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 readAs part of President Biden’s proposed budget for fiscal year 2023, the White House has once again endorsed a major tax increase on accumulated wealth, adding up to a 61 percent tax on wealth of high-earning taxpayers.
4 min readRecent discussions of a proposed wealth tax for the United States have included little information about trends in wealth taxation among other developed nations. However, those trends and the current state of wealth taxes in OECD countries can provide context for U.S. proposals.
3 min readWhile falling short of comprehensively reforming the complex U.S. retirement savings system, House and Senate lawmakers have proposed bipartisan bills to help simplify and expand access to retirement savings accounts to more workers.
4 min readWith several states entertaining proposals to tax the financial transactions of savers and investors who don’t even live in their states, some members of Congress see an interstate commerce question worthy of a federal response.
6 min readLawmakers looking to close budget shortfalls would be well-advised to consider other and more stable avenues for new revenue.
28 min readThe world is ready to close the book on 2020 and start fresh in 2021, awaiting widespread vaccination, an end to the pandemic, and the beginning of a new chapter of economic recovery. With a fresh start in mind, and a healthy dose of optimism, here are three New Year’s resolutions for crafting better tax policy in the coming year.
2 min readAs Congress works to provide another round of emergency economic relief, it is a good time to step back and consider how tax policy affects entrepreneurs and small businesses.
3 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 readJoe Biden recently released a piece reviewing his tax proposals, contrasting them with President Donald Trump’s tax ideas. A major theme within this piece can be summarized in the title: “A Tale of Two Tax Policies: Trump Rewards Wealth, Biden Rewards Work.”
4 min readAs the NYSE prepares to conduct a test of their server capacity elsewhere, New Jersey lawmakers may be forced to rethink the viability of their financial transaction tax proposal.
4 min readIn addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
2 min readWhat tax policy ideas did Harris propose along the campaign trail, and how do they differ from Biden’s plan?
3 min readIndividuals respond to taxes by changing their behavior. Hence, when there are tax differences between countries, some might respond by moving to a lower-tax area. For higher-income individuals, the benefits of moving as a result of higher taxes are greater because they have more income or wealth at stake.
4 min readSeeking new sources of funding, New York and New Jersey—two states at the heart of global financial markets—are considering financial transaction taxes.
5 min readJoe Biden and Bernie Sanders have both released proposals to tax capital gains at ordinary income rates for the wealthiest Americans. As part of a broader platform to address income inequality, Biden and Sanders suggest increasing current capital gains rates on taxpayers with income over $1 million and $250,000, respectively.
21 min readFTTs are unreliable sources of revenue and can increase risky financial activities. When looking to address income inequality and raise revenue, lawmakers should look to alternatives to this complicated and distortive tax.
5 min readIn a way, one should sometimes be most wary of taxes with a very, very, very low rate. It suggests a certain hesitance on the part of the policymaker, as if he knows he’s playing with something potentially very damaging.
4 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 read