DOCSLIB.ORG

Retirement Security for Women

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Retirement Security for Women RSP-PB_Women_9 3/24/08 5:19 PM Page 1 The Retirement Security Project Retirement Security for Women: Progress To Date and Policies for Tomorrow Nº 2008-1 The Retirement Security Project RSP-PB_Women_9 3/24/08 5:19 PM Page 2 Common sense reforms, realesults world www.retirementsecurityproject.org Advisory Board Bruce Bartlett Washington Times Columnist Michael Graetz The Retirement Security Project Justus S. Hotchkiss Professor of Law, Yale Law School is supported by Daniel Halperin Stanley S. Surrey Professor of Law, The Pew Charitable Trusts Harvard Law School in partnership with Nancy Killefer Director, McKinsey & Co. Georgetown University's Robert Rubin Director and Chairman of the Public Policy Institute and Executive Committee, Citigroup Inc. John Shoven the Brookings Institution. Charles R. Schwab Professor of Economics and Director, Stanford Institute for Economic Policy Research, Stanford University C. Eugene Steuerle Senior Fellow, The Urban Institute RSP-PB_Women_9 3/24/08 5:19 PM Page 3 Retirement Security for Women: Progress To Date and Policies for Tomorrow Leslie E. Papke, Lina Walker, and Michael Dworsky1 Introduction changes over time in the structure of The shift from pensions — the shift from defined benefit As the baby boomers approach to defined contribution plans — have defined benefit to retirement, hardly a day passes without differentially affected the ability of men reference to concerns — in media outlets, and women to prepare for retirement. defined contribution policy discussions, and research circles — Defined contribution (DC) plans tend to about whether households are saving have faster vesting schedules and they plans - have enough to finance adequate living also place less emphasis on long job standards in retirement.2 Most of this tenures than defined benefit (DB) plans — differentially affected discussion, however, focuses on the these attributes help women save given generation as a whole. In this paper, we their employment patterns. The loss of life the ability of men explore financial prospects and problems annuities through DB plans, however, for women and policies that could hurts women more than men because and women to materially improve their financial security in women tend to live longer and benefit retirement. more from the protection that guaranteed prepare for lifetime income provides against outliving The last several decades have seen major their resources. retirement. shifts in the economic opportunities and challenges facing women. These shifts Second, marriage patterns and living imply that women face a number of issues arrangements have been changing in that are often not addressed sufficiently in ways that adversely affect women's retirement policy debates. economic outcomes. Marriage rates have been falling and, in recent years, most of First, as has been frequently noted and that decline has been among women with justly celebrated, women's education, lower educational attainment. Single earnings, and employment have risen motherhood has also increased substantially over time. Nevertheless, dramatically over the same period. Marital because of the demands of child-birth, status and economic status are closely child-rearing, adult care, and other factors, linked for women. The decline in marriage women still tend to experience shorter and rates, particularly among households with more interrupted careers than men do, lower education attainment, and the rise and are more likely to work either part-time in single motherhood increase the or in low-paying occupations. The likelihood that these families will be ill- resulting work patterns adversely affect prepared for retirement. women's ability to save for retirement and to accumulate pension rights. Third, women are likely to experience longer retirement periods than men Because of these differences in work and because they tend to live longer than men retirement patterns, the substantial and to stop working at earlier ages in The Retirement Security Project • Retirement Security for Women: Progress To Date and Policies for Tomorrow february 2008 1 RSP-PB_Women_9 3/24/08 5:19 PM Page 4 order to retire at the same time as their, • Establishing automatic 401(k) plans typically, older husbands. Not only do and automatic IRAs, so that almost all elderly women have to fund a longer workers would be enrolled in a plan retirement period, they also face the where the default was set so that they prospect of transitioning to poverty when would participate unless they actively their husband dies. This is due, in part, to chose to withdraw; expenses incurred at their husband's death and, in part, to the loss of his • Expanding, rationalizing, and making income. As a result, women have a refundable the Saver's Credit, so that greater need for retirement saving and for moderate- and low-income workers forms of wealth that protect against would face clear and rewarding outliving their assets. incentives to accumulate retirement wealth; In this paper, we