Research by Author & Topic

Publications by Adam Carasso on Tax Policy

Kids' Share 2008, a second annual report, looks comprehensively at trends in federal spending and tax expenditures on children. Key findings suggest that historically children have not been a budget priority. In 2007, this trend continued, as children's spending did not keep pace with GDP growth. Absent a policy change, children's spending will continue to be squeezed in the next decade.

Key Facts: Kids' Share 2008 summarizes findings from the Kids' Share 2008 report, which looks comprehensively at trends in federal spending and tax expenditures on children. Key findings suggest that historically children have not been a budget priority. In 2007, this trend continued, as children's spending did not keep pace with GDP growth. Absent a policy change, children's spending will continue to be squeezed in the next decade.

One way to achieve an ownership society is to endow all children with savings accounts starting at birth. This report shows that specific design features of a children's savings account program will impact the distribution of wealth. For example, non-taxability of account earnings distributes significantly more benefits to higher-income groups than to lower-income groups. Also, because many families experience mobility over their lifetimes, a significant portion of benefits conditioned on low annual income will accrue to middle- and higher-income families. Regardless, these accounts could be important in getting children banked and teaching them the value of saving and compound interest.

This report tallies all federal spending and tax subsidies aimed at promoting the economic mobility of Americans for 1980, 2006, and 2012. This first effort at defining a mobility budget--$746 billion in 2006--reaches two major conclusions: (1) poor and lower-income households owe little or no tax and so are excluded from the bulk of economic mobility programs, which are often delivered in the form of tax subsidies; and (2) while these households do benefit from many other federal programs, those programs generally are not aimed at promoting mobility--and sometimes even discourage it. Furthermore, under current law, mobility enhancing programs targeted to toward lower income households would decline as a share of GDP from 2006 to 2012, while those targeted to the better off would increase over the same period.

The inadequacy of the current U.S. public and private pension systems may warrant the establishment of a universal pension system (UPS), which would cover all workers—full-time and part-time—and require them to contribute at a level that can help provide them with adequate incomes when they retire. This paper develops options for a system of individual accounts to which, starting in 2007, each employee or self-employed worker would be required to contribute 3 percent of covered payroll (i.e., 3 percent of up to $97,500 in 2007). The UPS we describe would raise the total "replacement rate" for average wage men to 49.0 percent of final wages—provided Social Security is fixed—or 39.8 percent if not

Before-tax corporate profits of nonfinancial corporations surged to 7.8 percent of net national product in the second quarter of 2006, having risen steadily from a post-war low of 3.6 percent, in the fourth quarter of 2001, after a stock market plunge. We find that the income of corporate capital owners of nonfinancial corporations, net corporate tax, has remained much steadier than corporate profits.

Individual giving to public charities-most of which comes in the form of charitable deductions from tax filers who itemize on their returns-actually comprises only a small part of charities’ gross receipts each year: between 8 and 12 percent of gross receipts over the 1996-2003 period.

The panoply of U.S. tax and transfer programs often act in concert to penalize low-income families who increase their work effort or marry, by saddling them with high effective marginal tax rates. These effective marginal tax rates-often the product of multiple, hidden phase-outs in benefit programs like the EITC, Food Stamps, and Medicaid-are often higher for low-to-middle income families with children earning between $10,000 and $40,000 than they are for more well-to-do families earning above, $90,000. Rates can be so high that families lose nearly a dollar in program benefits for every additional dollar of earnings income they bring in.

Widening access to retirement savings vehicles and increasing the accumulations within these vehicles could help secure the future for many lower-income families. Currently, the role played by private pensions in asset building is small to nonexistent for most poor and lower-middle class workers. Instead, these persons rely primarily on Social Security and the savings in their home equity, if any, to sustain them in retirement. This brief, based on feedback from a roundtable of experts convened at the Urban Institute, provides background data on the assets of US households and discusses options for increasing levels of saving and retirement security for low- and moderate-income families.

Over the past seventy years Congress has enacted dozens of tax and transfer programs, giving little if any attention to the marriage subsidies and penalties that they inadvertently impose. Although the programs affect both rich and poor Americans, the penalties fall most heavily on low- or moderate-income households with children. In this article, Adam Carasso and Eugene Steuerle review important penalties and subsidies, explain how they work, and help fill a big research gap by beginning to provide comprehensive data on the size of the penalties and subsidies arising from all public programs considered together. [© www.futureofchildren.org]