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Tax Proposals by the Biden Administration

The Biden administration has announced a number of tax proposals to fund new government investments such as infrastructure, education and family programs.

From analyzing the American Jobs Plan and the American Families Plan to the U.S. Treasury’s international tax proposals, Tax Foundation experts continue to serve as trusted thought leaders, providing research, modeling, analysis, and commentary on how these new policies will impact U.S. competitiveness, economic growth, tax revenue, and everyday taxpayers.

The posts below include our research and analysis on a variety of recently announced tax proposals, including changes to individual income taxes, corporate taxes, international taxes, and capital gains taxes. 

Dynamic Scoring of Infrastructure Spending Proposals Offsets Small Portion of the Cost

July 20, 2021

While it is good that policymakers are taking the impact of the economy on tax revenue seriously, it is important to remember that the dynamic effect of increased spending would only offset a small portion of the total spending. In other words, new spending—like tax cuts—rarely pays for itself.

IRS Sends Nearly $15 Billion of Advance Child Tax Credit Payments

July 19, 2021

New Treasury Department data released on the advance Child Tax Credit payments shows the distribution by state, including how much, on average, households in each state received. The expansion will only be in effect for the 2021 tax year—if policymakers wish to continue providing the increased benefits, they must address the administrative and revenue costs of the policy.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

Biden Plan’s Higher Taxation of Businesses Would Boost Collections to Highest in 40-Plus Years

July 8, 2021

President Biden’s tax proposals released as part of his fiscal year 2022 budget would collect about $2 trillion in new tax revenue from businesses over 10 years. This new revenue would bring income tax collections on businesses as a portion of GDP to its highest level on a sustained basis in over 40 years.

Unanswered Questions about Upcoming Advance Child Tax Credit Payments

July 7, 2021

Amidst the outstanding questions, potential confusion over how advanced child tax credit payments will affect tax refunds, and an incomplete portal to update taxpayer information, the IRS will begin sending payments to millions of households this month.

Biden’s Tax Proposals Could Impact Small Businesses Over Time

July 7, 2021

The Biden administration has primarily focused on increasing taxes on top earners to generate revenue to fund its spending priorities. However, these proposals would hit many pass-through businesses and much of pass-through business income, including small businesses, family-owned businesses, and farms.

Biden’s Top Marginal Capital Gains Tax Rate Would Be Highest in OECD

July 6, 2021

President Biden’s proposal to tax capital gains at higher, ordinary income tax rates would lead the U.S. to have the highest top marginal tax rate on capital gains in the OECD.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Expensing Is Infrastructure, Too

June 15, 2021

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be complementary to the goals of infrastructure spending.

Details and Analysis of President Biden’s FY 2022 Budget Proposals

June 16, 2021

When combining the economic impact of President Biden's tax proposals with the benefit of infrastructure spending, we estimate that long-run GDP would decrease by 0.9 percent and American incomes would fall by an average of 1 percent, resulting in 165,000 fewer American jobs.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

June 16, 2021

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

Who Bears the Burden of Corporation Taxation? A Review of Recent Evidence

June 10, 2021

The Biden administration has pledged to not raise taxes on anyone earning less than $400,000 a year. However, the administration’s corporate tax proposals would likely violate that pledge, given that corporations are comprised of people who also might earn less than $400,000.

Combined Effect of a Higher Corporate Rate and Permanent Bonus Depreciation

June 15, 2021

The negative effects of President Biden’s proposed 28 percent corporate income tax rate could be tempered by improving how the corporate income tax base treats investment expenses.

Infrastructure Funding for Highways Digs into Issues of Outdated Taxes and Narrow Bases

June 10, 2021

As spending priorities are dividing lawmakers trying to negotiate among the various federal infrastructure plans, less time is being spent on the funding of one of the key components—our highways, both current and future taxes and fees. One of the current taxes, a federal excise tax on heavy commercial vehicles and trailers, is an important revenue generator, but its flawed tax design has a negative impact on investment and leads to unstable revenue.

Broad-Based Taxes on Consumption and User Fees Are Efficient Ways to Raise Federal Revenue for Infrastructure

June 10, 2021

Rather than relying on damaging corporate tax hikes, policymakers should consider user fees and consumption taxes as options for financing new infrastructure to ensure that a compromise does not end up being a net negative for the U.S. economy.

Biden Proposals Would Significantly Expand Benefits Administered Through the Tax Code

June 3, 2021

The Biden administration will have to balance the desire to increase social spending through the tax code with the need to collect revenue and have a tax system that is transparent and easy to understand.

