For Immediate Release: Monday, April 30, 2012
Contact: Phoebe Silag or Karen Conner, email@example.com 202-775-8810
Four key tax policies would promote tax fairness and provide revenue for job creation
In a new Economic Policy Institute report, A perfect match: Coupling tax fairness with job creation for a stronger economy, Senior Policy Analyst Ethan Pollack outlines four tax policies that would promote tax fairness and that could finance job creation. Spending the revenue generated from these tax provisions on infrastructure (or another form of economic stimulus with a similar economic impact) would boost employment by nearly 1.3 million jobs in 2013 and by over 1.8 million jobs in each year from 2014 to 2017.
The report includes the number of jobs that would be created in each state under each of the four tax provisions.
The four tax policies are as follows:
- Cap the value of deductions at 28%: By capping the value of deductions at 28%, taxpayers with over $200,000 of income would still be able to take all the itemized deductions they want, but the value of their deductions would be no greater than the value enjoyed by middle-class taxpayers. This policy change would generate $333 billion in revenue over the next decade.
- Raise tax rates on high earners: This policy incorporates President Obama’s proposal to allow the top two brackets to revert to their Clinton-era levels as well as Rep. Jan Schakowsky’s Fairness in Taxation Act, which would adopt five additional brackets, ranging from 45 percent for taxable incomes above $1 million to 49 percent for incomes above $1 billion. The FTA would also eliminate the preferential tax rates on capital gains and dividends. Overall, these proposals would generate roughly $1.5 trillion in revenue over the next decade.
- Close corporate loopholes: Adopting the reforms to the U.S. international tax system proposed in President Obama’s fiscal year 2013 budget—reforms that largely target international corporate tax avoidance—would raise $168 billion over the next decade.
- Adopt financial transactions tax: By levying a small tax on the sales of financial products, large sums of revenue could be raised in a progressive manner while dampening volatility and without distorting productive economic activity. The Congressional Progressive Caucus’s version of the FTT would raise $849 billion over the next decade.
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