Jason J. Fichtner

Jason J. Fichtner

  • Senior Research Fellow

Jason J. Fichtner is a senior research fellow at the Mercatus Center at George Mason University. His research focuses on Social Security, federal tax policy, federal budget policy, retirement security, and policy proposals to increase saving and investment.

Previously, he served in several positions at the Social Security Administration, including as deputy commissioner of Social Security (acting), chief economist, and associate commissioner for retirement policy. He also served as senior economist with the Joint Economic Committee of the US Congress.

His work has been featured in the Washington Post, the Wall Street Journal, the New York Times, Investor’s Business Daily, the Los Angeles Times, the Atlantic, and USA Today, as well as on broadcasts by PBS, NBC, and NPR.

He also serves as an adjunct professor at the Georgetown McCourt School of Public Policy, the Johns Hopkins School of Advanced International Studies, and the Virginia Tech Center for Public Administration and Policy, where he teaches courses in economics, public finance, public policy process, public management, and public budgeting processes.

Fichtner earned his BA from the University of Michigan, Ann Arbor; his MPP from Georgetown University; and his PhD in public administration and policy from Virginia Tech.

"Fichtner is the author of "The Hidden Cost of Federal Tax Policy" and the editor of "The Economics of Medicaid."

Published Research

Jason J. Fichtner, Adam Michel | Mar 17, 2016
The system for international corporate income taxation is at risk of losing its most valuable feature—diversity and competition. The Base Erosion and Profit Shifting Project of the Organisation for Economic Co-operation and Development attempts to change the international tax system by transferring control of corporate taxation from individual nations to an international body. This shift favors consolidated and uniform tax rules but sacrifices compliance efficiency, taxpayer rights, and nations’ ability to set the tax policies best suited to their populations.
Jason J. Fichtner, Adam Michel | Jul 14, 2015
A new study published by the Mercatus Center at George Mason University surveys the current economic literature on research and development tax incentives. The study investigates design and implementation problems the R&D credit faces, including legal ambiguities, policy uncertainty, insufficient definitions of “research,” and special-interest lobbying.
Charles Blahous, Jason J. Fichtner, Mark J. Warshawsky | Mar 19, 2015
Social Security’s trustees have long warned Congress to address the troubled finances of the Disability Insurance (DI) program. Given the DI trust fund’s projected exhaustion date of 2016, legislation will be required during this Congress to prevent large, sudden benefit cuts.
Jason J. Fichtner, Adam Michel | Jan 29, 2015
The tax code is often manipulated by arbitrarily shortening depreciation timelines through accelerated depreciation or bonus expensing. As a solution to the current inequity and inefficiency of depreciation policies, this paper advocates full expensing. Expensing incentivizes investment by allowing businesses to write off all expenditures in the year they occur, resulting in a zero effective tax rate on equity-financed capital.

Working Papers

Jason J. Fichtner, Patrick McLaughlin | Jun 02, 2015
The current legislative and regulatory processes may not adequately inform Congress about the scope and economic consequences of legislation. Even if Congress had such information, no mechanism exists to allow Congress to easily act upon it. The budget process permits Congress to monitor and fund programs based on fiscal impact information. These processes could be improved to provide more, better, and actionable information about legislative and regulatory actions, especially through a reform that we term “legislative impact accounting.”…
Jason J. Fichtner, Jason S. Seligman | Mar 05, 2015
This paper focuses on disability insurance but makes the case for considering reforms in tandem—that is, (1) developing disability program reforms that accommodate plausible retirement program reforms while properly aligning incentives to support work and savings and (2) providing a financially secure, vital safety net for disabled Americans.
Jason J. Fichtner, Robert Greene | Sep 30, 2014
In this paper, we examine existing literature on the prevalence, consequences, wastefulness, and causes of year-end spending surges. We then report executive departments’ year-end obligated federal contract expenditure patterns using data obtained from USASpending.gov. We review literature on purported solutions to curb year-end spending surges, and conclude with a policy recommendation of our own.
Jason J. Fichtner, Jacob Feldman | Jun 19, 2014
The $69 billion mortgage interest deduction (MID) is often viewed as an element of the tax code that promotes middle-class prosperity. However, 64 percent of the benefits, as measured by effective tax reduction, goes to households earning more than $100,000 per year. The large variation in nominal benefits is one of the reasons why many economists state that the MID is regressive.

