All Tax VOX

Who benefits from tax subsidies for municipal bonds? It's not as obvious as you think. High-income investors benefit, yes, but depending on what state and local government do with the subsidies, there may also be benefits for low-tax brackets. 

Some commentators have proposed that the 'McConnell rule', which would allow the President to raise the debt ceiling unilaterally, become law. Gleckman argues these proposals illogical and instead argues that Congress ought to be mandated to finance all spending decisions that they approve.

When it comes to deficit reduction, cuts to familiar social programs such as Medicare, Social Security and college loans are often regarded as "untouchable." Gleckman reminds us that there is an additional $1 trillion-plus in tax subsidies that are also often seen as entitlements and are thus dismissed from discussions surrounding spending cuts. Gleckman argues these tax subsidies inefficient and claims that a restructuring of these subsidies could greatly reduce our deficit. 

Many argue that the short-term deal to reopen the government and reauthorize Treasury borrowing buys time but does nothing to change Washington’s toxic culture. But Congress and President Obama could reach a mini-bargain that would at least take the edge off the current ugliness, Gleckman writes.

If the agreement reached yesterday sticks, Congress has just shuttered much of the federal government for more than two weeks and risked a market-shattering federal default in order to convene a meeting of budget negotiators.

Revenue growth is accelerating in most states but many jurisdictions faced strong economic headwinds going into the recent partial government shutdown and potential default, according to the latest edition of the Tax Policy Center’s State and Local Finance Initiative’s State Economic Monitor.

The US Treasury actually hit the debt limit way back on May 19, Marron writes, but several accounting gimmicks and cash-flow sleights of hand allow the Treasury to keep paying our bills after hitting the debt limit. Is it time to get rid of those 'extraordinary measures'?

House Republicans have tentatively agreed on a plan to extend the debt limit for about six weeks while keeping the government partially shuttered. But the deal would only briefly put off what has become an ugly and dangerous confrontation over the nation’s ability to pay its bills, Gleckman writes.

The dollar is the world's reserve currency because the U.S. has the world's biggest economy, yes, but also because investors need not worry about political risk. But with the deadline to raise the debt-limit fast approaching and no compromise in sight, is the U.S. losing its reputation as a safe investment? 

The debt limit 'debate' is not about limiting the size of government, entitlement reforms, or tax reform. Instead, Republicans in Congress are yet again debating whether Congress should authorize the government to pay for spending—wait for it—that Congress has already authorized the government to undertake.

Government shutdowns could well become a standard part of the annual budget process, Gleckman writes. If government shutdowns become routine, attention-seeking lawmakers will only escalate their threats.

How might the government shutdown debate be different if 2008 had produced a President Romney rather than Obama, and led to an implementation of Romneycare, not Obamacare?

As a potential government shutdown approaches, House Republicans consider adding a framework for tax reform to legislation needed to increase the federal government’s borrowing authority. Gleckman explores what a GOP tax reform proposal could like, arguing it counterproductive. 

Earlier this week, Utah Senator Mike Lee unveiled the Family Fairness and Opportunity Tax Reform Act. Elaine Maag examines the plan which proposes tax cuts to families with children. 

Failure by Congress to raise the debt limit will result in severe economic harm, Marron writes. A prolonged delay would be a powerful 'anti-stimulus' that could easily push our economy back into recession.

New estimates released by the Tax Policy Center show the number of Social Security and Medicare taxpayers is growing. Even among those households that will not pay federal income tax this year, the majority will still owe Social Security and Medicare payroll taxes. 

With a hike in the estate tax exemption, estate tax lawyers are running out of work, Gleckman writes. 

More than 70,000 households with income over $200,000 will pay no federal income tax in 2013, Williams writes. How will they do that?

Starting Sept. 16, same-sex married couples must file federal income tax returns as married, regardless of whether the state where they live recognizes their marriage. That gives couples who haven’t yet filed their 2012 tax returns just a few more days to file as individuals if they choose, which could mean a much smaller tax bill for some. 

Here's an interesting but little known problem with the federal income tax system: People who have tax withheld from their paychecks but, for some reason, don’t file returns. For many, ignoring their 1040 means they are paying tax they don’t owe.