describe the underlying reasons for the differences between men • Reforming the asset tests that and women's retirement preparedness accompany federal means-tested and the challenges for women from lower- benefit programs, so that single income families (Section II). In Section III, mothers are not penalized for we delineate a series of specific policies accumulating retirement saving; that could materially improve the economic status of women in retirement. • Increasing awareness among tax filers These policies include: and preparers that individual income tax refunds may be directly deposited • Allowing care-givers to contribute to an by the IRS into multiple accounts, so Individual Retirement Account (IRA) and that tax filers have an easy and simple providing Social Security credit for way of saving some portion of their episodes of care-giving, so that people refund. who interrupt market work to care for family members are not penalized in In Section IV, we highlight a number of terms of retirement saving; other areas where more research and policies are needed, including increased ability to annuitize retirement resources, to access housing equity for retirement consumption purposes, and to pay for long-term care. The Retirement Security Project • Retirement Security for Women: Progress To Date and Policies for Tomorrow 2 february 2008 RSP-PB_Women_9 3/24/08 5:19 PM Page 5 The Changing Economic Landscape for Women Figure 1: Labor Force Participation Rates by Gender 100 A. Employment and Wages 90 80 Men Women have experienced substantial gains in the labor 70 market over the last several decades. The share of women 60 in the labor force has grown from under 38 percent in 1960 50 Women Percent to almost 60 percent in 2000 (See Figure 1). Women have 40 also made concomitant gains in educational attainment 30 levels and wage rates. Today, a higher proportion of women 20 than men graduate from college (Figure 2) and women's 10 earnings are approaching the level of men's. These gains 0 made by women have been driven, in part, by institutional 1960 1965 1970 1975 1980 1985 1990 1995 2000 Year changes that created employment opportunities for women Source: Robert Szafran, “Age-adjusted labor force participation rates, 1960-2045,” and, in part, by changes in social norms that transformed Monthly Labor Review, September 2002: 25-38. the perception of women's work from a “job” to “career” and galvanized women's participation in the labor force.3 Despite the improvements in women's employment Figure 2: Percent of 25-29 Year Olds with a Bachelor’s Degree or Higher, by Gender outcomes, gender differences in employment persist in 35 several key aspects. First, women are more likely to choose 30 jobs that are part-time, have shorter careers in the paid job Women market, and experience shorter job tenure at any given point 25 in time than men.4 Second, despite the fact that many women have entered highly-skilled and highly-paid 20 Men Percent occupations (Figure 3) the majority of women still work in 15 occupations or industries with lower earnings.5 Women continue to account for a higher proportion of workers in 10 service and sales/office occupations, which tend to have 5 lower earnings relative to other occupations. Even among professional workers, women are more likely to be employed 0 1940 1950 1960 1970 1980 1990 2000 in professions with lower relative earnings, such as Year education, training, and library occupations, rather than Source: Census Bureau (2000). computer and mathematical occupations (Figure 4). Figure 4: Female Median Weekly Wages, Across and Within Occupation Groups Figure 3: Women’s Employment and Change in Women’s Share of Employment between 1975 and 1995, by Occupation Median 70 Weekly Wage: $558 Percent in occupation Executive, administrative, and managerial +95* 1975 1995 60 $411 subgroups with wages above the median Professional specialty +17 $918 50 Percent in occupation Technicians and related support +24 subgroups with wages Sales occupation +18 below the media 40 Administrative support, including clerical +3 Protective service +124 30 $523 Handlers, equipment cleaners, helpers, and laborers +13 20 Service , except private household and protective -2 Transportation and material moving occupations +98 Percent Female Workers Percent 10 $621 Machine operators, assemblers, and inspectors -3 Precision production, craft, and repair +62 0 Sales and Service Management, Production, Natural resources, Service, except private household and protective +1 office occupations
Load more

Recommended publications
  • Monica Prasad Northwestern University Department of Sociology
