Savings and Investment: The Tax Treatment of Stock and Retirement Accounts in the OECD May 26, 2021 To encourage private retirement savings, OECD countries commonly provide tax-preferred retirement accounts. However, in many countries, including the United States, the system of tax-preferred retirement accounts is complex, which may deter savers from using such accounts—and potentially lower overall savings.
Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised May 12, 2021 As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.
Many Small Businesses Could Be Impacted by Biden Corporate Tax Proposals May 11, 2021 Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.
Details and Analysis of Tax Proposals in President Biden’s American Families Plan May 6, 2021 The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.
Tax Policy in the First 100 Days of the Biden Administration April 30, 2021 In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.
Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century April 26, 2021 The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.
Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan April 23, 2021 The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.
Lawmakers Reintroduce Bill to Protect Against Double Taxation of Financial Transactions March 3, 2021 With 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.
Does Your State Have an Estate or Inheritance Tax? February 24, 2021 In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax. Twelve states and Washington, D.C. impose estate taxes and six impose inheritance taxes. Maryland is the only state to impose both. Most states have been moving away from estate or inheritance taxes or have raised their exemption levels, as estate taxes without the federal exemption hurt a state’s competitiveness.
Pandemic Highlights the Need for Better Tax Policy for Entrepreneurs and Small Businesses December 21, 2020 As 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.
The Drawbacks of State Taxes on Financial Transactions January 11, 2021 Lawmakers looking to close budget shortfalls would be well-advised to consider other and more stable avenues for new revenue.
Wealth Taxes in Europe December 17, 2020 Net wealth taxes are recurrent taxes on an individual’s wealth, net of debt. The concept of a net wealth tax is similar to a real property tax. But instead of only taxing real estate, it covers all wealth an individual owns. As today’s map shows, only three European countries covered levy a net wealth tax, namely Norway, Spain, and Switzerland. France and Italy levy wealth taxes on selected assets but not on an individual’s net wealth per se.
Taxes and New York’s Fiscal Crisis: Evaluating Revenue Proposals to Close the State’s Budget Gap December 8, 2020 Our new study provides a 360-degree assessment of New York’s budget crisis, analyzes proposed revenue options, and offers solutions to raise revenue without driving more taxpayers out of the state or undoing recent positive reforms
President Biden’s 61 Percent Tax on Wealth April 12, 2022 As 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.
How Should Wealth and Work Be Treated in the Tax Code? September 21, 2020 Joe 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.”
New York Stock Exchange Signals Willingness to Relocate Servers to Avoid Proposed New Jersey Financial Transaction Tax September 14, 2020 As 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.
Does Your State Have an Estate or Inheritance Tax? September 2, 2020 In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
Where Does Kamala Harris Stand on Tax Policy? August 12, 2020 What tax policy ideas did Harris propose along the campaign trail, and how do they differ from Biden’s plan?
Evidence Suggests that Tax Rates Influence Migration Decisions August 6, 2020 Individuals 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.
New York and New Jersey Consider Financial Transaction Taxes July 23, 2020 Seeking new sources of funding, New York and New Jersey—two states at the heart of global financial markets—are considering financial transaction taxes.
Details and Analysis of President Joe Biden’s Campaign Tax Plan October 22, 2020 What 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.
Analysis of Capital Gains Tax Proposals Among Democratic Presidential Candidates March 18, 2020 Joe 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.
Recent Study on Financial Transaction Taxes Understates their Economic Harm February 20, 2020 FTTs 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.
Bloomberg’s Financial Transaction Tax (FTT) Proposal Revives Bad Policy February 20, 2020 In 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.
Looking Back on Taxation of Capital Gains January 22, 2020 When considering options to eliminate the deferral advantage of capital gains taxation, a lookback charge provides a reasonable solution for taxing hard-to-value assets. However, policymakers need to understand the limitations of a lookback charge compared to both mark-to-market taxation and the current system.
The Impact of a Financial Transaction Tax January 23, 2020 Policymakers 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
Analysis of Sen. Warren and Sen. Sanders’ Wealth Tax Plans January 28, 2020 New 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.
Reviewing the Tax Changes in Senator Bennet’s Real Deal January 7, 2020 The “Real Deal” would increase the tax burden on saving, investing, and working in the United States, and reduce the global competitiveness of the U.S. economy.
