Author: Alex Welch

June 15, 2010 03:37 PM | Permalink |

The tax extenders bill (H.R. 4213) currently pending in Congress contains a provision to close what is commonly known as the “John Edwards” loophole, which allows some shareholder-employees of “S corporations” to avoid paying the Medicare payroll tax on their earnings.  An amendment offered by Senators Olympia Snowe (R-ME) and Mike Enzi (R-WY) would remove this reform and preserve the loophole. This amendment should be rejected. Despite what these lawmakers may believe, closing this loophole will actually help most small businesses, which are currently subsidizing the minority who abuse it to avoid payroll taxes.

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June 3, 2010 01:22 PM | Permalink |

Investment fund managers have put forth outlandish arguments in defense of the “carried interest” loophole that allows them to pay taxes at lower rates than their secretaries. These arguments, which are gaining traction among some Senators, should be dismissed.

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May 27, 2010 07:19 PM | Permalink |

A recent paper from the National Foreign Trade Council (NFTC), a lobby for multinational U.S. corporations, unfairly criticizes provisions to end abuses of the foreign tax credit. These provisions, which are included in H.R. 4213, the jobs and “extenders” bill, would make our corporate tax system fairer and more rational.

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May 20, 2010 06:17 PM | Permalink |

While we have never supported the “tax extenders,” we believe that this is a more responsible approach than Congress used in the past, when the tax extenders were deficit-financed. We
also believe that the loophole-closing provisions used to pay for them will enhance tax fairness. For these reasons, we believe passage of this bill would be a major victory in that it shows Congress is finally putting the economic needs of ordinary Americans ahead of tax cuts for the wealthy and powerful.

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May 13, 2010 11:56 AM | Permalink |

As Congress prepares to take up legislation to boost small business job creation in the following weeks, some lawmakers argue that the legislation must extend parts of the Bush tax cuts that benefit the very rich. Two ideas along these lines are being discussed. One is to extend income tax reductions for the very rich, at least for taxpayers who can be somehow classified as “small business” taxpayers. The second is to eliminate most of the federal tax on the estates of millionaires. As this report explains, these proposals would allow the rich to continue to enjoy most of the tax cuts they received under President Bush while doing nothing to create or protect jobs.

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May 13, 2010 11:50 AM | Permalink |

Congress may be ready to close the “carried interest” loophole, which allows wealthy investment fund managers to pay taxes at lower rates than middle-income people. Carried interest is the share of profits that investors pay to compensate certain people for managing their money. The investment managers who receive carried interest have been allowed to pretend that this compensation represents profits on money they have invested themselves, thus entitling them to pay taxes at a lower rate.

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April 22, 2010 10:00 AM | Permalink |

A great deal of government “spending” is done through the tax code in the form of special breaks and loopholes known as tax expenditures. The figures in the report illustrate that tax expenditures are a significant portion of federal spending and cannot be ignored as Congress addresses the budget deficit.

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April 22, 2010 08:00 AM | Permalink |

The National Association of Manufacturers (NAM) has recently argued that President Obama’s proposal to allow the Bush income tax cuts to expire for the richest two percent will hurt small business employment because many small businesses are organized as “subchapter S corporations.”

The reality is that only 2.1 percent of small business taxpayers both (a) are rich enough to lose their Bush tax cuts under President Obama’s proposals, and (b) receive most of their income from an S corporation that they own. Further, S corporations are not necessarily as “small” as many people assume.

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April 15, 2010 10:33 AM | Permalink |

Click Here for the 2013 Edition of this Report

Conservative pundits and media outlets have seized upon an estimate that 47 percent of taxpayers owe no federal income tax for 2009. This statistic has morphed into the claim by conservatives that “47 percent of all Americans don’t pay any taxes.” The conservative pundits are wrong. It’s true that many taxpayers don’t pay federal income taxes, but they still pay federal payroll taxes (and some federal excise taxes) and also pay state and local taxes. Most of these other taxes are regressive, meaning they take a larger share of a poor or middle-class family’s income than they take from a rich family.

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April 13, 2010 10:24 AM | Permalink |

CTJ has new state-specific reports that aim to clear up this widespread misunderstanding over President Obama’s tax policies. They show that the President cut taxes for working people at all income levels for 2009 and they show who was helped by each individual tax break.

Read the fact sheet and the report for your state.

 

 

 

 

 

 

 

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