New paper on importance, challenges, and goals of progressive tax reform published in @taxnotes.com and now available outside paywall here: papers.ssrn.com/sol3/papers....
20.11.2025 16:42
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New paper on importance, challenges, and goals of progressive tax reform published in @taxnotes.com and now available outside paywall here: papers.ssrn.com/sol3/papers....
Behind paywall now, but will be able to post a version next week that is outside!
New paper on tax reform in wake of OBBBA is out this week in
@taxnotes.com. While that bill is (rightly) unpopular, risk that regressive and complex changes end up living on in years ahead if we follow past patterns. Paper begins to sketch out paths for progressive tax reform.
And the risk of more such damaging measures should be kept in mind and steps taken, when progressives are in power, to do what one can to avoid that being the way new (or old) commitments end up getting paid for. end/
Notably, the recent passage of this summer’s reconciliation bill—with its highly regressive financing—and Trump’s tariffs show the kinds of damaging measures that some would use to pay for the govt.
For instance: a paid leave program financed with a small payroll tax (as leading senators have proposed) may end up with more progressive results than one paid for from a slate of high income and corporate tax provisions (policies I also support and hope are enacted).
Policies that seem more progressive may be exactly the opposite when the ultimate financing is properly considered. And, it can lead to a re-evaluation of the wisdom of policy.
Answering that critical q requires analyzing the politics of the government–and under not just one’s preferred leaders but the ones we have and could have in the future–and asking what they will use to pay for new commitments by the govt.
Sharing a new paper forthcoming in Harv. J. on Legislation. Takes a step back to ask when policymakers enact a new spending program or a tax cut, who pays for the policy? Policymakers may not say or, even if they do, what they say may not be the ultimate financing. papers.ssrn.com/sol3/papers....
On June 3, join us for a webinar on the risks to taxpayer privacy as taxpayer data is accessed and shared across government in unprecedented ways. The event will be moderated by @lilybatch.bsky.social and feature an opening discussion with Daniel Werfel. Register here: nyu.zoom.us/webinar/regi...
(4) And on the clean energy credits, the details on the severe cuts and unworkable restrictions: taxlawcenter.org/blog/house-b...
(3) While SALT cap shouldn't be used to finance this regressive / unfair bill and instead for other purposes, that's the right thing for this policy. This reading is clear in the text but contrary to public reporting / others initial reading. They should stick w/ this version.
(2) On SALT cap, the text of legislation -- contrary to our initial reading -- clearly limits SALT workarounds (which are unfair and expensive) for all biz including 199A biz. taxlawcenter.org/blog/ways-an...
More from @taxlawcenter.org on House reconciliation bill. (1) Close reading of bill shows text curtails SALT cap workarounds for all biz (including 199A biz). That’s good news IF it sticks. (2) OTOH, bill slashes clean energy credits and imposes unworkable red tape. Bad news.
(7) And even as the IRS is radically cut making it even harder to administer any such misguided EITC precertification program even as higher income Americans escape from audit when it comes to complex tax planning. end/
(6) This is about making it harder for lower-income working families to get access to one of the key supports – even while those with higher incomes face no such barriers, whether it be in cutting their rate by 23% for biz income or claiming other tax expenditures.
(5) We can have a serious and worthwhile discussion about how to improve compliance up and down the income spectrum. But, between radical cuts to the IRS and gameable / hard to enforce new provisions in this bill, this isn’t about compliance.
(4) The contrast between an expanded special deduction for biz income disproportionately for highest income + no tax on tips / overtime to the new, burdensome precertification system for working families getting the EITC is particularly stark.
(3) On the onerous EITC precertification: taxlawcenter.org/blog/ways-an...
(2) On unfair and complex new provisions: taxlawcenter.org/blog/the-hou...
(1) Two new pieces from @taxlawcenter.org on tax provisions in the House reconciliation bill. Detailing unfair and complex new provisions to the benefit of those with higher incomes and then onerous provisions on lower-income working families.
(12) There’s much more to be said (and much more reading to do) and @taxlawcenter.org will have more to say as we do.... end/
(11) Now, it’s much more of a Frankenstein when it comes to the tax base. Some of those elements remain but even more mixed with unfair / complex / expanded giveaways -- all the while losing trillions in regressive fashion.
(10) The draft stands in contrast to some of the philosophy 2017, with the notable exception of 199A. That bill lost trillions. But, had a number of real base broadeners / simplifications. Like limiting mortgage interest deduction. Swapping itemized for standard deduction.
(9) And, there are large cutbacks in tax credits for clean energy. That brings me to the fact that it’s not about having a “pure” base. It’s about treating fairly and using limited resources to benefit those who need it and encourage activities we should have (like clean energy).
(8) And there's effectively a 35 percent cap on the value of itemized deductions. That's a good move--actually building off Biden / Obama. So, for that, but not to pay for even more regressive and complex tax cuts.