Evaluating Mark-to-Market Taxation of Capital Gains December 17, 2019 The 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.
Comparing Wealth Taxation and Income Taxes December 9, 2019 A low wealth tax rate is equivalent to a high-rate income tax. The interaction between wealth taxes and the existing income taxes must be considered when analyzing a wealth tax plan.
Comparing Capital Gains Tax Proposals by 2020 Presidential Candidates December 4, 2019 Biden, Sanders, and Warren have staked out similar plans to increase capital gains taxes on the wealthiest Americans. While all three candidates have called for taxing capital gains at ordinary income rates, the phase-in levels and top marginal tax rates vary.
Wealth Taxes in Europe November 20, 2019 Only three European countries levy a net wealth tax, namely Norway, Spain, and Switzerland. Belgium, Italy, and the Netherlands levy wealth taxes on selected assets, but not on an individual’s net wealth per se.
Illustrating Senator Warren’s Taxes on Capital Income November 15, 2019 Taken together, these proposed tax changes would significantly raise marginal and effective tax rates and increase the cost of capital, all of which would lead to a reduced level of output and less revenue than anticipated.
Proponents of Wealth Taxation Must Consider its Impact on Innovation November 12, 2019 Instead of raising revenue from a narrow tax base through high tax rates, policymakers should identify options to raise revenue efficiently through broad-based taxes consistent with sound tax policy.
Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All November 1, 2019 Elizabeth Warren released a detailed plan on how she would fund Medicare For All, proposing a wealth tax, financial transactions tax, mark-to-market taxation of capital gains income, and a country-by-county minimum tax, among other reforms.
Booker’s Plan to Eliminate Step-up in Basis and Expand the Estate Tax September 27, 2019 Removing step-up in basis would encourage taxpayers to realize capital gains and it would plug a hole in the current income tax, while increasing federal revenue. Combined, however, with the estate tax, this would result in a significant tax burden on certain saving by requiring both the appreciation in and total value of transferred property to be taxed at death
JCT Report Shows Capital Gains are Sensitive to Taxation September 25, 2019 JCT’s report on capital gains elasticities reminds us that capital gains realizations, at least under a tax system that allows deferral, are sensitive to tax rates. Moving to mark-to-market taxation of all capital gains would remove this sensitivity by taxing capital gains annually.
No Good Options as Chicago Seeks Revenue September 17, 2019 Facing an $838 million budget shortfall, a looming pension crisis, and an aggressive spending wish list, some Chicago policymakers and activists are expressing interest in a laundry list of new and higher taxes that could, collectively, raise as much as an additional $4.5 billion a year.
Evaluating Senator Wyden’s “Mark-to-Market” Capital Gains Tax September 9, 2019 Wyden’s “mark-to-market” proposal strives to subject capital gains to the same treatment as ordinary income. While the plan resolves the “lock in effect” issue and would make the tax code more progressive, it would increase the tax burden on savers and increase tax code complexity.
Senator Van Hollen Introduces Proposal to Raise Taxes on High-Income Households July 1, 2019 Van Hollen’s proposals add to the long list of Democratic Party tax proposals that attempt to both raise additional revenue from corporations and high-income households and make the tax code more progressive and “equitable.”
A Property Tax is a Wealth Tax, but… April 30, 2019 Warren’s comparison between the property tax and her proposed wealth tax makes a good sales pitch. However, there are important differences between the taxes. By no means is the property tax in many jurisdictions perfect, but it is generally better structured than a wealth tax.
New Study Finds that High Tax Rates Lower the Chance of Business Survival April 29, 2019 America’s tax code distorts the economic decision-making of firms, such as the favorable treatment of debt financing over equity. This study adds to this argument while providing motivation for policymakers to focus on how reforms to tax policy can increase American entrepreneurship.
An Overview of Capital Gains Taxes April 16, 2019 Capital 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.
Tax Policy and Entrepreneurship: A Framework for Analysis April 3, 2019 A 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.
A High Tax Rate on Star Inventors Lowers Total Innovation February 4, 2019 Findings from a new study suggest that while a policy agenda to revive innovation must include an assortment of changes - including greater access to mentorship - tax policy matters too.
Sanders’ Estate Tax Plan Won’t Likely Raise the Revenue Intended January 31, 2019 While progressivity may look appealing—particularly at a time when policymakers in Congress seem to be competing on how best to extract revenue from the wealthiest in the country—it may not raise the revenue intended.
