Tax Cuts and Jobs Act (TCJA)

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.

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.

The U.S. Tax Burden on Labor, 2023

Although the U.S. has a progressive tax system and a relatively low tax burden compared to the OECD average, average-wage workers still pay more than 30 percent of their wages in taxes.

Testimony: Taxes, Spending, and Addressing the U.S. Debt Crisis

A better-designed tax system should be a goal of any fiscal consolidation package. That said, our simulations suggest that even substantially higher tax increases are insufficient to curtail long-run debt-to-GDP growth.

Minnesota Looks to Raise Taxes despite Projected $17.6 Billion Budgetary Surplus

Testimony: U.S. International Tax Policies That Support Investment and Innovation

Even in the face of a global minimum tax, Congress still has a chance to develop a strategic approach in support of U.S. investment and innovation.

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.

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.

Deteriorating Federal Budget to Run $1.4 Trillion Deficit in 2023, CBO Projects

Immediately balancing the $20 trillion budget shortfall would take drastic, unwanted policy changes. Instead, lawmakers should target a more achievable goal, such as stabilizing debt and deficits with an eye toward comprehensive tax reform that can produce sufficient revenue with minimal economic harm.

New Tax Expenditures Report Highlights Concerning Changes in Tax System

A new tax expenditures report by the Joint Committee on Taxation (JCT) reveals two problematic developments: 1) policymakers have increasingly relied on the tax code to deliver benefits to individuals, and 2) the broad, neutral tax treatment of investment has shifted to targeted subsidies for businesses.

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.

CBO Analysis Finds Income Growth and Progressive Tax Code in 2019

Newly published data from the CBO indicates in 2019, before the onset of the pandemic, American incomes continued to rise as part of a broad economic expansion. It also shows that, contrary to common perceptions, the federal tax system is progressive.

Bonus Depreciation and New Corporate Investment in 2018

If bonus depreciation is allowed to phase out, then the tax bias against capital investments will increase, discouraging firms from making otherwise profitable investments.

Would Americans Make Charitable Donations without Tax Incentives?

Over the long run, tax policies that grow after-tax incomes and the economy do more to boost charitable giving than policies that try to incentivize people to be charitable.

Changing Trends in R&D Investment Show the Importance of Business R&D

Lawmakers should recognize both the growing importance of business R&D and the need to support it through a commonsense tax policy, namely a return to full and immediate expensing for R&D.

Tighter Limits on U.S. Interest Deductibility Make U.S. an Outlier and Increase Pain of Rising Interest Rates

While there is disagreement about the amount of interest that should be deductible, it’s clear that the limit based on EBIT makes the U.S. an outlier compared to other countries across the OECD while raising the cost of new investment.

Prospects for Federal Tax and Budget Policy after the 2022 Midterms

Two weeks after the 2022 midterm elections, it’s becoming clearer where tax policy may be headed for the rest of the year and into 2023. In the short term, Congress must deal with tax extenders and expiring business tax provisions that may undermine the economy.

Post-Election Breakdown

The 2022 midterm elections are wrapping up, and taxpayers are looking at a divided Congress for the next two years. Senior Policy Analyst Garrett Watson sits down with Jesse to give a quick analysis of what these elections mean for tax policy.

Shaky Economic and Fiscal Outlook Requires Stable and Pro-Growth Tax Extenders Policy

Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.

Difficult Trade-Offs Make Policy Consensus on Child Tax Credit Elusive

As we near this year’s “lame duck” session of Congress, there has been renewed interest in reforming the child tax credit as part of a tax deal. Our new analysis highlights the trade-offs that policymakers will face