Erica York is Senior Economist and Research Manager with Tax Foundation’s Center for Federal Tax Policy. She previously worked as an auditor at a large community bank in Kansas and interned at Tax Foundation’s Center for State Tax Policy.
Her analysis has been featured in The Wall Street Journal, The Washington Post, Politico, and other national and international media outlets. She holds a master’s degree in Economics from Wichita State University and an undergraduate degree in Business Administration and Economics from Sterling (KS) College, where she is currently an adjunct professor. Erica lives in Kansas with her husband and their two children.
Immediately balancing the $20 trillion budget shortfall would take drastic, unwanted policy changes. Instead, lawmakers should target a more achievable goal, such as stabilizing debt and deficits with an eye toward comprehensive tax reform that can produce sufficient revenue with minimal economic harm.
President Biden’s State of the Union Address outlined three tax proposals, including raising the tax on stock buybacks, imposing a billionaire minimum tax, and expanding the child tax credit.
The latest IRS data shows that the U.S. federal individual income tax continued to be progressive, borne primarily by the highest income earners.
The FairTax is a proposal to replace all major sources of the federal government’s revenue—the individual income tax, corporate income tax, estate and gift taxes, and payroll tax—with a national sales tax and rebate, abolishing the IRS in the process.
A combination of long-standing IRS operational deficiencies, the agency’s temporary closure due to the pandemic, and the now-expired pandemic relief produced a perfect recipe for a paper backlog.
The year-end omnibus federal spending package makes a number of reforms to retirement savings accounts.
If bonus depreciation is allowed to phase out, then the tax bias against capital investments will increase, discouraging firms from making otherwise profitable investments.
The business tax changes originally introduced in the TCJA are scheduled to increase tax burdens on businesses at a time when economic headwinds and broader uncertainty are higher than they have been in decades.
The phaseout of 100 percent bonus depreciation, scheduled to take place after the end of 2022, will increase the after-tax cost of investment in the U.S. Permanently extending it would increase long-run economic output by 0.4 percent and increase employment by 73,000 FTE jobs.
The Inflation Reduction Act may be smaller than the proposed Build Back Better legislation from 2021, but both sets of legislation propose a reintroduced corporate alternative minimum tax (AMT). The 30-year experience with a corporate AMT shows it is not a good solution.
Reviewing reported income helps to understand the composition of the federal government’s revenue base and how Americans earn their taxable income. The individual income tax, the federal government’s largest source of revenue, is largely a tax on labor.
While the bulk of the proposed tax increases and spending programs remain under debate, Democratic lawmakers have reportedly agreed on prescription drug pricing provisions as a starting point for a revived Build Back Better package.
The proposals share a common goal of improving incentives for households to save during a time when inflation is impacting their finances.
President Biden’s budget proposes several new tax increases on high-income individuals and businesses, which combined with the Build Back Better plan would give the U.S. the highest top tax rates on individual and corporate income in the developed world.
The CBO projections show policymakers’ top priority over the next five years will need to be cleaning up our country’s fiscal situation while maintaining a pro-growth and competitive tax code.
Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code.
Efforts to improve the taxpayer experience should focus on the IRS’s operations and include structural improvements to the tax code.
Government-set pricing of prescription drugs is not a fix for today’s rampant inflation and further, it would give rise to new problems of its own.
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
Biden’s proposal would impose a complicated never been tried before tax, adding new compliance and administrative challenges for an already overburdened IRS while weakening the U.S. economy by raising the tax burden on U.S. saving and entrepreneurship.