Inflation

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.

State Tax Reform and Relief Trend Continues in 2023

R&D Amortization Hurts Economic Growth, Growth Industries, and Small Businesses

The current tax treatment of R&D expenses is irrational, complicated, and counterproductive. Fortunately, fixing this problem is a bipartisan issue.

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.

Expensing of Machinery and Equipment Should Be Made Permanent

Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.

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.

New Jersey Should Take Opportunity to Make Corporate Taxes More Competitive

By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.

Ranking Individual Income Taxes on the 2023 State Business Tax Climate Index

Individual income tax rates can influence location decision-making, especially in an era of enhanced mobility, where it is easier for individuals to move without jeopardizing their current job, or without limiting the scope of their search for a new one.

How to Unlock Global Growth: The Role of Taxation

Our recent policy conference brought together academics and political leaders to present research on some of the most pressing issues in global tax policy and to discuss solutions that can unlock genuine global growth.

Is Michigan’s Tax Cut Temporary or Permanent?

Michiganders will pay a lower individual income tax rate next year thanks to high general fund revenues, but these savings may be short-lived following an opinion released by the state’s attorney general.

VAT Carveouts in Portugal

The Portuguese government has introduced plans to exempt “essential” food items from its value-added tax (VAT) in response to the recent inflation spike. While this may sound like a reasonable measure on the surface, it comes with numerous unintended consequences that compromise its effectiveness.

Capital Cost Recovery across the OECD, 2023

To recover from the pandemic and put the global economy on a trajectory for growth, policymakers need to aim for more generous and permanent capital allowances. This will spur real investment and can also contribute to more environmentally friendly production across the globe.

Mississippi’s Capital Improvement Plan Leads in the South and Nationwide

A recently enacted bill in Mississippi made the Magnolia State only the second state in the country to make full expensing permanent. The bill joins reductions to the individual income tax and capital stock tax rates, already in progress, as model, pro-growth reforms for the region.

State Individual Income Tax Rates and Brackets, 2023

Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:

Efforts to Combat Inflation’s Impact on the Tax Code Should Remain a Priority in 2023

While 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.

There’s Still Room for Responsible State Income Tax Relief in 2023

Forty-three states adopted tax relief in 2021 or 2022—often in both years—and of those, 21 cut state income tax rates. It’s been a remarkable trend, driven by robust state revenues and an increasingly competitive tax environment.

State Tax Policy as an Inflation Response

At the end of 2022, prices were 14.6 percent higher than they were two years prior. That’s the fastest inflation rate over any two calendar years since the stagflation era of the late 1970s. State policymakers are understandably interested in bringing any tools at their disposal to bear on the problem. And many of them are reaching for tax policy solutions.

Georgia Should Reinforce Its Tax Reform Intentions

By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.

Wealth Tax Proposals Are Back as States Take Aim at Investment

In a coordinated effort, lawmakers in seven states that collectively house about 60 percent of the nation’s wealth—California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington—are introducing wealth tax legislation on Thursday.