Details and Analysis of President Biden’s American Jobs Plan

June 4, 2021

We estimate the infrastructure spending would increase long-run GDP by 0.3 percent, but this positive economic effect is entirely offset by the increase in corporate taxation, resulting in less corporate investment which reduces GDP by 0.5 percent in the long run, reduces wages by 0.5 percent, and eliminates 101,000 full-time equivalent jobs.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Two Important Issues that Must Be Resolved in “Global Tax Reform”

May 25, 2021

If the U.S. is suggesting a 15 percent effective rate as the minimum acceptable rate for a global agreement, then the tax bases of the various minimum taxes adopted as part of the agreement should be aligned to minimize complexities and unintended consequences.

Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.

Reviewing Recent Evidence of the Effect of Taxes on Economic Growth

May 21, 2021

With the Biden administration proposing a variety of new taxes, it is worth revisiting the literature on how taxes, particularly on corporate and individual income, can impact economic growth.

GILTI by Country Is Not as Simple as it Seems

May 18, 2021

If policymakers want a recipe to dramatically expand the complexity of U.S. international tax rules and the burden on U.S. multinational businesses, then a tax on foreign earnings calculated at the country level would be the way to do it. Alternatively, policymakers could focus on mitigating the unintended consequences of GILTI and other recent international tax rules.

How Biden’s Corporate Tax Increases Could Make Tax Enforcement Harder

May 18, 2021

If Biden wants to reduce tax evasion, raising the corporate rate, increasing the incentives to engage in tax evasion, and creating a larger tax advantage to becoming a pass-through business is counterproductive.

Financing Infrastructure Spending with Corporate Tax Increases Would Stunt Economic Growth

May 14, 2021

The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.

Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised

May 12, 2021

As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.

Many Small Businesses Could Be Impacted by Biden Corporate Tax Proposals

May 11, 2021

Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.

Treasury Rule on State Tax Cuts Limitation Raises New Questions

May 10, 2021

Today, the U.S. Treasury issued an interim final rule on the $350 billion in State and Local Fiscal Recovery Funds provided under the American Rescue Plan Act (ARPA). The proposed rule resolves several important questions but continues to involve the federal government in state finances at an extraordinary level.

Details and Analysis of Tax Proposals in President Biden’s American Families Plan

May 6, 2021

The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.

25 Percent Corporate Income Tax Rate Would Make U.S. Above Average Compared to Peers

May 4, 2021

Some lawmakers have expressed concerns about President Biden’s proposal to raise the federal corporate income tax rate from 21 percent to 28 percent, and instead suggest raising the rate to 25 percent.

U.S. Top Combined Integrated Tax Rate on Corporate Income Would Become Highest in the OECD

May 3, 2021

Under President Biden’s tax plan, the United States would tax corporate income at the highest top rate in the industrialized world, averaging 65.1 percent.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Effects of Proposed International Tax Changes on U.S. Multinationals

April 28, 2021

The international corporate tax changes in President Biden’s tax plan would increase tax rates on domestic income more than on foreign income, resulting in a net increase in profit shifting out of the US, according to our Multinational Tax Model.

Testimony: Tax Fairness, Economic Growth, and Funding Government Investments

April 27, 2021

Economic research and Tax Foundation modeling indicate there is a negative trade-off between progressive taxes on capital income—such as the wealth tax, minimum book tax on corporate income, and a higher corporate tax rate—and economic growth.

Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century

April 26, 2021

The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.

Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan

April 23, 2021

The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.

Corporate Investment Outweighs Federal Revenue Losses Since TCJA

April 22, 2021

The Biden administration has argued for raising the corporate tax rate to offset the drop in federal corporate revenues following the Tax Cuts and Jobs Act (TCJA) of 2017, claiming it did not lead to more corporate investment as advertised. Although corporate revenues did drop following this tax reform, the ensuing increase in corporate investment far exceeds these revenue losses.

Raising the Corporate Rate to 28 Percent Reduces GDP by $720 Billion Over Ten Years

April 21, 2021

The Options guide presents the economic effects we estimate would occur in the long term, or 20 to 30 years from now, but we can also use our model to show the cumulative effects of the policy change—providing more context, for instance, about how the effects of a higher corporate income tax rate compound over time, which we estimate would reduce GDP by a cumulative $720 billion over the next 10 years.

Business Tax Collections Within Historical Norm After Accounting for Pass-through Business Taxes

April 15, 2021

A common argument for raising the corporate income tax rate is that collections as a share of gross domestic product (GDP) fell after the rate was reduced to 21 percent as part of the Tax Cuts and Jobs Act (TCJA) in 2017. But that argument is incomplete, as the U.S. also has a large pass-through business sector where taxes are collected through the individual income tax system.

Treasury’s Latest Pillar 1 Proposal: A Strategy to Split the Riches or Give Away the Store?

