As Inflation Rises, So Will Tax Bills in Many States
Inflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.
5 min readInflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.
5 min readA well-structured tax code (that’s both competitive and neutral) is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
40 min readTwo major provisions in the federal tax code have been limited since the Tax Cuts and Jobs Act (TCJA) of 2017: the state and local tax (SALT) deduction and the home mortgage interest deduction (MID).
3 min readIn the past three years, eight European OECD countries changed their top personal income tax rate, of which four of them cut their top personal income tax rates.
3 min readTax competition has proven to be key in keeping tax hikes under control in some regions of Spain as regional governments look to copy Madrid’s tax reforms.
6 min readThe White House Council of Economic Advisors (CEA)’s recent report estimates the average federal individual income tax rate for the top 400 wealthiest households in the U.S to be 8.2 percent, lower than typically estimated for top earners.
4 min readThe Spanish Regional Tax Competitiveness Index allows policymakers, businesses, and taxpayers to evaluate and measure how their regions’ tax systems compare and serves as a road map for policymakers to reform their tax systems and make their regions more competitive and attractive for entrepreneurs and residents.
7 min readAs Congress considers several tax proposals designed to raise taxes on high-income earners, it’s worth considering the distribution of the existing tax code.
3 min readUnder the House Democrats’ reconciliation plan, the top tax rate on pass-through business income would exceed 50 percent in most states. Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses and majority of private sector employment in the United States.
3 min readWhether spurred by a belief that government is improperly favoring religious institutions, an antipathy to wealthy celebrity pastors, or a hope that taxing houses of worship could bring down personal tax bills, the taxation of religious bodies is hotly debated online, but barely on the radar of actual elected officials. But is that true? How much, if any, tax revenue is forgone, and what do the policies look like?
7 min readMark-to-market is not simple to implement, as it involves new administrative and compliance challenges for taxpayers. Mark-to-market levies tax on phantom income, requiring some taxpayers to engage in some degree of liquidation, ultimately suppressing incentives to save and invest. The limited tax revenues that could result from these proposals are not worth the risk.
5 min readTemporary policy creates uncertainty for taxpayers and scheduling more expirations will add to the already-expiring provisions under the Tax Cuts and Jobs Act (TCJA) of 2017.
3 min readIt is important to understand how the SALT deduction’s benefits have changed since the SALT cap was put into place in 2018 before repealing the cap or making the deduction more generous. Doing so would disproportionately benefit higher earners, making the tax code more regressive.
6 min readHow do current federal individual income tax rates and brackets compare historically?
1 min readThe Biden administration recently cited an analysis from Treasury claiming that “the President’s agenda will protect 97 percent of small business owners from income tax rate increases.” However, the figure is misleading. To assess the economic effect of higher marginal tax rates, it matters how much income or investment will be affected—not how many taxpayers.
3 min readAccording to the Tax Policy Center, an estimated 60 percent of U.S. households paid no income tax in 2020, up from around 43 percent of households in 2019.
4 min readThe original goal of AMTs—to prevent deductions from eliminating income tax liability altogether—can be accomplished best by simplifying the existing tax structure, not by creating an alternative tax which adds complexity and lacks transparency and neutrality.
2 min readAugust 15th was the deadline to take advantage of the premium tax credits originally provided in the Affordable Care Act and recently expanded in the American Rescue Plan. Future extensions may provide longer-lasting benefits, although the extensions may create trade-offs for consumer choice and program costs.
5 min read