    SPRING 2016 NEW YORK UNIVERSITY SCHOOL OF LAW COLLOQUIUM ON TAX POLICY AND PUBLIC FINANCE “The Popular Origins of Neoliberalism in the Reagan Tax Cut of 1981” Monica Prasad Northwestern University Department of Sociology May 3, 2016 Vanderbilt-208 Time: 4:00-5:50 pm Number 14 SCHEDULE FOR 2016 NYU TAX POLICY COLLOQUIUM (All sessions meet on Tuesdays from 4-5:50 pm in Vanderbilt 208, NYU Law School) 1. January 19 – Eric Talley, Columbia Law School. “Corporate Inversions and the unbundling of Regulatory Competition.” 2. January 26 – Michael Simkovic, Seton Hall Law School. “The Knowledge Tax.” 3. February 2 – Lucy Martin, University of North Carolina at Chapel Hill, Department of Political Science. “The Structure of American Income Tax Policy Preferences.” 4. February 9 – Donald Marron, Urban Institute. “Should Governments Tax Unhealthy Foods and Drinks?" 5. February 23 – Reuven S. Avi-Yonah, University of Michigan Law School. “Evaluating BEPS” 6. March 1 – Kevin Markle, University of Iowa Business School. “The Effect of Financial Constraints on Income Shifting by U.S. Multinationals.” 7. March 8 – Theodore P. Seto, Loyola Law School, Los Angeles. “Preference-Shifting and the Non-Falsifiability of Optimal Tax Theory.” 8. March 22 – James Kwak, University of Connecticut School of Law. “Reducing Inequality With a Retrospective Tax on Capital.” 9. March 29 – Miranda Stewart, The Australian National University. “Transnational Tax Law: Fiction or Reality, Future or Now?” 10. April 5 – Richard Prisinzano, U.S. Treasury Department, and Danny Yagan, University of California at Berkeley Economics Department, et al. “Business In The United States: Who Owns It And How Much Tax Do They Pay?” 11.
    [Show full text]
  • Contrasting the 1986 Tax Reform Act with the 2017 Tax Cuts and Jobs Act
    The Promise and Limits of Fundamental Tax Reform: Contrasting the 1986 Tax Reform Act with the 2017 Tax Cuts and Jobs Act Ajay K. Mehrotra†* & Dominic Bayer** In December 2017, the Trump administration and its congressional allies enacted the Tax Cuts and Jobs Act, hailing it as the twenty-first century successor to the “landmark” Reagan-era Tax Reform Act of 1986. Indeed, the ’86 Act has long been celebrated by scholars and lawmakers alike as the apex of fundamental tax reform. The ’86 Act’s commitment to broadening the income tax base by eliminating numerous tax benefits and reducing marginal tax rates was seen in 1986 as the culmination of a nearly century- long intellectual movement toward conceptual tax reform. † Copyright © 2019 Ajay K. Mehrotra & Dominic Bayer. * Executive Director & Research Professor, American Bar Foundation; Professor of Law & History, Northwestern University Pritzker School of Law. An earlier version of this Essay was presented at the 2019 American Association of Law School’s Annual Conference. Many thanks to the participants at that conference for useful feedback, with special thanks for specific comments to Reuven Avi-Yonah, Isaac Martin, Shuyi Oei, Monica Prasad, Dan Shaviro, and Joe Thorndike. And thanks to Clare Gaynor Willis and Robert Owoo for their research assistance and to the editors of the UC Davis Law Review Online, especially Louis Gabriel, for all their help and editorial guidance. ** Leopold Fellow, Nicholas D. Chabraja Center for Historical Studies, Northwestern University Class of 2020. 93 94 UC Davis Law Review Online [Vol. 53:93 While the ’86 Act may have been landmark legislation at its inception, it gradually unraveled over time.
    [Show full text]
  • Tax Transparency and the Marketplace: a Pathway to State Sustainability
    110474 001-130 int NB_43_corr_Ok-Proofs_PG 1_2015-01-09_11:24:08_K Tax Transparency and the Marketplace: A Pathway to State Sustainability Montano Cabezas* This article advances the argument that market to society. It then investigates how more diffuse participants, increasingly concerned about the measurements based on externality assessment 2014 CanLIIDocs 108 sustainability of the social benefits and oppor- could be used to “score” a company’s contribu- tunities derived from the state, are interested tion to society, and how such scoring could affect in how companies contribute to society via both the markets and tax policy. The article con- taxation. The article advocates that companies cludes by reiterating aspirations for tax transpar- should disclose their tax returns for each juris- ency, and by advocating for a new state-business diction in which they operate, in order to give tax paradigm in order to ensure the continued market participants a tool to better understand a viability of the state as a provider of social goods. company’s comprehensive economic contribution L’auteur avance que les acteurs économiques, façon dont la diffusion de mesures tenant de plus en plus préoccupés par la durabilité des compte des externalités peut aider les entreprises opportunités et des avantages sociaux fournis par à évaluer leur contribution sociétale ainsi que l’État, s’intéressent à la façon dont les entreprises l’impact d’une telle diffusion sur les marchés contribuent financièrement à la société grâce et sur la politique fiscale. L’auteur conclut en à l’impôt. L’auteur suggère que les entreprises réitérant ses aspirations pour des politiques devraient divulguer leurs déclarations de fiscales transparentes et en plaidant en faveur revenus dans chacune des juridictions où d’un nouveau paradigme fiscal entre l’État et elles opèrent afin de permettre aux acteurs les entreprises qui vise à assurer la viabilité de économiques de comprendre leur contribution l’État en tant que fournisseur de services sociaux.
