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Tax Policy Blog

Stay informed with quick and accessible analysis of today's top tax policy topics. Read Tax Foundation's Tax Policy Blog for insight from our experts on tax policies across the U.S. and abroad.

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6141 Results
unemployment compensation taxable income unemployment compensation as taxable income american rescue plan act's exclusion A person filling out tax papers, tax treatment of the working class

A Neutral Tax Code Counts Unemployment Compensation as Taxable Income

Since 1987, unemployment compensation benefits have been subject to federal income tax and, in most states, to state income tax. According to the Congressional Research Service, such treatment—including unemployment compensation benefits in taxable income—is common across industrial nations.

4 min read
EU business tax reform, European Union business tax reform, European Commission EU business taxation framework

The EU Determined to Reform the Business Tax

The EU recently launched a consultation to reform the business tax system, which will outline the priorities for corporate taxation over the coming years to meet the needs of a globalized economy that struggles to recover from the consequences of the COVID-19 crisis. It will also set EU actions regarding the ongoing international discussion on the taxation of the digital economy and a global minimum tax.

3 min read
Washington capital gains income tax Washington capital gains tax 2021 Washington election results ballot measures Washington State Lawmakers Floats a Wealth Tax Which Relies Almost Exclusively on Four People, Washington wealth tax proposal, Washington State wealth tax

Washington State Lawmakers Consider 1,000% Tax Increase on Tobacco Businesses

Limiting addiction to nicotine is a laudable goal, but lawmakers should exercise caution with the methods employed. Using gross receipts taxes on businesses to effectively levy an excise tax introduces complexity to an already flawed tax design. It is better to let the excise tax internalize externalities and the business tax raise general revenue.

3 min read
2021 tax season, tax refunds, IRS extends tax filing deadline to May 17

What to Expect During the 2021 Tax Season

The IRS recently announced the extension of tax filing and payment deadlines from April 15th to May 17th to help taxpayers navigating the many tax changes amid the pandemic and give the IRS opportunity to clear its backlog of tax returns and correspondence.

7 min read
Inflation Reduction Act stock buyback tax Making the expanded child tax credit permanent American Rescue Plan Act. House Democrats covid plan. House Ways and Means coronavirus relief legislation. House Ways and Means committee coronavirus relief legislation. Ways and Means Chairman Richard E. Neal coronavirus relief package. New coronavirus relief bill summary, Stimulus check round 2, unemployment benefits

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

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.

3 min read
Tax Cuts and Jobs Act offshoring Controlled Foreign Corporation rules around the world CFC rules US CFC rules passive foreign investment companies, PFICs GILTI, global minimum tax

TCJA Is Not GILTI of Offshoring

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.

6 min read
Total Covid relief (Total Covid-19 relief) in the US. Total unemployment insurance and total unemployment benefits, including total covid relief families. How much money has the US spent on covid-19 Comparing covid relief packages

U.S. COVID-19 Relief Provided More Than $60,000 in Benefits to Many Unemployed Families

During the pandemic, an unemployment family of four previously earning $60,000 will have received $50,840 in federal and state unemployment benefits from April 1, 2020 to September 6, 2021, plus $11,400 in stimulus payments, plus $7,200 in Child Tax Credit, totaling $69,440 in combined COVID-19 relief benefits.

4 min read
PA gas tax proposal seeks to phase out the PA gas tax (Pennsylvania gas tax) to fund PA highway funding. Learn more about the Gov. Tom Wolf gas tax proposal

Will Pennsylvania Be the First State to Motor Past the Gas Tax?

In Pennsylvania, Gov. Tom Wolf (D) has proposed phasing out the gas tax as the main funding mechanism for the state’s highway fund, and he has established a commission to recommend options for replacing it with alternative revenue sources. In a statement, the governor called the current motor fuel tax burdensome, outdated, and unreliable.

5 min read
International tax rules, International Tax rules House Democrats' covid-19 relief proposal

How GILTI Are U.S. Industries?

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.

6 min read
Ron Wyden energy tax proposal in Biden infrastructure bill. Katie Porter oil executive tax deduction

Wyden’s Energy Tax Proposal a Mixed Bag

As the Biden administration turns toward infrastructure, Sen. Ron Wyden (D-Or.) has suggested including reforms to the way the tax code subsidizes energy production in such a package, eliminating 44 “tax breaks” for various activities in the energy sector and replacing them with only three.

3 min read
American Rescue Plan state tax cuts, American Rescue Plan tax cuts State Unemployment Compensation Trust Funds, Elizabeth Warren wealth tax, Some tax hikes are more damaging than others, according to Congressional Budget Office (CBO) and new Tax Foundation economic modeling.

Does the American Rescue Plan Ban State Tax Cuts?

Senate amendments to the American Rescue Plan Act prohibit using any of the $350 billion in State and Local Fiscal Recovery Funds to cut taxes, but many are concerned that states which accept the funds could be prohibited from implementing tax cuts between now and 2024—an astonishing level of federal interference in states’ fiscal affairs.

8 min read
distributed profits tax cash-flow tax model for business taxes stock buybacks dividends

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

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.

2 min read
excise tax definition suspending the gas tax proposal Kentucky's gas tax road funding, Kentucky gas tax bill

Kentucky’s Century-Old Gas Tax Is Failing to Keep Up with Road Funding Needs

For the fourth year in a row, a comprehensive infrastructure funding reform bill has been introduced in Kentucky, with the centerpiece being a gas tax increase of 8.6 cents per gallon (cpg). Like many states, Kentucky faces a backlog of road maintenance and construction projects, and existing transportation taxes and user fees are failing to keep pace with funding needs.

4 min read
American Families Plan tax proposals American Family Plan Details and Analysis Biden American Families Plan Senate American Rescue Plan direct payments stimulus checks federal covid relief American Rescue Plan tax american rescue plan stimulus payments

Senate Direct Payment Design Would Create High Implicit Marginal Tax Rates

As the Senate debates the relief package and makes progress in the budget reconciliation process, policymakers should keep in mind the trade-off between targeted economic relief and increasing marginal tax rates in the tax code, which can distort incentives to earn income and induce taxpayers to creatively adjust their AGI to receive a payment in the next tax season.

4 min read
New Hampshire Business Profits Tax, New Hampshire Business Enterprise Tax, New Hampshire business tax cut, New Hampshire House Bill 10, New Hampshire Income Tax

New Hampshire Bill Aims to Reduce Tax Burden on Businesses

A year ago, it seemed possible that New Hampshire was headed toward a triggered tax increase. Instead, lawmakers may trim business tax rates and begin the phaseout of the state’s tax on interest and dividend income, which would take away the asterisk and make New Hampshire the ninth state to forgo an individual income tax altogether.

4 min read
Remote work tax revenue implications digital nomad visas, digital nomads, tax incentives for remote workers. Deutsche Bank tax work-from-home tax Deutsche Bank privilege tax on remote work

Tax Incentives for Digital Nomads and Remote Workers

Policy changes to attract foreigners are not without benefits, but governments should carefully weigh the costs of the tax incentives against opportunities to implement broader tax reforms. A more efficient income tax system is a better objective than just focusing on incentives for foreigners to change their tax residence.

4 min read