Charts

Veronique de Rugy, Jason J. Fichtner | May 06, 2016
According to the federal government’s latest estimates, government programs for fiscal year 2015 paid out $137 billion “improperly”—meaning that these payments violated guidelines or rules in some way. Fraud is not the only reason, as the federal government reports. Rather, an improper payment can also result from simple clerical error or failure to confirm that a recipient was eligible to receive the amount of money that was disbursed. Whether due to fraud, the complexity of program rules, or bureaucracy, $137 billion is a significant amount of taxpayer funds. Federal spending has grown too massive for the government to provide adequate oversight.
Jason J. Fichtner, Courtney Michaluk, Adam Michel | Dec 03, 2015
Pfizer Inc. recently became the largest US firm to move to a lower-tax jurisdiction by combining with a foreign competitor. In this so-called “inversion,” Pfizer will merge with Allergan PLC, and the new headquarters will be located in Ireland. Inversions are a symptom the United States’ broken, outdated, and uncompetitive corporate tax system. The United States has the single highest corporate tax rate in the developed world—the US combined corporate tax rate is 39.1 percent. The chart below shows that US peer nations have systematically lowered their high corporate tax rates, while the United States’ rate has remained unchanged.
Jason J. Fichtner, Adam Michel | Aug 05, 2015
The research and development (R&D) tax credit—which is one of the largest corporate “tax expenditures,” with an annual cost of more than $9 billion—is one of about 50 “tax extenders” that Congress reauthorizes on a temporary basis. While the tax credit is intended to encourage economic growth by functioning as an incentive for investment in new and innovative technologies, it may not be the best policy to achieve growth.
Veronique de Rugy, Jason J. Fichtner | Feb 24, 2015
This week’s chart is an updated comparison of the different measurements of the unemployment rate from the Bureau of Labor Statistics (BLS). It includes new data on the official and alternative unemployment measurements for January 2015. The widely reported official unemployment rate, which remains the primary measure of labor market performance, is not the most realistic representation of the current state of the economy, because it fails to capture, among other things, individuals who have simply stopped looking for work. The limited perspective on the labor market offered by the official unemployment rate is readily apparent when compared to alternative measures of unemployment.
Veronique de Rugy, Jason J. Fichtner | Jan 13, 2015
This week’s chart presents improper payments made by the thirteen programs that the Office of Management and Budget has labeled “high-error.” The chart ranks transfer programs that allocate at least $750 million in payments from those with the lowest improper payments to those with the highest. The chart also displays the total improper-payment rates as a percentage of total program outlays for each program.
Jason J. Fichtner, Jacob Feldman | Jul 07, 2014
One of the most commonly cited justifications for the mortgage interest deduction (MID) is the claim that the deduction promotes homeownership among the middle class and supports industries that employ middle-class workers. But with 65.2 percent of all tax filers claiming to make less than $50,000, only 9.8 percent of these returns used the mortgage interest deduction.
Veronique de Rugy, Jason J. Fichtner | Feb 17, 2014
This week’s chart, which uses 2012 data from the Office of Management and Budget’s “High-Error Programs Report” to display improper payment amounts and improper payment rates of federal transfer programs, shows that over $100 billion in taxpayer funds were improperly spent in 2012.
Jason J. Fichtner | Jan 27, 2014
The IRS’s mission statement is to “provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” Yet the Economix blog of the New York Times recently posted the following graph on declining performance of IRS customer service representatives (CSR). The data come from a series of annual reports released by Taxpayer Advocate Service—an independent organization within the IRS.

Policy Briefs

Jason J. Fichtner, Angela Kuck, Adam Michel | Mar 10, 2016
Frustration over federal budget gridlock is fueling renewed interest in reforming the congressional budget process. Timely, effective budgeting has proven increasingly elusive for both Democratic and Republican Congresses—both of which have had to rely on temporary funding measures to bridge between one fiscal year and the next. One proposal getting significant attention in Congress is a move away from an annual budget to a biennial budget.
Jason J. Fichtner, Adam Michel | Dec 07, 2015
In an increasingly global economy, national governments are searching for ways to keep corporations from moving highly valuable intellectual property and associated economic activity to lower tax jurisdictions. In particular, governments are concerned with losing jobs, investment that fosters innovation, and the tax base attributable to income arising from intellectual property. One proposed solution is a patent box, also called an innovation box. A patent box lowers the rate of corporate income taxes paid on income originating from targeted intellectual property.
Jason J. Fichtner, Courtney Michaluk, Adam Michel | Dec 03, 2015
Over $2 trillion of US corporate profits have been systematically locked out of the US economy by an outdated tax system. One major symptom of the poorly designed worldwide corporate tax rules in the US is the rise of corporate inversions, where a domestic firm merges with a foreign firm and moves the new corporation’s headquarters abroad.
Veronique de Rugy, Jason J. Fichtner | Aug 21, 2014
The recent decline in federal deficits should not create a false sense that the national debt is no longer a clear and present threat. While this improvement may be encouraging, it represents only a temporary respite from the government’s growing fiscal imbalances.

