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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Studies have shown that accelerated depreciation helps increase wage growth. A recent report found that states that implemented accelerated depreciation in their tax codes led to a 2.5 percent increase in compensation per employee in manufacturing, relative to states that did not.
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Countries around the world have implemented and continue to implement emergency tax measures to support their economies during the coronavirus (COVID-19) crisis.
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In the first year of enactment alone, we estimate the combination of full expensing and neutral cost recovery would increase full-time equivalent employment by more than 44,000 jobs. The cumulative impact by year five of the policy would be nearly 200,000 new jobs.
4 min read
In line with the nationwide trend of taxing vapor products, the Michigan Senate has passed a new 18 percent tax on vapor products. These taxes are often intended to achieve a two-fold goal: deterring youth use and raising revenue. The Michigan bill is no exception.
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Nebraska lawmakers may ultimately opt for a package that includes both property tax relief and the renewal of business incentives, but they should avoid doing so at the expense of decoupling from the CARES Act’s liquidity-enhancing provisions.
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Based on the CBO’s assessment of the economic and budgetary effects of federal investment, lawmakers should look to spur private sector investment rather than try to enact a massive federal infrastructure bill.
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The U.S. has called for a pause in global digital tax negotiations, dealing a blow to Pillar 1 of the OECD’s international tax project. What happens next could be very harmful for the global economy.
3 min read
A neutral cost recovery system lowers the short-term cost of the policy to the federal government while providing nearly equivalent economic benefits. While neutral cost recovery is not a new idea, there are several policy questions lawmakers will want to consider when designing this system.
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As policymakers continue evaluating their evolving revenue and spending options, the importance of enacting policies that enhance business liquidity must remain at the forefront.
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The lockdowns imposed in response to the COVID-19 pandemic induced an increase in demand for broadband internet, as work from home and other social distancing measures pushed people to spend more time online. As broadband becomes a more important piece of America’s infrastructure, it makes sense to look at tax policy that will help drive more investment and better service.
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As lawmakers explore options for “Phase 4” coronavirus relief legislation, one idea that has received renewed attention is allowing businesses to cash out business tax credits. This proposal would be strengthened by also permitting acceleration of firms’ accrued net operating loss (NOL) deductions and designing the proposal so that firms can quickly convert these tax assets into cash.
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Tax policy responses to the pandemic should be designed to provide immediate support while paving the way to recovery. A temporary VAT rate cut in the context of an inefficient VAT system is likely to deliver mixed results at best.
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Seattle’s city council are again gearing up for an effort to increase taxes on the city’s largest employers, intended to generate revenue for cash assistance to low-income households impacted by the COVID-19 crisis, among other reasons.
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Despite a balanced budget and and revenue shortfalls arising from the coronavirus crisis, the D.C. Council will consider proposals to raise income taxes to fund newly proposed spending projects.
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One idea that would help the nation’s economic recovery during the coronavirus crisis would be moving to full expensing of capital investment. The depreciation debate might seem confusing, so the question at hand is: how, when, and by what amount can businesses recognize (or recover) the cost of a capital investment, like a piece of equipment or a new warehouse, on their income tax return?
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While it is understandable that lawmakers and organizers are worried about Colorado’s financial situation, they should remember that narrow taxes are volatile and disrupt markets. Excise taxes can play a role in state revenues even as policymakers appreciate that excise taxes are not viable long-term revenue tools for general spending priorities.
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As New Jersey lawmakers grapple with reduced revenues due to the coronavirus pandemic, they have turned to an unusual solution: the issuance of bonds that would be repaid, if necessary, through temporarily higher sales and property taxes.
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The pandemic has left states in dire straits financially and lawmakers are getting creative in their pursuit of new revenue sources. However, it’s unlikely that revenue from sports betting will have any meaningful impact on budget shortfalls
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