Taxes and Social Programs

The Roadmap for America's Future Act of 2010 is a detailed reform package that overhauls Social Security, Medicare, Medicaid, and the U.S. federal tax system. In a January 27, 2010, report, the Congressional Budget Office (CBO) analyzed the spending provisions of the plan. This paper presents the Tax Policy Center's estimates of the revenue and distributional impact of the Roadmap's tax provisions.

In 2010, 45 percent of tax returns will either remit no federal income tax or receive a net tax refund. But this figure overstates the share of taxpayers who would be unaffected by higher income tax rates. Raising all rates by 1 percent would hold only 34 percent of tax returns harmless; others would either pay higher taxes or receive smaller net rebates.

The numbers are, simply put, mind numbing. The federal deficit will total $6.7 trillion this decade under current law, the Congressional Budget Office projects. The figure will nearly double to $12.7 trillion if the 2001 and 2003 tax cuts are not allowed to sunset as scheduled in 2011 and Congress, once again, "patches" the alternative minimum tax.

Eric Toder testified before the Senate Committee on Finance on how recently proposed incentives for small business may help economic recovery. These incentives are only a small component of broader policies to accelerate recovery from the deep recession we have experienced in the past two years and reduce unemployment.

The New Markets Tax Credit (NMTC) program targets debt and equity capital to businesses or organizations situated in low-income, economically distressed communities. This is a report on a diverse sample of five projects that utilized New Markets Tax Credits allocated early in the program's history. Its substantive purpose is to describe the characteristics, evolution, financial arrangements, and anticipated community impacts of the projects, while its methodological purpose is to explore the strengths and limitations of using in-depth, semi-structured telephone interviews with key project actors and stakeholders as a basis for generating data for a future evaluation of the NMTC program.