What the U.S. Can Learn from the Adoption (and Repeal) of Wealth Taxes in the OECD January 18, 2022 Recent 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.
The Real Lesson of 70 Percent Tax Rates on Entrepreneurial Income January 29, 2019 The fall and then rise of entrepreneurial income claimed on the wealthy’s 1040 tax returns clearly tracks the seeming decline of inequality from 1950 to 1980, followed by the sudden rise in inequality since 1986. The shifting composition of income claimed by the rich due to changes in tax laws explains this illusion.
Unclear if Warren’s Wealth Tax Proposal is Constitutional January 25, 2019 There is a chance that Senator Warren’s proposed wealth tax would be found unconstitutional, but opinions are mixed and the precedents go both ways.
Sen. Warren’s Wealth Tax Is Problematic January 24, 2019 Sen. Elizabeth Warren recently proposed a wealth tax on high-net-worth individuals, a type of tax that is poorly targeted, difficult to administer, and raises constitutional questions.
Unequal Tax Treatment Is Contributing to Rising Debt Levels for Entrepreneurs December 13, 2018 A recent paper discusses two main trends related to U.S. entrepreneurs: the decrease in the number of entrepreneurs and the increase in their borrowing. Entrepreneurs have increased their debt holdings relative to their assets over the past three decades.
New IRS Data Reiterates Shortcomings of the Estate Tax October 18, 2018 The estate tax’s narrow base and high rate limit its ability to generate revenue. The estate tax discourages economic growth by discouraging investment.
New Federal Reserve Paper: State Corporate Taxes Hurt Entrepreneurship January 16, 2018 For every 1 percentage point increase in a state's corporate tax rate, employment in start-up firms declines 3.7 percent, according to a recent Federal Reserve study.
State Inheritance and Estate Taxes: Rates, Economic Implications, and the Return of Interstate Competition July 17, 2017 Estate and inheritance taxes reduce investment, discourage business expansion, and sometimes drive wealthy taxpayers out of state. It's little wonder that states are under pressure to reduce or eliminate them.
Losing the Future: The Decline of U.S. Saving and Investment October 1, 2014 Saving and investment are necessary for a society to adequately provide for its future. Saving and investment have declined substantially as a percentage of GDP over the last 40 years. American private saving barely keeps pace with total government deficits. On the whole, the country saves very little. American investment barely keeps pace with depreciation; U.S. private and public capital stock and infrastructure deteriorates almost as quickly as it can be repaired or replaced with new investment.
Wealth Taxes in Europe December 17, 2020 Net wealth taxes are recurrent taxes on an individual’s wealth, net of debt. The concept of a net wealth tax is similar to a real property tax. But instead of only taxing real estate, it covers all wealth an individual owns. As today’s map shows, only three European countries covered levy a net wealth tax, namely Norway, Spain, and Switzerland. France and Italy levy wealth taxes on selected assets but not on an individual’s net wealth per se.
President Biden’s 61 Percent Tax on Wealth April 12, 2022 As 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.
How Should Wealth and Work Be Treated in the Tax Code? September 21, 2020 Joe 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.”
Evidence Suggests that Tax Rates Influence Migration Decisions August 6, 2020 Individuals 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.
Analysis of Sen. Warren and Sen. Sanders’ Wealth Tax Plans January 28, 2020 New 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.
Comparing Wealth Taxation and Income Taxes December 9, 2019 A low wealth tax rate is equivalent to a high-rate income tax. The interaction between wealth taxes and the existing income taxes must be considered when analyzing a wealth tax plan.
Wealth Taxes in Europe November 20, 2019 Only three European countries levy a net wealth tax, namely Norway, Spain, and Switzerland. Belgium, Italy, and the Netherlands levy wealth taxes on selected assets, but not on an individual’s net wealth per se.
Illustrating Senator Warren’s Taxes on Capital Income November 15, 2019 Taken together, these proposed tax changes would significantly raise marginal and effective tax rates and increase the cost of capital, all of which would lead to a reduced level of output and less revenue than anticipated.
Proponents of Wealth Taxation Must Consider its Impact on Innovation November 12, 2019 Instead of raising revenue from a narrow tax base through high tax rates, policymakers should identify options to raise revenue efficiently through broad-based taxes consistent with sound tax policy.
Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All November 1, 2019 Elizabeth Warren released a detailed plan on how she would fund Medicare For All, proposing a wealth tax, financial transactions tax, mark-to-market taxation of capital gains income, and a country-by-county minimum tax, among other reforms.
A Property Tax is a Wealth Tax, but… April 30, 2019 Warren’s comparison between the property tax and her proposed wealth tax makes a good sales pitch. However, there are important differences between the taxes. By no means is the property tax in many jurisdictions perfect, but it is generally better structured than a wealth tax.
What the U.S. Can Learn from the Adoption (and Repeal) of Wealth Taxes in the OECD January 18, 2022 Recent 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.
Unclear if Warren’s Wealth Tax Proposal is Constitutional January 25, 2019 There is a chance that Senator Warren’s proposed wealth tax would be found unconstitutional, but opinions are mixed and the precedents go both ways.
Savings and Investment: The Tax Treatment of Stock and Retirement Accounts in the OECD May 26, 2021 To encourage private retirement savings, OECD countries commonly provide tax-preferred retirement accounts. However, in many countries, including the United States, the system of tax-preferred retirement accounts is complex, which may deter savers from using such accounts—and potentially lower overall savings.
Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised May 12, 2021 As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.
Details and Analysis of Tax Proposals in President Biden’s American Families Plan May 6, 2021 The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.
Tax Policy in the First 100 Days of the Biden Administration April 30, 2021 In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.
Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century April 26, 2021 The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.
Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan April 23, 2021 The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.
Taxes and New York’s Fiscal Crisis: Evaluating Revenue Proposals to Close the State’s Budget Gap December 8, 2020 Our new study provides a 360-degree assessment of New York’s budget crisis, analyzes proposed revenue options, and offers solutions to raise revenue without driving more taxpayers out of the state or undoing recent positive reforms
President Biden’s 61 Percent Tax on Wealth April 12, 2022 As 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.
How Should Wealth and Work Be Treated in the Tax Code? September 21, 2020 Joe 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.”
Where Does Kamala Harris Stand on Tax Policy? August 12, 2020 What tax policy ideas did Harris propose along the campaign trail, and how do they differ from Biden’s plan?
Details and Analysis of President Joe Biden’s Campaign Tax Plan October 22, 2020 What 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.
Analysis of Capital Gains Tax Proposals Among Democratic Presidential Candidates March 18, 2020 Joe 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.
Looking Back on Taxation of Capital Gains January 22, 2020 When considering options to eliminate the deferral advantage of capital gains taxation, a lookback charge provides a reasonable solution for taxing hard-to-value assets. However, policymakers need to understand the limitations of a lookback charge compared to both mark-to-market taxation and the current system.
Reviewing the Tax Changes in Senator Bennet’s Real Deal January 7, 2020 The “Real Deal” would increase the tax burden on saving, investing, and working in the United States, and reduce the global competitiveness of the U.S. economy.
Evaluating Mark-to-Market Taxation of Capital Gains December 17, 2019 The 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.
Comparing Capital Gains Tax Proposals by 2020 Presidential Candidates December 4, 2019 Biden, Sanders, and Warren have staked out similar plans to increase capital gains taxes on the wealthiest Americans. While all three candidates have called for taxing capital gains at ordinary income rates, the phase-in levels and top marginal tax rates vary.
Illustrating Senator Warren’s Taxes on Capital Income November 15, 2019 Taken together, these proposed tax changes would significantly raise marginal and effective tax rates and increase the cost of capital, all of which would lead to a reduced level of output and less revenue than anticipated.
Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All November 1, 2019 Elizabeth Warren released a detailed plan on how she would fund Medicare For All, proposing a wealth tax, financial transactions tax, mark-to-market taxation of capital gains income, and a country-by-county minimum tax, among other reforms.
JCT Report Shows Capital Gains are Sensitive to Taxation September 25, 2019 JCT’s report on capital gains elasticities reminds us that capital gains realizations, at least under a tax system that allows deferral, are sensitive to tax rates. Moving to mark-to-market taxation of all capital gains would remove this sensitivity by taxing capital gains annually.
Evaluating Senator Wyden’s “Mark-to-Market” Capital Gains Tax September 9, 2019 Wyden’s “mark-to-market” proposal strives to subject capital gains to the same treatment as ordinary income. While the plan resolves the “lock in effect” issue and would make the tax code more progressive, it would increase the tax burden on savers and increase tax code complexity.
