New America Foundation
Fax: Director, Fiscal Policy Program
NBER Working Papers and Publications
|April 2011||Capping Individual Tax Expenditure Benefits|
with Martin Feldstein, Daniel Feenberg: w16921
This paper analyzes a new way of reducing the major individual tax expenditures: capping the total amount that tax expenditures as a whole can reduce each individual's tax burden. More specifically, we examine the effect of limiting the total value of the tax reduction resulting from tax expenditures to two percent of the individual's adjusted gross income. Each individual can benefit from the full range of tax expenditures but can receive tax reduction only up to 2 percent of his AGI.
Simulations using the NBER TAXSIM model project that a 2 percent cap would raise $278 billion in 2011. The paper analyzes the revenue increases by AGI class. The 2 percent cap would also cause substantial simplification by inducing more than 35 million taxpayers to shift from itemizing their deductions ...
Published: “Capping Individual Tax Expenditure Benefits”, (with Dan Feenberg and Maya MacGuinneas) in Tax Notes, May 2, 2011, p 505-509. NBER Working Paper 16921, April 2011.