94-400: The Economic Growth and Tax Relief Reconciliation Act of 2001 was a major piece of tax legislation passed by the 107th United States Congress and signed by President George W. Bush . It is also known by its abbreviation EGTRRA (often pronounced "egg-tra" or "egg-terra"), and is often referred to as one of the two " Bush tax cuts ". Bush had made tax cuts the centerpiece of his campaign in
188-431: A flat percentage rate of taxation on personal annual income, but most scale taxes are progressive based on brackets of yearly income amounts. Most countries charge a tax on an individual's income and corporate income . Countries or sub-units often also impose wealth taxes , inheritance taxes , gift taxes , property taxes , sales taxes , use taxes , environmental taxes , payroll taxes , duties , or tariffs . It
282-433: A pay-as-you-earn basis, with corrections made after the end of the tax year . These corrections take one of two forms: Income-tax systems often make deductions available that reduce the total tax liability by reducing total taxable income. They may allow losses from one type of income to count against another – for example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate
376-448: A "catch-up" provision for older workers. EGTRRA allows, for the first time, for participants in non-qualified 401(a) money purchase, 403(b) tax-sheltered annuity, and governmental 457(b) deferred compensation plans (but not tax-exempt 457 plans) to "roll over" their money and consolidate accounts, whether to a different non-qualified plan, to a qualified plan such as a 401(k), or to an IRA. Prior rules only allowed plan moneys to leave
470-714: A Byrd Rule point of order is sustained are colloquially referred to as "Byrd droppings". Title X of the Act, also known as the Impoundment Control Act of 1974 , specifies that the president may request that Congress rescind appropriated funds. If both the Senate and the House of Representatives have not approved a rescission proposal (by passing legislation) within forty-five days of continuous session, any funds being withheld must be made available for obligation. Congress
564-426: A certain area ( social engineering ). For example, a high excise is used to discourage alcohol consumption, relative to other goods. This may be combined with hypothecation if the proceeds are then used to pay for the costs of treating illness caused by alcohol use disorder . Similar taxes may exist on tobacco , pornography , marijuana etc., and they may be collectively referred to as " sin taxes ". A carbon tax
658-446: A commodity is sold to its final consumer. Retail organizations contend that such taxes discourage retail sales. The question of whether they are generally progressive or regressive is a subject of much current debate. People with higher incomes spend a lower proportion of them, so a flat-rate sales tax will tend to be regressive. It is therefore common to exempt food, utilities, and other necessities from sales taxes, since poor people spend
752-469: A definition and system of classification of internal taxes, generally followed below. In addition, many countries impose taxes ( tariffs ) on the import of goods. Many jurisdictions tax the income of individuals and of business entities , including corporations . Generally, the authorities impose a tax on net profits from a business , on net gains, and on other income. Computation of income subject to tax may be determined under accounting principles used in
846-406: A higher proportion of their incomes on these commodities, so such exemptions make the tax more progressive. This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e. luxury) items pay the tax. A small number of U.S. states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax. Such states tend to have a moderate to
940-641: A higher tax rate. Historically, in many countries, a contract needs to have a stamp affixed to make it valid. The charge for the stamp is either a fixed amount or a percentage of the value of the transaction. In most countries, the stamp has been abolished but stamp duty remains. Stamp duty is levied in the UK on the purchase of shares and securities, the issue of bearer instruments, and certain partnership transactions. Its modern derivatives, stamp duty reserve tax and stamp duty land tax , are respectively charged on transactions involving securities and land. Stamp duty has
1034-497: A large amount of tourism or inter-state travel that occurs within their borders, allowing the state to benefit from taxes from people the state would otherwise not tax. In this way, the state is able to reduce the tax burden on its citizens. The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas, Washington state, and Wyoming. Additionally, New Hampshire and Tennessee levy state income taxes only on dividends and interest income. Of
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#17327756109161128-553: A particular amount. Such upper or lower limits may apply for retirement but not for health-care components of the tax. Some have argued that such taxes on wages are a form of "forced savings" and not really a tax, while others point to redistribution through such systems between generations (from newer cohorts to older cohorts) and across income levels (from higher income levels to lower income-levels) which suggests that such programs are really taxed and spending programs. Unemployment and similar taxes are often imposed on employers based on
