Federal tax collections are approaching the highest levels in U.S. history set during World War II and again during the dot-com bubble in 2000. Meanwhile, federal spending in FY 2022 was over 25 percent of GDP—a level only exceeded during the height of the pandemic in 2020 and 2021, and during World War II.
4 min read
Repealing LIFO, as some policymakers have proposed, is not sound policy. LIFO helps firms avoid the penalty on inventory investment created by FIFO and is neither a targeted tax break nor a subsidy (as some opponents suggest).
17 min read
President Biden proposed a 7-point hike in the corporate tax rate to 28 percent, a new minimum book tax on corporate profits, and higher taxes on international activity. We estimated these proposals would reduce the size of the economy (GDP) by 1.6 percent over the long run and eliminate 542,000 jobs.
6 min read
Some tax ballot initiatives will be straightforward, some will be complex, and—let’s be honest—some will be a drafting nightmare.
5 min read
The Inflation Reduction Act primarily uses carrots, not sticks, to incentivize reductions in carbon emissions. It creates or expands tax credits for various low- or no-emission technologies, rather than imposing a generalized penalty for emissions, such as a carbon tax.
5 min read
For many years, the UK has adopted a strikingly ungenerous approach to capital cost recovery – the ability of firms to write off investment against tax. This has coincided with consistently low levels of business investment. The super-deduction, which has temporarily made the UK tax system much more supportive of capital investment in plant and machinery is set to expire.
34 min read
The Section 232 tariffs on imports of steel and aluminum raised the cost of production for manufacturers, reducing employment in those industries, raising prices for consumers, and hurting exports.
14 min read
Carryover tax provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
4 min read
The Inflation Reduction Act created numerous tax subsidy programs intended to accelerate the transition to a greener economy.
8 min read
If ever there was a paycheck protection program, defending people from bracket creep may be the most important one ever designed.
6 min read
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
29 min read
In a pattern that has become all too common in recent decades, the newly enacted Inflation Reduction Act (IRA) added yet another layer of complexity to an already complex and burdensome federal tax code.
9 min read
Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules.
6 min read
The Senate has begun debate on the so-called Chips bill, which would provide $52 billion in grants and $24 billion in tax credits to supposedly strengthen the production of semiconductors in the U.S.
3 min read
Policymakers should continue to focus on longer term impacts rather than emphasizing the short-term stimulus effects of tax cuts.
3 min read
While the global minimum tax gets much attention in the media, there is another significant piece to the deal.
6 min read
Academic research indicates foreign direct investment (FDI) is highly responsive to the corporate effective tax rate (ETRs); that is, the tax rate after accounting for all deduction and credits available to corporations.
3 min read
Policymakers from both parties in Harrisburg have proposed reducing Pennsylvania’s 9.99 percent corporate net income tax (CNIT) rate but could not agree on an approach—until now. With the enactment of HB 1342 lawmakers finally succeeded in cutting what had been the second highest state corporate tax rate in the nation.
7 min read
Given the state’s strong budget surplus and projected continued revenue growth, Wisconsin is in a prime position to enact pro-growth reforms to improve the state’s competitive standing for decades to come.
54 min read