Molly F. Sherlock
Analyst in Economics
Donald J. Marples
Section Research Manager
The major sources of federal tax revenue are individual income taxes, Social Security and other payroll taxes, corporate income taxes, excise taxes, and estate and gift taxes. This report describes the federal tax structure, provides some statistics on the tax system as a whole, and presents analysis of selected tax concepts.
The federal income tax is levied on an individual’s taxable income, which is adjusted gross income (AGI) less deduction and exemptions. Tax rates, based on filing status (e.g., married filing jointly or single individual) determine the level of tax liability. Tax rates in the United States are progressive, such that higher levels of income are taxed at higher rates. Once tax liability is calculated, tax credits can be used to reduce tax liability. Tax deductions and tax credits are tools available to policymakers to increase or decrease the after-tax price of undertaking specific activities. Individuals with high levels of exemptions, deductions, and credits relative to income may be required to file under the alternative minimum tax (AMT).
Corporate taxable income is also subject to varying rates, where those with higher levels of income pay higher levels of taxes. Social Security and Medicare tax rates are, respectively, 12.4% and 2.9%. In 2011, Social Security taxes are levied on the first $106,800 of wages, with the wage cap adjusted annually for increases in average wages in the economy. Medicare taxes are assessed against all wage income. Federal excise taxes are levied on specific goods, such as transportation fuels, alcohol, tobacco, and telephones.
In FY2010, individual income taxes accounted for 42% of total federal revenue. Social Security taxes accounted for 40%. Corporate income taxes accounted for 9% while excise taxes accounted for 3%. Estate and gift, customs, and miscellaneous taxes accounted for the remaining 7% of total revenue. Over time, corporate income tax has become much less important as a revenue source while Social Security taxes have provided a larger share of total revenues.
Analysis of tax statistics from the federal tax system as a whole leads to three conclusions: (1) federal revenue as a percentage of GDP is in line with historical trends; (2) the U.S. fiscal position is in line with the fiscal position of other industrialized nations (revenues and expenditures as a percentage of GDP are relatively low); and (3) over the past decade, effective tax rates have fallen for individuals at all income levels, but have fallen more for lower-income individuals, reducing their share of overall tax liabilities.
The final sections of this report analyze a number of tax concepts. Tax expenditures are revenue losses from special tax deductions, credits, and other benefits. Capital gains warrant special attention, as there is debate about their being taxed at a lower rate. Marriage tax penalties and bonuses, while reduced following legislation enacted in 2001 and 2003, still pose an inequity in the tax system. Tax deferral, or the timing of taxes, poses problems related to the timing of taxation, specifically with respect to capital gains. Depreciation is important, as accelerated depreciation schemes or expensing can influence firm behavior. Tax liability also depends on form of business organization. Finally, the issue of whether taxes can influence firms’ competitiveness is reviewed.
Date of Report: March 15, 2011
Number of Pages: 30
Order Number: RL32808
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Katelin P. Isaacs
Analyst in Income Security
Julie M. Whittaker
Specialist in Income Security
The 112th Congress may consider a number of issues related to currently available unemployment insurance programs: Unemployment Compensation (UC), the temporary Emergency Unemployment Compensation (EUC08), and Extended Benefits (EB). With the national unemployment predicted to remain high into next year, the increased demand for regular and extended unemployment benefits will continue. At the same time, the authorization for several key unemployment insurance provisions is temporary and will end in the next year. For instance, the EUC08 program, which currently provides the bulk of extended unemployment benefits, is scheduled to expire the week ending on or before January 3, 2012. The 100% federal financing of the EB program, will expire on January 4, 2012. In addition, a temporary 0.2% federal unemployment tax (FUTA) surtax expires at the end of June 2011.
The 112th Congress faces these upcoming expirations as well as other likely unemployment insurance policy issues, including unemployment insurance financing. Additionally, recent policy discussions have focused on the appropriate length of unemployment benefits. This discussion includes consideration of whether additional weeks of unemployment benefits—the creation of a tier V of the EUC08 program, for instance—is warranted.
This report provides a brief overview of the three unemployment insurance programs—UC, EUC08, and EB—that may currently pay benefits to eligible unemployed workers. It also summarizes unemployment insurance legislation in the previous (111th) Congress and describes relevant legislation introduced in the 112th Congress.
Date of Report: March 18, 2011
Number of Pages: 14
Order Number: R41662
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Maggie McCarty, Coordinator
Specialist in Housing Policy
Libby Perl
Specialist in Housing Policy
Bruce E. Foote
Analyst in Housing Policy
Katie Jones
Analyst in Housing Policy
Eugene Boyd
Analyst in Federalism and Economic Development Policy
The Department of Housing and Urban Development (HUD) is the federal agency charged with administering a number of programs designed to promote both the availability of safe, decent, and affordable housing and community development. The agency submits a budget as a part of the President’s formal budget request each year, and then Congress, through the appropriations process, decides how much funding to provide to the agency. Funding for HUD is under the jurisdiction of the Department of Transportation, HUD, and Related Agencies subcommittees of the House and the Senate appropriations committees.
Regular appropriations for HUD (not including emergency supplemental funding) have increased by 57% in the past nine years. This increase in the HUD budget has been partly attributable to increased funding for HUD programs, particularly the Section 8 programs, which have had a 70% increase in funding over this period and have grown to account for well over half of HUD’s total budget. The increase in funding has also resulted from a decrease in the amount of rescissions, collections, and receipts available to offset the cost of the HUD budget.