1222-625: A result of market forces . Certain countries (usually small in size or population, which results in a smaller infrastructure and social expenditure) function as tax havens by imposing minimal taxes on the personal income of individuals and corporate income. These tax havens attract capital from abroad (particularly from larger economies) while resulting in loss of tax revenues within other non-haven countries (through base erosion and profit shifting ). Legal and economic definitions of taxes differ, such that many transfers to governments are not considered taxes by economists. For example, some transfers to
1316-439: A return. If an eligible person did not receive a rebate check by December 2001, then they could apply for the rebate in their 2001 tax return. EGTRRA generally reduced the rates of individual income taxes : The EGTRRA in many cases lowered the taxes on married couples filing jointly by increasing the standard deduction for joint filers to between 164% and 200% of the deduction for single filers. Additionally, EGTRRA increased
1410-524: A single-rate form of taxation regardless of ability to pay (the Community Charge , but more popularly referred to as the Poll Tax), led to widespread refusal to pay and to incidents of civil unrest, known colloquially as the ' Poll Tax Riots '. Some types of taxes have been proposed but not actually adopted in any major jurisdiction. These include: An ad valorem tax is one where the tax base
1504-437: A tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. The tax may be levied on " natural " or " legal persons. " A value-added tax (VAT), also known as Goods and Services Tax (GST), Single Business Tax, or Turnover Tax in some countries, applies the equivalent of a sales tax to every operation that creates value. To give an example, sheet steel
1598-766: Is a United States federal law that governs the role of the Congress in the United States budget process . Titles I through IX of the law are also known as the Congressional Budget Act of 1974 . Title II created the Congressional Budget Office . Title III governs the procedures by which Congress annually adopts a budget resolution, a concurrent resolution that is not signed by the President , which sets fiscal policy for
1692-493: Is a per unit tax, where the tax base is the quantity of something, regardless of its price. An excise tax is an example. Consumption tax refers to any tax on non-investment spending and can be implemented by means of a sales tax, consumer value-added tax, or by modifying an income tax to allow for unlimited deductions for investment or savings. This includes natural resources consumption tax , greenhouse gas tax (i.e. carbon tax ), "sulfuric tax", and others. The stated purpose
1786-430: Is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However, this distinction does not apply in other jurisdictions; for example, if using this terminology UK inheritance tax would be an estate tax. An expatriation tax is a tax on individuals who renounce their citizenship or residence. The tax
1880-601: Is a full VAT. The province of Quebec collects the Quebec Sales Tax [QST] which is based on the GST with certain differences. Most businesses can claim back the GST, HST, and QST they pay, and so effectively it is the final consumer who pays the tax. An excise duty is an indirect tax imposed upon goods during the process of their manufacture, production or distribution, and is usually proportionate to their quantity or value. Excise duties were first introduced into England in
1974-442: Is a general tax levied periodically on residents who own personal property (personalty) within the jurisdiction. Vehicle and boat registration fees are subsets of this kind of tax. The tax is often designed with blanket coverage and large exceptions for things like food and clothing. Household goods are often exempt when kept or used within the household. Any otherwise non-exempt object can lose its exemption if regularly kept outside
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#17327756109162068-596: Is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels, and natural gas. The object is to reduce the release of carbon into the atmosphere. In the United Kingdom, vehicle excise duty is an annual tax on vehicle ownership. An import or export tariff (also called customs duty or impost) is a charge for the movement of goods through a political border. Tariffs discourage trade , and they may be used by governments to protect domestic industries. A proportion of tariff revenues
2162-426: Is also possible to levy a tax on tax, as with a gross receipts tax . In economic terms ( circular flow of income ), taxation transfers wealth from households or businesses to the government. This affects economic growth and welfare , which can be increased (known as fiscal multiplier ) or decreased (known as excess burden of taxation ). Consequently, taxation is a highly debated topic by some, as although taxation
