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Taxing Wealth

July 15, 2015 Comments off

Taxing Wealth
Source: Federal Reserve Bank of Minneapolis

Some have proposed wealth taxation as a means of reducing economic inequality, but such proposals are premature. While economic theory and data measurement have solid grounding when analyzing other forms of taxation, such as income or sales taxes, this is not the case for wealth

Total estimates of the two most widely used measures of wealth, fixed assets and net worth, vary widely over the six decades for which data are available. Trend lines in these two wealth measures are rarely correlated. In addition, the relationship between the two—and explanation of why they differ so radically—remains a theoretical puzzle for economists. Given this state of affairs, accurate predictions for the impact, and design, of wealth taxation policies are not yet possible.

The U.S. Investment Tax Credit for Solar Energy: Alternatives to the Anticipated 2017 Step-Down

July 6, 2015 Comments off

The U.S. Investment Tax Credit for Solar Energy: Alternatives to the Anticipated 2017 Step-Down
Source: Stanford Graduate School of Business

The federal Investment Tax Credit (ITC) for solar installations is scheduled to step-down from 30% to 10% at the beginning of 2017 for corporate investors. This raises the question whether solar PV will be cost competitive post 2016 in the U.S. We examine the economics of solar PV for a sample of U.S. states and industry segments. Our model calculations indicate that for almost all of these settings the anticipated ITC step-down would render solar PV uncompetitive by early 2017, raising the specter of a ‘cliff’ for the solar industry. We identify and evaluate an alternative phase-down scenario that would reduce the ITC gradually and eliminate it completely by 2024. Provided the solar industry can maintain the pace of cost reductions demonstrated in past years, our projections indicated that solar PV would remain broadly competitive, even as federal tax support would be gradually diminished, and ultimately eliminated, under the alternative phase-down-scenario.

A Tax Reform Primer for the 2016 Presidential Candidates

June 25, 2015 Comments off

A Tax Reform Primer for the 2016 Presidential Candidates
Source: Heritage Foundation

America needs tax reform. As the 2016 presidential campaign progresses, candidates seeking the presidency will increasingly face questions about how they would address federal tax policy—foremost among them, if they support tax reform and how they would implement it should they become President. There is clear public support for major tax reform: 71 percent of the American public believes that the U.S. tax system needs major changes and reform. Only 5 percent think the tax system is working just fine. Tax reform is a complicated issue that encompasses a wide variety of sub-issues with which candidates will need to grapple if they are to answer those questions effectively. This Heritage Foundation tax primer will help them prepare.

Taxpayer Service, Case Closures, and Dollars Collected Suffer from Budget Cuts, TIGTA Finds

June 19, 2015 Comments off

Taxpayer Service, Case Closures, and Dollars Collected Suffer from Budget Cuts, TIGTA Finds (PDF)
Source: Treasury Inspector General for Tax Administration
From email:

Reduced budgets and collection resources at the Internal Revenue Service (IRS) have resulted in declines in taxpayer service, case closures, and dollars collected, according to a report released today by the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA initiated its audit to determine the impact that IRS budget reductions have had on collection programs and employees.

Between Fiscal Years 2010 and 2015, the IRS’s budget has been reduced by more than $1.2 billion. Since Fiscal Year 2010, decreases in the IRS’s budget have resulted in the reduction of 21 percent of Automated Collection Service (ACS) contact representatives and 28 percent of Field Collection revenue officers.

This has resulted in the ACS answering 25 percent fewer taxpayer telephone calls since 2011, because there were fewer ACS contact representatives available to answer them. Taxpayers whose calls were answered spent an average of eight minutes (97 percent) longer waiting for a contact representative. In addition, ACS inventory grew and became older, and more cases were not resolved and were transferred to the Queue, a data base that houses delinquent accounts that the IRS is unable to work.

Alternative Policies to Agricultural Export Taxes That Are Less Market Distorting

June 11, 2015 Comments off

Alternative Policies to Agricultural Export Taxes That Are Less Market Distorting
Source: USDA Economic Research Service

Many economists believe that export restrictions increase world prices for food commodities, thereby exacerbating food insecurity and poverty among the world’s poorest people. The authors examine alternative policies to a conventional export tax that are less market distorting and less welfare diminishing.

New Report Finds Drivers Pay Less Than Half the Cost of Roads

June 8, 2015 Comments off

New Report Finds Drivers Pay Less Than Half the Cost of Roads
Source: Frontier Group and U.S. PIRG

As Congress struggles to renew the federal transportation law, a new report from CALPIRG Education Fund and the Frontier Group finds that drivers currently pay less than half the total cost of roads, and argues that while increasing gas taxes could fill the shortfall, it would leave other problems unaddressed.

The new report, “Who Pays for Roads? How the ‘Users Pays’ Myth Gets in the Way of Solutions to America’s Transportation Problems” exposes the widening gap between how Californians think we pay for transportation – through gas taxes and other fees – and how we actually do.

2014 IRS Research Bulletin

June 3, 2015 Comments off

2014 IRS Research Bulletin
Source: Internal Revenue Service
From email:

The 2014 IRS Research Bulletin features selected papers from the IRS-TPC Research Conference, held at the Urban Institute in Washington, DC, on June 19, 2014. The conference highlighted research on tax compliance and administration, and facilitated dialogue among IRS researchers, tax experts from other countries, academic researchers, Federal agencies, and private sector experts.

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