April 14, 2021

New international tax rules on super-profits would disproportionately impact U.S. companies however they are designed. The question that Treasury should answer is why limit the policy in such a way that magnifies that disproportionate application and the risk to the U.S. tax base.

Labor Share of Net Income is Within Its Historical Range

April 13, 2021

President Biden’s administration argues in the Made in America Tax Plan that corporate taxes should be raised to address a declining share of national income accruing to labor. The problem with the argument, which primarily relies on measures of gross domestic income, is it ignores that some income doesn’t accrue to workers or capital owners.

Biden’s Corporate Minimum Book Tax Narrows, but Problems and Uncertainties Remain

April 13, 2021

The corporate tax base should be reformed directly, rather than piecemeal through a complicated and burdensome separate tax applicable to a small number of companies.

Biden’s Tax Plan Would Restore U.S. Exceptionalism—But Not in a Good Way

April 9, 2021

No other country has tried to enforce some of the policies that the Biden administration is proposing. Embarking on such uncharted course would set the U.S. apart from global tax policy norms and best practices and could harm American competitiveness.

The Balancing Act of GILTI and FDII

April 7, 2021

The tax treatment of intangible assets has come into the spotlight recently with the Biden administration proposing to undo a policy adopted in 2017 to encourage intellectual property (IP) to be located in the U.S.

U.S. Effective Corporate Tax Rate Is Right in Line With Its OECD Peers

April 2, 2021

Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers. Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.

Combined Corporate Rates Would Exceed 30 Percent in Most States Under Biden’s Tax Plan

April 1, 2021

While the focus has been on the federal rate, it is important to include state tax rates when thinking about the total tax burden on corporate income.

President Biden’s Infrastructure Plan Raises Taxes on U.S. Production

March 31, 2021

An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China.

CBO Study: Benefits of Biden’s $2 Trillion Infrastructure Plan Won’t Outweigh $2 Trillion Tax Hike

March 31, 2021

The economics is clear: If Biden wants to maximize the economic benefits of his $3 trillion in new infrastructure spending, he should cut $3 trillion in other government spending to pay for it.

Making the Expanded Child Tax Credit Permanent Would Cost Nearly $1.6 Trillion

March 19, 2021

As the Biden administration and Congress consider making the expanded child tax credit permanent, a nearly $1.6 trillion expansion of tax code-administered benefits, they should consider financing it in a way that doesn’t create significant headwinds to economic recovery.

TCJA Is Not GILTI of Offshoring

March 18, 2021

Many members of Congress have taken issue with the 2017 tax reform. However, the reasoning that has led some to believe that GILTI provides a path to offshoring investment and jobs is flawed.

How GILTI Are U.S. Industries?

March 16, 2021

Both the Biden campaign and some Democratic members of Congress have recommended changes to GILTI, but before doing that, policymakers should consider how GILTI’s design can have ramifications for many U.S. companies and their tax burdens.

The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021

March 12, 2021

The major tax-related benefits in the $1.9 trillion economic relief plan are a third round of direct payments, extended unemployment insurance (UI) benefits and a $10,200 unemployment insurance income exemption for 2020, and an expansion of the Child Tax Credit.

Phasing in a Corporate Rate Hike Would Be the Worst of Both Worlds

March 9, 2021

The Biden administration has signaled its openness to raising the corporate tax rate, potentially by phasing in an increase over several years. While phasing in a tax increase, as opposed to hiking immediately, may seem like a reasonable middle ground, it would be the worst of both worlds because it provides old investment with a lower rate while penalizing new investment.

Can GILTI and the GloBE be Harmonized in a Biden Administration?

March 4, 2021

While there are several parts of the policy that are subject to further discussion and agreement, GloBE is expected to be different from GILTI in several ways.

Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

February 24, 2021

President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.

U.S. Cross-border Tax Reform and the Cautionary Tale of GILTI

February 17, 2021

The Biden campaign and Senate Democrats identified changes to GILTI that would increase the taxes U.S. companies pay on their foreign earnings. Rather than tacking on changes to a system that is currently neither fully territorial nor worldwide, policymakers should evaluate the structure of the current system with a goal of it becoming more, not less, coherent.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Joe Biden’s 61 Percent Tax on Wealth

April 29, 2021

Biden may have rejected a Bernie Sanders-style wealth tax, but the President is proposing other ways of taxing wealth without explicitly labeling his policies a wealth tax—by as much as 61 percent.

Details and Analysis of President Joe Biden’s Campaign Tax Plan

October 22, 2020

What has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.