    [Show full text]
  • Right of Reagan How the Extremism of Today’S Republican Presidential Candidates Sets Them Apart from Their Conservative Idol
    AP PHOTO/DAVID GOLDMAN PHOTO/DAVID AP Right of Reagan How the Extremism of Today’s Republican Presidential Candidates Sets Them Apart from Their Conservative Idol By Charles Posner, Molly Cain, and Anna Chu September 2015 WWW.AMERICANPROGRESSACTION.ORG Right of Reagan How the Extremism of Today’s Republican Presidential Candidates Sets Them Apart from Their Conservative Idol By Charles Posner, Molly Cain, and Anna Chu September 2015 Contents 1 Introduction and summary 6 Provided a pathway to citizenship for undocumented immigrants 8 Stood up to the NRA to establish background checks 10 Signed a multilateral international treaty to reduce pollution 12 Negotiated to reduce nuclear proliferation 14 Grew the federal government 16 Closed tax loopholes favoring the wealthy and raised taxes 18 Conclusion 20 Endnotes Introduction and summary On September 16, the Republican presidential candidates will gather at the Ronald Reagan Presidential Library in Simi Valley, California, for the second debate in the 2016 Republican primary process. It will be an opportunity for the candidates to pay homage to President Reagan, who to this day remains an idol and a paragon of conservatism to Republicans even though he left the Oval Office in 1989—nearly three decades ago. A 2012 Gallup poll showed that 90 percent of Republicans viewed Reagan as an outstanding or above average president, more favorably than any other recent president.1 And this year, 30 Republican governors signed procla- mations recognizing February 6 as Ronald Reagan Day.2 As presidential historian Douglas Brinkley explained, Reagan has “become a folklore president.”3 Clearly, part of the Reagan mystique is tied to the fact that he found a way to achieve something elusive to subsequent conservatives on the national stage: the ability to appeal to independents and Democrats and win the popular vote in presidential elections.
    [Show full text]
  • Transcript (Panel Three)
    THE BROOKINGS INSTITUTION Brookings Welfare Reform & Beyond Public Forum DOMESTIC POLICY IN PRESIDENT BUSH'S SECOND TERM PANEL THREE: FISCAL OUTLOOK Moderator: Maya MacGuineas, President Committee for a Responsible Federal Budget, and Director, Fiscal Policy Program, New America Foundation Alice M. Rivlin, Senior Fellow, Economic Studies, Brookings; Director, Brookings Greater Washington Research Program William A. Niskanen, Chairman, the Cato Institute Monday, November 29, 2004 Falk Auditorium The Brookings Institution 1775 Massachusetts Avenue, N.W. Washington, D.C. [TRANSCRIPT PREPARED FROM A TAPE RECORDING.] PANEL THREE: FISCAL OUTLOOK MS. MACGUINEAS: We just covered Social Security reform and tax reform. And those may have been the two easy topics on our overall panel today. We are now moving into the fiscal outlook, where we will first hear from Alice Rivlin, who is a Senior Fellow here at the Brookings Institution and well known for her many accomplishments in the field of the budget. And then we'll hear from Bill Niskanen who is the Chairman of the Cato Institute. So, thank you very much, and, Alice? MS. RIVLIN: Thank you, Maya. Well, despite that rather discouraging introduction, I'm going to be optimistic, optimistic about the return in this second Bush term to fiscal responsibility, or as we like to call it here at Brookings fiscal sanity. I think it's possible that in this term we will see a bipartisan budget deal that will involve both a tax increase, well disguised, and spending reduction. Now, why in the world am I that optimistic? Nothing has happened to make the budget deficit outlook better.
