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Articles by Scott Eastman
Wisconsin Knights of Columbus gather
The Wisconsin State Council of the Knights of Columbus held its 122nd annual meeting in Green Bay April 28-30. On Friday, April 28, they held their Blue Mass in honor of “men and women in uniform, military, police, fire and EMTs” (emergency medical technicians). The Mass was at St. Francis Xavier Cathedral and Bishop David Ricken was main celebrant with other bishops and priests as con-celebrants.
Evaluating Mark-to-Market Taxation of Capital Gains
Key Findings Several politicians have suggested eliminating deferral of capital gains (appreciation in an asset’s price over original purchase price) via a mark-to-market system as one way to generate revenue in a progressive manner and reduce inequality. A mark-to-market system would tax accrued gains on assets annually and eliminate the deferral advantage of the current capital gains tax system.
The Home Mortgage Interest Deduction
Key Findings Currently, the home mortgage interest deductionThe mortgage interest deduction is an itemized deduction for interest paid on home mortgages. It reduces households’ taxable incomes and, consequently, their total taxes paid. The Tax Cuts and Jobs Act (TCJA) reduced the amount of principal and limited the types of loans that qualify for the deduction.
The Home Mortgage Interest Deduction
Key Findings Currently, the home mortgage interest deduction (HMID) allows itemizing homeowners to deduct mortgage interest paid on up to $750,000 worth of principal, on either their first or second residence. This limitation was introduced by the Tax Cuts and Jobs Act (TCJA) and will revert to $1 million after 2025.
How Many Taxpayers Itemize Under Current Law?
The Tax Cuts and Jobs Act (TCJA) increased the standard deductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act (TCJA) as an incentive for taxpayers not to itemize deductions when filing their federal income taxes. from $6,500 to $12,000 for individuals (and from $13,000 to $24,000 for married filers) and reduced the value of certain itemized deductions.
How Many Taxpayers Itemize Under Current Law?
The Tax Cuts and Jobs Act (TCJA) increased the standard deduction from $6,500 to $12,000 for individuals (and from $13,000 to $24,000 for married filers) and reduced the value of certain itemized deductions. These changes reduce the percentage of taxpayers that itemize deductions and limit the ability of the tax code to encourage certain types of spending. Itemizing allows taxpayers to deduct certain expenses from their taxable income.
Most Expensive U.S. Cities & Metros, 2019
In May, the U.S. Bureau of Economic Analysis released new data covering differences in purchasing power in different metropolitan and nonmetropolitan areas in 2017. In layman’s terms, the data compares how much $100 can buy in different regions of the country. This post focuses on comparing the purchasing power in different metropolitan areas around the country. There are large differences in price level by region.
What is the Real Value of $100 in Your State?
This map shows the real value of $100 in each state. You can also see the real value of $100 in your metro area. Prices for the same goods are often much cheaper in the more rural areas of states like Missouri or Ohio than they are around large cities in states like New York or California. As a result, the same amount of cash can buy you comparatively more in a low-price state than in a high-price state.
Unpacking Biden’s Tax Plan for Capital Gains
Democratic presidential candidate and former Vice President Joe Biden recently released a health-care plan that, according to his campaign, would cost $750 billion over a decade. To finance the health-care plan, he would 1) increase the top marginal income tax rate on long-term capital gains to 39.6 percent for taxpayers earning more than $1 million annually, and 2) eliminate a tax expenditure called “step-up in basis” that allows decedents to pass capital gains to heirs without tax.
Democrats say they want to tax the rich, but they’re also pushing a terrible tax idea that would be a big win for the wealthy
There has been a fight over the Tax Cuts and Jobs Act's cap on the state and local taxes (SALT) paid deduction. Lawmakers in high tax states, particularly Democrats, are pushing for a repeal of the $10,000 cap on the SALT deduction. But such a repeal would mostly benefit high-income taxpayers and force the federal government to forgo $668 billion in tax revenue over the next 10 years. Given these issues, Congress should keep the SALT cap right where it is.
