Evaluating U.S. Tax Reform Options & Trade-Offs

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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State 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.

3 min read
Are Tax Rebates a Good Way for Relief from Rising Prices? Learn more about gas tax rebates and sound tax relief inflation policy
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Are Tax Rebates a Good Way to Provide Relief from Rising Prices?

States are flush with cash, but taxpayers’ purchasing power is being eroded by high inflation. Tax rebates, gas tax holidays, and other temporary tax expedients have the potential to add to existing inflation—but good intentions do not always make for good policy.

5 min read
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Europe

Analyzing Recent Tax Trends Among EU Countries

In recent years, EU countries have undertaken a series of tax reforms designed to maintain tax revenue levels while supporting investment and economic growth. However, not all tax reforms were created equal.

7 min read
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Inflation-Indexing a Useful Tool to Protect New Jersey Taxpayers

Households across the country are struggling with the effects of high inflation. Lawmakers in New Jersey are looking to combat an unlegislated tax increase by indexing the state’s individual income tax code for inflation, something all states should consider.

3 min read
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Will Kentucky Build Upon Its 2018 Reforms This Year?

As Kentucky policymakers make final decisions on tax relief this year, they should make the most of this opportunity to return excess tax collections in a manner that would also enhance the Bluegrass State’s prospects for long-term economic growth.

5 min read
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Windfall Profits Tax Wrong for American Energy

As oil prices skyrocket, a windfall profits tax targeted at oil company profits could punish domestic production and increase reliance on imports.

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Europe

Russia’s Ukrainian War Could Impact EU Carbon Proposal Too

Given the uncertainty surrounding the war in Ukraine, future trade relations with Russia, and the overall CBAM revenue structure. The EU will need to adjust policy when challenges arise as it looks to increase its role in fiscal affairs through new own resources.

5 min read