With the Biden administration proposing a variety of new taxes, it is worth revisiting the literature on how taxes, particularly on corporate and individual income, can impact economic growth.
9 min read
While much of the tax policy now under debate aims to increase the tax burden on businesses, several policies in the newly released Republican Study Committee (RSC) budget for Fiscal Year 2022 focus on reducing the tax code’s barriers to investment and saving.
3 min read
Property taxes are an important source of revenue for local and state governments. In FY 2018, property taxes generated over 30 percent of total U.S. state and local tax collections and over 70 percent of local tax collections.
2 min read
Governments often justify higher tax burdens with more extensive public services. However, the cost of these services can be more than half of an average worker’s salary.
21 min read
If policymakers want a recipe to dramatically expand the complexity of U.S. international tax rules and the burden on U.S. multinational businesses, then a tax on foreign earnings calculated at the country level would be the way to do it. Alternatively, policymakers could focus on mitigating the unintended consequences of GILTI and other recent international tax rules.
5 min read
If Biden wants to reduce tax evasion, raising the corporate rate, increasing the incentives to engage in tax evasion, and creating a larger tax advantage to becoming a pass-through business is counterproductive.
3 min read
New Joint Committee on Taxation (JCT) data indicates that the federal tax system is progressive, consistent with similar analysis by the Congressional Budget Office (CBO), and the OECD.
2 min read
The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.
3 min read
This week the Australian government released its latest budget proposal and two policies that stand out in its fiscal response to the pandemic should be helpful as the economic engine of the country turns back on. The first is full expensing for some investments and the second is the introduction of a loss carryback provision. The new budget takes both these temporary policies and extends them into 2023.
2 min read