Anti-Base Erosion Provisions and Territorial Tax Systems in OECD Countries

May 2, 2019

The U.S. decision to adopt a territorial tax system is certainly an improvement over having a worldwide system. However, in moving to a territorial system some of the new features created with the TCJA increased the complexity of the system.

Federal Capital Gains Tax Collections, Historical Data (1954-2018)

April 26, 2021

Dynamic Scoring of Infrastructure Spending Proposals Offsets Small Portion of the Cost

July 20, 2021

While it is good that policymakers are taking the impact of the economy on tax revenue seriously, it is important to remember that the dynamic effect of increased spending would only offset a small portion of the total spending. In other words, new spending—like tax cuts—rarely pays for itself.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

Biden Plan’s Higher Taxation of Businesses Would Boost Collections to Highest in 40-Plus Years

July 8, 2021

President Biden’s tax proposals released as part of his fiscal year 2022 budget would collect about $2 trillion in new tax revenue from businesses over 10 years. This new revenue would bring income tax collections on businesses as a portion of GDP to its highest level on a sustained basis in over 40 years.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Expensing Is Infrastructure, Too

June 15, 2021

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be complementary to the goals of infrastructure spending.

Details and Analysis of President Biden’s FY 2022 Budget Proposals

June 16, 2021

When combining the economic impact of President Biden's tax proposals with the benefit of infrastructure spending, we estimate that long-run GDP would decrease by 0.9 percent and American incomes would fall by an average of 1 percent, resulting in 165,000 fewer American jobs.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

June 16, 2021

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

Who Bears the Burden of Corporation Taxation? A Review of Recent Evidence

June 10, 2021

The Biden administration has pledged to not raise taxes on anyone earning less than $400,000 a year. However, the administration’s corporate tax proposals would likely violate that pledge, given that corporations are comprised of people who also might earn less than $400,000.

Combined Effect of a Higher Corporate Rate and Permanent Bonus Depreciation

June 15, 2021

The negative effects of President Biden’s proposed 28 percent corporate income tax rate could be tempered by improving how the corporate income tax base treats investment expenses.

Infrastructure Funding for Highways Digs into Issues of Outdated Taxes and Narrow Bases

June 10, 2021

As spending priorities are dividing lawmakers trying to negotiate among the various federal infrastructure plans, less time is being spent on the funding of one of the key components—our highways, both current and future taxes and fees. One of the current taxes, a federal excise tax on heavy commercial vehicles and trailers, is an important revenue generator, but its flawed tax design has a negative impact on investment and leads to unstable revenue.

Broad-Based Taxes on Consumption and User Fees Are Efficient Ways to Raise Federal Revenue for Infrastructure

June 10, 2021

Rather than relying on damaging corporate tax hikes, policymakers should consider user fees and consumption taxes as options for financing new infrastructure to ensure that a compromise does not end up being a net negative for the U.S. economy.

Details and Analysis of President Biden’s American Jobs Plan

June 4, 2021

We estimate the infrastructure spending would increase long-run GDP by 0.3 percent, but this positive economic effect is entirely offset by the increase in corporate taxation, resulting in less corporate investment which reduces GDP by 0.5 percent in the long run, reduces wages by 0.5 percent, and eliminates 101,000 full-time equivalent jobs.

Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.

How Biden’s Corporate Tax Increases Could Make Tax Enforcement Harder

May 18, 2021

If Biden wants to reduce tax evasion, raising the corporate rate, increasing the incentives to engage in tax evasion, and creating a larger tax advantage to becoming a pass-through business is counterproductive.

Financing Infrastructure Spending with Corporate Tax Increases Would Stunt Economic Growth

May 14, 2021

The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.

25 Percent Corporate Income Tax Rate Would Make U.S. Above Average Compared to Peers

May 4, 2021

Some lawmakers have expressed concerns about President Biden’s proposal to raise the federal corporate income tax rate from 21 percent to 28 percent, and instead suggest raising the rate to 25 percent.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Effects of Proposed International Tax Changes on U.S. Multinationals

April 28, 2021

The international corporate tax changes in President Biden’s tax plan would increase tax rates on domestic income more than on foreign income, resulting in a net increase in profit shifting out of the US, according to our Multinational Tax Model.

Testimony: Tax Fairness, Economic Growth, and Funding Government Investments

April 27, 2021

Economic research and Tax Foundation modeling indicate there is a negative trade-off between progressive taxes on capital income—such as the wealth tax, minimum book tax on corporate income, and a higher corporate tax rate—and economic growth.

Labor Share of Net Income is Within Its Historical Range

April 13, 2021

President Biden’s administration argues in the Made in America Tax Plan that corporate taxes should be raised to address a declining share of national income accruing to labor. The problem with the argument, which primarily relies on measures of gross domestic income, is it ignores that some income doesn’t accrue to workers or capital owners.