2256-440: Is an ad valorem tax levy on the value of a property that the owner of the property is required to pay to a government in which the property is situated. Multiple jurisdictions may tax the same property. There are three general varieties of property: land, improvements to land (immovable human-made things, e.g. buildings), and personal property (movable things). Real estate or realty is the combination of land and improvements to
2350-484: Is considered the most viable option to operate the government (instead of widespread state ownership of the means of production ), as taxation enables the government to generate revenue without heavily interfering with the market and private businesses; taxation preserves the efficiency and productivity of the private sector by allowing individuals and companies to make their own economic decisions, engage in flexible production , competition , and innovation as
2444-433: Is deemed necessary by consensus for society to function and grow in an orderly and equitable manner through the government provision of public goods and public services , others such as libertarians and anarcho-capitalists are anti-taxation and denounce taxation broadly or in its entirety, classifying taxation as theft or extortion through coercion along with the use of force . Within market economies, taxation
2538-464: Is economically justified, as it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do. When real estate is held by a higher government unit or some other entity not subject to taxation by the local government, the taxing authority may receive a payment in lieu of taxes to compensate it for some or all of the foregone tax revenues. In many jurisdictions (including many American states), there
2632-495: Is generally a gain on sale of capital assets—that is, those assets not held for sale in the ordinary course of business. Capital assets include personal assets in many jurisdictions. Some jurisdictions provide preferential rates of tax or only partial taxation for capital gains. Some jurisdictions impose different rates or levels of capital-gains taxation based on the length of time the asset was held. Because tax rates are often much lower for capital gains than for ordinary income, there
2726-468: Is imported by a machine manufacturer. That manufacturer will pay the VAT on the purchase price, remitting that amount to the government. The manufacturer will then transform the steel into a machine, selling the machine for a higher price to a wholesale distributor. The manufacturer will collect the VAT on the higher price but will remit to the government only the excess related to the "value-added" (the price over
2820-541: Is named FairTax . In Canada, the federal sales tax is called the Goods and Services Tax (GST) and now stands at 5%. The provinces of British Columbia, Saskatchewan, Manitoba, and Prince Edward Island also have a provincial sales tax [PST]. The provinces of Nova Scotia, New Brunswick, Newfoundland & Labrador, and Ontario have harmonized their provincial sales taxes with the GST—Harmonized Sales Tax [HST], and thus
2914-480: Is not required to vote on the request and has ignored most presidential requests. In response, some have called for a line item veto to strengthen the rescission power and force Congress to vote on the disputed funds. The Act was passed because Congressional representatives thought that President Nixon had abused his power of impoundment by withholding funds for programs he opposed. The Act, especially after Train v. City of New York (1975), effectively removed
Economic Growth and Tax Relief Reconciliation Act of 2001 - Misplaced Pages Continue
3008-528: Is often hypothecated to pay the government to maintain a navy or border police. The classic ways of cheating a tariff are smuggling or declaring a false value of goods. Tax, tariff and trade rules in modern times are usually set together because of their common impact on industrial policy , investment policy , and agricultural policy . A trade bloc is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside
3102-482: Is often imposed based on a deemed disposition of all the individual's property. One example is the United States under the American Jobs Creation Act , where any individual who has a net worth of $ 2 million or an average income-tax liability of $ 127,000 who renounces his or her citizenship and leaves the country is automatically assumed to have done so for tax avoidance reasons and is subject to
3196-465: Is preserved for the employee, the funds may be commingled for investment purposes. It is an improvement upon the unpopular qualified voluntary employee contribution (QVEC) provision developed in the early 1980s. The so-called Roth 401(k)/403(b) is a new tax-qualified employer-sponsored retirement plan to become effective in 2006, and would offer tax treatment in a retirement plan similar to that offered to account holders of Roth IRAs. For plan sponsors,
