Canada’s Tax-Free Savings Accounts Are a Huge Success. U.S. Lawmakers Should Take Note
For most Americans, saving is a taxing experience. Our neighbors to the north have found a better solution—and U.S. lawmakers should take note.
5 min readThe United States has long been a forward-thinking country that builds for tomorrow through saving, investment, and entrepreneurship. Saving gives us security, investment gives us rising incomes through enhanced productivity, and entrepreneurship drives economic growth and dynamism, creating new opportunities.
However, over the last fifty years, all three have been eroded. Citizens aren’t saving enough, businesses aren’t investing enough, and the country is undergoing a retreat in the level of economic growth and dynamism.
As it is, the U.S. tax code places substantial burdens on each of these essential factors of our economy. What’s worse, while other nations have become more attractive, there has been a proliferation of proposals in the U.S. that would only cause further harm—wealth taxes, “mark-to-market” capital gains taxes, estate taxes, and financial transaction taxes.
Below, we offer in-depth analysis of these and other proposals, which highlight a harmful trend in tax policy. Americans are industrious, entrepreneurial, and innovative. Policymakers should ensure we have a tax code that enhances those qualities, not hinders them.
For most Americans, saving is a taxing experience. Our neighbors to the north have found a better solution—and U.S. lawmakers should take note.
5 min readAmericans are saving less. While the U.S. saving rate has regularly lagged behind its peers, it has yet to return to pre-pandemic levels. Increasingly, people are turning to credit cards to fill the gaps in their budgets.
The uncertain future of American finances in a time of potential economic instability points to the need for tax reforms that encourage individuals to save and build financial security in a relatively simple way, such as through universal savings accounts.
6 min readWhat has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.
23 min readNew modeling finds that the wealth taxes proposed by Sen. Warren and Sen. Sanders would raise significantly less revenue than promised, face serious administrative and compliance challenges, and would increase foreign ownership of U.S. capital.
38 min readA key element of America’s dynamism problem is a drop in entrepreneurship. Removing tax barriers for entrepreneurs would improve America’s dynamism while making America’s tax code more neutral, efficient, and simple for all taxpayers.
25 min readCapital gains taxes create a burden on saving because they are an additional layer of taxes on a given dollar of income. The capital gains tax rate cannot be directly compared to individual income tax rates, because the additional layers of tax that apply to capital gains income must also be part of the discussion.
14 min readThe success of any mark-to-market system lies in its ability to accurately value tangible and non-tangible (or non-tradable) assets such as intellectual property and brand-value recognition. Administrative regulations, guidance, and enforcement are the Achilles’ heel of any plan to annually tax accrued gains.
17 min readPolicymakers should exercise caution in deciding whether to enact an FTT given the uncertainty regarding the FTT’s ability to raise revenue and the significant damage it could cause to the U.S. financial system
39 min readDo taxes affect individuals’ decisions regarding where to live and work? Can high taxes cause the outmigration of wealthy individuals?
5 min readVermont lawmakers are considering the adoption of two new taxes on high earners, which proponents have branded “wealth taxes.”
4 min readOnly three European countries levy a net wealth tax—Norway, Spain, and Switzerland. France and Italy levy wealth taxes on selected assets.
4 min readFor most Americans, saving is a taxing experience. Our neighbors to the north have found a better solution—and U.S. lawmakers should take note.
5 min readIt is essential to understand that the taxation of capital gains places a double tax on corporate income.
5 min readWith Secure 2.0, lawmakers recognized and addressed several flaws in the tax code’s treatment of saving and retirement, but there is continued work to be done simplifying and expanding savings and retirement options for taxpayers.
5 min readAmericans are saving less. While the U.S. saving rate has regularly lagged behind its peers, it has yet to return to pre-pandemic levels. Increasingly, people are turning to credit cards to fill the gaps in their budgets.
The uncertain future of American finances in a time of potential economic instability points to the need for tax reforms that encourage individuals to save and build financial security in a relatively simple way, such as through universal savings accounts.
6 min readIncome taxes impose steeper economic costs, and often steeper administrative and compliance costs, than consumption taxes. Moving to a consumption tax would end the tax bias against saving and investment and provide an opportunity to greatly simplify anti-poverty programs embedded in the tax code.
45 min readGiven that wealth taxes collect little revenue and have the potential to disincentivize entrepreneurship and investment, perhaps European countries should repeal them rather than implement one across the continent.
4 min readMaking expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
7 min readInstead of reforming and hiking the wealth tax, perhaps policymakers should consider whether the tax is serving its intended objectives, and, if not, consider repealing the tax altogether.
4 min readTax 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.
5 min readWhen peeling back layers of the JCT report, it becomes clear that many tax expenditures are not “loopholes” or benefits for narrow special interests, but important structural elements of the tax code.
6 min readPresident 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.
6 min readIn 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.
7 min readThe year-end omnibus federal spending package makes a number of reforms to retirement savings accounts.
3 min readThe proposals share a common goal of improving incentives for households to save during a time when inflation is impacting their finances.
3 min readOnly three European OECD countries levy a net wealth tax, namely Norway, Spain, and Switzerland.
3 min read