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COVID-19 (coronavirus) Pandemic Tax Policies

As the U.S. federal, state, and local governments, as well as countries around the world, continue to implement measures to support their economies amid the coronavirus (COVID-19) pandemic, our experts are providing trusted analysis of the latest coronavirus tax developments to better inform policymakers, journalists, and taxpayers.

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All Related Articles

cost recovery expensing capital allowances factory

Inefficiencies Created by the Tax System’s Dependence on Economic Depreciation

One idea that would help the nation’s economic recovery during the coronavirus crisis would be moving to full expensing of capital investment. The depreciation debate might seem confusing, so the question at hand is: how, when, and by what amount can businesses recognize (or recover) the cost of a capital investment, like a piece of equipment or a new warehouse, on their income tax return?

6 min read

New Jersey Considers Bonds Paid for by Statewide Property Tax

As New Jersey lawmakers grapple with reduced revenues due to the coronavirus pandemic, they have turned to an unusual solution: the issuance of bonds that would be repaid, if necessary, through temporarily higher sales and property taxes.

2 min read
Sports betting tax treatment of sports betting operators and gross gaming revenue

Sports Betting Will Not Solve State Budget Crises

The pandemic has left states in dire straits financially and lawmakers are getting creative in their pursuit of new revenue sources. However, it’s unlikely that revenue from sports betting will have any meaningful impact on budget shortfalls

3 min read

Watch: Economic Recovery After Coronavirus

What are the best tax policies to encourage a smooth transition and strong economic recovery? How should goals of economic recovery and growth be balanced with revenue needs?

1 min read

Lessons from Alberto Alesina for U.S. Lawmakers

Alesina’s work suggests that raising taxes to reduce the federal deficit and national debt would be an economic mistake. The less economically damaging path is to cut spending, what some have called austerity policies.

3 min read
Federal deductibility SBA Paycheck Protection Program (PPP) in the CARES Act. Small Business Administration Paycheck Protection Program (PPP) in the CARES Act

HEROES Act Temporarily Increases Dependent Credit Generosity

The HEROES Act would make notable expansions to all three dependent-related credits, increasing maximum credit amounts, refundability, and income eligibility phaseouts. Practically, this means that certain filers could expect to receive a larger refund for each additional hour of work, eligible dependent, and dependent care expenses if the bill became law.

5 min read
Neutral Cost Recovery, Jack Kemp, Bob Kasten

Neutral Cost Recovery Is Not a New Idea

As stated by Rep. Jack Kemp in 1985, “Neutral cost recovery is designed to provide the present value of investment expensing without some of its practical problems.”

5 min read
Capital cost recovery and capital allowances in the OECD 2023 , full expensing, full immediate expensing

Empirical Evidence Shows Expensing Leads to More Investment and Higher Employment

The Tax Foundation’s General Equilibrium Model suggests that allowing businesses to immediately deduct or “expense” their capital investments in the year in which they are purchased delivers the biggest bang for the buck in spurring economic growth and jobs compared to other tax policies.

7 min read

Louisiana Considers Temporary Suspension of Part of Corporation Franchise Tax

State recovery plans should lessen the burden on businesses by shifting from capital stock taxes and other taxes that are charged regardless of profitability. Louisiana does well to target its Corporation Franchise Tax, a burdensome tax that would target businesses that may already be struggling.

2 min read
Understanding the Tax Treatment of Inventory: The Role of LIFO

Options for Improving the Tax Treatment of Structures

Improving the tax treatment of structures is one of the most cost-effective tax policy changes available to lawmakers as they consider how to remove investment barriers in the tax code to hasten the economic recovery. Policymakers must weigh the trade-offs among long-run economic output goals, revenue constraints, and the existing stock of structures.

13 min read
Who Shoulders the Burden of Federal Income Taxes? high-income earners, high-income taxpayers, progressive tax system, federal income tax, income inequality, wealth tax

Under the HEROES Act, State Budgets Could Soar as the Economy Suffers

The HEROES Act, proposed by House Democrats as a next round of fiscal relief during the coronavirus outbreak, contains about $1.08 trillion in aid to states and localities. That would bring the pandemic total to $1.63 trillion—an amount so large that it might overwhelm their ability to spend it and could reward fiscal irresponsibility.

8 min read
State and local relief package, state and local government relief package amid coronavirus, business and government aid, coronavirus relief package, state revenue deficit, state budget deficit

Designing a State and Local Government Relief Package

The COVID-19 pandemic and accompanying economic downturn will wreak havoc on state and local tax revenues, with projections of a 15-20 percent decline in state revenues. Our new report provides a framework for how to design an effective state and local relief package.

35 min read