3290-486: Is sometimes called a net wealth tax . Recurrent property taxes may be imposed on immovable property (real property) and on some classes of movable property. In addition, recurrent taxes may be imposed on the net wealth of individuals or corporations. Many jurisdictions impose inheritance tax on property at time of inheritance or gift tax at the time of gift transfer. Some jurisdictions impose taxes on financial or capital transactions . A property tax (or millage tax)
3384-439: Is the value of a good, service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value-added taxes are different types of ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value-added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs). In contrast to ad valorem taxation
3478-399: Is to reduce the environmental impact by repricing . Economists describe environmental impacts as negative externalities . As early as 1920, Arthur Pigou suggested a tax to deal with externalities (see also the section on Increased economic welfare below). The proper implementation of environmental taxes has been the subject of a long-lasting debate. An important feature of tax systems is
3572-412: Is widespread controversy and dispute about the proper definition of capital. Corporate tax refers to income tax, capital tax, net-worth tax, or other taxes imposed on corporations. Rates of tax and the taxable base for corporations may differ from those for individuals or for other taxable persons. Many countries provide publicly funded retirement or healthcare systems. In connection with these systems,
3666-557: The 2000 presidential election , and he introduced a major tax cut proposal shortly after taking office. Though a handful of Democrats supported the bill, most support came from congressional Republicans . The bill was passed by Congress in May 2001, and signed into law by Bush on June 7, 2001. Due to the narrow Republican majority in the United States Senate , EGTRRA was passed using the reconciliation process, which bypasses
3760-674: The American Taxpayer Relief Act of 2012 . The sunset provision allowed EGTRRA to sidestep the Byrd Rule , a Senate rule that amends the Congressional Budget Act to allow Senators to block a piece of legislation if it purports a significant increase in the federal deficit beyond ten years. The sunset allowed the bill to stay within the letter of the PAYGO law while removing nearly $ 700 billion from amounts that would have triggered PAYGO sequestration. In addition to
3854-567: The Bill Clinton administration , and with the Federal Reserve Chairman Alan Greenspan 's support, Bush argued that the best use of the surplus was to lower taxes. By the time Bush took office, reduced economic growth had led to less robust federal budgetary projections, but Bush maintained that tax cuts were necessary to boost economic growth. After Treasury Secretary Paul O'Neill expressed concerns over
Economic Growth and Tax Relief Reconciliation Act of 2001 - Misplaced Pages Continue
3948-546: The Budget Enforcement Act of 1990 , and the Balanced Budget Act of 1997 . The original 1974 legislation, however, remains the basic blueprint for budget procedures today. The limitation on debate that prevents a budget reconciliation bill from being filibustered in the Senate (requiring a three-fifths vote to end debate) led to frequent attempts to attach amendments unrelated to the budget to
4042-579: The Jobs and Growth Tax Relief Reconciliation Act of 2003 ("JGTRRA"), which cut taxes by another $ 350 billion over 10 years. That law also lowered the capital gains tax and taxes on dividends . Collectively, the Bush tax cuts reduced federal individual tax rates to their lowest level since World War II , and government revenue as a share of gross domestic product declined from 20.9% in 2000 to 16.3% in 2004. A 2012 Congressional Budget Office analysis found that
4136-756: The White House Office of Management and Budget expressing her concerns beginning in July 2019 that the White House withholding fund from Ukraine could be a violation of the Impoundment Control Act. On January 16, 2020, the Government Accountability Office (GAO) issued a decision on the "Matter of: Office of Management and Budget—Withholding of Ukraine Security Assistance." The GAO report found: "In
4230-472: The customs house , and revenue derived from that source is called excise revenue proper. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury as spirits , beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles (a customs duty ). Excises (or exemptions from them) are also used to modify consumption patterns of
4324-402: The elderly , unemployment benefits , transfer payments , subsidies and public transportation . Energy , water and waste management systems are also common public utilities . According to the proponents of the chartalist theory of money creation , taxes are not needed for government revenue, as long as the government in question is able to issue fiat money . According to this view,
4418-567: The Congress. This budget resolution sets limits on revenues and spending that may be enforced in Congress through procedural objections called points of order . The budget resolution can also specify that a budget reconciliation bill be written, which the Congress will then consider under expedited procedures. The act has been amended several times, including provisions in the Balanced Budget and Emergency Deficit Control Act of 1985 ,
