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.
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The price tag of the Inflation Reduction Act’s green energy tax credits is much higher than originally thought. Among other things, the updated analysis indicates the Inflation Reduction Act does not reduce deficits after all.
The distributed profits tax is a sounder approach to concerns about investment and stock buybacks than the existing policy approach.
Tax reform should be about increasing fairness. And the way to get there is by reducing complexity and double taxation, not by doubling down on them.
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.
President Biden’s State of the Union Address outlined three tax proposals, including raising the tax on stock buybacks, imposing a billionaire minimum tax, and expanding the child tax credit.
In response to high oil prices, Sen. Wyden has proposed raising taxes on oil and gas companies in three ways. His “Taxing Big Oil Profiteers Act” would create an additional 21 percent tax on so-called excess profits earned over 10 percent of revenues of oil companies with annual revenues over $1 billion; levy a tax on stock buybacks; and remove last-in, first-out (LIFO) tax treatment of inventory accounting.
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.
Congress is debating new ways to raise revenue that would make the tax code more complex and more difficult to administer. The new proposals—imposing an alternative minimum tax on corporate book income, applying an excise tax on stock buybacks, and, at one point this week, a tax on unrealized capital gains for billionaires—are unreliable and highly complex ways to raise revenue.
Research shows that a tax on stock buybacks would not be the right policy solution to encourage long-term investment or lift wages.