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.
President Biden’s 61 Percent Tax on Wealth
As part of President Biden’s proposed budget for fiscal year 2023, the White House has once again endorsed a major tax increase on accumulated wealth, adding up to a 61 percent tax on wealth of high-earning taxpayers.
4 min readCan Taxes Predict the UEFA Champions League Winner?
Before competing in the UEFA Champions League, football clubs in Europe also compete to lure the best players.
4 min readWhich Global Minimum Tax Will We Get?
Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have been debated in recent months, there are clear divides between U.S. proposals and the global minimum tax rules.
5 min readKentucky Legislature Sends Pro-Growth Tax Changes to Governor
Kentucky is making commendable progress toward a more modern and competitive tax code, but more work on comprehensive tax reform should be prioritized next session.
7 min readBiden Budget Would Raise Income Tax Rates to Highest in Developed World
The FY 2023 budget proposes several new tax increases, which in combination with the Build Back Better Act, would give the U.S. the highest top tax rates on individual and corporate income in the developed world.
4 min readSustainable Tax Reform a Win for Mississippians
Mississippi policymakers delivered the largest tax cut in state history, providing meaningful relief for taxpayers by cutting individual income tax rates.
7 min readProposed Minimum Tax on Billionaire Capital Gains Takes Tax Code in Wrong Direction
Biden’s proposal would impose a complicated never been tried before tax, adding new compliance and administrative challenges for an already overburdened IRS while weakening the U.S. economy by raising the tax burden on U.S. saving and entrepreneurship.
6 min readWill Colorado Spend Millions on Flavored Tobacco and Nicotine Prohibition?
Lawmakers in Colorado, and in the several other states considering flavor bans, should think twice before following in the footsteps of Massachusetts. A statewide ban on flavored tobacco products is more than likely to costs millions of dollars, increase smuggling, and have a negligible effect on public health.
5 min readBiden’s Trade Agenda Should End the Trade War and Promote Free Trade
The Biden administration should lift the Trump administration’s tariffs, as they have failed in their objective to bring better trading practices and instead brought about significant damage to U.S. businesses and workers.
6 min readState Legislatures Take Up Tax Reform and Relief in 2022
After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done.
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