Sep 20, 2017 | Op-Eds
Last week, I had the privilege of being one of four witnesses invited to testify at the Senate Finance Committee’s wide-ranging hearing on reforms to the individual income tax. Sitting down the witness table from me was AEI visiting fellow Ramesh Ponnuru. Our testimonies approached tax reform from different vantage points. Ponnuru homed in on one tax policy — what he calls the “parent tax” — and made a clear case for the expansion of the child tax credit as a remedy. I gave a broader view of tax reform principles and the importance of broadening the tax base (that is, limiting deductions, exclusions, and credits).
Sep 15, 2017 | Interviews
“One of the things we heard yesterday is that there is pretty wide agreement among all lawmaker about the problem. There may not be agreement about the solution. That’s an underappreciated fact.”
Sep 14, 2017 | Testimony
The opportunity for fundamental and comprehensive tax reform is before this Committee for the first time in many decades. As every Member of this Committee well knows, the tax code has frequently and sometimes significantly changed over the last 30 years, but not since 1986 has it been truly reformed in a manner that sought to broaden the base – that is, eliminate special deductions, credits, and exclusions– while lowering statutory tax rates. As Senators Hatch, Wyden, Roberts, and Grassley know firsthand, that legislative process was arduous and sometimes controversial, but the 1986 Tax Reform Act did result in a simpler income tax code with a broader tax base and significantly lower statutory tax rates.
Sep 13, 2017 | Analysis
Under current law, a taxpayer can claim a Child Tax Credit (CTC) of up to $1,000 for each qualified child under 17 years of age. The credit amount is dependent on the taxpayer’s modified adjusted gross income. If the CTC is greater than the amount of taxes owed, taxpayers may be eligible for the partially refundable Additional Child Tax Credit.
Sep 13, 2017 | Analysis
Under current law, a taxpayer can claim a personal exemption for themself, his or her spouse, and each qualified dependent. The personal exemption amount for 2017 will be $4,050. The actual benefit depends on the taxpayer’s marginal tax rate and gross income. Taxpayers can also claim a standard deduction as an alternative to itemizing deductions. In 2017, the standard deduction will be $6,350 for single filers, $9,350 for head-of-household filers, and $12,700 for married couples filing jointly.