Testimony & Comments

Jason J. Fichtner | Mar 22, 2016
My testimony focuses on two key issues. First, I will explain how the current-law Windfall Elimination Provision (WEP) is overly complex and unfair. Second, I will discuss how reforming the Social Security benefit formula would improve the simplicity and fairness of the WEP, while still maintaining the original public policy purpose. Additionally, though most of my testimony focuses on the WEP, a related provision, the Government Pension Offset (GPO), has similar complexity and fairness problems that should be addressed.
Jason J. Fichtner, Adam Michel | Mar 22, 2016
The OECD hopes that the new reporting standards will provide tax administrators with useful information to more effectively direct auditors while making it easier to identify artificial profit shifting to tax-advantaged environments. This public comment will argue that the accounting costs of country-by-country reporting will be larger than the Department of the Treasury’s revenue gains and that there will be even higher unanticipated costs from inadvertent disclosures of sensitive information. Because the costs of information centralization will be greater than the benefits, we recommend that the IRS should not implement the proposed regulation on country-by-country reporting. This recommendation is informed by a recent paper from the Mercatus Center at George Mason University that explains key features of the international corporate tax system, the changes the OECD wants to make, and the potentially far-reaching consequences of those changes. The study also provides recommendations to improve corporate taxation without compromising state sovereignty or taxpayer rights.
Jason J. Fichtner | Sep 30, 2015
Academic research and some anecdotal evidence suggests that the current budget rule of use it or lose it is not optimal and may be encouraging wasteful spending of taxpayer dollars. The question remains: If such spending is indeed wasteful, what can be done to reduce it?
Jason J. Fichtner | May 21, 2014
Social Security faces real financial challenges. Dismissing the real and current fiscal challenges facing the Social Security system and kicking the “reform can” further down the road will only increase the severity of the burden associated with reforms when they inevitably must take place.

Research Summaries & Toolkits

Jason J. Fichtner, Veronique de Rugy, Matthew Mitchell, Angela Kuck, Adam Michel | May 25, 2016
The nation’s persistently sluggish economic growth and dire long-term fiscal outlook have increased the urgency of the need to reform the federal revenue system. But what does successful, sustainable tax reform look like? What are its key elements? And what would it achieve?
Jason J. Fichtner, Veronique de Rugy | Dec 03, 2013
Some in Washington claim the federal spending and deficit problem is solved. While the deficit has been cut in half (from a record-high of $1.4 trillion in FY09 to $680 billion in FY13), this reduction can be attributed to several singular events, such as the end of the payroll tax “holiday” and higher receipts from Fannie Mae and Freddie Mac. Over the longer term, deficits and debt are projected to continue increasing.
Veronique de Rugy, Jason J. Fichtner | Oct 10, 2013
As federal government borrowing is set to exceed yet another debt limit, most are quick to recall—and wish to avoid a repeat of—the 2011 debt-limit showdown. If current rhetoric is any indication, it appears many of the last debate’s lessons have been forgotten. Regrettably, it seems many of the debate’s facts have been forgotten as well.
Veronique de Rugy, Jason J. Fichtner, Charles Blahous, Matthew Mitchell | Mar 15, 2013
Despite years without a federal budget, trillion-dollar deficits, and ad hoc, crisis-driven fiscal and economic policies that failed to deal with the looming entitlement crisis, leaders on both sides in Washington are now touting seemingly miraculous progress toward a “fix” to our budgetary woes.

Expert Commentary

Jun 22, 2016

The Social Security annual report, released today, shows that while the projected insolvency date for the combined Old Age, Survivor, and Disability Insurance (OASDI) trust funds remains unchanged at 2034, another year has been lost to inaction.
Apr 05, 2016

While the WEP is intended to ensure that Social Security beneficiaries are treated fairly and that benefits are provided only for years in which people paid into the Social Security system, the result is that the replacement rate for some people with high lifetime combined earnings is higher than those with low lifetime earnings.
Mar 09, 2016

Given that the FDA is already exceeding its mandate of approving safe and effective drugs, a temporary funding shortage well within a typical annual budget increase should not be a cause for concern.
Jan 19, 2016

The Treasury Department is once again doubling down on the bad bet that more regulation will stop U.S. firms from moving abroad. Treasury's Nov. 19 anti-inversion notice repeats the same mistakes from years past and doesn't address the underlying incentives which discourage businesses from headquartering in the United States.

Contact

Jason J. Fichtner

Books

Jason J. Fichtner, Jason S. Seligman | Mar 2016
This book was published by The McCrery-Pomeroy SSDI Solutions Initiative, and includes a chapter by Mercatus scholars Jason Fichtner and Jason Seligman.

Podcasts

Jason J. Fichtner | April 10, 2015
Numerous opportunities for tax reform have been proposed in recent years including consumption-based taxes and an overhaul of the existing system. Jason Fichtner discusses the strengths and weaknesses of various reform initiatives on C-SPAN Radio.
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