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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The major tax-related benefits in the $1.9 trillion economic relief plan are a third round of direct payments, extended unemployment insurance (UI) benefits and a $10,200 unemployment insurance income exemption for 2020, and an expansion of the Child Tax Credit.
6 min read
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.
7 min read
The American Rescue Plan Act’s restriction on states’ Fiscal Recovery Funds being used to directly or indirectly offset a net tax cut is vague and raises difficult questions of interpretation and application. A broad interpretation of this prohibition may be unconstitutional.
19 min read
The government of Hartford County, Connecticut is in line to receive $173 million in local aid under the American Rescue Plan Act (ARPA). There’s only one problem: the government of Hartford County doesn’t exist, nor do any of Connecticut’s other counties have county-level government despite being allocated a collective $691 million under the bill.
4 min read
State and local tax policy have always mattered, but the rise of remote work is bringing tax burdens and economic competitiveness to the forefront. It is a development that states cannot afford to ignore.
5 min read
As the Biden administration and Congress consider making the expanded child tax credit permanent, a nearly $1.6 trillion expansion of tax code-administered benefits, they should consider financing it in a way that doesn’t create significant headwinds to economic recovery.
3 min read
As we near this year’s “lame duck” session of Congress, there has been renewed interest in reforming the child tax credit as part of a tax deal. Our new analysis highlights the trade-offs that policymakers will face
5 min read
A new CBO report reveals that lower- and middle-income households are disproportionately shouldering the burden of this current inflation wave. And historical analysis suggests there is much more to come.
5 min read
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
43 min read
Although the dispersion of our supply chains throughout the world has been scrutinized in recent years, both inbound and outbound foreign direct investment are critical to sustaining supply chain resiliency and reducing economic risks for both firms and investors.
5 min read
If Sooner State policymakers want to use a portion of their higher revenues to make the economy work better for all Oklahomans, they should consider repealing the franchise tax, trimming the income tax, or both—paired, if desired, with targeted aid to those in the greatest need—not writing a single round of gimmicky checks.
5 min read
Efforts to improve the taxpayer experience should focus on the IRS’s operations and include structural improvements to the tax code.
4 min read
The ongoing economic uncertainty from the COVID-19 pandemic, supply chain disruptions, and current inflationary pressures have highlighted the importance of investment.
33 min read
As the deadline for tax filing nears, the IRS faces scrutiny for its backlog of returns, inaccessible taxpayer service, and delays in issuing certain refunds.
5 min read
In recent years, EU countries have undertaken a series of tax reforms designed to maintain tax revenue levels while supporting investment and economic growth. However, not all tax reforms were created equal.
7 min read
Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.
50 min read
By reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.
40 min read
A new report finds many businesses have yet to receive tax refunds that they are due from pandemic-related emergency relief. Future business tax relief must be provided in a timely manner during the next downturn, because delayed tax relief is not much better than no relief at all.
2 min read
States will continue to cut taxes because revenues are skyrocketing. But some will also be keeping a close eye on litigation targeting this dubious restriction on states’ fiscal autonomy.
8 min read
Consumer prices rose by 7 percent in 2021, the highest annual rate of inflation since 1982. Where did this inflation come from and what might its impacts be? Tax and fiscal policy offer important clues.
5 min read
The 2022 tax filing season is about to begin. With expected delays, pandemic-related troubles, and a backlog of over 8 million unprocessed returns from the 2021 tax filing season, Garrett Watson joins Jesse Solis to discuss what all these troubles will mean for taxpayers in what is shaping up to be a chaotic spring.
New research shows that the United States had the second largest fiscal response to the COVID-19 pandemic globally. But did this magnitude of stimulus have the economic impact policymakers were hoping for?
Well-designed Net Operating Loss (NOL) provisions benefit the economy by smoothing business income, which mitigates entrepreneurial risk and helps firms survive economic downturns.
24 min read
As the U.S. grapples with rising price inflation, a large and growing national debt, as well as a possible economic slowdown due to Omicron, the decision to provide additional fiscal support will prove to be a difficult one. Policymakers can debate how much stimulus is appropriate, but what is clear is that the U.S. fiscal support so far during the pandemic outranks nearly every industrialized country.
3 min read