The Tax Policy Blog

November 25, 2015

Each year, the Tax Foundation honors state legislators, executives, and other individuals with its Outstanding Achievement in State Tax Reform award. As the name suggests, the honoree's accomplishments must be (1) outstanding, (2) an achievement (not merely a proposal) during 2015, and (3) reform taxes to make them more simple, more neutral, more transparent, more stable, and more pro-growth.

Working for...

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November 24, 2015

Last week, S.2320, a bill that would create Universal Savings Accounts in the federal tax code, was referred to the Senate Finance Committee. The bill, sponsored by Senator Jeff Flake and Representative Dave Brat, would allow Americans age 18 or older to open an account to which they could contribute $5,500 of after-tax money. The money could be invested in bonds and equities, and grow tax free.

In many...

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November 24, 2015

Part 3: Lower Tax Rates on Saving and Investment Discourage Saving and Investment (?)

This blog continues a discussion of a recent piece by the Center for American Progress,...

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November 24, 2015

Over the past few years, politicians in both parties have expressed enthusiasm for lowering federal tax rates. This makes sense: many economists have found that high tax rates hurt economic growth and...

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November 24, 2015

The merger between U.S.-based pharmaceutical company Pfizer Inc. and the Irish-based Allergan has sparked the predictable outrages and gnashing of teeth. For example, Senate Minority Leader Harry Reid—whose home state of Nevada has neither a corporate nor individual income tax and may benefit more from domestic “inversions” than nearly any other state—was quoted by the Washington Post as saying “It’s time for Congress to get serious, close the loopholes, and prevent these kind of inversions...

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November 19, 2015

Senator Sanders and Governor O’Malley made some inaccurate references to past tax rates during their presentations last Saturday night. All three candidates, including Secretary Clinton, failed to mention the economic consequences of past policies of the sort they suggested.

Senator Sanders was asked how high he would raise the top tax rate. He answered, jokingly, that he would boost it a lot, although perhaps not to the 90% top tax rate in the Eisenhower Administration; that he, the...

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November 19, 2015

Over the past couple of weeks there has been a lot discussion about the value-added tax among those in the media and in certain policy circles.  The conversation began because Senator Ted Cruz introduced a tax reform plan that would eliminate both the payroll tax and the corporate income tax and replace the revenue with a “business flat tax,” or subtraction-method value-added tax. We found that the...

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November 18, 2015

In 2015, the vast majority of federal revenue came from just two sources: individual income taxes and payroll taxes. But it wasn’t always that way. In fact, the sources of federal revenue have changed dramatically over the course of the last century.

Let’s travel back one hundred years, to 1915. Back then, the main sources of federal revenue were very different. Almost half of all...

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November 17, 2015

Two weeks ago, we analyzed a proposed hike in the Oklahoma state sales tax, finding that the increase would give Oklahoma the highest sales taxes in the country. While the Oklahoma statewide sales tax currently sits at 4.5 percent, and the hike would bring the statewide rate to a modest 5.5 percent, local sales taxes are hefty in Oklahoma, adding an average of 4.28 percent on to the total sales tax consumers are...

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November 17, 2015

Chicago last month approved a $543 million property tax increase, phased in over four years. With Illinois residents already paying an effective property tax rate of 2.32 percent (in 2013, the most recent year Census data is available), the increase will likely displace New Jersey’s long-standing record of the state with the nation’s highest property taxes (2.38 percent on...

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November 17, 2015

Part 2: Capital Does Respond to Tax Changes

This blog continues a discussion of a recent piece by the Center for American Progress, “Long-Termism or Lemons: The Role...

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November 17, 2015

This morning we released the 2016 State Business Tax Climate Index!

We compile the Index each year to rank the 50 U.S. states across more than 100 variables in the areas of corporate income tax, individual income tax, sales tax, property...

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November 17, 2015

Last week, I wrote about the latest corporate depreciation statistics from the IRS and what they can tell us about the effects of bonus depreciation. Today, I’ll use the same dataset to discuss the effects of Section 179, another provision in the tax code that allows companies to deduct the costs of investment...

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November 13, 2015

Recently, the IRS released new statistics about corporate depreciation in 2012. While this may sounds like a painfully boring topic to many readers, the data is relevant to some of the most important tax policy discussions going on in Congress today.

When a U.S. business makes an investment – such as purchasing a machine or building a factory – it is not allowed to deduct the entire cost of the...

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November 13, 2015

Part 1: Puzzlement over Interest Rates

A recent piece by the Center for American Progress (CAP), “Long-Termism or Lemons: The Role of Public Policy in Promoting Long...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog 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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