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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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.
5 min read![Wisconsin income tax reform proposals competition](https://taxfoundation.org/wp-content/uploads/2022/05/Wisconsin-state-capitol-2022-e1654007187373-300x169.jpeg)
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.
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