4512-459: The IRA to a new employer's 403(b) or the entire transfer could be directly from the old employer's 403(b) to the new employer's 401(k). That the new Tax Act allows employers to do so does not mean that any employer is forced to accept new money from the outside. The so-called "catch-up" provision allows employees over the age of 50 to make additional contributions to their retirement plans over and above
4606-551: The Senate filibuster . EGTRRA lowered federal income tax rates, reducing the top tax rate from 39.6 percent to 35 percent and reducing rates for several other tax brackets. The act also reduced capital gain taxes, raised pre-tax contribution limits for defined contribution plans and Individual Retirement Accounts , and reduced the estate tax . In 2003, Bush signed another bill, the Jobs and Growth Tax Relief Reconciliation Act of 2003 , which contained further tax cuts and accelerated certain tax changes that were part of EGTRRA. Due to
4700-558: The above states, only Alaska and New Hampshire do not levy a state sales tax. Additional information can be obtained at the Federation of Tax Administrators website. In the United States, there is a growing movement for the replacement of all federal payroll and income taxes (both corporate and personal) with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The tax proposal
4794-485: The arts , public works , distribution , data collection and dissemination , public insurance , and the operation of government itself. A government's ability to raise taxes is called its fiscal capacity . When expenditures exceed tax revenue , a government accumulates government debt . A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services . These services can include education systems , pensions for
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#17327756109164888-412: The bloc. A customs union has a common external tariff , and the participating countries share the revenues from tariffs on goods entering the customs union. In some societies, tariffs also could be imposed by local authorities on the movement of goods between regions (or via specific internal gateways). A notable example is the likin , which became an important revenue source for local governments in
4982-404: The cost of the sheet steel). The wholesale distributor will then continue the process, charging the retail distributor the VAT on the entire price to the retailer, but remitting only the amount related to the distribution mark-up to the government. The last VAT amount is paid by the eventual retail customer who cannot recover any of the previously paid VAT. For a VAT and sales tax of identical rates,
5076-407: The country typically requires employers or employees to make compulsory payments. These payments are often computed by reference to wages or earnings from self-employment. Tax rates are generally fixed, but a different rate may be imposed on employers than on employees. Some systems provide an upper limit on earnings subject to the tax. A few systems provide that the tax is payable only on wages above
5170-422: The effect of discouraging speculative purchases of assets by decreasing liquidity. In the United States , transfer tax is often charged by the state or local government and (in the case of real property transfers) can be tied to the recording of the deed or other transfer documents. Some countries' governments will require a declaration of the taxpayers' balance sheet (assets and liabilities), and from that exact
5264-464: The estates of the deceased. In contrast with a tax on real estate (land and buildings), a land-value tax (or LVT) is levied only on the unimproved value of the land ("land" in this instance may mean either the economic term, i.e., all-natural resources, or the natural resources associated with specific areas of the Earth's surface: "lots" or "land parcels"). Proponents of the land-value tax argue that it
5358-488: The fifth provision can have the effect of requiring that any tax cut or spending an increase, which be approved by a three-fifths majority, or else the law must return to its previous state after ten years. This is responsible for the use of sunset clauses in several recent budget acts, when proposed tax cuts commanded majority support but not the necessary three-fifths majority to suspend the Byrd Rule. For example, many of
5452-516: The funds from obligation for an unauthorized reason in violation of the ICA.1 See 2 U.S.C. § 684. We also question actions regarding funds appropriated to the Department of State (State) for security assistance to Ukraine." The Center for Public Integrity found that "OMB's actions did not comply with any of the exceptions to the law's demand that a president carry out congressional spending orders,
5546-793: The government expenditure of taxes raised is often highly debated in politics and economics . Tax collection is performed by a government agency such as the Internal Revenue Service (IRS) in the United States , His Majesty's Revenue and Customs (HMRC) in the United Kingdom , the Canada Revenue Agency or the Australian Taxation Office . When taxes are not fully paid, the state may impose civil penalties (such as fines or forfeiture ) or criminal penalties (such as incarceration ) on
