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.
If the EU is going to harmonize its tax base, it should do so in a way that increases the efficiency and competitiveness of tax policy for the EU as a whole, and not just seek out the lowest common denominator.5 min read
The OECD recently released a trove of new documents on a draft multilateral tax treaty. The U.S. Treasury has opened a 60-day consultation period for the proposal and is requesting public review and input.7 min read
As the 2024 presidential campaign season gets fully underway, candidates are beginning to sketch out their tax policy proposals. One tax proposal embraced by both former President Donald Trump and former Vice President Mike Pence is a reduction in the federal corporate tax rate from 21 percent to 15 percent.4 min read
If tax increases are included in a package, international experience points toward raising consumption taxes, rationalizing tax expenditures, and broadening the tax base—not hiking income taxes.6 min read
Outside of the pandemic years, this year’s federal deficit is the highest in U.S. history. While tax revenue has increased about 28 percent since the pre-pandemic year 2019, spending has increased about 46 percent. Annual deficits are headed towards $3 trillion over the next few years.3 min read
At the most recent Republican primary debate, former governor and United Nations ambassador Nikki Haley (R-SC) proposed eliminating the federal gas tax to lower fuel prices for consumers.3 min read
Pillar Two implementation is underway in many jurisdictions, and many governments are aiming to get their proposals approved before the end of 2023. However, estimating Pillar Two’s impact on government revenue is proving difficult. As a result, only a few countries have publicly presented their findings.6 min read
Can an organization rightfully be called a “nonprofit” if it almost always makes money? And what if most of that organization’s income comes from “business income,” should it legitimately be considered a “charity”?7 min read
In recent years, European countries have undertaken a series of tax reforms designed to maintain tax revenue levels while protecting households and businesses from high inflation.8 min read
As increased political attention focuses on the state of the American worker, expect to see a resurgence of the argument that the labor share of income is in decline.5 min read