Senator Van Hollen Introduces Proposal to Raise Taxes on High-Income Households July 1, 2019 Van Hollen’s proposals add to the long list of Democratic Party tax proposals that attempt to both raise additional revenue from corporations and high-income households and make the tax code more progressive and “equitable.”
An Overview of Capital Gains Taxes April 16, 2019 Capital 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.
Does Your State Have an Estate or Inheritance Tax? February 24, 2021 In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax. Twelve states and Washington, D.C. impose estate taxes and six impose inheritance taxes. Maryland is the only state to impose both. Most states have been moving away from estate or inheritance taxes or have raised their exemption levels, as estate taxes without the federal exemption hurt a state’s competitiveness.
President Biden’s 61 Percent Tax on Wealth April 12, 2022 As 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.
How Should Wealth and Work Be Treated in the Tax Code? September 21, 2020 Joe 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.”
Does Your State Have an Estate or Inheritance Tax? September 2, 2020 In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
Where Does Kamala Harris Stand on Tax Policy? August 12, 2020 What tax policy ideas did Harris propose along the campaign trail, and how do they differ from Biden’s plan?
Evidence Suggests that Tax Rates Influence Migration Decisions August 6, 2020 Individuals 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.
Details and Analysis of President Joe Biden’s Campaign Tax Plan October 22, 2020 What 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.
Reviewing the Tax Changes in Senator Bennet’s Real Deal January 7, 2020 The “Real Deal” would increase the tax burden on saving, investing, and working in the United States, and reduce the global competitiveness of the U.S. economy.
Illustrating Senator Warren’s Taxes on Capital Income November 15, 2019 Taken together, these proposed tax changes would significantly raise marginal and effective tax rates and increase the cost of capital, all of which would lead to a reduced level of output and less revenue than anticipated.
Booker’s Plan to Eliminate Step-up in Basis and Expand the Estate Tax September 27, 2019 Removing step-up in basis would encourage taxpayers to realize capital gains and it would plug a hole in the current income tax, while increasing federal revenue. Combined, however, with the estate tax, this would result in a significant tax burden on certain saving by requiring both the appreciation in and total value of transferred property to be taxed at death
Senator Van Hollen Introduces Proposal to Raise Taxes on High-Income Households July 1, 2019 Van Hollen’s proposals add to the long list of Democratic Party tax proposals that attempt to both raise additional revenue from corporations and high-income households and make the tax code more progressive and “equitable.”
Sanders’ Estate Tax Plan Won’t Likely Raise the Revenue Intended January 31, 2019 While progressivity may look appealing—particularly at a time when policymakers in Congress seem to be competing on how best to extract revenue from the wealthiest in the country—it may not raise the revenue intended.
New IRS Data Reiterates Shortcomings of the Estate Tax October 18, 2018 The estate tax’s narrow base and high rate limit its ability to generate revenue. The estate tax discourages economic growth by discouraging investment.
Lawmakers Reintroduce Bill to Protect Against Double Taxation of Financial Transactions March 3, 2021 With 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.
The Drawbacks of State Taxes on Financial Transactions January 11, 2021 Lawmakers looking to close budget shortfalls would be well-advised to consider other and more stable avenues for new revenue.
Taxes and New York’s Fiscal Crisis: Evaluating Revenue Proposals to Close the State’s Budget Gap December 8, 2020 Our new study provides a 360-degree assessment of New York’s budget crisis, analyzes proposed revenue options, and offers solutions to raise revenue without driving more taxpayers out of the state or undoing recent positive reforms
New York Stock Exchange Signals Willingness to Relocate Servers to Avoid Proposed New Jersey Financial Transaction Tax September 14, 2020 As 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.
New York and New Jersey Consider Financial Transaction Taxes July 23, 2020 Seeking new sources of funding, New York and New Jersey—two states at the heart of global financial markets—are considering financial transaction taxes.
Recent Study on Financial Transaction Taxes Understates their Economic Harm February 20, 2020 FTTs 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.
Bloomberg’s Financial Transaction Tax (FTT) Proposal Revives Bad Policy February 20, 2020 In 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.
The Impact of a Financial Transaction Tax January 23, 2020 Policymakers 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
Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All November 1, 2019 Elizabeth Warren released a detailed plan on how she would fund Medicare For All, proposing a wealth tax, financial transactions tax, mark-to-market taxation of capital gains income, and a country-by-county minimum tax, among other reforms.
