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Forty-three states adopted tax relief in 2021 or 2022—often in both years—and of those, 21 cut state income tax rates. It’s been a remarkable trend, driven by robust state revenues and an increasingly competitive tax environment.
At the end of 2022, prices were 14.6 percent higher than they were two years prior. That’s the fastest inflation rate over any two calendar years since the stagflation era of the late 1970s. State policymakers are understandably interested in bringing any tools at their disposal to bear on the problem. And many of them are reaching for tax policy solutions.
The FairTax is a proposal to replace all major sources of the federal government’s revenue—the individual income tax, corporate income tax, estate and gift taxes, and payroll tax—with a national sales tax and rebate, abolishing the IRS in the process.
Earlier this month, New York Governor Kathy Hochul (D) proposed increasing the state’s cigarette tax rate by $1.00 a pack, banning the sale of flavored vaping products, and ceasing the sale of all flavored tobacco products. If enacted, these policies would fuel black markets and create a fiscal hole for the state to fill, all while hurting New York businesses and consumers.
The process leading to the global minimum tax has been messy, and the mess will likely continue for years to come. New revenues are hardly a salve for the setback they represent.
West Virginia is one of only seven states that hasn’t offered any significant tax relief since 2021—and five of the other six forgo an individual income tax.
On the heels of adopting one of the most comprehensive state tax reform packages in years, Iowa lawmakers are back in Des Moines with property tax relief in their sights. But while the issue is worthy of their attention, House File 1 (HF 1) as currently drafted misses the mark.
Before EU policymakers rush to implement massive reforms, they should remember the goals of the Single Market, its international limitations, and the role of tax policy.
By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.
A combination of long-standing IRS operational deficiencies, the agency’s temporary closure due to the pandemic, and the now-expired pandemic relief produced a perfect recipe for a paper backlog.
In a coordinated effort, lawmakers in seven states that collectively house about 60 percent of the nation’s wealth—California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington—are introducing wealth tax legislation on Thursday.
Lawmakers should use the most comprehensive analytical tools available to them—like dynamic scoring—to make informed decisions about policy changes.
The EU’s unilateral approach with carbon taxes, faster track on the global minimum tax, and threat of renewed efforts on DSTs means that U.S. policymakers face some hard choices. Policymakers on both sides of the Atlantic should keep in mind pro-growth tax and trade principles that promote a rules-based international order and increase opportunity.
It’s Christmas time, and for millions of families around the country, that means revisiting some classic holiday movies. For some, that includes It’s a Wonderful Life and Home Alone. For others, that includes Die Hard.
The year-end omnibus federal spending package makes a number of reforms to retirement savings accounts.
As it stands, Pillar One would usher in the end of many digital services taxes (though perhaps not all) at the cost of increased complexity (in an already complex and uncertain system).
Over the long run, tax policies that grow after-tax incomes and the economy do more to boost charitable giving than policies that try to incentivize people to be charitable.
As Chile looks to the future, the accelerated deductions for capital investment costs should be extended and made permanent while unnecessary tax hikes on individuals and capital should be avoided. Policymakers should focus on growth-oriented tax policy that encourages investment, savings, and entrepreneurial activity, increasing Chile’s international tax competitiveness.
The tax treatment of research and development (R&D) expenses is one of the biggest issues facing Congress as the year winds down.
Later this week, the European Union is expected to release a new Tobacco Tax Directive, the first update in more than a decade. Early reports indicate that the EU will propose a significant increase to the existing minimum cigarette tax rates levied across the Union and expand the product categories that are taxed, including a block-wide vaping tax.