A better-designed tax system should be a goal of any fiscal consolidation package. That said, our simulations suggest that even substantially higher tax increases are insufficient to curtail long-run debt-to-GDP growth.
Rather than continue down the path of growing debt, lawmakers should craft a comprehensive solution. International experience cautions against tax-based fiscal consolidations, but modest tax increases may be part of a successful debt reduction package.
According to the International Monetary Fund (IMF), the U.S. federal government is among the most indebted governments in the world.
While research on optimal taxation often focuses on the pure economic implications, it rarely considers cultural and societal differences that can lead to very different outcomes when trying to implement an optimal tax system.
If Wisconsin policymakers return some of the projected continued revenue growth to taxpayers in a structurally sound and pro-growth manner, those tax cuts will benefit businesses and individuals throughout the state, leading to more innovation, more job and wage growth, more economic opportunities, and more vibrant communities.
As Minnesota lawmakers consider making theirs the first state to mandate worldwide combined reporting, they are relying on a revenue estimate that is—this may not be the technical term—completely bogus.
By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.
As policymakers look to tackle America’s debt and deficit crisis, they should consider international experiences on successful fiscal consolidations.
One of the arguments in favor of the FairTax is that it would do a better job of taxing the underground economy than the income tax it is intended to replace.
When a country has a broad base with a simple and transparent tax code, small rate changes have little influence. Therefore, policymakers shouldn’t only focus on rate changes when it comes to increasing tax competitiveness.
As policymakers in St. Paul finalize this year’s tax bill, they should avoid policies that incentivize the diversion or relocation of capital. Importantly, states do not institute tax policy in a vacuum. The evidence from states’ experiences and the academic literature supports the conclusion that tax competitiveness matters not just to businesses but to human flourishing.
When it comes to EU-level tax policy ideas, competitiveness seems to be less of a priority than raising revenue or pursuing social objectives.
The Carbon Border Adjustment Mechanism (CBAM) is a key aspect of the EU’s broader Fit for 55 package which aims to cut 55 percent of net greenhouse gas (GHG) emissions in the EU by 2030. The growing number of competing climate policies between the EU and U.S., such as tax provisions in the Inflation Reduction Act, could present policymakers on both sides of the Atlantic an opportunity to work together.
As predicted, the Inflation Reduction Act’s misguided price-setting policy is already discouraging drug development. Rather than double down on it, as President Biden proposes doing in his budget, lawmakers ought to restore incentives to invest in the United States.
While some temporary policies can help in a crisis, policymakers should focus their efforts on sustainable policies that support growth and the resilience of businesses (and government coffers) over the long term.
The distributed profits tax is a sounder approach to concerns about investment and stock buybacks than the existing policy approach.
Our recent policy conference brought together academics and political leaders to present research on some of the most pressing issues in global tax policy and to discuss solutions that can unlock genuine global growth.
Scandinavian countries are well known for their broad social safety net and their public funding of services such as universal health care, higher education, parental leave, and child and elderly care. So how do Scandinavian countries raise their tax revenues?
Consistent principles ought to apply across the tax code. In the case of intangible drilling costs, companies should be able to claim full deductions for the costs they incur.