“Cadillac Tax,” While Likely Repealed, Would Control Health Care Costs
Tomorrow, the House of Representatives will vote on H.R. 748, sponsored by Representative Joe Courtney (D-CT). This bill would repeal the excise tax on high-cost employer-sponsored health coverage, otherwise known as the “Cadillac tax,” for taxable years starting after 2019. While repealing is likely to pass the House, ideally, the tax should be implemented. It isn’t perfect, but it would limit our tax code’s subsidization of employer-sponsored insurance and likely reduce health-care costs.
Congress needs to stop kicking the can and finally implement an Obamacare tax that could help bring down healthcare costs
The House of Representatives is considering a bill to permanently do away with "Obamacare's" "Cadillac tax," a tax on very generous employer-sponsored healthcare plans. But the Cadillac tax is actually good policy and can help to fight rising healthcare costs. The Cadillac tax is also a progressive way to raise revenue. Scott Eastman is federal research manager at the Tax Foundation, where he coordinates research production for the Center for Federal Tax Policy.
Are Opportunity Zones Working as Intended?
Politicians continue to tout the benefits of opportunity zones, but economists continue to be skeptical. The findings from a new study underscore concerns that the Opportunity Zones program, while it may be welcomed by those directly benefiting from the program’s tax breaks, may not broadly revitalize economically distressed communities. Economists Alan Sage, Mike Langen, and Alex Van de Minne looked at the effect of opportunity zone designation on property prices.
The Cadillac Tax | Income Tax Exclusion | Employer-Sponsored Insurance
Key Findings The Patient Protection and Affordable Care Act (PPACA) imposed an excise tax on high-cost employer-sponsored health coverage. This “Cadillac” tax was established to help pay for the PPACA’s provisions and to reduce health-care costs by limiting the income tax exclusion for employer-sponsored insurance. The tax has been delayed on several occasions but is currently scheduled to be enacted in 2022.
Sen. Cory Booker’s Renters Tax Credit and It's Unintended Consequences
On June 5, Senator and presidential candidate Cory Booker (D-NJ) released a plan to increase access to affordable housing. While this proposal would likely decrease the amount that low-income individuals pay in rent, the policy could perpetuate the trend towards high-cost rentals and have pervasive effects on the housing market.
Understanding Business Taxes in America
Unlike the individual tax code, it’s often easy to view the business tax code impersonally. Who are the workers, consumers, and shareholders who interact with businesses in the U.S.? What forms do these businesses take? How do business taxes impact people’s lives? It is essential we answer these questions in order to design a business tax system that is simple, efficient, and enables economic progress.
The Tax Gap Tops $500 Billion a Year
The Joint Committee on Taxation (JCT) recently released a report entitled “Overview of the Tax Gap.” The tax gap is the difference between taxes paid and taxes owed, and this gap can exist for a few reasons. Taxpayers may report less than their full tax liability on their return (underreporting), pay less taxes than owed (underpayment), or simply not file a tax return at all (non-filing).
Marginal Tax Rates for Pass-through Businesses Vary by State
Pass-through businesses—businesses like sole proprietorships, S corporations, and partnerships that “pass” their income “through” to their owner’s income tax returns and pay the ordinary individual income tax—make up a majority of U.S. businesses. Marginal tax rates vary for pass-throughs depending upon the state in which they operate because of differences in how states tax individual income. In 2016, pass-through businesses made up at least half of each state’s private sector workforce.
State Corporate Income Taxes Increase Tax Burden on Corporate Profits
The Tax Cuts and Jobs Act (TCJA) reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent. However, most U.S. states also tax corporate income. These state-level taxes mean the average statutory corporate income tax rate in the U.S., which combines the average of state corporate income tax rates with the federal corporate income tax rate, is 25.8 percent in 2019. State-level corporate income tax rates vary across the country.
Corporate and Pass-through Business Income and Returns Since 1980
Businesses in America broadly fall into two categories: C corporations, which pay the corporate income tax, and pass throughs—such as partnerships, S corporations, LLCs, and sole proprietorships—which “pass” their income “through” to their owner’s income tax returns and pay the ordinary individual income tax. Understanding the composition and characteristics of American businesses provides important context for tax policy debates.
