While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
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.
While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
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.
States are unprepared for the ongoing shift to remote and flexible work arrangements, or for the industries and activities of today, to say nothing of tomorrow. In some states, moreover, existing tax provisions exacerbate the impact of high inflation and contribute to the supply chain crisis.
A landmark comparison of corporate tax costs in all 50 states, Location Matters provides a comprehensive calculation of real-world tax burdens, going beyond headline rates to demonstrate how tax codes impact businesses and offering policymakers a road map to improvement.
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In our new report, we explore the design implications of a carbon tax and provide estimates for revenue, economic, and distributional effects of three potential carbon tax and revenue recycling proposals. Each proposal faces different trade-offs and achieves different policy goals.
Connecticut, California, New York, and New Jersey rank lowest in our 2020 State Business Tax Climate Index, which compares states on more than 120 tax policy variables to show how well they structure their tax systems and to provide a road map for improvement.
Advances in technology have enabled workers to connect with customers via online platform applications for work ranging from ridesharing to home repair services. The rise of gig economy work has reduced barriers to self-employment, bringing tax challenges like tax complexity and taxpayer noncompliance.
Our International Index compares OECD countries on over 40 variables that measure how well each country’s tax system promotes sustainable economic growth and investment.
Tangible personal property taxes increase the complexity of state and local tax codes, discriminate against taxpayers based on their capital structure, and change economic behavior by incentivizing taxpayers to modify their property ownership to avoid the tax.
The Cadillac tax offers one way that policymakers can work to rein in our tax code’s subsidization of the health-care industry, which has increased the price of health-care services.
From a broad standpoint, agreement at the OECD will require countries to give up some measure of their own tax sovereignty on policies they have designed to minimize the distortionary effects of the corporate income tax. Over the years tax competition has led to some countries adopting policies that are attractive to businesses because they have a more neutral rather than distortionary approach to taxing corporate income. This project could directly undermine that progress by introducing new levels of complexity and distortion that would ultimately have a negative impact on global trade and growth.
By almost any measure, Utah is, and deserves to be, the envy of its peers. Utah leads the country in job growth, and the state’s economy has grown at twice the rate of the nation at large. Utah’s income tax reforms adopted in 2007 established a model for other states to follow. But today, some of these gains are being undone—not by conscious policy choices, but by their absence.