Sens. Kevin Cramer (R-ND) and Christopher Coons (D-DE) have recently introduced a bill laying the groundwork for a possible solution to the problem: a tax on the carbon content of imports. But it falls short of the optimal approach in several ways.
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By extending bonus depreciation and introducing neutral cost recovery, the RSC budget would significantly improve the treatment of investment leading to increased growth, expanded employment, and higher wages.
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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.
6 min read
Lawmakers should avoid delivering social and economic benefits through the tax code whenever possible and work to simplify or repeal the tax expenditures already in the tax code.
7 min read
The current tax treatment of R&D expenses is irrational, complicated, and counterproductive. Fortunately, fixing this problem is a bipartisan issue.
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As the UTPR is a new concept, it is worth explaining what it is and why Rep. Smith cares about it. In a sentence, the Undertaxed Profits Rule (UTPR) is a looming extraterritorial enforcement mechanism for a tax base the U.S. has not adopted.
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Making expensing permanent is especially important now, when the economy is threatened with a recession and inflation remains high.
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Legislation currently advancing in Louisiana—related to the franchise tax, inventory tax, and corporate rebate and exemption programs—would make the state’s tax code simpler and more competitive.
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The Pennsylvania Senate Finance Committee recently advanced two bills, SB 345 and SB 346, that would build on last year’s historic corporate net income tax (CNIT) reform.
7 min read
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.
14 min read
Rather than continue down the path of growing debt, lawmakers should craft a comprehensive solution. International experience cautions against tax-based fiscal consolidations, but modest tax increases may be part of a successful debt reduction package.
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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.
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As Minnesota lawmakers consider making theirs the first state to mandate worldwide combined reporting, they are relying on a revenue estimate that is—this may not be the technical term—completely bogus.
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Permanent full expensing is an efficient and neutral tax policy that will allow markets to allocate private investment effectively while moving the economy towards the climate goals of the EU.
33 min read
By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.
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One of the arguments in favor of the FairTax is that it would do a better job of taxing the underground economy than the income tax it is intended to replace.
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In our latest report, we consider several theoretical arguments for carbon taxes and the evidence from carbon taxes implemented around the world related to emissions, economic growth, distribution and revenue recycling options, other environmental taxes, green subsidies, and environmental regulations.
49 min read
Individual income tax rates can influence location decision-making, especially in an era of enhanced mobility, where it is easier for individuals to move without jeopardizing their current job, or without limiting the scope of their search for a new one.
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When a country has a broad base with a simple and transparent tax code, small rate changes have little influence. Therefore, policymakers shouldn’t only focus on rate changes when it comes to increasing tax competitiveness.
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As policymakers in St. Paul finalize this year’s tax bill, they should avoid policies that incentivize the diversion or relocation of capital. Importantly, states do not institute tax policy in a vacuum. The evidence from states’ experiences and the academic literature supports the conclusion that tax competitiveness matters not just to businesses but to human flourishing.
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