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.

Increasing the Tax Burden on Capital Investment and Automation Hurts Workers, taxing automation, use of robots and automation
Blog

Increasing the Tax Burden on Capital Investment and Automation Hurts Workers

There has been an ongoing debate about how automation and the use of robots in the workplace has impacted workers’ wages and employment. Recently, MIT and Boston University economists examined whether tax policy favors certain forms of automation that puts workers at a competitive disadvantage.

7 min read
Remote work tax revenue implications digital nomad visas, digital nomads, tax incentives for remote workers. Deutsche Bank tax work-from-home tax Deutsche Bank privilege tax on remote work
Blog

No, We Don’t Need a Federal Work-From-Home Tax

A recent Deutsche Bank analysis proposes a federal work-from-home tax (“privilege tax”), which is designed to strip away the financial benefit of remote work.

5 min read
Federal tax policy after the 2020 election, upcoming federal tax increases, another round of economic relief
Blog

Prospects for Federal Tax Policy After the 2020 Election

President Biden and Congress should concentrate on areas of common ground, finding incremental places to improve the tax code. A bipartisan bill recently introduced to help retirement savings is a good model for what incremental reform may look like.

4 min read