Taxes

The New Federal Tobacco Tax: Who Loses?

The recent expansion of the State Children's Health Insurance Program (S-CHIP) was funded by an increase in federal excise taxes on tobacco products. Congress increased the federal tax on cigarettes b…

Not-So-Sweet Excise Taxes

Some members of Congress want to raise excise taxes to pay for health care reform and energy technology development.  Federal excises on tobacco and alcohol are often called sin taxes; others designed…

How Tax Relief Can Stimulate Economic Growth

Congress is debating an economic stimulus package that would substantially increase federal spending, but may not speed recovery from the current recession.  The Congressional Budget Office estimates…

The Case for Corporate Income Tax Cuts

Globalization and capital mobility are increasing tax competition among countries.  Lower tax rates increase after-tax returns to capital, raising economic growth rates.  They can also make economies…

Optimal Taxation, Economic Growth and Income Inequality in the United States

Up to a point, government spending on public goods - such as national defense and protection of property - can raise the economic growth rate. However, as government spending rises, the tendency is to…

Will Congress Penalize Marriage Again?

The marriage penalty is a quirk in the tax code that pushes married couples into a higher tax bracket than two unmarried single earners living together and earning the same combined income. The 2001 B…

Does it Pay to Work More?

Does it pay to work more hours in order to earn more income?  The answer depends on what one earns after taxes.  Virtually all American households are confronted with high to very high marginal tax ra…

Tax Code Became More Progressive after the Bush Tax Cuts

Critics complain that the 2001 and 2003 Bush tax cuts gave the greatest tax relief to the wealthiest taxpayers. However, every major tax bill over the past 15 years — both Republican and Democrat — ha…