Congressional Research Service

Cuba remains a one-party communist state with a poor record on human rights. The country's political succession in 2006 from the long-ruling Fidel Castro to his brother Ra l was characterized by a remarkable degree of stability. In February 2013, Castro was reappointed to a second five-year term as President (until 2018, when he would be 86 years old), and selected 52-year old former Education Minister Miguel D az-Canel as his First Vice President, making him the official successor in the event that Castro cannot serve out his term. Ra l Castro has implemented a number of gradual economic policy changes over the past several years, including an expansion of self-employment. A party congress held in April 2011 laid out numerous economic goals that, if implemented, could significantly alter Cuba's state-dominated economic model. Few observers, however, expect the government to ease its tight control over the political system. While the government reduced the number of political prisoners in 2010-2011, the number increased in 2012; moreover, short-term detentions and harassment have increased significantly over the past several years.

Colombia is the third-most-populous country in Latin America, with roughly 47 million inhabitants. A key U. S. ally in the region, Colombia has endured an internal armed conflict for half a century. Drug trafficking has fueled the violence by funding both left-wing and right-wing armed groups. In the late 1990s, some analysts feared Colombia would become a failed state. The Colombian government defied that prediction, however, at least partly by closely cooperating with the United States through a security strategy known as Plan Colombia. Focused initially on counternarcotics, and later counterterrorism, Plan Colombia laid the foundation for a strategic partnership that has broadened to include sustainable development, human rights, trade, regional security, and many other areas of cooperation. The evolution of the partnership took place in tandem with increasing Colombian investment in its own security programs. Colombia succeeded in reestablishing government control over much of its territory, reducing poverty and homicide rates, and making significant progress in combatting drug trafficking and terrorism. The government's long-term strategy has moved from a policy of defeating insurgents in combat and consolidating its gains with its "whole-of-government" approach, to a new stage of preparing for the post-conflict period. Despite significant gains in citizen security and economic stability in Colombia, some observers continue to raise concerns about human rights conditions in the country. Current President Juan Manuel Santos, first elected in 2010, launched peace talks in 2012 with the Revolutionary Armed Forces of Colombia (FARC), the country's main leftist insurgent group and Latin America's oldest, largest, and best financed guerrilla organization. Although previous negotiations with the FARC had failed, this effort has endured. The FARC-government talks, which opened in Norway, have continued in Cuba for 30 rounds. As of November 2014, the negotiators have resolved three topics on a six-point agenda. Remaining issues include victims' reparations, disarmament and transitional justice, and how the final agreement will be approved, verified, and implemented. In November 2014, the talks were temporarily suspended by the Santos government when the FARC captured a Colombian general and two others. Santos had stated that the talks would not resume until the captives were released, which occurred in late November. President Santos won reelection in a closely fought runoff race in June 2014 by making completion of peace talks his central campaign promise. Colombia held legislative and presidential elections in March and May 2014, which concluded with the June presidential runoff. Former President lvaro Uribe (2002-2010), who opposes the peace talks and is a fierce critic of President Santos, started a new opposition party, the right-leaning Democratic Center. Uribe ran for and won a seat in the Colombian Senate leading his party to a strong showing in both houses of Congress. Many observers saw the presidential elections as a referendum on the peace talks. At his inauguration in August 2014, Santos declared Peace, Equality and Education to be the three pillars of his second term.

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 deductions 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 2014, Social Security taxes are levied on the first $117,000 of wages. In 2015, the Social Security wage base is inflation-adjusted to $118,500, reflecting 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 FY2013, individual income taxes accounted for 47% of total federal revenue. Social Security taxes accounted for 34%. Corporate income taxes accounted for 10% while excise taxes accounted for 3%. Estate and gift, customs, and miscellaneous taxes accounted for the remaining 6% of total revenue. Over time, the 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, average 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.

Since the Islamic Revolution in Iran in 1979, a priority of U. S. policy has been to reduce the perceived threat posed by Iran to a broad range of U. S. interests. However, a common enemy has emerged in the form of the Islamic State organization, reducing gaps in U. S. and Iranian interests. During the 1980s and 1990s, U. S. officials identified Iran's support for militant Middle East groups as a significant threat to U. S. interests and allies. A perceived potential threat from Iran's nuclear program emerged in 2002, and the United States has orchestrated broad international economic pressure on Iran to try to compel it to verifiably confine that program to purely peaceful purposes. The pressure has harmed Iran's economy and might have contributed to the June 2013 election as president of Iran of the relatively moderate Hassan Rouhani, who campaigned as an advocate of ending Iran's international isolation. Subsequent multilateral talks with Iran produced an interim agreement ("Joint Plan of Action," JPA) that halted the expansion of Iran's nuclear program in exchange for modest sanctions relief. As the November 24, 2014 deadline for the JPA expiration approaches, the United States and its partners are negotiating intensively to reach a comprehensive agreement on the nuclear issue, but significant differences reportedly remain. A final nuclear agreement would further improve U. S.-Iran relations. Senior level U. S.-Iran talks are held regularly, primarily on the nuclear issue but also including regional issues such as how to defeat the Islamic State organization. U. S. officials have raised with their Iranian counterparts the issue of American citizens detained in Iran. The nuclear negotiations also have eased tensions between Iran and its neighbors in the Persian Gulf region-all allies of the United States. However, the Gulf states, Israel, and other regional states express concern that an Iran that is reintegrated into the region and the international community would give Iran additional resources to support movements and regimes that oppose U. S. and U. S.-allied interests. State Department reports on international terrorism assert that Iran continues to provide funds and arms to a wide range of movements, including Lebanese Hezbollah, Hamas, the embattled government of Bashar Al Assad of Syria, Iraqi Shiite militias, and rebels in Yemen and Bahrain. President Obama has asserted, both before and after the JPA was agreed, that the option of U. S. military action against Iran's nuclear facilities is available. However, further U. S.-or Israeli-discussion of military options against Iran is unlikely unless nuclear talks collapse outright. In line with a JPA provision that no new sanctions be imposed on Iran during the JPA period, the Administration has threatened to veto legislation, including S. 1881, that would add sanctions on Iran-even though sanctions provisions would take effect only after the JPA expires. Rouhani's unexpected election win-a result of a large turnout of reform-minded voters such as those who protested the 2009 election results-demonstrated strong support not only for reducing Iran's isolation but for domestic reform. Rouhani has sought to satisfy this constituency, in part by orchestrating the release of some political prisoners and easing some media restrictions. But, Iran's judiciary remains in the hands of hardliners who continue to restrict social freedoms and prosecute regime critics and dissenters. For further information, see CRS Report RS20871, Iran Sanctions, by Kenneth Katzman; and CRS Report R43333, Interim Agreement on Iran's Nuclear Program, by Kenneth Katzman and Paul K. Kerr.