Pass-Through Businesses

Distributed Profits Tax

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.

Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal

According to our analysis, President Biden’s budget would reduce long-run economic output by about 1.3 percent and eliminate 335,000 FTE jobs. See what tax policies the president is proposing.

Oklahoma Lawmakers’ Tax Reform Plan Would Put State in Top 10

The changes put forth in a new package of bills would represent significant pro-growth change for Oklahoma that would set the state up for success in an increasingly competitive tax landscape.

Biden’s FY 2024 Budget Would Result in More Than $4.5 Trillion in Gross Tax Increases

President Biden’s new budget proposal outlines several major tax increases targeted at businesses and high-income individuals that would bring U.S. income tax rates far out of step with international norms.

Taxing Distributed Profits Makes Business Taxation Simple and Efficient

Adopting a distributed profits tax would greatly simplify U.S. business taxes, reduce marginal tax rates on investment, and renew our country’s commitment to pro-growth tax policy.

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:

Do Unto Others: The Case for State Income Tax Reciprocity

Remote and flexible work opportunities are here to stay, whether states like it or not. With enhanced opportunities to take their job with them wherever they please, more workers can factor tax burdens into their decision of where to live.

2023 Tax Brackets

The IRS recently released the new inflation adjusted 2023 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.

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.

Massachusetts’ Graduated Income Tax Amendment Threatens the Commonwealth’s Economic Transformation

Massachusetts’ competitive tax advantage in New England is driven primarily by its competitive individual income tax rate and its sales and use tax structure. If the Commonwealth changes its tax code in ways that narrow the base or increase the rate, it cedes greater tax competitiveness to other states, regionally and nationally.

Audit

Does Your State Have a Marriage Penalty?

A marriage penalty exists when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers. In other words, married couples who file jointly under this scenario have a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.

Push for Higher Taxes Is Misguided During a Time of Inflation and Looming Recession

Some 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.

Pennsylvania Cuts Corporate Net Income Tax Rate

Policymakers from both parties in Harrisburg have proposed reducing Pennsylvania’s 9.99 percent corporate net income tax (CNIT) rate but could not agree on an approach—until now. With the enactment of HB 1342 lawmakers finally succeeded in cutting what had been the second highest state corporate tax rate in the nation.

Idaho’s Tax Hiking Ballot Measure Is Riddled With Mistakes

Idaho Ballot initiative would impose an incredibly high top marginal rate that would fall on many small businesses, not just high-income earners.

Ranking Individual Income Taxes on the 2022 State Business Tax Climate Index

Top Tax Rate on Pass-through Business Income Would Exceed 50 Percent in Most States Under House Dems’ Plan

Under the House Democrats’ reconciliation plan, the top tax rate on pass-through business income would exceed 50 percent in most states. Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses and majority of private sector employment in the United States.

Analysis of Sen. Wyden’s Pass-through Deduction Proposal

Sen. Wyden recently introduced the Small Business Tax Fairness Act—the impact of which we modeled—to reform the Section 199A pass-through business deduction created in the Tax Cuts and Jobs Act (TCJA) of 2017. The provision currently allows taxpayers to deduct up to 20 percent of their qualified business income from their taxable income, subject to certain limitations.

How Biden’s Tax Plans Could Negatively Impact Housing

While President Biden has many proposals aimed at increasing the supply of affordable housing, including tax credits, his plans to raise business taxes could hinder that goal.