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Evaluating U.S. Tax Reform Options & Trade-Offs

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.

Property Taxes in Arkansas

As Arkansas considers tax reform, expanding or increasing the state’s property tax, if used to finance other tax changes, would be worth exploring.

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Alcohol Taxes Beer

The Health Impact of Alcohol Taxes

A proposal in the Senate tax reform bill to reduce alcohol taxes wouldn’t create the negative health consequences that some claim.

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Tax on stock buybacks Wyden stock buybacks tax Tax Cuts and Jobs Act, House Ways and Means, temporary tax policy

JCT’s Dynamic Score is Positive But Underestimates Economic Benefits

The Joint Committee on Taxation (JCT) dynamic scoring estimate of the Senate’s Tax Cuts and Jobs Act confirms that tax changes impact economic growth. While JCT’s estimates are positive, there is reason to believe that the tax plan would produce even greater dynamic effects than its analysis shows.

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