Tax Policy Blog

Californians Still Smoking Menthol after Ban: Evidence from a Discarded Pack Audit

It’s been almost a year since California banned the sale of all flavored tobacco products, and the big question is: did it work?

Changing Tax Policy Landscape Will Worsen U.S. Competitiveness

Policymakers on Capitol Hill should prioritize permanent pro-growth policy in the coming years as the economy struggles with inflation and the recovery from the pandemic.

IRS Report Shows Closing the Tax Gap Would Not Close the Deficit

The latest tax gap report from the IRS has generated much media attention—and much misunderstanding.

European Tax Policy Scorecard: Capital Cost Recovery under BEFIT versus Current Member State Policies

A harmonized EU tax base is a project in the making. Policymakers have a chance to put the Union on a path for increased investment and economic growth by focusing on the details of capital cost recovery.

The State Business Tax Climate Index Is Your Guide to Economic “Wins Above Replacement”

Pennsylvania Cigarette Minimum Markups Will Cost the State $47 Million per Year

Minimum markup policies tend to be wildly unpopular among both taxpayers and policymakers. Lawmakers should carefully evaluate whether minimum markup laws are policies that improve the well-being of their constituents.

CCCTB vs. BEFIT: How Have the Proposals Changed?

If the EU is going to harmonize its tax base, it should do so in a way that increases the efficiency and competitiveness of tax policy for the EU as a whole, and not just seek out the lowest common denominator.

Five Takeaways from the New Pillar One Documents

The OECD recently released a trove of new documents on a draft multilateral tax treaty. The U.S. Treasury has opened a 60-day consultation period for the proposal and is requesting public review and input.

Most Successful Fiscal Consolidations Do Not Rely Solely on Tax Hikes

If tax increases are included in a package, international experience points toward raising consumption taxes, rationalizing tax expenditures, and broadening the tax base—not hiking income taxes.

Federal Deficit Grew to $2 Trillion in FY 2023

Outside of the pandemic years, this year’s federal deficit is the highest in U.S. history. While tax revenue has increased about 28 percent since the pre-pandemic year 2019, spending has increased about 46 percent. Annual deficits are headed towards $3 trillion over the next few years.

Nikki Haley’s Plan to Eliminate the Federal Gas Tax Would Be a Mistake

At the most recent Republican primary debate, former governor and United Nations ambassador Nikki Haley (R-SC) proposed eliminating the federal gas tax to lower fuel prices for consumers.

Select Country-Level Revenue Estimates for Pillar Two

Pillar Two implementation is underway in many jurisdictions, and many governments are aiming to get their proposals approved before the end of 2023. However, estimating Pillar Two’s impact on government revenue is proving difficult. As a result, only a few countries have publicly presented their findings.

Nonprofits are Financially Healthy and Doing Big Business

Can an organization rightfully be called a “nonprofit” if it almost always makes money? And what if most of that organization’s income comes from “business income,” should it legitimately be considered a “charity”?

Tax Trends in European Countries

In recent years, European countries have undertaken a series of tax reforms designed to maintain tax revenue levels while protecting households and businesses from high inflation.

Labor Share of Net Income is Within Its Historical Range

As increased political attention focuses on the state of the American worker, expect to see a resurgence of the argument that the labor share of income is in decline.

USITC Report Highlights Trade-Offs of Using Tariffs

The assessment of the tariffs President-elect Donald Trump imposed in 2018 and 2019 is clear: the policies have had a negative effect on American’s welfare.

BEFIT: One-Stop-Shop or One-More-Stop?

On 12 September, the European Commission released a proposal called “Business in Europe: Framework for Income Taxation” (BEFIT) and two associated proposals on transfer pricing and a Head of Office tax system.

Leave Worldwide Combined Reporting in the ‘80s, Where It Belongs

Given enough time, everything old is new again—including tax ideas best consigned to history. But worldwide combined reporting, which a few states flirted with in the 1980s, is rearing its head again.

U.S. Businesses Face Growing Impact from Tightened Interest Deductions and Higher Interest Rates

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.

The Tax Policy Implications of the Spanish Elections at the Regional, National, and European Levels

The Spanish election results are moving the country away from pro-growth tax reforms while launching the government’s tax agenda, and the agenda of the Spanish presidency of the Council of the European Union, into uncertainty.