    [Show full text]
  • "Starve the Beast": Origins and Development of a Budgetary
    SUBSCRIBE NOW AND RECEIVE CRISIS AND LEVIATHAN* FREE! “The Independent Review does not accept “The Independent Review is pronouncements of government officials nor the excellent.” conventional wisdom at face value.” —GARY BECKER, Noble Laureate —JOHN R. MACARTHUR, Publisher, Harper’s in Economic Sciences Subscribe to The Independent Review and receive a free book of your choice* such as the 25th Anniversary Edition of Crisis and Leviathan: Critical Episodes in the Growth of American Government, by Founding Editor Robert Higgs. This quarterly journal, guided by co-editors Christopher J. Coyne, and Michael C. Munger, and Robert M. Whaples offers leading-edge insights on today’s most critical issues in economics, healthcare, education, law, history, political science, philosophy, and sociology. Thought-provoking and educational, The Independent Review is blazing the way toward informed debate! Student? Educator? Journalist? Business or civic leader? Engaged citizen? This journal is for YOU! *Order today for more FREE book options Perfect for students or anyone on the go! The Independent Review is available on mobile devices or tablets: iOS devices, Amazon Kindle Fire, or Android through Magzter. INDEPENDENT INSTITUTE, 100 SWAN WAY, OAKLAND, CA 94621 • 800-927-8733 • [email protected] PROMO CODE IRA1703 “Starve the Beast” Origins and Development of a Budgetary Metaphor ✦ BRUCE BARTLETT n recent years, one of the most common metaphors for using tax cuts to disci- pline government spending has been “starve the beast.” The idea is that if Irevenues are unilaterally reduced, this reduction will lead to a higher budget deficit, which will force legislators to enact spending cuts. Thus, using tax cuts to bring about spending cuts has been called “starving the beast.” The budgetary experience of recent years, in which Congress has enacted large tax cuts and large spending increases at the same time, has caused some former supporters of the starve-the-beast idea to reconsider their view.
    [Show full text]
  • Cigarette Smuggling District of Columbia (65 Cents Tax) Technically Engage by Bruce Bartlett in Smuggling by Buying Cigarettes in Virginia
    National Center for Policy Analysis BRIEF ANALYSIS No. 423 For immediate release: Wednesday, October 30, 2002 Every day, residents of Maryland ($1 tax) and the Cigarette Smuggling District of Columbia (65 cents tax) technically engage by Bruce Bartlett in smuggling by buying cigarettes in Virginia. Al- though interstate cigarette smuggling is a crime, pros- Diverse state tobacco taxes are a key reason for ecutions are rare. cigarette smuggling, in which organized crime and terrorist groups increasingly are involved. A July 21 The Role of Organized Crime and Terrorism. article in the Detroit News quoted John D’Angelo of On June 1, the Washington Post reported that the Bureau of Alcohol, Tobacco and Firearms (ATF) Maryland’s cigarette tax increase from 66 cents to $1 as saying, “There is no doubt that there’s a direct led to an immediate jump in smuggling. It said that “a relationship between the increase in a state’s tax and vast and burgeoning underworld of criminals” is now an increase in illegal engaged in the business: trafficking.” State Cigarette Tax per Pack, 2002 “Criminals who once The Profit in Smug- dealt exclusively in ille- gling. According to the State Tax Rate State Tax Rate gal drugs are now smug- Federation of Tax Ad- New Jersey $1.50 U.S. Median $0.41 gling cigarettes be- New York $1.50 Iowa $0.36 ministrators, so far this Washington $1.43 Nevada $0.35 cause it is so lucrative year 17 states have Rhode Island $1.32 Nebraska $0.34 and punishments gen- raised their cigarette Connecticut $1.11 Florida $0.34 erally are much less taxes in an effort to Alaska $1.00 South Dakota $0.33 severe.” Hawaii $1.00 Arkansas $0.32 cover their budget defi- Maine $1.00 Pennsylvania $0.31 For years, police cits.
