here’s our report: Has the TCJA helped American workers and businesses with additional economic growth?  Such questions are impossible to answer with absolute certainty, since we will never know what the economy would have done ...

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Grading the TCJA, Two Years Later2019-09-27T17:05:23+00:00

Perception v. Reality on Tax Rates

Here’s a conundrum.  A recent poll revealed that 76 percent of Americans support increasing taxes on the “wealthy,” while sixty-one percent support the wealth tax proposed by Senator Elizabeth Warren, which is like an income tax, only at ridiculously high rates. But polls also show Americans consistently oppose high tax rates, even on the wealthy.  This summer, for example, the Winston Group asked registered voters: “For each of the following, what is the maximum rate at which you think they should be taxed?”  ...[T]he average responses were all consistently low, ranging from a high of 31 percent for the wealthy ...

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Perception v. Reality on Tax Rates2019-09-09T15:44:51+00:00