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.

Lottery
Blog

Mississippi Lawmakers Consider Creation of State Lottery

As Mississippi policymakers contemplate a lottery, it may be tempting to think of it as free money—new revenue raised without having to adopt a new tax. A better way of thinking about the issue, however, would recognize the lottery for what it is: a regressive form of high implicit taxation.

3 min read
Blog

Other Federal Tax Changes in the New Year

Though the focus has been on the Tax Cuts and Jobs Act, there are other federal changes that took place on January 1, 2018 which are also worth reviewing.

3 min read
Retirement Savings Tax Cuts and Jobs Act
Blog

Retirement Savings Left Largely Untouched by Tax Reform

While rumors flew around Washington in the fall that the Tax Cuts and Jobs Act would dramatically impact retirement savings accounts, the plan has made only a few minor modifications.

3 min read