Taxation of the Really Big House

A. Overview Serious long-term tax reform will need to limit the considerable tax advantages now available in owning the very largest houses and other personal-use properties. The primary return from the investment in residences and similar property is the rental value of the personal use of the house, which is always tax exempt. If the [...]

Full Story »

Posted in | Tagged , , | Leave a response

Gains and Losses on Business Depreciable Property

This proposal would repeal section 1231, which accords capital gain treatment to gains but gives ordinary treatment to losses. That asymmetry increases the expected value of volatile investments over the pretax value of the investments. During a revenue crisis, the tax system should not increase an investment’s value. Moreover, section 1231 has been expanded to [...]

Full Story »

Posted in | Tagged , , , | Leave a response

Replace the Corporate Tax With a Market Capitalization Tax

This proposal would replace the 35 percent corporate tax on publicly traded companies with a low 20-basis point quarterly tax on the issuer on the market capitalization including both traded debt and equity. A low-yield corporate tax would remain for corporations that are not publicly traded, and for a transition period, the tax would apply [...]

Full Story »

Posted in | Tagged , | Leave a response

Previous Pause Next

Impose Capital Gain Tax on Like-Kind Exchanges

Current law allows a taxpayer to avoid taxation of gain on a disposition of real estate to the extent the taxpayer is willing to acquire other real estate as a replacement. The proposal would repeal section 1031 regarding gain and require an exchange broker to file an information return showing the amount realized by the [...]

Posted in | Tagged , , | Leave a response

Who Benefits from the Earned Income Tax Credit? Incidence Among Recipients, Coworkers and Firms

Abstract How are hourly wages affected by the Earned Income Tax Credit? Two strategies are utilized to determine the relationship between the credit and hourly wages. First, I use variation in state EITC supplements, which magnify the effect of the federal EITC. I find that a 10 percent increase in the generosity of the EITC [...]

Posted in | Tagged , , , , , , | Leave a response

Repeal Tax Exemption for Municipal Bonds

Overview The proposal would repeal for future years the exemption for interest on state and local bonds. While the exemption is supposed to help state and local borrowers, only a fraction of the federal cost of the exemption is captured by the borrowers. What is captured, in the form of lower interest paid, does harm [...]

Posted in | Tagged , , | Leave a response

Alcohol/Leisure Complementarity: Empirical Estimates and Implications for Tax Policy

Sarah E. West Ian W.H. Parry Abstract This paper provides a first attempt to estimate the cross-price elasticity between alcoholic beverages and leisure, which is critical for assessing how much alcohol taxation might be warranted on fiscal grounds. We estimate an Almost Ideal Demand System defined over alcohol, leisure, and other goods, using data from [...]

Posted in | Tagged , , , , | Leave a response

An Analysis of Budget Offset Requirements for Tax Expenditures

An Analysis of Budget Offset Requirements for Tax Expenditures

Abstract Budget rules enacted by Congress in the 1990’s (and currently still in force) established pay-as- you-go (PAYGO) rules requiring that the revenue loss from any new or expanded tax expenditure provision be offset in the same fiscal year by legislation raising an equivalent amount of extra revenue. This note extends Dharmapala’s (1999) model of [...]

Posted in | Tagged , , , , , , , , | Leave a response