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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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Blog Articles

6158 Results
Neutral Cost Recovery, Jack Kemp, Bob Kasten

Neutral Cost Recovery Is Not a New Idea

As stated by Rep. Jack Kemp in 1985, “Neutral cost recovery is designed to provide the present value of investment expensing without some of its practical problems.”

5 min read
Capital cost recovery and capital allowances in the OECD 2023 , full expensing, full immediate expensing

Empirical Evidence Shows Expensing Leads to More Investment and Higher Employment

The Tax Foundation’s General Equilibrium Model suggests that allowing businesses to immediately deduct or “expense” their capital investments in the year in which they are purchased delivers the biggest bang for the buck in spurring economic growth and jobs compared to other tax policies.

7 min read

Louisiana Considers Temporary Suspension of Part of Corporation Franchise Tax

State recovery plans should lessen the burden on businesses by shifting from capital stock taxes and other taxes that are charged regardless of profitability. Louisiana does well to target its Corporation Franchise Tax, a burdensome tax that would target businesses that may already be struggling.

2 min read
Who Shoulders the Burden of Federal Income Taxes? high-income earners, high-income taxpayers, progressive tax system, federal income tax, income inequality, wealth tax

Under the HEROES Act, State Budgets Could Soar as the Economy Suffers

The HEROES Act, proposed by House Democrats as a next round of fiscal relief during the coronavirus outbreak, contains about $1.08 trillion in aid to states and localities. That would bring the pandemic total to $1.63 trillion—an amount so large that it might overwhelm their ability to spend it and could reward fiscal irresponsibility.

8 min read
LIFO tax treatment of inventory LIFO repeal US supply chain resiliency Biden small business taxes Biden tax plan small business impact Investments in long-lived assets, such as structures, must be deducted over long cost recovery periods: up to 27.5 years (for residential buildings) or 39 years (for nonresidential buildings), cost recovery of buildings.

Reducing the Bias Against Long-term Investments

Other countries have shown that providing deductions in line with invested capital costs can have positive impacts both on investment and on debt bias.

7 min read

Watch: Coronavirus: A Path to Economic Recovery

What challenges should we expect to face as the U.S. economy begins to re-open? When is the right time for legislators to start focusing on long-term recovery vs. short-term needs? What policies should federal legislators pursue to clear a path to recovery?

1 min read
White House considers capital gains tax cut, neutral cost recovery, full expensing amid coronavirus economic relief options, coronavirus business relief

White House Considers Neutral Cost Recovery for Structures

When considering long-term policies for increasing long-run levels of investment and economic growth, full expensing and neutral cost recovery are better targeted than policies like a capital gains cut.

6 min read
OECD Pillar 1 Amount A proposal OECD Secretariat, OECD unified approach pillar 1, OECD pillar 1, OECD international tax, OECD unified approach digital tax, OECD multinational businesses, OECD digital tax

Chaos to the Left of Me. Chaos to the Right of me.

The OECD recently announced that the negotiation timeline for new digital tax proposals has now been pushed back to October due to the COVID-19 pandemic, although the end-of-year deadline for the overall project is still in place.

5 min read
Virginia local option sales tax

April 24th Afternoon State Tax Update

Virginia enacted a biennial budget, which includes a new excise tax on “skill games.” Meanwhile, Arizona and Connecticut announced plans to convene in special sessions later this year while Oklahoma gets the green light to use rainy day fund money to close budget gaps.

4 min read
windfall profits tax windfall tax excess profits tax windfall taxes definition oil prices

Historic Oil Price Burns Hole in State Budgets

Alaska and North Dakota collect revenue primarily from oil-related taxes. These states must start thinking about how to plan for an era of reduced oil revenue.

5 min read