Author: Alex Welch

December 19, 2006 01:44 PM | Permalink |

Over the last couple of years, Americans have faced rising gasoline prices — affecting their everyday lives as well as the economy in which they try to make a living — even as oil and gas companies enjoy record profits. Some suspect that the energy industry is becoming so consolidated that it does not face the sort of competition that would normally keep oil prices down to reasonable levels. Some progressives have argued that this is reason to impose a new tax on large oil and gas companies, perhaps even a new version of the windfall profits tax that was in place in the 1980s.

A better policy, at least in the short-term, would be to simply close the absurd loopholes that currently allow Big Oil to avoid paying its fair share. If the public debate revolves around whether or not Big Oil needs to be subsidized through the tax code at a time when oil prices are at an all-time high, it will be much more difficult for the energy companies to win the debate. As a practical policy matter, it makes sense for Congress to get energy companies to simply pay the taxes they would owe without special loopholes, before considering adding a new tax on their excess profits.

The Bush administration, which claims to support free-market policies, may find it difficult to oppose a proposal to stop using the tax code to subsidize large energy companies. This is particularly true of the latest round of energy tax breaks, which were added in the Energy Policy Act of 2005. These were so embarrassing that even President Bush (hardly an enemy of Big Oil) opposed them and only signed them into law when it was clear that they were necessary to get a bill passed through Congress.

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December 14, 2006 12:56 PM | Permalink |

Keeping the individual Alternative Minimum Tax from affecting tens of millions of innocent taxpayers is a problem that has bedeviled Congress ever since it passed President Bush’s big cuts in the regular income tax back in 2001 without simultaneously adjusting the AMT.

Over the past several years, Congress has repeatedly enacted temporary increases in the AMT exemption to protect most otherwise-affected families from having to deal with the AMT. But the cost of continuing these temporary patches has become prohibitive — exceeding $250 billion in lost revenues over the next four years.

Yet there is a straightforward way to pay for extending the temporary AMT relief through the end of this decade without busting the budget. This solution has the added advantage of returning the AMT to its original purpose: to assure that people with very high incomes pay a reasonable amount in federal income taxes.

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November 30, 2006 04:04 PM | Permalink |

Recently, there has been renewed interest in the idea of raising or eliminating the cap on earnings subject to the Social Security payroll tax and self-employment tax. This paper evaluates the effects of such a change and examines some of the issues it raises.

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November 16, 2006 01:46 PM | Permalink |

Control over the House and Senate will change when the new Congress begins in January, but one thing remains the same: members of Congress of both parties still love to shower corporate interests with targeted tax breaks to encourage campaign donations. A package of extensions for a group of tax breaks, known on Capitol Hill as the “tax extenders,” is attracting little notice among the general public but a fair amount of consternation among members of Congress. The package, with an estimated cost of over $38 billion, includes corporate tax breaks that are usually renewed every two years or so rather than enacted permanently — after all, corporate interests would have no incentive to make campaign contributions if they didn’t have to return to the Hill every year to grovel.

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October 20, 2006 04:05 PM | Permalink |

On October 11, the Bush administration announced that the fiscal 2006 budget deficit is $248 billion. In reality the budget deficit is much larger. Including the $186 billion borrowed from the Social Security Trust Fund, it is $434 billion for fiscal 2006. That brings total federal borrowing over the past five years to $2,413 billion.

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October 16, 2006 03:39 PM | Permalink |

Over the past six years, Congress and President Bush have made major changes to the federal tax system, dramatically affecting tax fairness, revenues and budget deficits. This Congressional Tax Report Card looks at the five key tax votes in the House and Senate that have produced these changes, plus one additional vote on an important recent tax bill that Congress narrowly rejected.

The Tax Report Card details how members of Congress voted on these six bills, and grades each member on the combination of his or her votes. The grading system is based on the combination of two criteria: tax fairness and fiscal responsibility — principles that all sides of the political debate at least pretend to honor.

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October 13, 2006 03:41 PM | Permalink |

After half a dozen major tax cuts in the first six years of the Bush administration—many of which have different phase-in dates, and almost all of which sunset completely after 2010—you need a scorecard to keep track of which cuts take effect each year. Here’s your scorecard: a year-by-year list of federal tax cuts (and hikes) taking effect between 2001 and 2010.

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October 10, 2006 03:43 PM | Permalink |

State Fact Sheets and Analysis

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August 30, 2006 01:47 PM | Permalink |

A fellow from PricewaterhouseCoopers, the big accounting, lobbying and corporate public relations firm, called me the other day to talk about a PwC project called the “Total Tax Contribution framework,” which he described as “an effort to enhance transparency in corporate tax reporting.” He buttered me up by citing my long history in exposing corporate tax avoidance, and then asked if he and some of his colleagues could sit down with me for an hour or so and talk about the project. To further interest me, he added that the idea had already been tried out in the United Kingdom, and had proven to be very popular there.

I was wary. So I asked him to e-mail me some background materials. The next day, I received two colorful brochures, designed to pitch the “Total Tax Contribution framework” to PwC’s corporate clients. A quick look confirmed my suspicions. Amazingly, PwC is trying to get corporations to pretend their tax bills are bigger than they really are, by counting not just their actual taxes, but also taxes they don’t pay, such as those paid by their customers, workers, suppliers and so forth!

PwC’s materials suggest that such misinformation might be usefully employed by companies in things such as phonybaloney “corporate responsibility reports” and “PR and marketing campaigns.” The brochures offer PwC’s help in doing so, presumably for a hefty fee.

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August 4, 2006 02:06 PM | Permalink |

Citizens for Tax Justice congratulates the U.S. Senate on its decision to reject the effort to hand a new $62 billion a year estate tax break to a small group of America’s wealthiest families. A sufficient minority of Senators has said “no” to another expensive tax giveaway to the rich at a time when our nation is sliding deeper and deeper into debt.

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