Tax Policy Blog

Value-added Taxes in the Pandemic

Many governments have chosen to use VAT as a tool to provide tax relief for consumption in various sectors throughout the pandemic, but in the long term, VAT should not be used as a tool for relief.

Wisconsin’s PPP Loan Recipients Face Hundreds of Millions in Surprise Taxes

Unless the legislature acts, businesses that have received PPP loans and related federal assistance will face $457 million in state taxes through 2024—with more than half of those taxes coming due this spring—despite Wisconsin being on track to see continued general fund revenue growth even amid the pandemic.

What the GameStop Saga Can Teach Us About Mark-to-Market Taxation of Capital Gains

Whether you see the GameStop saga as a Robin Hood-style victory for the little guys or as a case of disruptive investor hysteria, it provides an interesting case study in just how badly the mark-to-market treatment of capital gains income could go awry.

Washington State Floats a Wealth Tax Which Relies Almost Exclusively on Four People

What happens if you create a tax and its base is, for all intents and purposes, four people? If some Washington lawmakers had their way, we might find out.

Using Carbon Tax Revenue to Grow the Economy

The economy and climate change are two challenges the Biden administration has identified as priorities. One way to address both issues at the same time is to enact a carbon tax to discourage carbon emissions, and to use the resulting carbon tax revenue to lower—or in the case of the TCJA’s individual provisions, avoid increases of—other, more distortive, types of taxes. This would not only address the challenges of climate change but also support the economy.

5 Observations on Janet Yellen’s Recent Confirmation Testimony

In her recent confirmation hearing, economist Janet Yellen, President Biden’s choice for Treasury Secretary, sought to reassure markets that the new administration would not raise corporate taxes until the economy improves. At the same time, however, she sent a troubling signal that when they do push for higher corporate tax rates, they would do so in coordination with other countries so that the U.S. doesn’t lose its competitive edge.

New York Governor Proposes THC-based Tax on Recreational Marijuana

Massachusetts Flavored Tobacco Ban Has Severe Impact on Tax Revenue

The Massachusetts flavored tobacco ban highlights the complications of contradictory tax and regulatory policy, the instability of excise taxes that go beyond pricing in the cost of externalities, and the public risks of driving consumers into the black market through excessive taxation or regulation.

President Biden Outlines Plan for Additional Coronavirus-Related Relief and Stimulus

President Biden’s plan builds on previous relief packages and would include larger payments to individuals, expanded relief for households and small businesses, funding for vaccine distribution, and aid to state and local governments.

Day 2 of OECD Consultation on International Tax Reform Blueprints

The OECD consultation is in the context of the Inclusive Framework on Base Erosion and Profit Shifting which is made up of delegates from more than 135 countries and is focused on policies that reduce opportunities for tax avoidance by multinational companies. The current proposals being considered would change both where and how much companies pay in corporate taxes.

Day 1 of OECD Consultation on International Tax Reform Blueprints

The first session was focused on Pillar 1 of the OECD proposal. The pieces in Pillar 1 would change tax rules so that companies would be paying more taxes in countries based on the location of customers. This approach would move more tax revenues into so-called “market countries.”

Several States Considering Legal Recreational Marijuana

With most states experiencing reduced tax revenues due to the coronavirus pandemic, several are contemplating whether recreational marijuana legalization and taxation may be one avenue to raise new revenue. While states that have already legalized do raise meaningful revenue, lawmakers should remember that establishment of legal markets takes time.

Digital Tax Collection Triggers New U.S. Tariffs on France

A multilateral solution to digital taxation would be preferable over DSTs and retaliatory measures, especially during these challenging economic times. DSTs are indeed distortionary taxes that can act as trade barriers. Retaliatory tariffs, however, only further weaken the U.S.-French trade relationship and will negatively impact both economies.

Three New Year’s Resolutions for Tax Policymakers

The world is ready to close the book on 2020 and start fresh in 2021, awaiting widespread vaccination, an end to the pandemic, and the beginning of a new chapter of economic recovery. With a fresh start in mind, and a healthy dose of optimism, here are three New Year’s resolutions for crafting better tax policy in the coming year.

The COVID-19 Relief Bill Contains Over $100 Billion in State Aid After All

The $900 billion coronavirus relief package provides nearly $82 billion for the Education Stabilization Fund, $14 billion for mass transit, and $10 billion for state highways,

Here’s How Education-Related Tax Benefits Could Change in 2021

COVID-19 Relief Package FAQ

The latest $900 billion coronavirus relief bill extends and modifies several provisions first enacted in the CARES Act, Congress’s $2.2 trillion pandemic relief law that was passed in March. With this package, lawmakers will have responded to the coronavirus and related economic hardship with a record-setting $3 trillion of fiscal support.

Tax Extenders Hitch a Ride on Omnibus and COVID-19 Relief Deal

Tax extenders are no stranger to hitching a last-minute ride on year-end legislation. This year they made another last-minute appearance, finding a hold in their own division of the 5,593-page bill to fund the government through the fiscal year and provide additional coronavirus relief through March.

Congress Passes $900 Billion Coronavirus Relief Package

The coronavirus relief package represents the second-largest recovery legislation, behind only the CARES Act, for a combined total of more than $3 trillion in support.

Pandemic Highlights the Need for Better Tax Policy for Entrepreneurs and Small Businesses

As Congress works to provide another round of emergency economic relief, it is a good time to step back and consider how tax policy affects entrepreneurs and small businesses.