Combined Corporate Rates Would Exceed 30 Percent in Most States Under Biden’s Tax Plan

April 1, 2021

While the focus has been on the federal rate, it is important to include state tax rates when thinking about the total tax burden on corporate income.

President Biden’s Infrastructure Plan Raises Taxes on U.S. Production

March 31, 2021

An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China.

CBO Study: Benefits of Biden’s $2 Trillion Infrastructure Plan Won’t Outweigh $2 Trillion Tax Hike

March 31, 2021

The economics is clear: If Biden wants to maximize the economic benefits of his $3 trillion in new infrastructure spending, he should cut $3 trillion in other government spending to pay for it.

Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

February 24, 2021

President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

Biden Plan’s Higher Taxation of Businesses Would Boost Collections to Highest in 40-Plus Years

July 8, 2021

President Biden’s tax proposals released as part of his fiscal year 2022 budget would collect about $2 trillion in new tax revenue from businesses over 10 years. This new revenue would bring income tax collections on businesses as a portion of GDP to its highest level on a sustained basis in over 40 years.

Biden’s Tax Proposals Could Impact Small Businesses Over Time

July 7, 2021

The Biden administration has primarily focused on increasing taxes on top earners to generate revenue to fund its spending priorities. However, these proposals would hit many pass-through businesses and much of pass-through business income, including small businesses, family-owned businesses, and farms.

Biden’s Top Marginal Capital Gains Tax Rate Would Be Highest in OECD

July 6, 2021

President Biden’s proposal to tax capital gains at higher, ordinary income tax rates would lead the U.S. to have the highest top marginal tax rate on capital gains in the OECD.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Details and Analysis of President Biden’s FY 2022 Budget Proposals

June 16, 2021

When combining the economic impact of President Biden's tax proposals with the benefit of infrastructure spending, we estimate that long-run GDP would decrease by 0.9 percent and American incomes would fall by an average of 1 percent, resulting in 165,000 fewer American jobs.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

June 16, 2021

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

Biden Proposals Would Significantly Expand Benefits Administered Through the Tax Code

June 3, 2021

The Biden administration will have to balance the desire to increase social spending through the tax code with the need to collect revenue and have a tax system that is transparent and easy to understand.

Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised

May 12, 2021

As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.

Details and Analysis of Tax Proposals in President Biden’s American Families Plan

May 6, 2021

The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century

April 26, 2021

The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.

Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan

April 23, 2021

The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.

Joe Biden’s 61 Percent Tax on Wealth

April 29, 2021

Biden may have rejected a Bernie Sanders-style wealth tax, but the President is proposing other ways of taxing wealth without explicitly labeling his policies a wealth tax—by as much as 61 percent.

Federal Capital Gains Tax Collections, Historical Data (1954-2018)

April 26, 2021

IRS Sends Nearly $15 Billion of Advance Child Tax Credit Payments

July 19, 2021

New Treasury Department data released on the advance Child Tax Credit payments shows the distribution by state, including how much, on average, households in each state received. The expansion will only be in effect for the 2021 tax year—if policymakers wish to continue providing the increased benefits, they must address the administrative and revenue costs of the policy.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

Unanswered Questions about Upcoming Advance Child Tax Credit Payments

July 7, 2021

Amidst the outstanding questions, potential confusion over how advanced child tax credit payments will affect tax refunds, and an incomplete portal to update taxpayer information, the IRS will begin sending payments to millions of households this month.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Details and Analysis of President Biden’s FY 2022 Budget Proposals

June 16, 2021

When combining the economic impact of President Biden's tax proposals with the benefit of infrastructure spending, we estimate that long-run GDP would decrease by 0.9 percent and American incomes would fall by an average of 1 percent, resulting in 165,000 fewer American jobs.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

June 16, 2021

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

Infrastructure Funding for Highways Digs into Issues of Outdated Taxes and Narrow Bases

June 10, 2021

As spending priorities are dividing lawmakers trying to negotiate among the various federal infrastructure plans, less time is being spent on the funding of one of the key components—our highways, both current and future taxes and fees. One of the current taxes, a federal excise tax on heavy commercial vehicles and trailers, is an important revenue generator, but its flawed tax design has a negative impact on investment and leads to unstable revenue.

Broad-Based Taxes on Consumption and User Fees Are Efficient Ways to Raise Federal Revenue for Infrastructure

June 10, 2021

Rather than relying on damaging corporate tax hikes, policymakers should consider user fees and consumption taxes as options for financing new infrastructure to ensure that a compromise does not end up being a net negative for the U.S. economy.

