Our experts provide the latest policy research, analysis, and commentary on the US federal budget and spending, including the impact of US debt and interest rates.
We estimate the One Big Beautiful Bill Act would increase long-run GDP by 1.2 percent and reduce federal tax revenue by $5 trillion over the next decade on a conventional basis.
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Our experts are providing the latest details and analysis of proposed federal tax policy changes.
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Senate Republicans have advanced legislation to extend many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) alongside dozens of new provisions, following broadly similar legislation put forward by House Republicans.
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Lawmakers are right to be concerned about deficits and economic growth. The best path to address those concerns is to ensure OBBB provides permanent full expensing of capital investment, avoids inefficient tax cuts, and offsets remaining revenue losses by closing tax loopholes and reducing spending.
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As lawmakers consider options for budgetary offsets, they should prioritize competitiveness and economic growth, as a heavier corporate tax burden will undermine the core purpose and achievement of the TCJA.
24 min read
President Trump has repeatedly floated the idea of entirely replacing the federal income tax with new tariffs. Recently, he has said that when tariff revenues come in, he will use them to replace or substantially cut income taxes for people making under $200,000.
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As Congress attempts to prevent the expiration of major Tax Cuts and Jobs Act provisions, it needs to find ways to pay for them. Ideally, it should use the least economically harmful means possible.
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In a perilous economic and fiscal environment, with instability created by Trump’s trade war and publicly held debt on track to surpass the highest levels ever recorded within five years, a lot rides on how Republicans navigate tax and spending reforms in reconciliation.
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Permanently extending the Tax Cuts and Jobs Act would boost long-run economic output by 1.1 percent, the capital stock by 0.7 percent, wages by 0.5 percent, and hours worked by 847,000 full-time equivalent jobs.
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The Tax Foundation models tax policy using our proprietary Taxes and Growth model, illustrating the economic, revenue, and distributional impacts of different changes to the federal tax code. We’ve recently implemented improvements to the model that have been underway for the past several years, and we will be detailing them further in our forthcoming model methodology update.
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If Republicans want a successful year for tax reform, they must put aside the extensive demands for niche provisions and, instead, approach this debate with a principles-first mindset.
The House Budget Committee has released a budget resolution that specifies large reductions in both taxes and spending over the next decade, paving the way to extend the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially cut other taxes.
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As Republicans look for ways to offset the budgetary cost of extending the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially enacting other tax cuts, the latest estimates indicate several trillion dollars could be raised by reducing tax credits and other preferences in the tax code.
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If Republicans want to pursue this policy, they’ll need to answer some questions about what Trump’s promise means. And they’ll need to be careful that the idea doesn’t turn into a budget-buster.
What will the future of tax policy look like? In this episode, we dive into the critical challenges and opportunities looming on the horizon, especially with major tax cuts set to expire, which could increase taxes for 62 percent of filers.
Given the poor state of the budget process and worsening debt trajectory, lawmakers should move boldly and quickly to address the issue, including via a fiscal commission process. Issues to consider should include reforms to both spending and taxes.
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The analysis provides key insights into how their models work and the sort of outputs we can expect from their models as part of next year’s tax debate.
8 min read
The US already has massive problems with cigarette smuggling. A cigarette prohibition would be devastating to tax coffers while pushing smokers toward what could become the world’s largest illicit market.
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What happens to your taxes when the Tax Cuts and Jobs Act expires on January 1, 2026? In this episode, we explore the potential tax hikes facing millions of Americans and the debate over measuring the budgetary impacts of extending tax cuts.
If lawmakers are serious about pro-growth policies and fiscal responsibility, they will need to put policies forward that achieve those goals. Simply adjusting the baseline doesn’t reduce actual deficits in the coming years.
7 min read