For FY2011, the President’s budget requested about $45.57 billion in net new budget authority for HUD, a decrease of about 1% from the FY2010 enacted level. However, the requested decrease in net new budget authority would actually include a 3% increase in appropriations for HUD programs in aggregate. The overall increase in appropriations requested would be more than offset by a substantial increase in offsetting collections and receipts, which are estimated to come from proposed changes to the Federal Housing Administration (FHA) mortgage insurance programs. The two Section 8 rental assistance programs were requested to receive the largest increases, followed by increases for programs for the homeless and for HUD’s research and technology needs. The President’s budget proposed decreased funding for other programs, such as programs providing housing for persons who are elderly or disabled and capital repairs in public housing, and the brownfields redevelopment program would no longer be funded.
The House Appropriations Committee reported its version of the FY2011 HUD funding bill on July 26, 2010 (H.R. 5850, 111th Congress), and it passed the full House on July 29, 2010. The Senate Appropriations Committee approved its version (S. 3644, 111th Congress) on July 23, 2010. The House-passed version would have provided $46.55 billion for HUD in FY2011 and the Senate committee-reported version would have provided $46.59 billion, about $1 billion more than the President’s request.
When no appropriations legislation was enacted before the beginning of FY2011, the 111th Congress enacted a series of continuing resolutions (CR) to continue funding at the FY2010 level for most accounts in the federal budget (including all of the accounts in HUD’s budget). Before the last CR of the 111th Congress (P.L. 111-322) was slated to expire on March 4, 2011, the 112th Congress approved another short-term CR (H.J.Res. 44, P.L. 112-4), which funded the government through March 18, 2011. Prior to that CR expiring, Congress approved another, extending funding through April 8, 2011 (H.J.Res. 48, P.L. 112-6). In addition to these short-term CRs, the 112th Congress has considered legislation to fund the government for the remainder of the fiscal year. On February 18, 2011, the House approved H.R. 1, a year-long CR. It would fund some HUD accounts at their FY2010 levels, but would reduce funding for others, including the Community Development Block Grant (CDBG) program, which would be cut by over 60%. Overall, HUD’s net budget authority would be reduced by about 16% under H.R. 1. H.R. 1 was considered, but rejected, by the Senate on March 9, 2011.
Date of Report: March 18, 2011
Number of Pages: 43
Order Number: R41233
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Robert Jay Dilger
Senior Specialist in American National Government
Oscar R. Gonzales
Analyst in Economic Development Policy
The SBA administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery from natural disasters; and small business management and technical assistance training programs to assist business formation and expansion. Congressional interest in these programs has increased in recent years, primarily because assisting small business is viewed as a means to enhance economic growth.
Some, including President Obama, have argued that current economic conditions make it imperative that the SBA be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small business economic growth and job creation.
Several laws were enacted during the 111th Congress to enhance small business access to capital. For example, P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including funding to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program’s maximum loan guaranty percentage to 90%. P.L. 111-240, the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans, a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA’s loan guaranty and contracting programs, funding to continue the SBA’s fee subsidies and the 7(a) program’s 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322, the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program’s 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011.
This report addresses a core issue facing Congress during the 112th Congress: what, if any, additional action should the federal government take to enhance small business access to capital? After briefly discussing the role of small business in job creation and retention, this report provides an assessment of the supply and demand for small business loans. It also examines selected laws enacted during the 110th and 111th Congresses that were designed to enhance small business access to capital by increasing the supply of small business loans and/or the demand for small business loans. This report also includes empirical evidence concerning small business lending and borrowing, including the number and amount of small business loans guaranteed by the SBA.
Date of Report: March 21, 2011
Number of Pages: 24
Order Number: R40985
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Katelin P. Isaacs
Analyst in Income Security
Julie M. Whittaker
Specialist in Income Security
In July 2008, a new temporary unemployment benefit, the Emergency Unemployment Compensation (EUC08) program, began. The program’s authorization ends on January 3, 2012. EUC08 was created by P.L. 110-252, and it has been amended by P.L. 110-449, P.L. 111-5, P.L. 111-92, P.L. 111-118, P.L. 111-144, P.L. 111-157, P.L. 111-205, and P.L. 111-312. Most recently, P.L. 111-312 extends the authorization of the EUC08 program, but does not change the structure of the program or augment benefits. This temporary unemployment insurance program provides up to 20 additional weeks of unemployment benefits to certain workers who have exhausted their rights to regular unemployment compensation (UC) benefits. A second tier of benefits provides up to an additional 14 weeks of benefits (for a total of up to 34 weeks of EUC08 benefits for all unemployed workers). A third tier is available in states with a total unemployment rate of at least 6% and provides up to an additional 13 weeks of EUC08 benefits (for a total of up to 47 weeks of EUC08 benefits in certain states). A fourth tier is available in states with a total unemployment rate of at least 8.5% and provides up to an additional six weeks of EUC08 benefits (for a total of up to 53 weeks of EUC08 benefits in certain states).
All tiers of EUC08 benefits are temporary and expire the week ending on or before January 3, 2012. Those beneficiaries receiving tier I, II, III, or IV of EUC08 benefits before December 31, 2011 (January 1, 2012, in New York) are “grandfathered” for their remaining weeks of eligibility for that particular tier only. There will be no new entrants into any tier of the EUC08 program after December 31, 2011. If an individual is eligible to continue to receive his or her remaining EUC08 benefit tier after December 31, 2011, that individual would not be entitled to tier II benefits once those tier I benefits were exhausted. No EUC08 benefits—regardless of tier—are payable for any week after June 9, 2012.
On December 17, 2010, the President signed P.L. 111-312, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. P.L. 111-312 extends the authorization for the EUC08 program until January 3, 2012, and the 100% federal financing of the Extended Benefit (EB) program through January 4, 2012.
Date of Report: March 18, 2011
Number of Pages: 20
Order Number: RS22915
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Posts
