One possible explanation for the difficulty in controlling the budget is that a major component of spending --tax expenditures--receives privileged status. It is treated as tax cuts rather than spending. This paper explores the implications of that classification and illustrates how it can lead...

A variety of public policies aim to influence workers' disposition of preretirement lump-sum distributions (LSDs) from pensions. We use the implementation of several policy changes as natural experiments to test for rational and behavioral motives for saving behavior. Using data from the HRS and...

President Bush has proposed to replace most tax subsidies for healthcare with a standard deduction for health insurance available for taxpayers who have qualifying insurance coverage. The proposal would equalize the tax treatment of traditional health insurance for people who get coverage...

We examine retirement savers' choices between front- and back-loaded tax incentives, such as traditional and Roth IRAs, respectively. With equal dollar contribution limits, back-loaded plans shelter more funds than front-loaded plans. This implies that Roth IRAs can be the preferred choice even...

A bipartisan consensus favors public policy initiatives to expand health insurance coverage. This paper summarizes new Current Population Survey (CPS) data on health insurance coverage for the non-elderly and discusses the issues involved in subsidizing health insurance. We outline a tax credit...

Using data from several sources, we show that the vast majority of corporate income is not double-taxed in the United States. We estimate that the taxable share of U.S. corporate equity has declined dramatically in recent years, from over 80 percent in 1965 to about 30 percent at present. We...

Previous theoretical analyses of the capital gains tax have suggested that investors have considerable opportunity to avoid the tax. Yet, past empirical work has found relatively little evidence of such activity. Using a previously unavailable panel data set with a very large sample of...

The universal EITC is a worker subsidy designed to offset wage stagnation. The base proposal would replace existing subsidies for working families with a refundable 100-percent tax credit on individual wages up to $10,000 and a larger, refundable CTC. The maximum credit grows with GDP,...

We explore issues related to a financial transaction tax (FTT) in the United States. We trace the history and current practice of the tax in the United States and other countries, review evidence of its impact on financial markets, and explore the key design issues any such tax must address. We...

The alternative minimum tax (AMT) is a complex, unfair, and inefficient shadow tax system that threatens to affect 32 million taxpayers by 2010, many of them solidly middle class. Under current law, repealing the AMT without offsets would cost more than $850 billion through 2017. This paper...