Congress chose to exempt forgiven Paycheck Protection Program (PPP) loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.
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Denmark relies the most on revenue from individual income taxes, at 52.4 percent of total tax revenue, followed by Iceland and Ireland at 40.8 percent and 31.5 percent, respectively.
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In the United States, individual income taxes (federal, state, and local) are the primary source of tax revenue, at 41.5 percent of total tax revenue. Social insurance taxes make up the second-largest share, at 24.9 percent, followed by consumption taxes, at 17.6 percent, and property taxes, at 12.1 percent.
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Individual income taxes are a major source of state government revenue, accounting for 37 percent of state tax collections in fiscal year (FY) 2017. Several states had notable individual income tax changes in 2020: Arizona, Arkansas, Massachusetts, Michigan, Minnesota, North Carolina, Ohio, Tennessee, Virginia, and Wisconsin.
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Despite declining corporate income tax rates over the last 30 years in Europe (and other parts of the world), average revenue from corporate income taxes as a share of total tax revenue has not changed significantly compared to 1990.
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Developed countries have on average become more reliant on consumption taxes and less reliant on individual income taxes. These policy changes matter, considering that consumption-based taxes raise revenue with less distortionary effects than taxes on income.
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Sources of state revenue have come under closer scrutiny in light of the impact of the coronavirus pandemic, as different tax types have differing volatility and economic impact—although even beyond these unique circumstances, it is important for policymakers to understand the trade-offs associated with different sources of tax revenue.
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By failing to keep pace with modern consumption patterns, sales taxes have become less neutral, less equitable, and less economically efficient over time.
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Belgium, Finland, France, Ireland, Italy, Poland, Spain, Switzerland, Turkey, and the United Kingdom currently levy a type of financial transaction tax
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The latest IRS data shows that the U.S. federal individual income tax continued to be progressive, borne primarily by the highest income earners.
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