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.
![ARPA tax mandate American Rescue Plan Act state tax cuts](https://taxfoundation.org/wp-content/uploads/2024/07/tax-law-court-300x200.jpeg)
ARPA’s Tax Mandate Ruled Unconstitutional by Appellate Court
The Fifth Circuit has affirmed states’ authority over their respective tax policies and has asserted that the offset clause—often called the “Tax Mandate”—of the American Rescue Plan Act (ARPA) has enough fiscal impact on a state’s budget so as to be coercive, as opposed to incentivizing.
5 min read![Donald Trump Tax Plan 2024 Trump Tax Proposals and Tariff Ideas Trump Tax Reform](https://taxfoundation.org/wp-content/uploads/2024/07/Trump-tax-2020-300x179.jpg)
Trump’s Tax and Tariff Ideas: Details & Analysis
A new trade war could wipe out the benefits of pro-growth tax reform.
6 min read![Biden CHIPS and Biden Inflation Reduction Act analysis of Biden business investment and US investment research](https://taxfoundation.org/wp-content/uploads/2024/07/White-House-President-DC-300x207.jpeg)
White House Right on Importance of Business Investment, Wrong on Relevant Policy
The Treasury Department recently touted strong business investment in the years following the pandemic-driven recession and pointed to the Biden administration’s industrial policies in the Inflation Reduction Act and CHIPS Act as key drivers.
7 min read![Pa income tax reform 2024 Pennsylvania income tax cuts PA tax cuts and Pennsylvania tax cuts](https://taxfoundation.org/wp-content/uploads/2024/07/Pa-capitol-taxes-300x198.jpeg)
Evaluating Proposed Pennsylvania Income Tax Reforms
The proposal is a good example of what can be done to reduce tax burdens on residents if spending is constrained. There are real, tangible benefits associated with enacting this pro-growth reform that should not be discounted.
5 min read![2017 tax law revenue impact of 2017 Tax Cuts and Jobs Act TCJA](https://taxfoundation.org/wp-content/uploads/2024/07/us-capitol-summer-spring-300x200.jpeg)
How Have Federal Revenues Evolved since the Tax Cuts and Jobs Act?
As members of Congress prepare to address the expiration of the TCJA, they should appreciate how revenues have evolved since 2017.
4 min read![retail delivery fees](https://taxfoundation.org/wp-content/uploads/2024/07/AdobeStock_770794420-300x168.jpeg)
Retail Delivery Fees Are Not the Panacea for States’ Transport Budget Woes
Retail delivery fees are an inefficient and ineffective way to close budget gaps, and lawmakers should consider other, more sound, policy options.
5 min read![California internet tax California data extraction mitigation fee California Journalism Preservation Act](https://taxfoundation.org/wp-content/uploads/2024/07/California-capitol-2024-300x200.jpeg)
California Explores New Ways to Tax the Internet
The data extraction mitigation fee is modeled after Maryland’s digital advertising tax, which has been mired in litigation since its inception and is very likely unconstitutional and in conflict with federal law.
6 min read![Hungary EU presidency tax reform and tax policies](https://taxfoundation.org/wp-content/uploads/2024/06/Hungary-EU-presidency-tax-reform-300x200.jpeg)
Tax Files under New Council of EU Presidency: Hungary
As Hungary takes over the six-month rotating presidency of the Council of the European Union in the aftermath of the European elections, the relationship between tax policy and Europe’s competitiveness will be closely linked.
6 min read![Full TCJA extension fiscal challenges highlighted by latest CBO projections](https://taxfoundation.org/wp-content/uploads/2024/06/US-capitol-building-300x200.jpeg)
Latest CBO Projections Highlight Fiscal Challenge of Full TCJA Extension
While neither full expiration nor a deficit-financed full extension of the TCJA would be appropriate, lawmakers should consider the incentive effects of whichever tax reform they pursue. Because taxes affect the economy, they also affect the sustainability of debt reduction.
3 min read![Arkansas tax cuts and relief Arkansas tax reform 2024](https://taxfoundation.org/wp-content/uploads/2024/06/Arkansas-capital-300x200.jpeg)
Arkansas Enacts Fourth Tax Cut in Less than Two Years
Governor Sarah Huckabee Sanders (R) recently called a brief special legislative session to enact the fourth round of reductions to the Natural State’s individual and corporate income taxes. Legislators also passed a modest property tax reform proposal.
4 min read