The TCJA Lowered Taxes for Individuals Throughout Income Groups
Tomorrow, the House Committee on Ways and Means will hold a hearing on the distributional effects of 2017’s Tax Cuts and Jobs Act (TCJA). The Joint Committee on Taxation (JCT) has prepared a distributional analysis of the TCJA’s impact, focusing generally on how the TCJA will impact taxpayers in 2019 relative to prior law. The report shows that the TCJA cut taxes for individuals across all income groups, including by more than $500 for almost half of taxpayers.
Increasing Individual Income Tax Rates Would Impact U.S. Businesses
Most U.S. businesses are not subject to the corporate income tax. Instead, most U.S. businesses are pass-through businesses, such as partnerships, S corporations, LLCs, and sole proprietorships. These businesses “pass” their income “through” to their owners, which is reported on the owners’ individual income tax returns. Overall, pass-through businesses account for more net income than corporations, meaning an increase in individual income tax rates will impact a majority of U.S. businesses.
Is a Capital Gains Tax Rate Increase the Right Way to Generate Revenue?
In February, billionaires Warren Buffett and Bill Gates suggested increasing taxes on the wealthy to pay for policies that would help people without market skills keep pace in an increasingly specialized economy. Both have proposed increasing tax rates for capital gains as one potential way to generate revenue for this purpose. Long-term capital gains, or appreciation on assets held for more than one year, are taxed at a lower rate than ordinary income when realized.
Game of zones: Tax break for distressed communities could come up short
If the "opportunity zones" program was an obscure provision when it was slipped into the Tax Cuts and Jobs Act, it isn’t now. Investors, with the help of their tax attorneys, are busy this new year figuring out how to exploit the generous array of capital gains tax breaks afforded by more than 8,700 designated distressed zones across the country.
Opportunity Zones: What We Know and What We Don’t
Key Findings The Tax Cuts and Jobs Act created the Opportunity Zones program to spur investment in economically distressed census tracts. Opportunity zones reduce capital gains taxes for individuals and businesses who invest in qualified opportunity zones. Opportunity zones were estimated to cost $1.6 billion in revenue from 2018-2027.
What Does the Catalonia Vote Mean for Spain?
Scott Eastman, associate professor of transnational history at Creighton University, is the author, most recently, of the book "Preaching Spanish Nationalism across the Hispanic Atlantic, 1759-1823." There were “songs all day and far into the night,” and “down the Ramblas, the wide central artery of the town…crowds of people streamed constantly to and fro.” George Orwell’s portrait of the revolution that shaped the city of Barcelona in the first stages of the Spanish Civil War in 1936 might...
Only a Grinch Would Tax Christmas Trees
In a development that would surely warm the “two sizes too small” heart of the Grinch, the “Christmas Tree Tax” is being collected for the first time this year. This is a tax levied on the sale of each Christmas tree in order to encourage the sale of ... Christmas trees. Christmas trees have been a hallmark of American Christmas celebrations since the late 1800s, when the tradition spread from Europe.
Only a Grinch Would Tax Christmas Trees
In a development that would surely warm the “two sizes too small” heart of the Grinch, the “Christmas Tree Tax” is being collected for the first time this year. This is a tax levied on the sale of each Christmas tree in order to encourage the sale of ... Christmas trees.Christmas trees have been a hallmark of American Christmas celebrations since the late 1800s, when the tradition spread from Europe.
The Marietta Daily Journal
In a development that would surely warm the “two sizes too small” heart of the Grinch, the “Christmas Tree Tax” is being collected for the first time this year. This is a tax levied on the sale of each Christmas tree in order to encourage the sale of ... Christmas trees.Christmas trees have been a hallmark of American Christmas celebrations since the late 1800s, when the tradition spread from Europe.
The Marietta Daily Journal
In a development that would surely warm the “two sizes too small” heart of the Grinch, the “Christmas Tree Tax” is being collected for the first time this year. This is a tax levied on the sale of each Christmas tree in order to encourage the sale of ... Christmas trees.Christmas trees have been a hallmark of American Christmas celebrations since the late 1800s, when the tradition spread from Europe.
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