Tip Off: The Problem with Exempting Tips from Taxes
September 20, 2024
Exempting tips from taxes does nothing to help most low-income workers, and it may do little for many tipped workers—or even actively harm them.
The U.S. federal government budget has run a deficit–it has spent more than it collected in revenues–every year but five over the past five decades. Under a deficit, the federal government needs to borrow in order to pay for government programs. The national debt is the accumulation of this borrowing, together with the associated interest owed to investors; it stood at over $31 trillion as of October, 2022.
The decisions governments make concerning taxation, borrowing, and spending–and the consequences of these policies for government deficits and debt–have profound and wide-ranging effects. They impact incentives and economic performance; growth; social welfare; and financial stability, among others. Our memos and podcasts address concerns about debt; the efficacy and distributional effects of tax policies and the social safety net; demographic implications for government finances; tax evasion; and state and local finance; among other topics.
September 20, 2024
Exempting tips from taxes does nothing to help most low-income workers, and it may do little for many tipped workers—or even actively harm them.
May 14, 2024
Current U.S. military spending is higher than at any point of the Cold War in inflation-adjusted terms, but relatively low as a percent of national income.
November 15, 2023
The debt is projected to reach levels beyond historical experience in the next 3 decades. The challenge is significant but manageable as a matter of economics.
November 2, 2023
Reducing public spending can help lower inflation. But targeted spending is especially important to protect those disproportionately hurt by high inflation.
October 2, 2023
Shutdowns end up costing the government more than regular operations and can hurt the economy. There have been over 20 shutdowns in the past 50 years.
September 4, 2023
Local governments have spent hundreds of millions of dollars in public subsidies for professional sports facilities over the past 70 years. What explains this?
June 12, 2023
Despite the high-stakes debt ceiling negotiations, U.S. debt relative to GDP is projected to keep growing over the next decade. What factors account for this projection and why does it matter?
May 24, 2023
The debt limit debate has cuts to Medicaid, SNAP and TANF on the table. The scope for savings in government spending is bound by their share of the budget.
May 11, 2023
The consequences of a failure to raise the debt ceiling are serious but difficult to quantify. Why does the U.S. have a debt ceiling, and what does it mean to raise it?