Fiscal Policy2018-08-31T19:22:02+00:00

Fiscal Policy

The Center for a Free Economy believes that getting fiscal policy right is the heart of getting government economic policies right. That means a pro-growth tax code which raises enough money for modest and well-designed government spending programs. Essential to fiscal policy is health care policy, which today dominates both tax and spending outlooks. 

Tax Policy
Federal Budget
Entitlement Reform

Recent News about Fiscal Policy:

Not just Mr. Moneybags: Ending the capital gains inflation tax helps ordinary Americans too

by Ryan Ellis | August 08, 2018 In the past week, there has been a flurry of press accounts that President Trump has directed the Treasury Department to examine whether they have the power to let investors index cost basis to inflation when calculating capital gains. This has taken the press corps by surprise, but it is an issue that has been around a long time — dating all the way back to a 1992 memo (updated in 2012) by former Reagan assistant Attorney General Charles Cooper. The assertion Cooper and conservatives like Americans for Tax Reform, the National Taxpayers Union, the Club for Growth, and my own Center for a Free Economy are making is a simple one: “Cost” is not defined in the tax statute, and therefore the Treasury Department has the authority to define “cost” in a reasonable way. A levelheaded way to define the cost of an investment [...]

The Senate Tax Reform Bill Cuts Rates For Small Businesses And Flow Through Firms

By Ryan Ellis This week, the U.S. Senate will consider their version of fundamental tax reform. A key area of debate here has been the treatment of non-corporate businesses--sole proprietorships, Subchapter-S companies, partnerships, and LLCs--compared to incorporated firms. Unlike corporations, these flow through businesses don't pay taxes themselves. Rather, the taxes "flow through" or "pass through" to the business owner, who pays taxes on the business profits at his own marginal income tax rate. Senator Ron Johnson (R-Wisc.) and others have raised the concern that the corporations are getting a better deal than the flow throughs. Below are some answers to this concern: The worst tax treatment for flow through firms is current law. Should tax reform fail, mature flow through firms will face taxation under current law. That means a federal income tax rate of 39.6 percent, plus either a self-employment or an investment income surtax of 3.8 percent, [...]

IWF Leads Coalition Letter Against a New Payroll Tax and New Paid Leave Entitlement Program

Independent Women's Forum today led a coalition of 33 freedom movement organizations and activists united against a new payroll tax and new paid leave entitlement program. "Everyone wants new parents to be able to have the time off they need to care for a new baby," explained IWF President Carrie Lukas, "But the wrong way to approach this issue is to have government take over and decide what kind of benefits are right for every single working woman and man.  And that's exactly what a new paid leave entitlement program would do. Once government begins collecting a new payroll tax and promising a new stream of benefit payments for every qualified worker, then all existing compensation packages are affected. It won't matter if you've liked what your employer is providing or not.  You'd be a part of a one-size-fits-all government system, which would create far more problems than it would [...]

April 1st, 2019|Categories: Center for a Free Economy, Middle Class, Ryan Ellis, Tax|

Bill Burr Is Right About Alexandria Ocasio-Cortez’s Socialist Tax Rates

Comedian Bill Burr this week went off on a totally not safe for work rant about Rep. Alexandria Ocasio-Cortez’s plan to impose a 70 percent tax rate on all income earned above $10 million. It’s hilarious and worth a listen, but do use earbuds for the sake of your more delicate neighbors. Burr makes a couple of good observations on the topic. First, he points out that no one should have to pay 70 percent of any of her income to the government. This is an important step conservatives often skip as we seek to dive right into policy arguments. As Arthur Brooks has famously pointed out, first you make a value alignment with your listener, then from that common value alignment you make a policy argument. Burr does that here simply and colorfully. Burr also helpfully uses an incarnational example to illustrate his point. He asks why the kid [...]

April 1st, 2019|Categories: Center for a Free Economy, Democrats, Ryan Ellis, Tax|

2019 Tax Refunds Will Be 26% Higher, Morgan Stanley Says

By Chris Morris, Odds are you’re paying too high a tax bill today. The good news, though, is that means you could see a notably higher refund next year. A research note from Morgan Stanley estimates 2019 refunds will top this year’s by 26%, working out to an extra $62 billion given back by the Internal Revenue Service. Payroll taxes are where people have been overpaying, says the investment firm, as most haven’t changed their withholding. Combine that with the GOP’s tax bill, which was passed last December and it increases the odds of a nice refund. The bulk of the refunds, says Morgan Stanley, will be sent in February. And that could have some positive effects for the economy. “We expect this boost in tax refunds to result in a sharply higher savings rate and elevated sales of big-ticket items in February and March 2019,” the firm wrote. The bulk of people [...]

February 13th, 2019|Categories: Fiscal Policy|
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