No Good Options as Chicago Seeks Revenue September 17, 2019 Facing an $838 million budget shortfall, a looming pension crisis, and an aggressive spending wish list, some Chicago policymakers and activists are expressing interest in a laundry list of new and higher taxes that could, collectively, raise as much as an additional $4.5 billion a year.
Senator Van Hollen Introduces Proposal to Raise Taxes on High-Income Households July 1, 2019 Van Hollen’s proposals add to the long list of Democratic Party tax proposals that attempt to both raise additional revenue from corporations and high-income households and make the tax code more progressive and “equitable.”
Taxing Unrealized Capital Gains at Death Is Unlikely to Raise Revenue Advertised May 12, 2021 As part of the tax proposals in President Biden’s American Families Plan, unrealized capital gains over $1 million would be taxed at death. However, this policy would likely raise less revenue than advocates expect after considering the proposal’s impact on taxpayer behavior, including capital gains realizations, and historical capital gains and estate tax revenue collections.
Many Small Businesses Could Be Impacted by Biden Corporate Tax Proposals May 11, 2021 Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.
Details and Analysis of Tax Proposals in President Biden’s American Families Plan May 6, 2021 The Biden administration’s proposed American Families Plan would partially pay for about $1.8 trillion in new federal spending on education and family programs with about $661 billion in additional taxes on higher-income individuals and pass-through businesses like partnerships, sole proprietorships, and S corporations.
Tax Policy in the First 100 Days of the Biden Administration April 30, 2021 In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.
Biden’s Proposed Capital Gains Tax Rate Would be Highest for Many in a Century April 26, 2021 The Biden administration is proposing to tax long-term capital gains at ordinary income rates for high earners, which will bring the top federal rate to highs not seen since the 1920s.
Top Combined Capital Gains Tax Rates Would Average 48 Percent Under Biden’s Tax Plan April 23, 2021 The top federal rate on capital gains would be 43.4 percent under Biden's tax plan (when including the net investment income tax). Rates would be even higher in many U.S. states due to state and local capital gains taxes, leading to a combined average rate of over 48 percent compared to about 29 percent under current law.
Pandemic Highlights the Need for Better Tax Policy for Entrepreneurs and Small Businesses December 21, 2020 As 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.
President Biden’s 61 Percent Tax on Wealth April 12, 2022 As 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.
How Should Wealth and Work Be Treated in the Tax Code? September 21, 2020 Joe 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.”
New York Stock Exchange Signals Willingness to Relocate Servers to Avoid Proposed New Jersey Financial Transaction Tax September 14, 2020 As 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.
Where Does Kamala Harris Stand on Tax Policy? August 12, 2020 What tax policy ideas did Harris propose along the campaign trail, and how do they differ from Biden’s plan?
Details and Analysis of President Joe Biden’s Campaign Tax Plan October 22, 2020 What 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.
Analysis of Capital Gains Tax Proposals Among Democratic Presidential Candidates March 18, 2020 Joe 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.
Bloomberg’s Financial Transaction Tax (FTT) Proposal Revives Bad Policy February 20, 2020 In 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.
Looking Back on Taxation of Capital Gains January 22, 2020 When considering options to eliminate the deferral advantage of capital gains taxation, a lookback charge provides a reasonable solution for taxing hard-to-value assets. However, policymakers need to understand the limitations of a lookback charge compared to both mark-to-market taxation and the current system.
Analysis of Sen. Warren and Sen. Sanders’ Wealth Tax Plans January 28, 2020 New 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.
Reviewing the Tax Changes in Senator Bennet’s Real Deal January 7, 2020 The “Real Deal” would increase the tax burden on saving, investing, and working in the United States, and reduce the global competitiveness of the U.S. economy.
Comparing Capital Gains Tax Proposals by 2020 Presidential Candidates December 4, 2019 Biden, Sanders, and Warren have staked out similar plans to increase capital gains taxes on the wealthiest Americans. While all three candidates have called for taxing capital gains at ordinary income rates, the phase-in levels and top marginal tax rates vary.
Illustrating Senator Warren’s Taxes on Capital Income November 15, 2019 Taken together, these proposed tax changes would significantly raise marginal and effective tax rates and increase the cost of capital, all of which would lead to a reduced level of output and less revenue than anticipated.
