Tax Policy Blog

Taxes, Fiscal Policy, and Inflation

Consumer prices rose by 7 percent in 2021, the highest annual rate of inflation since 1982. Where did this inflation come from and what might its impacts be? Tax and fiscal policy offer important clues.

What the U.S. Can Learn from the Adoption (and Repeal) of Wealth Taxes in the OECD

Recent discussions of a proposed wealth tax for the United States have included little information about trends in wealth taxation among other developed nations. However, those trends and the current state of wealth taxes in OECD countries can provide context for U.S. proposals.

Bumpy Tax Filing Season Ahead Due to IRS Backlog and Pandemic Tax Relief

The National Taxpayer Advocate argued the IRS telephone service “was the worst it has ever been” in 2021, with an answer rate of about 11 percent.

Proposal to Raise Vapor Taxes in Washington State Gets Base and Rate Wrong

Lawmakers in Washington need not revisit their vapor tax. The current tax is levied at an appropriate level and it has the right tax base.

Poor Tax Design in Alaska Vapor Tax Proposal

A proposal to introduce a wholesale tax on vapor products in Alaska could make switching from combustible tobacco products very expensive for smokers.

California Considers Doubling its Taxes

Practically doubling state taxes—even if the burden is partially offset through state-provided health coverage—could send taxpayers racing for the exits.

U.S. Fiscal Response to COVID-19 Among Largest of Industrialized Countries

As the U.S. grapples with rising price inflation, a large and growing national debt, as well as a possible economic slowdown due to Omicron, the decision to provide additional fiscal support will prove to be a difficult one. Policymakers can debate how much stimulus is appropriate, but what is clear is that the U.S. fiscal support so far during the pandemic outranks nearly every industrialized country.

A Holiday Tradition: Tax Extenders Slated to Expire at End of 2021

Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.

Gift or Lump of Coal: U.S. Cross-border Tax Changes Won’t Be Home for Christmas

As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act in the United States means new uncertainties for a global agreement and for taxpayers.

What Do Global Minimum Tax Rules Mean for Corporate Tax Policies?

The new OECD global minimum tax rules are complex, and some countries may opt to put them in place on top of preexisting rules for taxing multinational companies. However, countries should also consider ways to reform their existing rules in response to the minimum tax.

Why Washington State Can’t Claim Its Capital Gains Tax Is an Excise Tax

Permanent Build Back Better Act Would Likely Require Large Tax Increases on the Middle Class

Policymakers and taxpayers should understand the scope of tax changes necessary to fully pay for the large-scale social spending programs that would be initiated under the Build Back Better Act.

Patching Spain’s Tax Code Won’t Attract Investors

Spain should follow the example of Madrid, the country’s most competitive region. A more efficient income tax system is a better objective than just focusing on incentives for foreigners to change their tax residence.

Who Really Pays the Tariffs? US Firms and Consumers, Through Higher Prices

The bulk of economic evidence shows for most of the new tariffs imposed under the Trump administration, US firms or consumers bore 100 percent, or even more, of the burden through lower profits or higher retail prices.

Build Back Better Budget Deficits Could Mean More Inflation, More Policy Uncertainty

As the Senate weighs changes to the spending and tax portions of the Build Back Better Act, the Congressional Budget Office (CBO) and Tax Foundation find the bill would increase the cumulative budget deficit over the next 10 years—contrary to claims the legislation is “fully paid for.”

The Interest Limitation Pile-On

As Congress contemplates adding a new worldwide interest limitation rule as part of the House Build Back Better Act, it is useful to consider the potential effects of this proposal as well as whether it is necessary to add this on top of the U.S.’s existing restrictions on the value of interest deductions.

Arkansas’s Sustainable Tax Reform: A Gift That Will Keep On Giving

Faced not only with immediate surpluses but with the expectation of sustained revenue growth in coming years, Arkansas policymakers have chosen to return some of the additional revenue to taxpayers in the form of individual and corporate income tax rate reductions, with additional rate cuts if future revenues permit.

Book Minimum Tax versus Corporate Rate Increase: Pick Your Poison

While the book minimum tax is smaller in scale than the proposed original corporate rate increases, it would introduce more complexity, inefficiency, and problems at the industry- and sector-levels that a corporate rate increase would not. Neither option is an optimal way to raise new tax revenues.

Traveling for the Holidays? States Would Like the Gift of Taxes

In most states, you don’t have to visit for long before you start accruing tax liability.

Tax Policy’s Bipartisan Roots

Michael J. Graetz is the Columbia Alumni Professor of Tax Law and a leading expert on national and international tax law.