The economic crisis caused by the coronavirus pandemic poses a triple challenge for tax policy in the United States. Lawmakers are tasked with crafting a policy response that will accelerate the economic recovery, reduce the mounting deficit, and protect the most vulnerable.
To assist lawmakers in navigating the challenge, and to help the American public understand the tax changes being proposed, the Tax Foundation’s Center for Federal Tax Policy modeled how 70 potential changes to the tax code would affect the U.S. economy, distribution of the tax burden, and federal revenue.
In tax policy there is an ever-present trade-off among how much revenue a tax will raise, who bears the burden of a tax, and what impact a tax will have on economic growth. Armed with the information in our new book, Options for Reforming America’s Tax Code 2.0, policymakers can debate the relative merits and trade-offs of each option to improve the tax code in a post-pandemic world.


Spain’s COVID-19 Economic Response
Spain’s policy response needs to be broad and in keeping with long-term objectives. It is paramount that the short-term harm caused by this outbreak does not turn into a long-term economic downturn.
5 min read
Evaluating the Trade-offs of Unemployment Compensation Changes in the CARES Act
Policymakers must weigh the trade-offs of subsidizing unemployment with mitigating community spread of coronavirus.
6 min read
India Pushes Digital Taxes in a Difficult Time
Even during the coronavirus outbreak, efforts to change the way digital business models are taxed continue. India announced this week that its tax aimed at foreign digital companies, the “equalization levy,” will be expanded.
4 min read
Denmark Unplugs the Economy
Denmark, a high-tax country with 5.5 million citizens, has implemented policies designed to avoid layoffs and bankruptcies and basically unplug the economy during the pandemic.
4 min read
A German Export for Times of Crises: The Short-Time Work Scheme
One of the most talked about government economic responses to the COVID-19 crisis is Germany’s Kurzarbeit: the German short-work subsidy scheme.
3 min read
Weighing the Value of Tax Credits During an Economic Crisis
One idea under consideration is adjusting existing tax credits, such as the Child Tax Credit (CTC) or Earned Income Tax Credit (EITC), to provide financial relief during the crisis.
5 min read
State Aid Provisions of the Federal Coronavirus Response Bill
To be eligible for federal funding, state expenditures must meet certain conditions. We break down the state aid coronavirus provisions in the latest federal bill.
5 min read
Working from Home Brings Greater Exposure to State Tax Codes
During the present crisis, remote work has become a necessity for many people. The tax implications, however, are very real and potentially quite complex.
7 min read
What Happens with State Excise Tax Revenues During a Pandemic?
States will have to consider the effects of the COVID-19 pandemic on their excise tax revenues, including from gas taxes, tobacco taxes, and alcohol taxes.
7 min read