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.
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Efforts to Improve Tax Treatment of Saving Gain Traction on Hill
The proposals share a common goal of improving incentives for households to save during a time when inflation is impacting their finances.
3 min read![Both inbound and outbound foreign direct investment (FDI) are critical to sustaining supply chain resiliency and reducing economic risks](https://taxfoundation.org/wp-content/uploads/2022/06/fdi-supply-chains-supply-chain-resiliency-300x200.jpg)
How FDI Adds Value to Supply Chains
Although the dispersion of our supply chains throughout the world has been scrutinized in recent years, both inbound and outbound foreign direct investment are critical to sustaining supply chain resiliency and reducing economic risks for both firms and investors.
5 min read![Carbon Border Adjustment Mechanism EU CBAM carbon price carbon tariffs US global minimum tax US tax incentives Build Back Better tax rate on gilti Global Intangible Low Tax Income (GILTI) Global intangible low-taxed income US cross-border tax reform and GILTI Global Intangible Low Tax Income. Foreign tax credits](https://taxfoundation.org/wp-content/uploads/2021/02/global-map-international-300x200.jpg)
Carbon Taxes in the Global Market: Changes on the Way?
As policymakers on both sides of the Atlantic debate the way forward on carbon border adjustment mechanisms, it is important to keep principles of good tax policy in mind.
7 min read![The French election between Emmanuel Macron and Marine Le Pen could have a significant impact on French tax policy and the future of EU own resources.](https://taxfoundation.org/wp-content/uploads/2022/04/france-3-300x200.jpg)
Impact of Elections on French Tax Policy and EU Own Resources
The French election results are paralyzing for French pro-growth tax reforms, pessimistic for EU own resources, and dire for overall economic certainty.
5 min read![Biden corporate minimum tax global tax deal international tax corporate tax corporate global minimum tax proposal](https://taxfoundation.org/wp-content/uploads/2022/06/Biden-corporate-minimum-tax-global-tax-deal-international-tax-corporate-tax-corporate-global-minimum-tax-proposal-300x149.png)
4 Things to Know About the Global Tax Debate
The Biden administration has been supportive of the negotiations, but the changes should be reviewed in the context of recent policy changes in the U.S. and elsewhere, the general landscape of business taxation in the U.S., and potential challenges and risks arising from the global tax deal.
3 min read![US multinationals are large employers and investors in the US See FDI us employment impact](https://taxfoundation.org/wp-content/uploads/2022/06/AlexD-MultiNat-300x212.png)
Why FDI Matters for U.S. Employment, Wages, and Productivity
Contrary to the Biden administration’s claims, raising taxes on cross-border investment would hurt U.S. economic growth and jobs. Research shows that FDI creates jobs in the U.S. and raises workers’ wages and productivity.
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The Legacy of Harvard Economist Dale Jorgenson
Dr. Jorgenson’s work has been instrumental in convincing many in the tax policy community to take seriously the need to factor in the economic effects of taxation on capital formation, productivity, wages, and employment in forecasting the welfare and federal budget consequences of changes in tax policy.
3 min read![Republican budget tax proposals RSC budget Republican Study Committee budget House Democrats tax increases in historical context Build Back Better Act Federal tax expenditures CARES Act Weighing the Benefits of Permitting Business Credit Cashouts in Phase 4 Economic Relief](https://taxfoundation.org/wp-content/uploads/2020/06/linkedin-In-Stream_Wide___capitol-blue-sky-e1592343347527-300x158.jpeg)
Pro-Growth Tax Reforms Throughout the Republican Study Committee’s FY 2023 Budget
The United States needs to grow its way out of inflation and set the economy up for continued growth—the tax code provides tools for policymakers to do just that.
3 min read![Inflation Reduction Act taxes Biden tax increases bidens budget proposal 2023](https://taxfoundation.org/wp-content/uploads/2022/06/Biden-tax-increases-bidens-budget-proposal-2023-300x200.jpg)
Biden’s FY 2023 Budget Would Result in $4 Trillion of Gross Revenue Increases
President Biden’s budget proposes several new tax increases on high-income individuals and businesses, which combined with the Build Back Better plan would give the U.S. the highest top tax rates on individual and corporate income in the developed world.
5 min read![CBO report and projections on US GDP, US inflation, and US budget deficit Lauren Underwood increase SALT deduction cap, raise SALT deduction cap, increase SALT cap, H.B. 1757](https://taxfoundation.org/wp-content/uploads/2019/04/capitol-sun-e1556294460698-300x199.jpeg)
3 Takeaways from the New Congressional Budget Office Outlook
The CBO projections show policymakers’ top priority over the next five years will need to be cleaning up our country’s fiscal situation while maintaining a pro-growth and competitive tax code.
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