Federal Taxes

Taxes Matter

At the most basic level, taxes exist to fund the government. Decisions about how much revenue we should raise from federal taxes and from what sources we should raise it are incredibly important. The influence of federal tax policy ripples throughout the entire economy and affects funding at all levels of government. Jump to the latest updates...

Principles & Policies

Tax Reform - the current effort underway in Congress and any changes to federal tax law - should be guided by some basic principles of good tax policy. Taxes should:

Generate the appropriate amount of revenue to fund our national priorities. The current tax code does not raise enough revenue, which leads to cuts to programs and services.

Raise revenue from the sources that can most afford to pay for our collective enterprise of government. New revenue should come from the wealthy and from corporations whose taxes are lower now than they were a generation ago.

Make it easier to file and collect our taxes. Making it easier to file taxes will make the system fairer and make tax avoidance more difficult. It will also reduce the burden of compliance on families and small businesses.

These principles should guide all federal tax reform and policy change decisions. The main purpose of taxation is to generate revenue. We should generate enough revenue to pay for our national priorities and avoid unnecessary budget cuts. We should raise tax revenue from the sources that can most afford to pay. And we should make paying and collecting taxes simpler.

Policy Options

Tax wealth like work! 
Treating investment income like earned income would generate hundreds of billions of dollars. The current privilege given to investment income in the tax code overwhelmingly benefits the extremely wealthy. We should end this benefit.

Strengthen the estate tax.
The estate tax is our most progressive federal tax. The estate tax can generate significantly more revenue while still only being paid by the largest multimillion dollar estates. 

Erase the social security cap.
Cutting back on social security benefits to our current and future seniors is a flat out bad idea. Eliminating the social security cap that exclusively benefits high income taxpayers makes much more sense.

More worthy tax reform options that can easily increase revenue and progressivity Include: The Robin Hood Tax, new upper income tax brackets, eliminating deductions that beneft the wealthy, and a Buffet rule