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.
![Permanent expensing machinery equipment 100 percent expensing bonus depreciation](https://taxfoundation.org/wp-content/uploads/2023/05/Permanent-expensing-machinery-equipment-100-percent-expensing-bonus-depreciation-300x200.jpg)
Expensing of Machinery and Equipment Should Be Made Permanent
Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
7 min read![Ways & means tax proposal seeks to combat extraterritorial taxes and discriminatory taxes Global minimum tax revenue OECD Pillar Two revenue OECD impact assessment OECD Pillar One tax Pillar one amount a Biden interest limitation Biden interest deduction rule Biden interest expense limitation Business interest expense limitation Democrat Senate international tax overhaul discussion draft legislation (Wyden Brown Warner international tax overhaul) or Sen Wyden international tax plan,](https://taxfoundation.org/wp-content/uploads/2021/08/global-international-map-us-e1630689247673-300x200.jpg)
New Ways & Means Proposal Shows Continued Commitment to Combat Extraterritorial Taxes
The legislation follows from the bipartisan concern regarding tax policies adopted by other countries specifically targeting U.S. businesses or the U.S. tax base.
6 min read![2023 Louisiana tax reform includes Louisiana franchise tax and inventory taxes corporate business tax reform changes](https://taxfoundation.org/wp-content/uploads/2023/05/Louisiana-tax-reform-300x212.jpg)
Louisiana Considers Eliminating Corporate Franchise and Inventory Taxes
Legislation currently advancing in Louisiana—related to the franchise tax, inventory tax, and corporate rebate and exemption programs—would make the state’s tax code simpler and more competitive.
4 min read![PA tax reform including Pennsylvania corporate tax reform of corporate net income tax cnit](https://taxfoundation.org/wp-content/uploads/2023/05/PA-tax-reform-including-Pennsylvania-corporate-tax-reform-of-corporate-net-income-tax-cnit-300x190.jpg)
The Commonwealth’s Case for Corporate Tax Reforms
The Pennsylvania Senate Finance Committee recently advanced two bills, SB 345 and SB 346, that would build on last year’s historic corporate net income tax (CNIT) reform.
7 min read![Tackling US debt crisis requires Medicare reform and Social Security reform to reduce the deficit](https://taxfoundation.org/wp-content/uploads/2023/05/Artboard_2-1-300x212.png)
Tackling America’s Debt and Deficit Crisis Requires Social Security and Medicare Reform
Any serious proposal to tackle the emerging debt and deficit crisis must also address our largest mandatory spending programs: Social Security and Medicare. Together, these two programs will be responsible for nearly 80 percent of the deficit’s rise between 2023 and 2032, according to Congressional Budget Office (CBO) projections.
8 min read![Design Matters When Raising Taxes to Reduce the Deficit and Stabilize the Debt-to-GDP ratio US debt taxes deficits Gross Domestic Product GDP](https://taxfoundation.org/wp-content/uploads/2023/05/Design-Matters-When-Raising-Taxes-to-Reduce-the-Deficit-and-Stabilize-the-Debt-to-GDP-ratio-US-debt-taxes-deficits-300x200.jpg)
Design Matters When Raising Taxes to Reduce the Deficit and Stabilize the Debt
Rather than continue down the path of growing debt, lawmakers should craft a comprehensive solution. International experience cautions against tax-based fiscal consolidations, but modest tax increases may be part of a successful debt reduction package.
6 min read![2023 Minnesota tax reform plan includes GILTI corporate tax reform and income tax and capital gains tax changes](https://taxfoundation.org/wp-content/uploads/2023/05/Minnesota-state-capitol-taxes-300x199.jpg)
![US debt compared to other countries debt to gdp ratio by country](https://taxfoundation.org/wp-content/uploads/2023/05/us-globe-3-300x199.jpg)
How America’s Debt Problem Compares to Other Countries—and Why It Matters
According to the International Monetary Fund (IMF), the U.S. federal government is among the most indebted governments in the world.
6 min read![Details and Analysis of Canceling the Scheduled Tax Cuts and Jobs Act Business Tax Increases and tax changes including expirations](https://taxfoundation.org/wp-content/uploads/2022/10/Calculator-filing-NewFabrika-e1667227722281-300x200.jpeg)
Does the Optimal Tax System Exist?
While research on optimal taxation often focuses on the pure economic implications, it rarely considers cultural and societal differences that can lead to very different outcomes when trying to implement an optimal tax system.
3 min read![Minnesota Worldwide Combined Reporting revenue estimate ITEP](https://taxfoundation.org/wp-content/uploads/2023/05/Minnesota-state-capitol-300x199.jpg)
The Faulty Revenue Estimate Behind Minnesota’s Consideration of Worldwide Combined Reporting
As Minnesota lawmakers consider making theirs the first state to mandate worldwide combined reporting, they are relying on a revenue estimate that is—this may not be the technical term—completely bogus.
7 min read