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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North Carolina’s 2.5 percent corporate tax rate is the lowest in the country, followed by Missouri (4 percent) and North Dakota (4.31 percent). Seven other states impose top rates at or below 5 percent: Florida (4.458 percent), Colorado (4.55 percent), Arizona (4.9 percent), Utah (4.95 percent), and Kentucky, Mississippi, and South Carolina (5 percent).
7 min read
Value-added taxes (VAT) make up approximately one-fifth of total tax revenues in Europe. However, European countries differ significantly in how efficiently they raise VAT revenues. One way to measure a country’s VAT efficiency is the VAT Gap.
4 min read
Newly published data from the Internal Revenue Service (IRS) shows that the first round of economic impact payments primarily benefited households earning less than $100,000.
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Consumption taxes (like sales taxes) are more economically neutral than taxes on capital and income because they target only current consumption. Consumption taxes are generally more stable than income taxes in economic downturns as well.
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Some lawmakers have expressed interest in repealing the SALT cap, which was originally imposed as part of the Tax Cuts and Jobs Act (TCJA) in late 2017. It is important to understand who benefits from the SALT deduction as it currently exists, and who would benefit from the deduction if the cap were repealed.
6 min read
Many countries incentivize business investment in research and development (R&D), intending to foster innovation. A common approach is to provide direct government funding for R&D activity. However, a significant number of jurisdictions also offer R&D tax incentives.
4 min read