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.
![Nonprofits are Financially Healthy and Doing Big Business Nonprofit Hospitals and Universities Untaxed Income](https://taxfoundation.org/wp-content/uploads/2023/10/AdobeStock_622169523-300x200.jpeg)
Nonprofits are Financially Healthy and Doing Big Business
Can an organization rightfully be called a “nonprofit” if it almost always makes money? And what if most of that organization’s income comes from “business income,” should it legitimately be considered a “charity”?
7 min read![Details and analysis of European Tax Trends and European Tax Reforms](https://taxfoundation.org/wp-content/uploads/2023/09/Tax-Trends-in-European-Countries-300x200.jpeg)
Tax Trends in European Countries
In recent years, European countries have undertaken a series of tax reforms designed to maintain tax revenue levels while protecting households and businesses from high inflation.
8 min read![Gross income definition or gross pay definition TaxEDU Labor Share of Net Income is Within Its Historical Range President Biden Made in America Tax Plan and American Jobs Plan](https://taxfoundation.org/wp-content/uploads/2019/04/calculator-5-300x225.jpg)
Labor Share of Net Income is Within Its Historical Range
As increased political attention focuses on the state of the American worker, expect to see a resurgence of the argument that the labor share of income is in decline.
5 min read![USITC Report Highlights Trade-Offs of Using Tariffs United States International Trade Commission Trump Tariffs](https://taxfoundation.org/wp-content/uploads/2023/09/USITC-Report-Highlights-Trade-Offs-of-Using-Tariffs-300x202.jpeg)
USITC Report Highlights Trade-Offs of Using Tariffs
The assessment of the tariffs former president Donald Trump imposed in 2018 and 2019 is clear: the policies have had a negative effect on American’s welfare.
4 min read![EU BEFIT proposal for Business in Europe Framework for Income Taxation](https://taxfoundation.org/wp-content/uploads/2023/09/EU-BEFIT-proposal-for-Business-in-Europe-Framework-for-Income-Taxation-300x200.jpeg)
BEFIT: One-Stop-Shop or One-More-Stop?
On 12 September, the European Commission released a proposal called “Business in Europe: Framework for Income Taxation” (BEFIT) and two associated proposals on transfer pricing and a Head of Office tax system.
6 min read![worldwide combined reporting new hampshire and minnesota](https://taxfoundation.org/wp-content/uploads/2023/09/Worldwide-combined-reporting-minnesota-and-new-hampshire-300x231.jpeg)
Leave Worldwide Combined Reporting in the ‘80s, Where It Belongs
Given enough time, everything old is new again—including tax ideas best consigned to history. But worldwide combined reporting, which a few states flirted with in the 1980s, is rearing its head again.
6 min read![“Orthodox” Supply-Side Economics like the Tax Cuts and Jobs Act TCJA versus Industrial Policy like the CHIPS Act and Inflation Reduction Act (IRA) in the U.S. Businesses Face Growing Impact from Tightened Interest Deductions and Higher Interest Rates](https://taxfoundation.org/wp-content/uploads/2023/09/U.S.-Businesses-Face-Growing-Impact-from-Tightened-Interest-Deductions-and-Higher-Interest-Rates-300x200.jpeg)
U.S. Businesses Face Growing Impact from Tightened Interest Deductions and Higher Interest Rates
As Congress continues its work on the fiscal year 2024 appropriations process and associated tax provisions, it should consider an often-overlooked tax provision: the limitation on deductions companies take for interest payments.
7 min read![2023 Spain election tax reforms and tax policy implications of 2023 Spanish elections](https://taxfoundation.org/wp-content/uploads/2023/06/Spain-election-tax-implications-2023-e1688075068250-300x197.jpg)
The Tax Policy Implications of the Spanish Elections at the Regional, National, and European Levels
The Spanish election results are moving the country away from pro-growth tax reforms while launching the government’s tax agenda, and the agenda of the Spanish presidency of the Council of the European Union, into uncertainty.
7 min read![State semiconductor incentives and subsidies in the wake of the federal CHIPS Act or CHIPS and Science Act R&D legislation](https://taxfoundation.org/wp-content/uploads/2023/09/State-semiconductor-incentives-in-wake-of-CHIPS-Act-300x200.jpeg)
States Enact Semiconductor Subsidies in the Wake of CHIPS
Policymakers at all levels of government should avoid the pitfalls of incentives. Instead, they should focus on creating a more efficient, neutral, and structurally sound tax code to the benefit of all types of business investment.
6 min read![US Pillar Two responses should include a policy response from Congress on the OECD global tax deal's global minimum tax](https://taxfoundation.org/wp-content/uploads/2023/09/AdobeStock_403686521-300x200.jpeg)
How the U.S. Can Piece Together a Solution for Pillar Two
Congress should recognize that Pillar Two has significant U.S.-specific downsides, but also that it cannot unilaterally stop Pillar Two from taking effect. Instead, it should carefully consider a policy response for the next Congress, when a variety of forces are likely to compel it to act.
7 min read