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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Wisconsin Losing Ground to Tax-Friendly Peers
While Wisconsin has long been one of the highest-tax states in the nation, that distinction is increasingly detrimental as businesses and individuals enjoy increased economic and geographic mobility.
6 min read![Kansas tax cuts what about kansas tax experiment (kansas experiment about brownback tax cuts)](https://taxfoundation.org/wp-content/uploads/2022/05/Kansas-state-capitol-min-e1653416127839-300x200.jpeg)
Two Dozen States Show Why the Kansas Critique of Income Tax Cuts Is Mistaken
The Kansas experience is so infamous that “what about Kansas?” is almost guaranteed to be a question—sometimes as a retort, but often a genuine expression of concern—any time any state explores tax relief. But what about the other two dozen states that have cut their income taxes since then?
6 min read![section 179 expensing state tax conformity section 168 Oklahoma State Capital Building](https://taxfoundation.org/wp-content/uploads/2022/05/Oklahoma-state-capitol-2022-min-e1653336202654-300x200.jpeg)
Oklahoma Should Prioritize Pro-Growth Relief, Not Gimmicky Rebate Checks
If Sooner State policymakers want to use a portion of their higher revenues to make the economy work better for all Oklahomans, they should consider repealing the franchise tax, trimming the income tax, or both—paired, if desired, with targeted aid to those in the greatest need—not writing a single round of gimmicky checks.
5 min read![2022 state tax changes effective January 1, 2022 child tax credit changes and child tax credit reform options 2021 state tax changes July 1 2021 US business tax collections remained close to historical norm in 2018. US business tax revenue and taxes paid by pass-through firms](https://taxfoundation.org/wp-content/uploads/2021/04/Money-calendar-time-calculator-economy-business-tax-filing-e1618504666865-300x200.jpeg)
Delaying R&D Amortization Generates Short-Term Revenue but No Long-Term Economic Benefit
Starting this year, firms must amortize their research and development (R&D) expenses over five years rather than immediately deduct them from taxable income, a policy change designed to raise federal tax revenue in the short term.
4 min read![global tax agreement global tax deal OECD global minimum tax rules corporate minimum tax rules Secretariat Proposal, OECD Public Consultation Document, Unified Approach under pillar one profit shifting definition tax planning and avoidance foreign direct investment FDI global tax deal impact of global tax agreement OECD international tax proposal](https://taxfoundation.org/wp-content/uploads/2022/05/global-tax-deal-impact-of-global-tax-agreement-OECD-international-tax-proposal-300x199.jpeg)
Time for an Updated Impact Assessment of the Global Tax Deal
Treasury Secretary Janet Yellen offered estimates from the EU Tax Observatory as evidence that the Polish government would benefit from supporting the global tax deal. Unfortunately, evidence was, at best, out of date.
2 min read![Calculator for analyzing Senator Harris' tax plan, Senator Kamala Harris, Harris Tax](https://taxfoundation.org/wp-content/uploads/2018/10/calculator-300x200.jpg)
Comments on Tobacco Product Standard for Menthol in Cigarettes
Tax Foundation comments on the state tax and revenue implications of the proposed tobacco product standard for menthol in cigarettes.
14 min read![EU windfall profits tax EU energy security EU fossil fuel EU presidency European Union presidency including Czech presidency Europe council EU VAT Rates: EU VAT Directive & EU Reduced VAT Rates](https://taxfoundation.org/wp-content/uploads/2022/05/EU-European-Union-reduced-vat-rates-300x200.jpg)
Europe Opened the Pandora Box of Reduced VAT Rates
With this new VAT directive, the EU has invited member states to adopt policies that create new complexities, are poorly targeted, and undermine an Own Resource.
5 min read![Businesses Fund Majority of US Private R&D and Public R&D Investment Research and Development funding R&D funding](https://taxfoundation.org/wp-content/uploads/2022/05/Businesses-Fund-Majority-of-US-Private-RD-and-Public-RD-Investment-Research-and-Development-funding-RD-funding-300x222.png)
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U.S.-China Trade War Hurt American Industries and Workers
While the U.S. tariffs were intended to protect American industries, they have largely hurt the U.S. economy. Rather than pass on the tariffs to Chinese consumers, analysis shows that most U.S. firms simply bore the costs.
5 min read![Wyoming business tax competitiveness Wyoming business tax rankings](https://taxfoundation.org/wp-content/uploads/2022/04/Wyoming-2-e1650915166380-300x200.jpeg)
Evaluating Wyoming’s Business Tax Competitiveness
Wyoming’s low taxes are highly attractive, but policymakers are still hard at work helping the state achieve broader economic development goals.
13 min read