5640-506: The household. Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax. If an artwork had to be sent to another state for some touch-ups, it may have become subject to personal property tax in that state as well. Inheritance tax, also called estate tax, are taxes that arise for inheritance or inherited income. In United States tax law , there
5734-481: The individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller." According to this definition, for example, income tax is "direct", and sales tax is "indirect". Congressional Budget and Impoundment Control Act of 1974 The Congressional Budget and Impoundment Control Act of 1974 ( Pub. L. 93–344 , 88 Stat. 297 , 2 U.S.C. §§ 601 – 688 )
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#17327756109165828-512: The jurisdiction, which tax-law principles in the jurisdiction may modify or replace. The incidence of taxation varies by system, and some systems may be viewed as progressive or regressive . Rates of tax may vary or be constant (flat) by income level. Many systems allow individuals certain personal allowances and other non-business reductions to taxable income, although business deductions tend to be favored over personal deductions. Tax-collection agencies often collect personal income tax on
5922-734: The land. Property taxes are usually charged on a recurrent basis (e.g., yearly). A common type of property tax is an annual charge on the ownership of real estate , where the tax base is the estimated value of the property. For a period of over 150 years from 1695, the government of England levied a window tax , with the result that one can still see listed buildings with windows bricked up in order to save their owner's money. A similar tax on hearths existed in France and elsewhere, with similar results. The two most common types of event-driven property taxes are stamp duty , charged upon change of ownership, and inheritance tax , which many countries impose on
6016-508: The late Qing China . Occupational taxes or license fees may be imposed on businesses or individuals engaged in certain businesses. Many jurisdictions impose a tax on vehicles. A poll tax, also called a per capita tax , or capitation tax , is a tax that levies a set amount per individual. It is an example of the concept of fixed tax . One of the earliest taxes mentioned in the Bible of a half-shekel per annum from each adult Jew (Ex. 30:11–16)
6110-410: The law requires involuntary cash-out distributions of 401(k) accounts into a default IRA. It accelerates the mandatory vesting schedule applied to matching contributions, but increases the portion of employer contributions permitted from profit sharing. Small employers are granted tax incentives to offer retirement plans to their employees, and sole proprietors, partners and S corporation shareholders gain
6204-475: The loss, such that business losses can only be deducted against business income tax by carrying forward the loss to later tax years. In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental payment from the government instead of paying taxes to the government. Most jurisdictions imposing an income tax treat capital gains as part of income subject to tax. Capital gain
6298-638: The most notable characteristics of EGTRRA is that its provisions were designed to sunset (or revert to the provisions that were in effect before it was passed) on January 1, 2011 (that is, for tax years, plan years, and limitation years that begin after December 31, 2010). After a two-year extension by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 , the Bush era rates for taxpayers making less than $ 400,000 per year ($ 450,000 for married couples) were ultimately made permanent by
6392-586: The non-paying entity or individual. The levying of taxes aims to raise revenue to fund governing , to alter prices in order to affect demand , or to regulate some form of cost or benefit . States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure ( roads , public transportation , sanitation , legal systems , public security , public education , public health systems ), military , scientific research & development , culture and
6486-475: The normal limits. For workers who are already retired, the law raises the age for minimum required distributions (MRDs), directing the Treasury to revise its life expectancy tables and simplify MRD rules. EGTRRA created two new retirement savings vehicles. The Deemed IRA or Sidecar IRA is a Roth IRA attached as a separate account to an employer-sponsored retirement plan; while the differing tax treatment
6580-479: The per-child tax credit and the amount eligible for credit spent on dependent child care, phased out limits on itemized deductions and personal exemptions for higher income taxpayers, and increased the exemption for the Alternative Minimum Tax, and created a new depreciation deduction for qualified property owners. The capital gains tax on qualified gains of property or stock held for five years
