The mission of our federal program is to promote tax and fiscal policy that leads to greater U.S. competitiveness, higher economic growth, and improved quality of life for all taxpayers.
We have several projects, such as the Center for Economic Analysis, that help us educate taxpayers, journalists, and policymakers on how the U.S. tax system works and the impact of federal tax changes on taxpayers and the economy.
Since 2015, our Center for Economic Analysis has used our Taxes and Growth (TAG) macroeconomic model to analyze dozens of legislative and campaign tax proposals, including every major tax plan put forth during the 2016 presidential campaigns, the House GOP’s 2016 Tax Reform Blueprint, the Tax Cuts and Jobs Act, and President Biden’s tax reform agenda.
For a look at where tax modeling started, explore the extensive body of work from the Institute for Research on the Economics of Taxation (IRET), the think tank that pioneered dynamic tax modeling. Explore the IRET Archives
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Tax Modeling | Cost Recovery | Taxes & Inflation | Taxes on Savers & Investors | Tariffs & Trade | Carbon Taxes
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.
President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.
The Biden campaign and Senate Democrats identified changes to GILTI that would increase the taxes U.S. companies pay on their foreign earnings. Rather than tacking on changes to a system that is currently neither fully territorial nor worldwide, policymakers should evaluate the structure of the current system with a goal of it becoming more, not less, coherent.
Joe Biden has proposed an ambitious agenda that would make the federal fiscal system more progressive, and the huge budget deficits caused by the numerous COVID-19 relief packages could heighten the call for more tax revenues. What is needed are benchmark facts to guide these debates.
Expensing for capital investments is a powerful tax policy for economic growth. But expensing can also help shift the economy to a more sustainable future through increased investment in new, less carbon-intensive technology. Expensing for capital investment would eliminate a tax bias against energy efficiency improvements that reduce operating costs but involve high upfront investments. It could also serve to accelerate the existing trend of movement towards more green energy power sources.
Lawmakers looking to close budget shortfalls would be well-advised to consider other and more stable avenues for new revenue.
At the end of 2020, 33 temporary tax provisions are scheduled to expire at the federal level. These provisions generally fall under four categories: cost recovery, energy, individual, and other business provisions.