    [Show full text]
  • Fight Or Flight of U.S.-Based Multinational Businesses: Analyzing the Causes For, Effects Of, and Solutions to the Corporate Inversion Trend Hale E
    Northwestern Journal of International Law & Business Volume 23 Issue 3 Spring Spring 2003 Fight or Flight of U.S.-Based Multinational Businesses: Analyzing the Causes for, Effects of, and Solutions to the Corporate Inversion Trend Hale E. Sheppard Follow this and additional works at: http://scholarlycommons.law.northwestern.edu/njilb Part of the International Law Commons, and the Taxation-Transnational Commons Recommended Citation Hale E. Sheppard, Fight or Flight of U.S.-Based Multinational Businesses: Analyzing the Causes for, Effects of, and Solutions to the Corporate Inversion Trend, 23 Nw. J. Int'l L. & Bus. 551 (2002-2003) This Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized administrator of Northwestern University School of Law Scholarly Commons. Fight or Flight of U.S.-Based Multinational Businesses: Analyzing the Causes for, Effects of, and Solutions to the Corporate Inversion Trend Hale E. Sheppard* I. INTRODUCTION When a person is confronted by a threat, he or she experiences a psy- chological and physiological response commonly known as "fight or flight."' In general, this innate survival mechanism causes the body to di- rect blood to vital areas and to release lactic acid, adrenaline and other chemicals in order to prepare a person to either face the threat or flee im- mediately.2 Multinational corporations based in the United States, likewise, have recently displayed similar fight-or-flight behavior when faced with the threat of high taxes. Unfortunately for the U.S.
    [Show full text]
  • The Creation and Destruction of the Great American Middle Class (1930-2010)
    Loyola University Chicago Loyola eCommons School of Business: Faculty Publications and Other Works Faculty Publications 10-2018 The Creation and Destruction of the Great American Middle Class (1930-2010) Stanley F. Stasch Loyola University Chicago, [email protected] Follow this and additional works at: https://ecommons.luc.edu/business_facpubs Part of the Finance and Financial Management Commons, and the History Commons Recommended Citation Stasch, Stanley F., "The Creation and Destruction of the Great American Middle Class (1930-2010)" (2018). School of Business: Faculty Publications and Other Works. Paper 5. http://ecommons.luc.edu/ business_facpubs/5 This Book is brought to you for free and open access by the Faculty Publications at Loyola eCommons. It has been accepted for inclusion in School of Business: Faculty Publications and Other Works by an authorized administrator of Loyola eCommons. For more information, please contact [email protected]. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License. © 2018 Stanley F. Stasch. (CC Licensed) Stanley F. Stasch Professor Emeritus Loyola University Chicago THE THIRD EDITION THE CREATION AND DESTRUCTION of the GREAT AMERICAN MIDDLE CLASS (1930-2010), and … …the Second, Conservative Great Worldwide Depression In Less Than Eighty Years A Free, Online American History Course* Stanley F. Stasch, Ph.D. Professor Emeritus Quinlan School of Business Loyola University Chicago *The equivalent of a 200 page book Stanley F. Stasch Professor Emeritus Loyola University Chicago INTRODUCTION TO THE THIRD EDITION This third edition of “The Creation and Destruction of the Great American Middle Class: 1930-2010” was written because four important matters, which should be a part of this history, were not included in the earlier editions.
    [Show full text]
  • Trump's Broken Promises
    Broken Promises More Special Interest Breaks and Loopholes Under the New Tax Law The Tax Cuts and Jobs Act (TCJA) was introduced on November 2, 2017, rushed through Congress on a partisan basis, and signed by President Donald Trump just seven weeks later. No hearings were held on the actual bill and experts who could have helped ensure that provisions were properly drafted had barely any opportunity to digest legis- lative language or analysis from the Congressional Joint Committee on Taxation, much less to provide comments. Additionally, Democratic legislators were not permitted in the drafting room. The result is a bill riddled with drafting errors, special tax breaks that were not vetted, and new loopholes.1 While some are mere glitches, others appear to be purposeful giveaways that will create complexity and confusion for taxpayers and will have a significant impact on federal revenues.2 Most tax policy experts understand tax reform to involve making the tax system fairer, as well as simpler and more efficient where possible.3 This is achieved in part by eliminat- ing special interest tax breaks and loopholes that allow savvy taxpayers to legally escape tax.4 This approach contributed to the success of the Tax Reform Act of 1986.5 While it will take time before the full ramifications of the TCJA are fully revealed, it is clear at this point that the effort did not result in true tax reform. Rather, while some special interest tax breaks and tax loopholes were eliminated or reduced, a host of others were left in place. And new breaks and loopholes were added that individuals and busi- nesses, with the help of their sophisticated tax advisers, can use to avoid paying taxes in the years ahead.6 This issue brief provides a sample of the many special tax breaks that remain or were added to the tax code, along with some new loopholes that have been identified in the two short months since the bill was passed.