Reviewing Elizabeth Warren’s Tax Proposals to Fund Medicare for All November 1, 2019 Elizabeth Warren released a detailed plan on how she would fund Medicare For All, proposing a wealth tax, financial transactions tax, mark-to-market taxation of capital gains income, and a country-by-county minimum tax, among other reforms.
Booker’s Plan to Eliminate Step-up in Basis and Expand the Estate Tax September 27, 2019 Removing step-up in basis would encourage taxpayers to realize capital gains and it would plug a hole in the current income tax, while increasing federal revenue. Combined, however, with the estate tax, this would result in a significant tax burden on certain saving by requiring both the appreciation in and total value of transferred property to be taxed at death
No Good Options as Chicago Seeks Revenue September 17, 2019 Facing an $838 million budget shortfall, a looming pension crisis, and an aggressive spending wish list, some Chicago policymakers and activists are expressing interest in a laundry list of new and higher taxes that could, collectively, raise as much as an additional $4.5 billion a year.
Evaluating Senator Wyden’s “Mark-to-Market” Capital Gains Tax September 9, 2019 Wyden’s “mark-to-market” proposal strives to subject capital gains to the same treatment as ordinary income. While the plan resolves the “lock in effect” issue and would make the tax code more progressive, it would increase the tax burden on savers and increase tax code complexity.
New Study Finds that High Tax Rates Lower the Chance of Business Survival April 29, 2019 America’s tax code distorts the economic decision-making of firms, such as the favorable treatment of debt financing over equity. This study adds to this argument while providing motivation for policymakers to focus on how reforms to tax policy can increase American entrepreneurship.
Tax Policy and Entrepreneurship: A Framework for Analysis April 3, 2019 A 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.
A High Tax Rate on Star Inventors Lowers Total Innovation February 4, 2019 Findings from a new study suggest that while a policy agenda to revive innovation must include an assortment of changes - including greater access to mentorship - tax policy matters too.
Sanders’ Estate Tax Plan Won’t Likely Raise the Revenue Intended January 31, 2019 While progressivity may look appealing—particularly at a time when policymakers in Congress seem to be competing on how best to extract revenue from the wealthiest in the country—it may not raise the revenue intended.
The Real Lesson of 70 Percent Tax Rates on Entrepreneurial Income January 29, 2019 The fall and then rise of entrepreneurial income claimed on the wealthy’s 1040 tax returns clearly tracks the seeming decline of inequality from 1950 to 1980, followed by the sudden rise in inequality since 1986. The shifting composition of income claimed by the rich due to changes in tax laws explains this illusion.
Unclear if Warren’s Wealth Tax Proposal is Constitutional January 25, 2019 There is a chance that Senator Warren’s proposed wealth tax would be found unconstitutional, but opinions are mixed and the precedents go both ways.
Sen. Warren’s Wealth Tax Is Problematic January 24, 2019 Sen. Elizabeth Warren recently proposed a wealth tax on high-net-worth individuals, a type of tax that is poorly targeted, difficult to administer, and raises constitutional questions.
Unequal Tax Treatment Is Contributing to Rising Debt Levels for Entrepreneurs December 13, 2018 A recent paper discusses two main trends related to U.S. entrepreneurs: the decrease in the number of entrepreneurs and the increase in their borrowing. Entrepreneurs have increased their debt holdings relative to their assets over the past three decades.
New Federal Reserve Paper: State Corporate Taxes Hurt Entrepreneurship January 16, 2018 For every 1 percentage point increase in a state's corporate tax rate, employment in start-up firms declines 3.7 percent, according to a recent Federal Reserve study.
State Inheritance and Estate Taxes: Rates, Economic Implications, and the Return of Interstate Competition July 17, 2017 Estate and inheritance taxes reduce investment, discourage business expansion, and sometimes drive wealthy taxpayers out of state. It's little wonder that states are under pressure to reduce or eliminate them.
Losing the Future: The Decline of U.S. Saving and Investment October 1, 2014 Saving and investment are necessary for a society to adequately provide for its future. Saving and investment have declined substantially as a percentage of GDP over the last 40 years. American private saving barely keeps pace with total government deficits. On the whole, the country saves very little. American investment barely keeps pace with depreciation; U.S. private and public capital stock and infrastructure deteriorates almost as quickly as it can be repaired or replaced with new investment.
