As Congress continues its work on the fiscal year 2024 appropriations process and associated tax provisions, it should consider an often-overlooked tax provision: the limitation on deductions companies take for interest payments.
Dr. William McBride is the Vice President of Federal Tax Policy & Stephen J. Entin Fellow in Economics at the Tax Foundation, where he leads our efforts to research, model, and reform the U.S. tax code.
Dr. McBride has more than ten years of experience analyzing a variety of economic and policy issues. Prior to his current role at the Tax Foundation, he served as a manager in the National Economic and Statistics (NES) group at PricewaterhouseCoopers where he worked on numerous projects, including economic impact analyses, industry surveys, U.S. federal and state tax revenue estimates, and general quantitative analyses. He also has experience researching and modeling the economics of taxation and issues related to tax reform at the state, federal, and international levels.
Dr. McBride is no stranger to the Tax Foundation. From 2011 to 2015 he served as chief economist, where he wrote extensively on the economics of taxation, particularly regarding business investment, and guided the development of the Tax Foundation dynamic scoring model.
Dr. McBride holds a PhD in economics from George Mason University, where he specialized in macroeconomics and agent-based modeling. His research has been cited by policymakers, quoted by major media outlets, including The Wall Street Journal and The New York Times, and published in scholarly journals, such as the National Tax Journal and Tax Notes.
Now is the time for lawmakers to focus on long-term fiscal sustainability, as further delay will only make an eventual fiscal reckoning that much harder and more painful. Congressional leaders should follow through on convening a fiscal commission to deal with the long-term budgetary challenges facing the country.
A major case pending before the U.S. Supreme Court (Moore v. United States) is calling into question provisions on large portions of the U.S. tax base which could quickly become legally uncertain, putting significant revenue at stake.
Congress should reconsider key elements of the IRA, including the book minimum tax and the green energy credits, with an eye towards simplification and fiscal responsibility.
Starting on September 1st, federal student loan payments will resume after a three-and-a-half-year pause on payments and accrued interest following the onset of the COVID-19 pandemic.
The federal tax code remains a major source of frustration and controversy for Americans, and a hindrance to economic growth and opportunity. Other countries, such as Estonia, have proven that sufficient tax revenue can be collected in a less frustrating and more efficient way.
Lawmakers should focus on simplifying the federal tax code, creating stability, and broadly improving economic incentives. There are incremental steps that can be made on the path to fundamental tax reform.
The price tag of the Inflation Reduction Act’s green energy tax credits is much higher than originally thought. Among other things, the updated analysis indicates the Inflation Reduction Act does not reduce deficits after all.
Debt Ceiling Deal Reduces Deficits in the Short Term but Delays a More Comprehensive Budget Reckoning
To address the more challenging parts of the budget, especially the unsustainable growth in mandatory spending, lawmakers should follow up on this debt ceiling agreement with a focus on long-term fiscal sustainability.
According to the International Monetary Fund (IMF), the U.S. federal government is among the most indebted governments in the world.
Lawmakers should simplify the tax code so that taxpayers can understand the laws and the IRS can administer them with minimum cost and frustration.
According to our analysis, President Biden’s budget would reduce long-run economic output by about 1.3 percent and eliminate 335,000 FTE jobs. See what tax policies the president is proposing.
Tax reform should be about increasing fairness. And the way to get there is by reducing complexity and double taxation, not by doubling down on them.
Adopting a distributed profits tax would greatly simplify U.S. business taxes, reduce marginal tax rates on investment, and renew our country’s commitment to pro-growth tax policy.
Lawmakers should recognize both the growing importance of business R&D and the need to support it through a commonsense tax policy, namely a return to full and immediate expensing for R&D.
Federal tax collections are approaching the highest levels in U.S. history set during World War II and again during the dot-com bubble in 2000. Meanwhile, federal spending in FY 2022 was over 25 percent of GDP—a level only exceeded during the height of the pandemic in 2020 and 2021, and during World War II.
A new CBO report reveals that lower- and middle-income households are disproportionately shouldering the burden of this current inflation wave. And historical analysis suggests there is much more to come.
How will the Inflation Reduction Act taxes impact inflation, economic growth, tax revenue, and everyday taxpayers? See Inflation Reduction Act tax changes.
While exempting accelerated depreciation from the book minimum tax would reduce some of the economic harm of the tax, there remain many unresolved problems within the design and structure of the tax that make it a poorly chosen revenue option.
In the rush to pass the Inflation Reduction Act, which features an ill-conceived tax on the book income of U.S. corporations, it is worth reminding policymakers of a well-established finding in the economic literature.