Biden Proposals Would Significantly Expand Benefits Administered Through the Tax Code

June 3, 2021

The Biden administration will have to balance the desire to increase social spending through the tax code with the need to collect revenue and have a tax system that is transparent and easy to understand.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Reviewing Recent Evidence of the Effect of Taxes on Economic Growth

May 21, 2021

With the Biden administration proposing a variety of new taxes, it is worth revisiting the literature on how taxes, particularly on corporate and individual income, can impact economic growth.

Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised

May 12, 2021

As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.

Many Small Businesses Could Be Impacted by Biden Corporate Tax Proposals

May 11, 2021

Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.

Treasury Rule on State Tax Cuts Limitation Raises New Questions

May 10, 2021

Today, the U.S. Treasury issued an interim final rule on the $350 billion in State and Local Fiscal Recovery Funds provided under the American Rescue Plan Act (ARPA). The proposed rule resolves several important questions but continues to involve the federal government in state finances at an extraordinary level.

Details and Analysis of Tax Proposals in President Biden’s American Families Plan

May 6, 2021

The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.

U.S. Top Combined Integrated Tax Rate on Corporate Income Would Become Highest in the OECD

May 3, 2021

Under President Biden’s tax plan, the United States would tax corporate income at the highest top rate in the industrialized world, averaging 65.1 percent.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century

April 26, 2021

The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.

Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan

April 23, 2021

The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.

Making the Expanded Child Tax Credit Permanent Would Cost Nearly $1.6 Trillion

March 19, 2021

As the Biden administration and Congress consider making the expanded child tax credit permanent, a nearly $1.6 trillion expansion of tax code-administered benefits, they should consider financing it in a way that doesn’t create significant headwinds to economic recovery.

The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021

March 12, 2021

The major tax-related benefits in the $1.9 trillion economic relief plan are a third round of direct payments, extended unemployment insurance (UI) benefits and a $10,200 unemployment insurance income exemption for 2020, and an expansion of the Child Tax Credit.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Joe Biden’s 61 Percent Tax on Wealth

April 29, 2021

Biden may have rejected a Bernie Sanders-style wealth tax, but the President is proposing other ways of taxing wealth without explicitly labeling his policies a wealth tax—by as much as 61 percent.

Details and Analysis of President Joe Biden’s Campaign Tax Plan

October 22, 2020

What has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

Biden Plan’s Higher Taxation of Businesses Would Boost Collections to Highest in 40-Plus Years

July 8, 2021

President Biden’s tax proposals released as part of his fiscal year 2022 budget would collect about $2 trillion in new tax revenue from businesses over 10 years. This new revenue would bring income tax collections on businesses as a portion of GDP to its highest level on a sustained basis in over 40 years.

Biden’s Tax Proposals Could Impact Small Businesses Over Time

July 7, 2021

The Biden administration has primarily focused on increasing taxes on top earners to generate revenue to fund its spending priorities. However, these proposals would hit many pass-through businesses and much of pass-through business income, including small businesses, family-owned businesses, and farms.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Expensing Is Infrastructure, Too

June 15, 2021

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be complementary to the goals of infrastructure spending.

Details and Analysis of President Biden’s FY 2022 Budget Proposals

June 16, 2021

When combining the economic impact of President Biden's tax proposals with the benefit of infrastructure spending, we estimate that long-run GDP would decrease by 0.9 percent and American incomes would fall by an average of 1 percent, resulting in 165,000 fewer American jobs.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

June 16, 2021

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

Who Bears the Burden of Corporation Taxation? A Review of Recent Evidence

June 10, 2021

The Biden administration has pledged to not raise taxes on anyone earning less than $400,000 a year. However, the administration’s corporate tax proposals would likely violate that pledge, given that corporations are comprised of people who also might earn less than $400,000.

Combined Effect of a Higher Corporate Rate and Permanent Bonus Depreciation

June 15, 2021

The negative effects of President Biden’s proposed 28 percent corporate income tax rate could be tempered by improving how the corporate income tax base treats investment expenses.

Infrastructure Funding for Highways Digs into Issues of Outdated Taxes and Narrow Bases

June 10, 2021

As spending priorities are dividing lawmakers trying to negotiate among the various federal infrastructure plans, less time is being spent on the funding of one of the key components—our highways, both current and future taxes and fees. One of the current taxes, a federal excise tax on heavy commercial vehicles and trailers, is an important revenue generator, but its flawed tax design has a negative impact on investment and leads to unstable revenue.

Repealing Tariffs Would Be a Simple Option to Boost U.S. Economic Growth

June 1, 2021

Of the many tax policies modeled in our new Options for Reforming America’s Tax Code 2.0, repealing the tariffs imposed under President Trump’s administration would be one of the simplest ways policymakers could boost economic growth.

Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.

Reviewing Recent Evidence of the Effect of Taxes on Economic Growth

May 21, 2021

With the Biden administration proposing a variety of new taxes, it is worth revisiting the literature on how taxes, particularly on corporate and individual income, can impact economic growth.

How Biden’s Corporate Tax Increases Could Make Tax Enforcement Harder

May 18, 2021

If Biden wants to reduce tax evasion, raising the corporate rate, increasing the incentives to engage in tax evasion, and creating a larger tax advantage to becoming a pass-through business is counterproductive.

Financing Infrastructure Spending with Corporate Tax Increases Would Stunt Economic Growth

May 14, 2021

The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.

Many Small Businesses Could Be Impacted by Biden Corporate Tax Proposals

May 11, 2021

Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.

Treasury Rule on State Tax Cuts Limitation Raises New Questions

May 10, 2021

Today, the U.S. Treasury issued an interim final rule on the $350 billion in State and Local Fiscal Recovery Funds provided under the American Rescue Plan Act (ARPA). The proposed rule resolves several important questions but continues to involve the federal government in state finances at an extraordinary level.

25 Percent Corporate Income Tax Rate Would Make U.S. Above Average Compared to Peers

May 4, 2021

Some lawmakers have expressed concerns about President Biden’s proposal to raise the federal corporate income tax rate from 21 percent to 28 percent, and instead suggest raising the rate to 25 percent.

U.S. Top Combined Integrated Tax Rate on Corporate Income Would Become Highest in the OECD

May 3, 2021

Under President Biden’s tax plan, the United States would tax corporate income at the highest top rate in the industrialized world, averaging 65.1 percent.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Effects of Proposed International Tax Changes on U.S. Multinationals

April 28, 2021

The international corporate tax changes in President Biden’s tax plan would increase tax rates on domestic income more than on foreign income, resulting in a net increase in profit shifting out of the US, according to our Multinational Tax Model.

Testimony: Tax Fairness, Economic Growth, and Funding Government Investments

April 27, 2021

Economic research and Tax Foundation modeling indicate there is a negative trade-off between progressive taxes on capital income—such as the wealth tax, minimum book tax on corporate income, and a higher corporate tax rate—and economic growth.

Corporate Investment Outweighs Federal Revenue Losses Since TCJA

April 22, 2021

The Biden administration has argued for raising the corporate tax rate to offset the drop in federal corporate revenues following the Tax Cuts and Jobs Act (TCJA) of 2017, claiming it did not lead to more corporate investment as advertised. Although corporate revenues did drop following this tax reform, the ensuing increase in corporate investment far exceeds these revenue losses.

Raising the Corporate Rate to 28 Percent Reduces GDP by $720 Billion Over Ten Years

April 21, 2021

The Options guide presents the economic effects we estimate would occur in the long term, or 20 to 30 years from now, but we can also use our model to show the cumulative effects of the policy change—providing more context, for instance, about how the effects of a higher corporate income tax rate compound over time, which we estimate would reduce GDP by a cumulative $720 billion over the next 10 years.

Business Tax Collections Within Historical Norm After Accounting for Pass-through Business Taxes

April 15, 2021

A common argument for raising the corporate income tax rate is that collections as a share of gross domestic product (GDP) fell after the rate was reduced to 21 percent as part of the Tax Cuts and Jobs Act (TCJA) in 2017. But that argument is incomplete, as the U.S. also has a large pass-through business sector where taxes are collected through the individual income tax system.

Labor Share of Net Income is Within Its Historical Range

April 13, 2021

President Biden’s administration argues in the Made in America Tax Plan that corporate taxes should be raised to address a declining share of national income accruing to labor. The problem with the argument, which primarily relies on measures of gross domestic income, is it ignores that some income doesn’t accrue to workers or capital owners.

Biden’s Corporate Minimum Book Tax Narrows, but Problems and Uncertainties Remain

April 13, 2021

The corporate tax base should be reformed directly, rather than piecemeal through a complicated and burdensome separate tax applicable to a small number of companies.

U.S. Effective Corporate Tax Rate Is Right in Line With Its OECD Peers

April 2, 2021

Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers. Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.

Combined Corporate Rates Would Exceed 30 Percent in Most States Under Biden’s Tax Plan

April 1, 2021

While the focus has been on the federal rate, it is important to include state tax rates when thinking about the total tax burden on corporate income.

CBO Study: Benefits of Biden’s $2 Trillion Infrastructure Plan Won’t Outweigh $2 Trillion Tax Hike

March 31, 2021

The economics is clear: If Biden wants to maximize the economic benefits of his $3 trillion in new infrastructure spending, he should cut $3 trillion in other government spending to pay for it.