6674-417: The percentage of the tax burden as it relates to income or consumption. The terms progressive, regressive, and proportional are used to describe the way the rate progresses from low to high, from high to low, or proportionally. The terms describe a distribution effect, which can be applied to any type of tax system (income or consumption) that meets the definition. The terms can also be used to apply meaning to
6768-428: The plan and maintain its tax deferred status only if the money went directly to an IRA or to an IRA and back into a "like kind" defined contribution retirement account. For example, 403(b) moneys leaving the old employer could only go to the new employer's defined contribution plan if it were also a 403(b). Now the old 401(k) plan money could be transferred directly in a trustee-to-trustee "rollover" to an IRA and then from
6862-578: The presidential power of impoundment. In late November 2019, the Impoundment Control Act made news during the Trump impeachment investigation , when two budget office staffers resigned over their concerns over apparent improprieties regarding the hold of approved Ukraine military funds . Among the concerns was the questionable transfer of decision-making authority to Michael Duffey, a political appointee. Further emails released showed that Acting Undersecretary of Defense (Comptroller) Elaine McCusker emailed
6956-576: The provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 would have expired as soon as fiscal year 2010 if not extended. The provisions that were to expire including the $ 1000 per child tax credit, the 10% income tax bracket for low-income workers, and the deduction for state and local sales taxes paid. The expiration dates in those Acts were inserted in order to avoid Byrd Rule points of order. Provisions against which
7050-458: The public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by "creating" money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as traffic fines ), by borrowing and confiscating criminal proceeds. From
7144-440: The purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security. The Organisation for Economic Co-operation and Development (OECD) publishes an analysis of the tax systems of member countries. As part of such analysis, OECD has developed
7238-510: The reconciliation bills. In response, the budget reconciliation acts of 1985, 1986, and 1990 adopted the "Byrd Rule" (Section 313 of the Budget Act). The Byrd Rule allows Senators to raise points of order (which can be waived by a three-fifths majority of Senators ) against provisions in the reconciliation bills that are "extraneous". Provisions are considered extraneous if they: Since the reconciliation bill may cover as many as ten years,
7332-491: The right amount of tax at the right time and securing the correct tax allowances and tax relief. The first known taxation occurred in Ancient Egypt around 3000–2800 BC. Taxes consist of direct or indirect taxes and may be paid in money or as labor equivalent. All countries have a tax system in place to pay for public, common societal, or agreed national needs and for the functions of government. Some countries levy
7426-433: The right to take loans from their company pension plans. House Republicans pushed Congress to provide incentives for those investing in education. One bill in the house was proposed to remove the time limit on student loan interest deductions. Their push was successful and was included in the final bill. The EGTRRA made sweeping changes to the estate tax, gift tax , and generation-skipping transfer tax . Because EGTRRA
7520-416: The rules concerning reconciliation, EGTRRA contained a sunset provision that would end the tax cuts in 2011, but most of the cuts were made permanent with the passage of the American Taxpayer Relief Act of 2012 . Bush's promise to cut taxes was the centerpiece of his 2000 presidential campaign, and upon taking office, he made tax cuts his first major legislative priority. A budget surplus had developed during
7614-547: The summer of 2019, OMB withheld from obligation approximately $ 214 million appropriated to DOD for security assistance to Ukraine. (...) OMB withheld amounts by issuing a series of nine apportionment schedules with footnotes that made all unobligated balances for the Ukraine Security Assistance Initiative (USAI) unavailable for obligation. (...) Pursuant to our role under the ICA, we are issuing this decision. (...) we conclude that OMB withheld
7708-410: The supply of people is in fact not fixed over time: on average, couples will choose to have fewer children if a poll tax is imposed. The introduction of a poll tax in medieval England was the primary cause of the 1381 Peasants' Revolt . Scotland was the first to be used to test the new poll tax in 1989 with England and Wales in 1990. The change from progressive local taxation based on property values to
7802-524: The support of congressional Republicans and a minority of congressional Democrats, passing in the House on May 16. The bill was then passed in the Senate on May 26. President Bush signed it into law in June of 2001. The narrow Republican majority in the Senate necessitated the use of the reconciliation , which in turn necessitated that the tax cuts would phase out in 2011 barring further legislative action. One of
