Currently, the European Commission has plans to generate more tax revenue to fund the forthcoming MFF, the long-term budget running from 2028 to 2034. But the truth is, without serious reform, the EU isn’t ready for new taxation.
Tax collections vary widely by state, making per capita collections figures—a measure of collections per person—especially useful, as they allow comparisons across differences in tax rates and bases, economic capacities, and policy decisions that impact the size and scope of government.
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Structural reforms such as broadening tax bases, improving cost recovery, and shifting toward less distortive taxes can improve competitiveness without necessarily reducing revenue.
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Scandinavian countries are well known for their broad social safety nets and their public funding of services such as universal health care, higher education, parental leave, and child and elderly care. High levels of government spending naturally require high levels of taxation. So, how do these countries raise their tax revenues?
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Each level of government provides its own services and therefore levies its own taxes to generate revenue for these services.
Creative destruction—coined by famed economist Joseph Schumpeter—is the idea that new innovations disrupt and “destroy” existing economic structures as they create better and more efficient products and processes.
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When property values soar, homeowners can end up paying significantly higher taxes for basically the same services. Thankfully, there is a solution.
Backfilling forgone local property tax revenue through new state taxes is difficult because it dramatically shifts overall tax burdens, undermines local accountability, and cannot easily adjust for changing population mixes.
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How do current federal individual income tax rates and brackets compare historically?
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How have US federal capital gains tax rates and collections changed over time?
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Different taxes have different economic effects, so policymakers should always consider how tax revenue is raised and not just how much is raised.
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Developed countries raise tax revenue through individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes—the combination of which determines how distortionary or neutral a tax system is.
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Given the poor state of the budget process and worsening debt trajectory, lawmakers should move boldly and quickly to address the issue, including via a fiscal commission process. Issues to consider should include reforms to both spending and taxes.
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How do current federal corporate tax rates and brackets compare historically?
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How does tax policy shape a nation’s competitiveness? Today, we’re diving into the showdown between the US and China, exploring how China’s enticing tax incentives pose a formidable challenge to America’s economic supremacy.
While federal tax collections—especially corporate taxes—have reached historically high levels, these gains have not kept pace with escalating spending, particularly on debt interest, leading to a substantial and concerning budget deficit in FY24.
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Restoring expensing for R&D, machinery, and equipment; extending better cost recovery to structures investment; and avoiding raising the corporate tax rate would create a stronger, pro-investment policy environment for the US economy.
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Short FormWorld War II shaped many aspects of the modern world, including the US tax code. But the dramatic changes to our system that military mobilization required didn’t subside when the fighting finished; they’ve persisted to today.
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The government provides various services at the federal, state, and local levels. How are they paid for? Taxes.