Help us achieve a world where the tax code doesn't stand in the way of success.
The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.
Unlike the individual tax code, it’s often easy to view the business tax code impersonally. Who are the workers, consumers, and shareholders who interact with businesses in the U.S.? What forms do these businesses take? How do business taxes impact people’s lives?
It is essential we answer these questions in order to design a business tax system that is simple, efficient, and enables economic progress.
The posts below are designed to provide taxpayers and lawmakers with the facts and data necessary to better understand business taxes in America and have an open and productive debate.
Stay Informed on Tax Policy Research and Analysis
One of the most significant provisions in the Tax Cuts and Jobs Act was the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent.
A key element of America’s dynamism problem is a drop in entrepreneurship. Removing tax barriers for entrepreneurs would improve America’s dynamism while making America’s tax code more neutral, efficient, and simple for all taxpayers.
Since most U.S. businesses are pass-through businesses, such as partnerships, S corporations, LLCs, and sole proprietorships, changes to the individual income tax, especially to top marginal rates, can affect a business’s incentives to invest, hire, and produce.
The federal income tax and federal payroll tax make up a growing share of federal revenue. Individual income taxes have become a central pillar of the federal revenue system, now comprising nearly half of all revenue.
Here's how the new pass-through deduction works and how it can be reformed to be less complex, less prone to abuse, more neutral, and more economically efficient.