How to improve the tax code is the subject of much debate.
Any further efforts to address marriage penalties should be targeted to two-earner couples and structured to avoid increasing marriage bonuses.
Policymakers use the tax system not only to raise revenue but also to promote social policy goals.
Policymakers should broaden the tax base by limiting tax preferences that do not efficiently achieve important policy goals.
Policymakers should not increase the taxation of Social Security benefits and should exempt people with low and moderate incomes from paying tax on their benefits.
A progressive income tax is the preferred method of raising revenue at the federal and state levels but other sources, such as a consumption taxes, may be needed.
Most states and localities impose a tax on retail sales. Such taxes generate a significant portion of state and local revenue.
Although state and local sales taxes are major revenue raisers, they are regressive.
States and localities should include services in the taxable base to reduce regressivity and improve neutrality.