IRS Funding Cuts Have Damaging Effects

April 1, 2015 at 4:01 pm

Deep cuts to the Internal Revenue Service (IRS) budget over the past five years have resulted in “truly an abysmal level of service” to taxpayers, IRS Commissioner John Koskinen noted in a speech yesterday.  That’s one more reminder why, as our updated paper explains, policymakers should give the IRS the funds it needs to do its job effectively.

Policymakers have cut the IRS budget by 18 percent since 2010, adjusted for inflation.  These cuts — coming at the same time that the IRS’ responsibilities have grown — have forced the agency to significantly cut its workforce and scale back employee training (see chart). … Read more

Case for “Single Sales Factor” Tax Cut Now Much Weaker

April 1, 2015 at 10:39 am

Lawmakers in North Carolina, North Dakota, and Tennessee are considering a costly corporate tax giveaway in hopes of attracting or retaining manufacturing jobs.  But a new study casts serious doubt on the research that has long served as the main justification for this tax break.

Called the “single sales factor formula,” the tax break enables multistate corporations to pay income taxes based only on their sales to consumers in that state.  In states without this tax break, a corporation’s taxes typically reflect the shares of its property and payroll, as well as sales, located in the state.… Read more

The Basics of Disability Insurance, Updated

March 31, 2015 at 4:42 pm

We’ve updated two important pieces about Disability Insurance (DI), an integral part of Social Security that protects workers who can’t support themselves anymore because of a severe medical impairment, to reflect the latest statistics and research.

The first of those pieces, our popular chart book, presents nearly two dozen graphs that illustrate key DI facts:  why it’s important, why the DI rolls have grown, who receives benefits, and what financing issues the program faces.

The chart below, for example, shows that most DI applications are rejected. … Read more

Future SNAP Cuts Would Come on Top of Recent Cuts

March 31, 2015 at 12:29 pm

Policymakers considering SNAP cuts this year — the House budget calls for $125 billion in cuts over the next decade, for example — should remember that any future cuts would come on top of cuts that occurred recently or are occurring under current law.  Roughly 1 million unemployed, childless adults are slated to lose SNAP over the course of 2016 as a three-month limit on benefits returns in many areas.  And, as our new paper recaps, nearly every SNAP recipient experienced a benefit cut averaging 7 percent in November 2013 when the benefit boost in the 2009 Recovery Act expired.… Read more

Bernanke, Bernstein, et al. on Full Employment

March 30, 2015 at 3:06 pm

Update, April 3:  We’ve added the video to this post.

CBPP’s Full Employment Project hosted an event today featuring a keynote speech by former Federal Reserve Board Chairman Ben Bernanke and a discussion of leading economists about policies that can help restore and maintain full employment. 

In conjunction with this event, we released five papers by economists on how to start the nation on a path back to full employment:

Read more

States Looking to Strengthen Earned Income Tax Credits

March 30, 2015 at 10:56 am

As states continue to turn the corner on the Great Recession, policymakers in a number of states are looking to help low-paid working families by creating or expanding refundable state earned income tax credits (EITCs). These credits build on the federal EITC, which promotes work, helps families make ends meet, lifts them out of poverty, and yields lasting benefits for kids, studies show.

States considering EITC expansions include:

  • Illinois, where lawmakers have proposed doubling the size of the EITC to 20 percent of the federal credit, helping around 1 million working households.
Read more

In Case You Missed It . . .

March 27, 2015 at 4:03 pm

This week on Off the Charts, we focused on the congressional budget plans, federal and state taxes, health, and housing.

  • On the congressional budget plans, Robert Greenstein pointed out that despite Republicans’ anti-fraud rhetoric, the House and Senate budget plans leave out funding for “program integrity” activities that are proven to save money. David Reich noted that the plans have no plans to fix sequestration’s tight constraints on non-entitlement programs and described how both plans will dramatically cut transportation infrastructure funding.  
Read more

House, Senate Budgets Have Big Cuts in Transportation Infrastructure

March 27, 2015 at 10:49 am

Now that the House and Senate have both passed their budget plans, here’s one more problem with them: they’d cut highway construction and other transportation infrastructure funding over the next decade by 28 percent and 22 percent, respectively, below the cost of maintaining current funding levels.  Although the plans cite the Highway Trust Fund shortfall to justify these cuts, cutting investments in highways and mass transit isn’t the right solution.

The House budget calls for cutting mandatory funding in the transportation section of the budget by almost 90 percent in 2016, from $54 billion to $6 billion, as the chart below shows. … Read more

A Congressional Budget Dictionary

March 27, 2015 at 10:03 am

Congressional Republicans are using complicated — and likely poll-tested — language to make their budget plans’ deep spending cuts and dramatic structural changes in key programs for low- and moderate-income people sound benign and even positive.

As Budget Committee member Sen. Chuck Grassley (R-IA) noted before the plans’ release, “From the standpoint of a budget, the less words of the English language you use, the better off you are.”

While it’s common practice for lawmakers to use language that puts their plans in the best possible light, it’s important to understand exactly what they mean. … Read more

Senate Should Follow House and Streamline Rental Assistance for People With Fixed Incomes

March 26, 2015 at 10:50 am

The Senate should move quickly to approve a measure that the House passed this week to reduce administrative costs for the state and local housing agencies and private owners that administer federal rental assistance, while easing compliance burdens for many low-income tenants.

The bipartisan Tenant Income Verification Relief Act (TIVRA), co-sponsored by House Financial Services Committee members Earl Perlmutter (D-CO) and Steve Stivers (R-OH), allows agencies and owners to review tenants’ incomes every three years — instead of annually — for households with fixed incomes helped by programs such as Housing Choice Vouchers, public housing, and Section 8 project-based rental assistance.… Read more

Estate Tax Repeal: A Misguided and Costly Policy

March 25, 2015 at 5:29 pm

Eliminating the federal estate tax on inherited wealth, which the House Ways and Means Committee approved today and which we’ve explained would increase deficits and inequality, is a misguided — and expensive — policy, new data show.  New cost and distributional estimates from the Joint Committee on Taxation (JCT) confirm that repeal would reduce revenues by $269 billion from 2016 through 2025 (adding $320 billion to deficits once the additional interest cost on the national debt is included), with the entire benefit going to the nation’s roughly 5,400 wealthiest estates.… Read more

Fixing Sequestration Is Key to Restoring Housing Vouchers and Reducing Homelessness

March 25, 2015 at 4:14 pm

With millions of renters facing unaffordable housing costs and homelessness a large problem in many areas, policymakers should fully reverse the loss of 100,000 housing vouchers due to the sequestration budget cuts.  As our new report explains, the President’s 2016 budget would finish the job Congress began in 2014 of restoring all lost vouchers.  Unfortunately, the budget plans before the House and Senate this week not only have no plan to fix sequestration; they’d impose further cuts in programs for low-income people such as housing vouchers.… Read more