Inflation Reduction Act (IRA)

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.

The Woes of Temporary Tax Policy

From the Tax Cuts and Jobs Act in 2017 to the Inflation Reduction Act, signed into law just this summer, lawmakers across the political spectrum are often tempted to implement temporary tax reforms. Garrett Watson joins Jesse to discuss the pros and cons of writing tax laws that have an end date and why we find ourselves having a debate at the end of each year about so many temporary provisions.

The Sticks: Inflation Reduction Act’s Energy-Related Tax Increases

The Inflation Reduction Act primarily uses carrots, not sticks, to incentivize reductions in carbon emissions. It creates or expands tax credits for various low- or no-emission technologies, rather than imposing a generalized penalty for emissions, such as a carbon tax.

Breaking Down the Inflation Reduction Act’s Green Energy Tax Credits

The Inflation Reduction Act created numerous tax subsidy programs intended to accelerate the transition to a greener economy.

Accounting for the New Book Minimum Tax

The Inflation Reduction Act includes a book minimum tax, which is raising the eyebrows of accountants everywhere. Scott Dyreng, a professor of accounting at Duke University, and Daniel Bunn join Jesse to discuss how these minimum taxes work and how companies aim to comply with all these new complex rules and tax increases.

The Economic, Revenue, and Distributional Effects of Permanent 100 Percent Bonus Depreciation

The phaseout of 100 percent bonus depreciation, scheduled to take place after the end of 2022, will increase the after-tax cost of investment in the U.S. Permanently extending it would increase long-run economic output by 0.4 percent and increase employment by 73,000 FTE jobs.

IRS Is Raising More with Less, But New Funding Misses the Mark

The Inflation Reduction Act focused more on enforcement and hiring more auditors rather than programs that make it easier for taxpayers to comply with the code and the IRS to administer it.

The Tax Compliance Costs of IRS Regulations

In a pattern that has become all too common in recent decades, the newly enacted Inflation Reduction Act (IRA) added yet another layer of complexity to an already complex and burdensome federal tax code.

How to Think About IRS Tax Enforcement Provisions in the Inflation Reduction Act

The Inflation Reduction Act increases the IRS’s budget by roughly $80 billion over 10 years. The money is broken into four main categories—enforcement, operations support, business system modernization, and taxpayer services—as well as a few other small items such as an exploratory study on the potential of a free-file system.

Stock Buyback Tax Would Hurt Investment and Innovation

The Inflation Reduction Act calls for a new 1 percent excise tax on stock buybacks, the argument being it would be better for the economy if firms invested their surplus cash in the business, rather than returning this value to shareholders.

House Votes on the Inflation Reduction Act

The House of Representatives is set to pass the Inflation Reduction Act, the latest iteration of President Biden’s tax and climate agenda. Garrett Watson joins Jesse to discuss what sacrifices were made by key lawmakers to bring this bill to the finish line. They also look at what the economic impact of this proposal would be as the country continues to face historic rates of inflation.

Who Gets Hit by the Inflation Reduction Act Book Minimum Tax?

In dollar terms, the industries that would account for the largest book minimum tax liabilities are manufacturing, at $73.2 billion, followed by finance, insurance, and management at $46.9 billion.