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.
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?7 min read
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.4 min read
Michiganders will pay a lower individual income tax rate next year thanks to high general fund revenues, but these savings may be short-lived following an opinion released by the state’s attorney general.7 min read
While the IRS hopes to increase revenue collection and minimize additional burdens on taxpayers, uncertainty remains regarding its ability to deliver, particularly on the latter. Furthermore, some concerns about the original funding package are already surfacing, specifically around insufficient funding for taxpayer services.6 min read
The Portuguese government has introduced plans to exempt “essential” food items from its value-added tax (VAT) in response to the recent inflation spike. While this may sound like a reasonable measure on the surface, it comes with numerous unintended consequences that compromise its effectiveness.4 min read
Spain should follow the examples of Italy and the UK and enact tax reforms that have the potential to stimulate economic activity by supporting private investment while increasing its international tax competitiveness.7 min read
Accelerating its current individual income tax triggers and setting up the corporate income tax for eventual elimination would increase Missouri’s attractiveness among states at a time when businesses are increasingly mobile and tax competition matters more than ever.4 min read
Younger and healthier Brits have created a $17.1 billion budget hole by smoking and drinking less. Yet, despite this resounding piece of positive news, some see any decline in tax revenues as a public finance crisis. Excise taxes target a tax base that is intended to shrink. Less consumption is a stated goal of the policy.3 min read
If Alabama continues on its current path, its treatment of remote workers would be even more aggressive than that of New York—a shaky legal foundation.6 min read
Washington Supreme Court Affirms Capital Gains Tax and Invites Challenge to Broader Income Tax Restrictions
The Washington Supreme Court not only gave its blessing to a capital gains tax that runs afoul of the state constitution, but it also set out a welcome mat for legislators eager to implement a broader income tax.7 min read