Phasing in a Corporate Rate Hike Would Be the Worst of Both Worlds

March 9, 2021

The Biden administration has signaled its openness to raising the corporate tax rate, potentially by phasing in an increase over several years. While phasing in a tax increase, as opposed to hiking immediately, may seem like a reasonable middle ground, it would be the worst of both worlds because it provides old investment with a lower rate while penalizing new investment.

Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

February 24, 2021

President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.

Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

November 16, 2020

Biden has not specified how he would approach the Trump tariffs, though his advisers have said he will at least review them.

Details and Analysis of President Joe Biden’s Campaign Tax Plan

October 22, 2020

What has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.

Anti-Base Erosion Provisions and Territorial Tax Systems in OECD Countries

May 2, 2019

The U.S. decision to adopt a territorial tax system is certainly an improvement over having a worldwide system. However, in moving to a territorial system some of the new features created with the TCJA increased the complexity of the system.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

July 19, 2021

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.

The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

June 30, 2021

The redistribution of income from the Biden administration's tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

Two Important Issues that Must Be Resolved in “Global Tax Reform”

May 25, 2021

If the U.S. is suggesting a 15 percent effective rate as the minimum acceptable rate for a global agreement, then the tax bases of the various minimum taxes adopted as part of the agreement should be aligned to minimize complexities and unintended consequences.

Biden Administration Changes to GILTI and FDII Will Yield Automatic State Tax Increases

May 25, 2021

State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.

GILTI by Country Is Not as Simple as it Seems

May 18, 2021

If policymakers want a recipe to dramatically expand the complexity of U.S. international tax rules and the burden on U.S. multinational businesses, then a tax on foreign earnings calculated at the country level would be the way to do it. Alternatively, policymakers could focus on mitigating the unintended consequences of GILTI and other recent international tax rules.

Tax Policy in the First 100 Days of the Biden Administration

April 30, 2021

In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.

Effects of Proposed International Tax Changes on U.S. Multinationals

April 28, 2021

The international corporate tax changes in President Biden’s tax plan would increase tax rates on domestic income more than on foreign income, resulting in a net increase in profit shifting out of the US, according to our Multinational Tax Model.

Treasury’s Latest Pillar 1 Proposal: A Strategy to Split the Riches or Give Away the Store?

April 14, 2021

New international tax rules on super-profits would disproportionately impact U.S. companies however they are designed. The question that Treasury should answer is why limit the policy in such a way that magnifies that disproportionate application and the risk to the U.S. tax base.

Biden’s Tax Plan Would Restore U.S. Exceptionalism—But Not in a Good Way

April 9, 2021

No other country has tried to enforce some of the policies that the Biden administration is proposing. Embarking on such uncharted course would set the U.S. apart from global tax policy norms and best practices and could harm American competitiveness.

The Balancing Act of GILTI and FDII

April 7, 2021

The tax treatment of intangible assets has come into the spotlight recently with the Biden administration proposing to undo a policy adopted in 2017 to encourage intellectual property (IP) to be located in the U.S.

U.S. Effective Corporate Tax Rate Is Right in Line With Its OECD Peers

April 2, 2021

Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers. Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.

TCJA Is Not GILTI of Offshoring

March 18, 2021

Many members of Congress have taken issue with the 2017 tax reform. However, the reasoning that has led some to believe that GILTI provides a path to offshoring investment and jobs is flawed.

How GILTI Are U.S. Industries?

March 16, 2021

Both the Biden campaign and some Democratic members of Congress have recommended changes to GILTI, but before doing that, policymakers should consider how GILTI’s design can have ramifications for many U.S. companies and their tax burdens.

Can GILTI and the GloBE be Harmonized in a Biden Administration?

March 4, 2021

While there are several parts of the policy that are subject to further discussion and agreement, GloBE is expected to be different from GILTI in several ways.

U.S. Cross-border Tax Reform and the Cautionary Tale of GILTI

February 17, 2021

The Biden campaign and Senate Democrats identified changes to GILTI that would increase the taxes U.S. companies pay on their foreign earnings. Rather than tacking on changes to a system that is currently neither fully territorial nor worldwide, policymakers should evaluate the structure of the current system with a goal of it becoming more, not less, coherent.

Details and Analysis of President Joe Biden’s Campaign Tax Plan

October 22, 2020

What has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.

Anti-Base Erosion Provisions and Territorial Tax Systems in OECD Countries

May 2, 2019

The U.S. decision to adopt a territorial tax system is certainly an improvement over having a worldwide system. However, in moving to a territorial system some of the new features created with the TCJA increased the complexity of the system.