How did the TCJA change taxes of families with children? Q.How did the TCJA change taxes of families with children? A.The 2017 Tax Cuts and Jobs Act increased the standard deduction, eliminated personal exemptions, doubled the maximum child tax credit (CTC) from $1,000 to $2,000 per child under age 17, and added a $500 nonrefundable credit for children ineligible for the $2,000 credit. The legislation also changed how the earned income tax credit (EITC) is indexed, causing the credit to grow more slowly over time. Despite these changes, overall tax benefits for families with children remained roughly the same as under prior law. The changes not related to the EITC expire after 2025. Read more about How did the TCJA change taxes of families with children?
What is the Flat Tax? Q.What is the Flat Tax? A.While any tax system with flat rates could be called a flat tax, the name is usually reserved for a system developed by Robert Hall and Alvin Rabushka in 1985. Their flat tax is really a two-part VAT: All value added except wages is taxed at the business level and wages are taxed at the individual level at the same flat rate but with an exemption related to family size. Read more about What is the Flat Tax?
What is carried interest, and how is it taxed? Q.What is carried interest, and how is it taxed? A.Carried interest, income flowing to the general partner of a private investment fund, often is treated as capital gains for the purposes of taxation. Some view this tax preference as an unfair, market-distorting loophole. Others argue that it is consistent with the tax treatment of other entrepreneurial income. Read more about What is carried interest, and how is it taxed?