Inflation Reduction Act (IRA)

The U.S. Tax Code Is Too Complex for Direct eFile to Work

It is hard to imagine the IRS Direct e-File Program operating seamlessly with the complexity of the current U.S. tax system. Instead, lawmakers should first address the more fundamental problem that causes taxpayer frustration: our highly complicated tax code.

Details and Analysis of a Tax Reform Plan for Growth and Opportunity

The federal tax code remains a major source of frustration and controversy for Americans, and a hindrance to economic growth and opportunity. Other countries, such as Estonia, have proven that sufficient tax revenue can be collected in a less frustrating and more efficient way.

Testimony: Reviewing Recent Federal Tax Policies and Considering Pro-Growth Reforms

Lawmakers should focus on simplifying the federal tax code, creating stability, and broadly improving economic incentives. There are incremental steps that can be made on the path to fundamental tax reform.

Republican Study Committee’s Tax Plan Simplifies the Tax Code and Offers Pro-Growth Ideas

By extending bonus depreciation and introducing neutral cost recovery, the RSC budget would significantly improve the treatment of investment leading to increased growth, expanded employment, and higher wages.

Repealing Inflation Reduction Act’s Energy Credits Would Raise $663 Billion, JCT Projects

The price tag of the Inflation Reduction Act’s green energy tax credits is much higher than originally thought. Among other things, the updated analysis indicates the Inflation Reduction Act does not reduce deficits after all.

Debt Ceiling Deal Reduces Deficits in the Short Term but Delays a More Comprehensive Budget Reckoning

To address the more challenging parts of the budget, especially the unsustainable growth in mandatory spending, lawmakers should follow up on this debt ceiling agreement with a focus on long-term fiscal sustainability.

Testimony: Taxes, Spending, and Addressing the U.S. Debt Crisis

A better-designed tax system should be a goal of any fiscal consolidation package. That said, our simulations suggest that even substantially higher tax increases are insufficient to curtail long-run debt-to-GDP growth.

How America’s Debt Problem Compares to Other Countries—and Why It Matters

According to the International Monetary Fund (IMF), the U.S. federal government is among the most indebted governments in the world.

Carbon Taxes in Theory and Practice

In our latest report, we consider several theoretical arguments for carbon taxes and the evidence from carbon taxes implemented around the world related to emissions, economic growth, distribution and revenue recycling options, other environmental taxes, green subsidies, and environmental regulations.

Inflation Reduction Act’s Price Controls Are Deterring New Drug Development

As predicted, the Inflation Reduction Act’s misguided price-setting policy is already discouraging drug development. Rather than double down on it, as President Biden proposes doing in his budget, lawmakers ought to restore incentives to invest in the United States.

IRS Strategic Operating Plan Shows Promise, but Concerns Remain

While the IRS hopes to increase revenue collection and minimize additional burdens on taxpayers, uncertainty remains regarding its ability to deliver, particularly on the latter. Furthermore, some concerns about the original funding package are already surfacing, specifically around insufficient funding for taxpayer services.

Dear President von der Leyen: President Biden Can’t Fix European Competitiveness

Focusing on the “threat” to European industry caused by the Inflation Reduction Act rather than internal tax system flaws puts the EU at risk of slower economic growth and possibly losing some of its important industrial base. It is also contrary to the EU’s geopolitical goals.

Frustration and Delays as the 2023 Tax Filing Season Begins

A combination of long-standing IRS operational deficiencies, the agency’s temporary closure due to the pandemic, and the now-expired pandemic relief produced a perfect recipe for a paper backlog.

New Year, New Taxes

Erica York, senior economist at the Tax Foundation, joins Jesse to discuss how the book minimum tax came to be, if it will really stop companies from paying zero in taxes, if the new Republican House will revisit this debate, and what the tax’s impact will be on jobs and economic growth.

How the Inflation Reduction Act and Pillar Two Could Shape the Future of EU Competitiveness

French President Macron is coming to Washington, D.C., this week to ask President Biden the question on the minds of European leaders: “Why did you do this to us?”

Shaky Economic and Fiscal Outlook Requires Stable and Pro-Growth Tax Extenders Policy

Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.

How the Inflation Reduction Act Affects the Future of U.S.-EU Tax and Trade Cooperation

the Inflation Reduction Act gives us a glimpse into a future where the U.S. and EU opt for protectionist tax and trade policies rather than implementing principled tax policies and reducing trade barriers between allies.

Ways and Means Committee

Inflation Is Surging, So Are Federal Tax Collections

Federal tax collections are approaching the highest levels in U.S. history set during World War II and again during the dot-com bubble in 2000. Meanwhile, federal spending in FY 2022 was over 25 percent of GDP—a level only exceeded during the height of the pandemic in 2020 and 2021, and during World War II.

Tax Hike Proposals Live on Despite Being Dropped in the Inflation Reduction Act

President Biden proposed a 7-point hike in the corporate tax rate to 28 percent, a new minimum book tax on corporate profits, and higher taxes on international activity. We estimated these proposals would reduce the size of the economy (GDP) by 1.6 percent over the long run and eliminate 542,000 jobs.