Taxes, Fiscal Policy, and Inflation
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 readConsumer 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 readWhile hoping for inflation’s continued decline, policymakers should finish the job and index the tax code to prepare for future bouts of high inflation and as a contingency in case it takes longer to defeat elevated inflation than expected.
4 min readInflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.
5 min readA 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 readSome tax ballot initiatives will be straightforward, some will be complex, and—let’s be honest—some will be a drafting nightmare.
5 min readErnest S. Christian, Jr., (1937-2022) was one of the tax policy community’s most distinguished and influential experts, showing us how effective sound tax policy can be. He passed away on September 13th, leaving behind a legacy of tax reform.
4 min readIf ever there was a paycheck protection program, defending people from bracket creep may be the most important one ever designed.
6 min readIn an already-challenging economic environment, new UK Prime Minister Liz Truss must get tax rates correct to avoid over-burdening a population and business sector facing immense uncertainty. Focusing only on rates while ignoring the base misses an opportunity for real, pro-growth reform.
4 min readWith continued concerns over inflation, individuals may be wondering how their tax bills will be impacted. Less than half of OECD countries in Europe automatically adjust income tax brackets for inflation every year.
2 min readArkansas recently became the 13th state to authorize an individual income tax rate reduction this year. This round of tax cuts accelerated reforms enacted eight months ago.
7 min readIn 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.
6 min readHow will the Inflation Reduction Act taxes impact inflation, economic growth, tax revenue, and everyday taxpayers? See Inflation Reduction Act tax changes.
12 min readWhile exempting accelerated depreciation from the book minimum tax would reduce some of the economic harm of the tax, there remain many unresolved problems within the design and structure of the tax that make it a poorly chosen revenue option.
3 min readIn the rush to pass the Inflation Reduction Act, which features an ill-conceived tax on the book income of U.S. corporations, it is worth reminding policymakers of a well-established finding in the economic literature.
3 min readThe Inflation Reduction Act may be smaller than the proposed Build Back Better legislation from 2021, but both sets of legislation propose a reintroduced corporate alternative minimum tax (AMT). The 30-year experience with a corporate AMT shows it is not a good solution.
4 min readOver the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules.
6 min readThe Inflation Reduction Act would raise taxes on corporations and top earners with the goal of funding a number of programs to reduce carbon emissions, address prescription drug costs, and spur the economy. Garrett Watson joins Jesse Solis to talk through what these tax changes would mean for the economy: Will they reduce inflation, and do they break the President’s pledge not to raise taxes on those earning less than $400,000?
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
43 min readThe latest CBO long-term budget outlook paints a troubling picture of fiscal irresponsibility. Rather than halt this rampant spending, Congress is actively adding programs that will exacerbate these long-term trends.
7 min readExpediting income tax rate reductions and indexing major income tax provisions for inflation are two of the most important tax policy changes policymakers could make to provide meaningful tax relief to Hoosiers both now and in the years to come.
4 min readSome 40 years ago, the U.S. dealt with high inflation and slow economic growth. Then as now, the solution is a long-term focus on stronger economic growth and sustainable federal budgets.
5 min readIdaho Ballot initiative would impose an incredibly high top marginal rate that would fall on many small businesses, not just high-income earners.
7 min readThe proposals share a common goal of improving incentives for households to save during a time when inflation is impacting their finances.
3 min read