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The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The AMT has only a modest impact on the average marginal tax rates for most sources of income because it raises marginal tax rates for some taxpayers and lowers marginal tax rates for others. The Alternative Minimum Tax (AMT) is a provision of the U.S. income tax code that currently affects a modest number of taxpayers, but will become increasingly important over the next decade. The AMT was established in 1978. The AMT base includes all the components of Adjusted...

Research Summaries

Capital gains taxes imposed on corporations are increasing in importance; they interact with other distortions in important ways; and they deter firms from realizing gains, thus impeding the reallocation of assets to their most efficient owners. To mitigate the possibility of a third layer of taxation on corporate income, the U.S. tax code allows corporations a partial deduction for dividends received from other corporations; however, returns earned as capital gains...
Historically, the negative view of deflation may be attributed to the fact that deflation had been largely unanticipated. The negative view of deflation in the United States, no doubt, was reinforced by farmers who believed that the prices of the commodities they produced had fallen faster than the manufactured goods they consumed. In Good Versus Bad Deflation: Lessons from the Gold Standard Era (NBER Working Paper No. 10329), authors Michael Bordo, John Landon Lane,...
Funds held in a Uniform Transfer to Minors Act account can reduce aid by as much as $1.24 per dollar saved. Under current tax and financial aid policies, saving for their children's college education can make parents worse off than if they had never saved at all. Although tax-advantaged education savings accounts are intended to increase assets, people with more assets, or with assets of the "wrong" sort, can get less financial aid. The treatment of assets by the...

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