The Tax Policy Blog

June 23, 2014

The average U.S. worker faces a tax burden of 31.3 percent. This includes both income taxes and payrolls taxes. Between these two types of taxes, the average U.S. workers pays over $16,000 in taxes on their labor.

The tax burden is a combination of income taxes at the federal, state, and local levels as well as the employee and the employer payroll taxes. Of the 31.3 percent tax burden, 15.4 percent is...

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June 23, 2014

We've released a new video in which Tax Foundation President Scott Hodge and Economist Kyle Pomerleau explain the ins and outs of capital gains taxes in the United States.

Questions answered in the video:

  • What are capital gains?
  • What are capital gains taxes?
  • How does the U.S. treat capital gains...
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June 23, 2014

Bloomberg recently reported that the Bill and Hillary Clinton planned to avoid estate taxes by transferring their New York home to a residential trust. Their plans to avoid estate taxes are notable because of their political support for those taxes. But it’s also an excellent example of the arcane and complex nature of the estate tax and how simple reforms help to mitigate...

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June 20, 2014

This month, the OECD published its annual economic survey of the United States, recommending among other things a handful of tax changes that would bring the U.S. closer to the OECD average on a few metrics. Although many of these recommendations are growth-oriented, there are others that don’t make as much sense.

Not surprisingly, the report is quick to mention that the 39.1% statutory corporate income tax rate, 13...

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June 19, 2014

For the first time in decades, the District of Columbia is considering impressive, far-reaching tax reform that broadens tax bases, lowers business and individual income tax rates, and makes D.C.’s tax code more competitive with neighboring states. The D.C. Council has already approved the package in an 11-2 vote.

However, the fitness club industry is...

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June 19, 2014

Two of the taxes introduced in the Affordable Care Act (ACA) are not indexed for inflation. As incomes rise with inflation, more Americans will be subject to these new and burdensome taxes. This lack of inflation indexing flies in opposition to the treatment of most other taxes in the ACA as well as many other federal tax provisions.

The Additional...

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June 19, 2014

While last week’s map showed when each state adopted its individual income tax, this week’s map displays when states first imposed taxes on corporate...

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June 19, 2014

A new report by Michigan Future, Inc. focuses on Minnesota, claiming to show how Minnesota has maintained a high level of economic prosperity despite being a high-tax state. After a detailed look at Minnesota’s tax policies, the report claims that Minnesota’s strong economy is due to investing “additional revenue in services and investments that matter in a knowledge-based economy,” which means, broadly, higher...

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June 19, 2014

The Federal Highway Trust Fund is going bust this year. In fact, it goes bust every year. According to the Committee for a Responsible Federal Budget (CRFB), federal highway spending has exceeded dedicated tax revenue in 13 of the last 14 years. The shortfall is projected to be about $15 billion this year and $170 billion over the next 10 years. As shown in their chart,...

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June 19, 2014

Senators Chris Murphy (D-CT) and Bob Corker (R-TN) yesterday called for a twelve-cent increase in the federal gasoline and diesel taxes. The increase would phase in over two years, bringing the tax on ordinary gasoline up from 18.4 cents to 30.4 cents per gallon. From then on, the tax would be indexed to inflation. (The diesel tax would go from 24 cents a gallon to 36.)

This is a simple...

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June 18, 2014

Today the House Judiciary Committee voted to approve legislation to permanently extend the moratorium on taxation of internet access.

The bill, titled the Permanent Internet Tax Freedom Act, would make permanent the current internet tax moratorium that prevents states and localities from levying taxes on access to the internet. It would also eliminate a grandfather...

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June 18, 2014

A new report from the Department of Health and Human Services on Obamacare exchanges suggests that the magnitude of the subsidies (administered through a refundable tax credit) will be larger than previously expected. The Los Angeles Times reports that the total cost of subsidies may be $16.5 billion this year.

These subsidies were projected to become the largest refundable...

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June 18, 2014

The federal fuel tax sounds like it could be a simple excise tax. In a world with competent, broad-based tax policy, we could see such a thing. In America, we get IRS forms 720, 4136, 8849, 6478, and 8864.

A broad federal fuel tax makes some sense. There is federal spending on a variety of things (for example, the United States Highway Trust Fund) that directly benefits people in approximate proportion to their fuel usage. Rather than make these services “free,” which leads to...

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June 16, 2014

The cost of America’s extremely high corporate tax rate continues to pile up. The Wall Street Journal reports on yet another tax “inversion” deal:

Medtronic Inc. ...

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June 13, 2014

A recent National Bureau of Economic Research working paper assessing optimal sales tax policies has found that exempting some services (like health and education) from a hypothetical national sales tax would amount to only a 3 percent revenue loss. They also find that charging different rates on different categories of goods rather than a flat sales tax rate can improve society-wide “utility” (how well off people feel) by 30 percent for any...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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