7896-465: The tax cut reduced federal tax receipts by $ 1.2 trillion over ten years. Tax A tax is a mandatory financial charge or levy imposed on a taxpayer (an individual or legal entity ) by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities . Tax compliance refers to policy actions and individual behavior aimed at ensuring that taxpayers are paying
7990-542: The tax cut's size and the possibility of future deficits, Vice President Cheney took charge of writing the bill, which the administration proposed to Congress in March 2001. Bush initially sought a $ 1.6 trillion tax cut over a ten-year period, but ultimately settled for a $ 1.35 trillion tax cut. The administration rejected the idea of "triggers" that would phase out the tax reductions should the government again run deficits. The Economic Growth and Tax Relief Reconciliation Act won
8084-593: The tax cuts implemented by the EGTRRA, it initiated a series of rebates for all taxpayers that filed a tax return for 2000. The rebate was up to a maximum of $ 300 for single filers with no dependents, $ 500 for single parents, and $ 600 for married couples. Anybody who paid less than their maximum rebate amount in net taxes received that amount, meaning some people who did not pay any taxes did not receive rebates. The rebates were automatic for anybody who filed their 2000 tax return on time, or filed for an extension and quickly sent
8178-516: The taxation of select consumption, such as a tax on luxury goods and the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption and decreases a tax burden on low end consumption. Taxes are sometimes referred to as "direct taxes" or "indirect taxes". The meaning of these terms can vary in different contexts, which can sometimes lead to confusion. An economic definition, by Atkinson, states that "...direct taxes may be adjusted to
8272-405: The total payroll. These taxes may be imposed in both the country and sub-country levels. A wealth tax is levied on the total value of personal assets, including: bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses , financial securities , and personal trusts. Liabilities (primarily mortgages and other loans) are typically deducted, hence it
8366-681: The total tax paid is the same, but it is paid at differing points in the process. VAT is usually administrated by requiring the company to complete a VAT return, giving details of VAT it has been charged (referred to as input tax) and VAT it has charged to others (referred to as output tax). The difference between output tax and input tax is payable to the Local Tax Authority. Many tax authorities have introduced automated VAT which has increased accountability and auditability , by utilizing computer systems, thereby also enabling anti-cybercrime offices as well. Sales taxes are levied when
8460-443: The view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector , levied on a basis of predetermined criteria and without reference to specific benefits received. In modern taxation systems, governments levy taxes in money; but in-kind and corvée taxation are characteristic of traditional or pre- capitalist states and their functional equivalents. The method of taxation and
8554-516: The year 1643, as part of a scheme of revenue and taxation devised by parliamentarian John Pym and approved by the Long Parliament . These duties consisted of charges on beer, ale, cider, cherry wine, and tobacco, to which list were afterward added paper, soap, candles, malt, hops, and sweets. The basic principle of excise duties was that they were taxes on the production, manufacture, or distribution of articles which could not be taxed through
8648-443: Was a form of the poll tax. Poll taxes are administratively cheap because they are easy to compute and collect and difficult to cheat. Economists have considered poll taxes economically efficient because people are presumed to be in fixed supply and poll taxes, therefore, do not lead to economic distortions. However, poll taxes are very unpopular because poorer people pay a higher proportion of their income than richer people. In addition,
8742-544: Was reduced from 10% to 8% for those in the 15% income tax bracket. EGTRRA introduced sweeping changes to retirement plans , incorporating many of the so-called Portman - Cardin provisions proposed by those House members in 2000 and earlier in 2001. Overall it raised pre-tax contribution limits for defined contribution plans and Individual Retirement Accounts (IRAs), increased defined benefit compensation limits, made non- qualified retirement plans more flexible and more similar to qualified plans such as 401(k)s , and created
8836-588: Was subject to a "sunset" provision, the estate, gift, and generation-skipping taxes were automatically supposed to be reinstated in 2011. After the tax bill was passed, Senator Jim Jeffords left the Republican Party and began caucusing with the Democrats, giving them control of the Senate. After Republicans re-took control of the Senate during the 2002 mid-term elections, Bush proposed further tax cuts. With little support among Democrats, Congress passed
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