Summary of the Latest Federal Income Tax Data, 2022 Update
The latest IRS data shows that the U.S. federal individual income tax continued to be progressive, borne primarily by the highest income earners.
41 min read
Expert
Erica York
Vice President of Federal Tax Policy
Erica York is Vice President of Federal Tax Policy 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.
Latest Work
A Holiday Tradition: Tax Extenders Slated to Expire at End of 2021
Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.
8 min read
Book Minimum Tax versus Corporate Rate Increase: Pick Your Poison
While the book minimum tax is smaller in scale than the proposed original corporate rate increases, it would introduce more complexity, inefficiency, and problems at the industry- and sector-levels that a corporate rate increase would not. Neither option is an optimal way to raise new tax revenues.
4 min read
House Build Back Better Act: Details & Analysis of Tax Provisions in the Budget Reconciliation Bill
Learn more about the House Build Back Better Act, including the latest details and analysis of the Biden tax increases and reconciliation bill tax proposals.
15 min read
Trump-Biden Tariffs Hurt Domestic Manufacturing
As lawmakers today look for ways to boost American industry and reduce costs for consumers, they should pay attention to the mountains of evidence that the Trump-Biden tariffs have harmed American consumers and businesses.
6 min read
Red Flags Emerge in Build Back Better Book Minimum Tax, Interest Expense Limitation
The Build Back Better Act would raise taxes to pay for social spending programs. But the design of some of the tax increases may end up hurting private pensions, among other problems.
6 min read
How Do Build Back Better Taxes Affect 5G Competition?
One unintended consequence of the tax proposals in the Build Back Better Act is a higher potential burden on wireless spectrum investments, which could slow the build out of 5G technology as the U.S. races to compete with other countries—moving in the opposite direction of countries like China that are actively subsidizing 5G expansion.
5 min read
2022 Tax Brackets
The IRS recently released the new inflation adjusted 2022 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.
5 min read
Top Combined Capital Gains Tax Rates Would Average Nearly 37 Percent Under Build Back Better Framework
Under the Build Back Better framework, six states and D.C. would face combined top marginal capital gains tax rates of more than 40 percent, nearing the top rate among OECD countries.
3 min read
Proposed Top Combined Marginal Capital Gains Tax Rate Would Be Third-Highest in OECD
Under the new Build Back Better framework, the United States would tax capital gains at the third-highest top marginal rate among rich nations, averaging nearly 37 percent.
1 min read
Lawmakers Consider Untested and Complex Policies to Fund Reconciliation Bill
Congress is debating new ways to raise revenue that would make the tax code more complex and more difficult to administer. The new proposals—imposing an alternative minimum tax on corporate book income, applying an excise tax on stock buybacks, and, at one point this week, a tax on unrealized capital gains for billionaires—are unreliable and highly complex ways to raise revenue.
10 min read
Lawmakers Could Pay for Reconciliation While Improving the Tax Code
With corporate and individual rate hikes potentially out of the Build Back Better (BBB) reconciliation package, lawmakers are weighing alternative options to raise revenue. Rather than come up with untested proposals and complicated changes to the tax base, they should prioritize options that raise revenue while improving the structure of the tax code.
4 min read
What’s Going on with the Child Tax Credit Debate?
President Biden expanded and fundamentally changed the Child Tax Credit (CTC) for one year in the American Rescue Plan (ARP) passed in March 2021. Policymakers are now deciding the future of the expansion as part of the proposed reconciliation package, but a wide range of estimates for the effects of a permanent expansion is confusing the debate.
7 min read
U.S. Corporate Income Faces Third-Highest Integrated Tax Rate in OECD Under Ways and Means Plan
Under the House Ways and Means tax plan, the United States would tax corporate income at the third-highest integrated tax rate among rich nations, averaging 56.6 percent.
3 min read
Latest White House Report Tells Incomplete Story on Average Tax Rates for Wealthy
The 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 read
Reviewing Business Tax Expenditures: Credit Union Tax Exemption
Policymakers should carefully analyze tax expenditures before categorizing one as a loophole—some tax expenditures are important structural elements of the tax code while others are unsound.
14 min read
The Good, the Bad, and the Ugly of the Ways and Means Plan
The latest version of the Biden Build Back Better agenda, released last week by the House Ways and Means committee, is dense, with too many provisions to flesh out completely. Here’s a rundown of the good, the bad, and the ugly of it.
7 min read
U.S. Would Have Third-Highest Corporate Tax Rate in OECD Under Ways and Means Plan
Under the Ways and Means text, the U.S. would have an average corporate tax rate of 30.9 percent, which would be the third-highest corporate tax rate in the OECD, behind only Colombia and Portugal.
1 min read
Corporations in Most States Would Face Income Tax Rate Exceeding 30 Percent Under Ways and Means Proposal
Under the House Democrats’ tax plan, companies in 21 states and D.C. would face a higher corporate tax rate than in any country in the OECD.
1 min read
Tax on Stock Buybacks a Misguided Way to Encourage Investment
Research shows that a tax on stock buybacks would not be the right policy solution to encourage long-term investment or lift wages.
3 min read