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.

 

digitalization of the economy, international tax treaty system, OECD digital economy
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Sound Tax Policy Can Withstand Creative Destruction

Creative destruction—coined by famed economist Joseph Schumpeter—is the idea that new innovations disrupt and “destroy” existing economic structures as they create better and more efficient products and processes.

4 min read
US federal fiscal system is progressive and redistributive tax and spending
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Federal Tax System Remains Highly Progressive After the OBBBA

The 2017 Tax Cuts and Jobs Act (TCJA) simultaneously increased tax progressivity and decreased redistribution in the tax code. Our estimates suggest the OBBBA similarly combines a more progressive tax system with a lower degree of tax redistribution.

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Dr. Sergio Vasques
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Europe

Fiscal Forum: Future of the EU Tax Mix with Sérgio Vasques

Sean Bray interviewed Dr. Sérgio Vasques, Professor of Tax Law at the Catholic University of Lisbon and former Portuguese Secretary of State for Tax Affairs, about the future of the EU tax mix.

7 min read
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The Best Way to Tax Alcohol

The most effective way to tax alcoholic beverages is to tax according to alcohol content, rather than beverage type.

5 min read
earmark excise tax revenue excise tax revenue in europe, 2025
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What Should Be Done with Excise Tax Revenue?

Excise taxes generate more than two trillion dollars worldwide each year. While tying an excise tax revenue source to a specific expenditure program can be a best practice, the efficiency depends on the revenue source, the spending program, and why the excise tax was implemented in the first place.

6 min read