    [Show full text]
  • Hearings Committee on the Budget United States Senate
    S. HRG. 114–247 CONCURRENT RESOLUTION ON THE BUDGET FISCAL YEAR 2016 HEARINGS BEFORE THE COMMITTEE ON THE BUDGET UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION January 28, 2015-CBO’S BUDGET AND ECONOMIC OUTLOOK: FISCAL YEARS 2015-2025 February 3, 2015-THE PRESIDENT’S FISCAL YEAR 2016 BUDGET PROPOSAL February 11, 2015-THE COMING CRISIS: SOCIAL SECURITY DISABILITY TRUST FUND INSOLVENCY February 25, 2015-THE COMING CRISIS: AMERICA’S DANGEROUS DEBT March 4, 2015-WASTEFUL DUPLICATION IN THE FEDERAL GOVERNMENT March 11, 2015-BENEFITS OF A BALANCED BUDGET CONCURRENT RESOLUTION ON THE BUDGET FY2016 S. Hrg. 114–247 CONCURRENT RESOLUTION ON THE BUDGET FY2016 HEARINGS BEFORE THE COMMITTEE ON THE BUDGET UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS FIRST SESSION January 28, 2015-CBO’S BUDGET AND ECONOMIC OUTLOOK: FISCAL YEARS 2015-2025 February 3, 2015-THE PRESIDENT’S FISCAL YEAR 2016 BUDGET PROPOSAL February 11, 2015-THE COMING CRISIS: SOCIAL SECURITY DISABILITY TRUST FUND INSOLVENCY February 25, 2015-THE COMING CRISIS: AMERICA’S DANGEROUS DEBT March 4, 2015-WASTEFUL DUPLICATION IN THE FEDERAL GOVERNMENT March 11, 2015-BENEFITS OF A BALANCED BUDGET ( U.S. GOVERNMENT PUBLISHING OFFICE 95–387 WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON THE BUDGET MICHAEL B. ENZI, WYOMING, Chairman CHARLES E. GRASSLEY, Iowa BERNARD SANDERS, Vermont JEFF SESSIONS, Alabama PATTY MURRAY, Washington MIKE CRAPO, Idaho RON WYDEN, Oregon LINDSEY O.
    [Show full text]
  • An Analysis of Tax Administration Issues Raised by a Consumption Tax, Such As a National Sales Tax Or Value Added Tax
    2009 Annual Report to Congress AN AN ALY sis OF TAX ADM inistr Ati O N Issu E S RA is ED BY A CO nsu MP ti O N TAX , SU CH A S A NA ti O N AL SALE S TAX O R VAL U E ADDED TAX 2009 Annual Report to Congress National Taxpayer Advocate National Taxpayer Annual Report to Congress 2009 Annual Report to Congress TAS Research December 31, 2009 09_TAS ARC_VOL 2.indb 35 1/1/10 9:48:52 PM Notices of Federal Delinquent Running Social Value Added Tax Ombudsmen Tax Lien Taxpayers Programs An Analysis of Tax Administration Issues Raised by a Consumption Tax, Such as a National Sales Tax or Value Added Tax An Analysis of Tax Administration Issues Raised by a Consumption Tax, Such as a National Sales Tax or Value Added Tax 1 TABLE OF CONTENTS Introduction . 38 Why is the National Taxpayer Advocate discussing consumption taxes? . 38 Why is a value added tax (VAT) or retail sales tax (RST) being considered? . 38 What types of VATs have been proposed? . 40 How does a VAT work? . 42 Credit invoice method VATs can resemble RSTs . 42 VATs can be computed using a subtraction method . 43 Subtraction method VATs can be “naive” or “sophisticated” . 43 Subtraction method VATs can resemble corporate income taxes . 43 The business component of a flat tax is a modified VAT . 43 Examples of VATs and RSTs . 44 Credit invoice method VATs can have “exempt” and “zero-rated” sales . 45 There are special problems with administering exemptions and zero ratings under a subtraction method VAT .
    [Show full text]