Focus on Tax Policy

Focus on Tax Policy

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On February 2, economists Pierre Cahuc and Stéphane Carcillo reviewed a 2007 French law that eliminated taxation on overtime work. They find that it did not induce additional work. Rather, workers and employers manipulated the law to maximize the tax benefits.

Also on February 2, the Senate Budget Committee held a hearing on tax reform. Among the witnesses were economists Eugene Steuerle, Donald Marron, Roseanne Altshuler, and Lawrence Lindsey.

On February 1, Williams College economist William Gentry posted a draft paper on the impact of capital gains taxation on entrepreneurship.

On January 28, David Weigel of Slate reported that Tea Party members may challenge Sen. Orrin Hatch, Republican of Utah, in the 2012 primary. This may be significant for tax policy because Hatch recently became the ranking Republican on the Senate Finance Committee.

In a January 26 blog post, Ryan Ellis of Americans for Tax Reform stated that the position of his organization on tax reform is to cut taxes on corporations and nothing else; no reforms, no revenue-raisers, just more tax cuts that are not paid for in any way.

On January 24, the Center for Economic and Policy Research published a study on the deficit-reducing potential of a financial speculation tax.

In a January 23 blog post, NYU law professor Daniel Shaviro discussed some of the pitfalls in pursuing corporate tax reform. One is that if the corporate tax rate is reduced then non-corporate businesses that pay taxes at individual income tax rates will be more heavily taxed than big corporations.

On January 21, the Joint Committee on Taxation published a report on expiring tax provisions.

On January 20, the House Ways and Means Committee held its first hearing the new Congress on the issue of tax reform. Among the witnesses was economist Martin Sullivan, who testified that many large corporations pay effective corporate tax rates far below the statutory rate.

A January 20 CBS News/New York Times poll found that close to two-thirds of people would rather raise taxes than cut benefits for Social Security or Medicare in order to stabilize their finances. The poll also found that if taxes must be raised, 33 percent would favor a national sales tax, 32 percent would support restricting the mortgage interest deduction, 12 percent would raise the gasoline taxes, and 10 percent would tax health care benefits.

On January 19, the Joint Committee on Taxation published a report on the federal excise tax system.

I last posted items on this topic on January 17.

Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).

Bruce Bartlett’s columns focus on the intersection of politics and economics. The author of seven books, he worked in government for many years and was senior policy analyst in the Reagan White House.