The federal tax code remains a major source of frustration and controversy for Americans, and a hindrance to economic growth and opportunity. Other countries, such as Estonia, have proven that sufficient tax revenue can be collected in a less frustrating and more efficient way.
A robust collection of 70 potential US tax reform changes and US tax reform options for reforming the tax code. See the comprehensive tax reform guide.
The IRS recently released the new inflation adjusted 2023 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.
The latest IRS data shows that the U.S. federal individual income tax continued to be progressive, borne primarily by the highest income earners.
The Trump administration imposed nearly $80 billion worth of new taxes on Americans by levying tariffs on thousands of products, amounting to one of the largest tax increases in decades. The Biden administration has so far kept most of the Trump administration tariffs in place.
Different taxes have different economic effects, so policymakers should always consider how tax revenue is raised and not just how much is raised.
A growing international tax agreement known as Pillar Two presents two new threats to the U.S. tax base: potential lost revenue and limitations on Congress’s ability to set its own tax policy.
Congress should reconsider key elements of the IRA, including the book minimum tax and the green energy credits, with an eye towards simplification and fiscal responsibility.
Even in the face of a global minimum tax, Congress still has a chance to develop a strategic approach in support of U.S. investment and innovation.
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Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code.
Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.
By reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.
Learn more about the House Build Back Better Act, including the latest details and analysis of the Biden tax increases and reconciliation bill tax proposals.
Policymakers should carefully analyze tax expenditures before categorizing one as a loophole—some tax expenditures are important structural elements of the tax code while others are unsound.