While strong economic growth—fueled by higher levels of investment, productivity, and jobs—will lift after-tax incomes over time, policies that provide relief by immediately boosting after-tax incomes of lower-income households are also available. As lawmakers consider such policies, they should keep in mind the trade-offs among them.
As President Biden’s tax plans are considered in Congress, the future of the $10,000 cap for state and local tax deductions (SALT) is becoming an important part of the tax debate.
According to the Tax Policy Center, an estimated 60 percent of U.S. households paid no income tax in 2020, up from around 43 percent of households in 2019.
Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have surfaced in recent weeks, there are clear divides among various proposals.
If Congress wants to reduce profit shifting, the proposal from the Ways and Means Committee is not an effective tool for this.
Under the House Ways and Means plan to raise taxes on corporations and individuals, the integrated tax rate on corporate income would rise to the third highest in the OECD. To reduce this burden, policymakers could explore integrating the individual and corporate tax systems.
Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.
In his State of the Union Address, President Biden called for leveling the global research & development (R&D) playing field by increasing federal R&D spending, specifically by asking Congress to pass the bipartisan United States Innovation and Competition Act (USICA).
The Biden administration should lift the Trump administration’s tariffs, as they have failed in their objective to bring better trading practices and instead brought about significant damage to U.S. businesses and workers.
The FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.