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.
![Junk fees ban from the FTC Biden tax hike proposals live on Build Back Better Inflation Reduction Act Biden tax rates](https://taxfoundation.org/wp-content/uploads/2022/03/Washington-DC-capitol-national-mall-white-house-DC-skyline-e1646089530835-300x200.jpeg)
Proposed “Junk Fee” Rule Would Create Inadvertent Tax Headaches
One particular provision of the Biden administration’s proposal to ban so-called “junk fees” would have unintended consequences.
5 min read![Treasury Finds TCJA Interest Limitations Had Small Impact on Corporate Activity](https://taxfoundation.org/wp-content/uploads/2024/02/US-Treasury-Department-Tax-Foundation-300x199.jpeg)
Treasury Finds TCJA Interest Limitations Had Small Impact on Corporate Activity
Limiting interest deductibility continues to be a worthwhile policy goal, but given the current climate, policymakers should opt to pair any further limitations with other pro-growth policies such as full expensing to ensure firms’ incentives to invest are preserved.
3 min read![Latest House GOP SALT Deduction Cap Proposal, SALT Marriage Penalty Elimination Act, Increases Budget Deficit, Creates New Tax Cliffs, and Is Regressive](https://taxfoundation.org/wp-content/uploads/2024/02/US-Capitol-Congress-tax-budget-calculator-money-300x200.jpeg)
Latest SALT Deduction Cap Proposal Increases Budget Deficit, Creates New Tax Cliffs, and is Regressive
From a revenue standpoint, about $9 billion of the $11.7 billion in lost revenue would accrue to joint filers earning more than $200,000.
5 min read![Five Facts to Know about the House Bipartisan Tax Deal](https://taxfoundation.org/wp-content/uploads/2024/02/US-capitol-building-2024-300x200.jpeg)
Five Facts to Know about the Bipartisan Tax Deal
The U.S. House of Representatives has passed a highly anticipated bipartisan tax deal. The Tax Relief for American Workers and Families Act now awaits action in the Senate.
6 min read![Maryland local income tax hike proposal](https://taxfoundation.org/wp-content/uploads/2024/02/Maryland-state-capitol-300x200.jpeg)
Maryland Considers Raising Local Income Taxes
Local income taxes in Maryland constitute about 35 percent of local tax collections and more than 17 percent of local revenue, giving Maryland’s localities the highest dependence on income taxes in the nation.
5 min read![Tax Foundation Discussion on the Harms of Retaliatory Tax and Trade Policies with Senator Blackburn](https://taxfoundation.org/wp-content/uploads/2024/01/AdobeStock_253977390-300x186.jpeg)
Tax Foundation Discussion on the Harms of Retaliatory Tax and Trade Policies
Historical evidence and recent studies have shown that retaliatory tax and trade proposals raise prices and reduce the quantity of goods and services available to U.S. businesses and consumers, resulting in lower incomes, reduced employment, and lower economic output.
5 min read![Portugal VAT tax reform options](https://taxfoundation.org/wp-content/uploads/2024/01/Lisbon-Portugal-300x200.jpeg)
Mind the Gap, Please! How Portugal Could Reform Its VAT System
Portugal’s value-added tax (VAT) policy is a treasure trove of tax oddities. Thankfully, VAT base broadening is an ideal instrument to give the Portuguese government the fiscal room to implement pro-growth tax reforms
5 min read![2024 Kansas flat tax reform and relief proposal veoted by Governor Laura Kelly](https://taxfoundation.org/wp-content/uploads/2024/01/Kansas-state-capitol-taxes-300x200.jpeg)
A Lower, Flat Income Tax Would Promote Long-Term Economic Growth in Kansas
After years of strong revenue growth, Kansas has substantial cash reserves on hand, and policymakers on both sides of the aisle have expressed a desire to return some of the extra revenue to taxpayers.
5 min read![Donald Trump China Trade War Proposal Tariff of Abominations Redux: Trump Proposes 60% Tariff on Chinese Goods](https://taxfoundation.org/wp-content/uploads/2024/01/Donald-Trump-China-Trade-War-Proposal-Tariffs-300x200.jpg)
Tariff of Abominations Redux: Trump Proposes 60% Tariff on Chinese Goods
The Trump campaign is mulling a massive tax increase on American purchases from China. If reelected, he might quintuple the tax, imposing tariffs of 60 percent on imports from China. The economic ramifications would be significant and unwelcome.
5 min read![Policymakers Must Weigh the Revenue, Distributional, and Economic Trade-Offs of SALT Deduction Cap Design Options](https://taxfoundation.org/wp-content/uploads/2023/12/calculator-chart-data-300x200.jpeg)
Permanent Bipartisan Tax Deal Would Grow Economy but Create Revenue Challenges
Examining the revenue, economic, and distributional effects of a hypothetical deal with permanent tax policy changes shows the longer-run trade-offs policymakers would face.
5 min read