The Tax Foundation’s Center for Federal Tax Policy takes a quantitative approach to analyzing the economic, budgetary, and distributional impact of important campaign, legislative, and other popular tax proposals using our General Equilibrium Model, known as our Taxes and Growth (TAG) Model.
The mission of our economic and tax modeling program is to educate lawmakers and the public about the key trade-offs in tax policy, the real-world impact of those trade-offs on taxpayers and our economy, and the best options for achieving principled and pro-growth tax reform.
The Tax Foundation uses and maintains a General Equilibrium Model, known as our Taxes and Growth (TAG) Model to simulate the effects of government tax and spending policies on the economy and on government revenues and budgets.
9 min read
The Tax Foundation models tax policy using our proprietary Taxes and Growth model, illustrating the economic, revenue, and distributional impacts of different changes to the federal tax code. We’ve recently implemented improvements to the model that have been underway for the past several years, and we will be detailing them further in our forthcoming model methodology update.
4 min read
This tax reform plan would boost long-run GDP by 2.5%, grow wages by 1.4%, and add 1.3M jobs, all while collecting a similar amount of tax revenue as the current code and reducing the long-run debt burden.
38 min read
Policymakers should have two priorities in the upcoming economic policy debates: a larger economy and fiscal responsibility. Principled, pro-growth tax policy can help accomplish both.
21 min read
A robust collection of 70 potential US tax reform changes and US tax reform options for reforming the tax code. See the comprehensive tax reform guide.
Lawmakers should use the most comprehensive analytical tools available to them—like dynamic scoring—to make informed decisions about policy changes.
5 min read
Short FormEconomics isn’t just a course with supply and demand graphs and a quirky usage of “guns and butter.” It’s a discipline focused on incentives and responses, and we can see its impact all around us, shaping our world and our choices.
3 min read
The debt limit is one of Congress’s few chances to debate unsustainable borrowing, and reforms should create more room for bipartisan deficit reduction, not less.
6 min read
A new paper shows raising top income tax rates on the current tax base may not yield as much revenue as previously estimated, due to opportunities to shift income to different tax bases within the tax code.
5 min read
If we want to ensure that AI raises economic growth, we shouldn’t be pursuing tax policies that are stuck in the past and represent some of the worst ideas from the early internet age.
Nearly half of all hospitals are exempt from paying US corporate income taxes. As healthcare spending rises, lawmakers have questioned whether hospitals are providing as much in community benefits as they derive from tax exemptions.
11 min read
As scrutiny over data center investment and AI rises, some commentators are concerned about how expensing interacts with these ongoing investments. Most of these concerns misunderstand what expensing does.
5 min read
The federal government’s debt burden and interest on the debt are near record levels and headed higher, raising legitimate concerns about an eventual debt crisis. Given the increasingly dysfunctional budget process, the most viable option on the table to stave off such a crisis is a statutory bipartisan fiscal commission with buy-in from leaders of both parties.
6 min read
Economists and journalists have been pointing to a labor share of income series from the Bureau of Labor Statistics (BLS) as evidence that capital is taking an ever-increasing slice of the economic pie. But a closer look at the national income accounts shows a different story.
7 min read
The Tax Foundation uses and maintains a General Equilibrium Model, known as our Taxes and Growth (TAG) Model to simulate the effects of government tax and spending policies on the economy and on government revenues and budgets.
9 min read
It is good to see senators talking about the Social Security crisis that is rapidly unfolding. But any serious proposal has to grapple with the trade-offs of different reforms and accept that the fix will come from both sides of the ledger: taxes and expenditures.
5 min read
With nearly 2 million US jobs tied to trade with Canada and Mexico, stalling renewal — or withdrawing outright — would compound tariff uncertainty at exactly the wrong time.
6 min read
AI may be a transformative technology, but that is not a good justification for throwing core principles of tax policy out the window.
Publicly held debt is projected to rise to a new record high of 106 percent of GDP within the next four years and continue to rise to 120 percent by 2036 and 175 percent by 2056.
8 min read
This study simulates several large tax increases and consistently finds that even tax increases large enough to close the primary deficit in the near term will lose ground over time and fail to put the debt on a sustainable course.
41 min read
The evidence overall paints a far different picture than American Compass presents, and a consistent theoretical framework undercuts its assertions of how tariffs should be expected to impact the economy moving forward.
25 min read
One year after “Liberation Day,” evidence shows President Trump’s tariffs were not reciprocal, did not generate the promised investment boom, raised less revenue than projected, and contributed to higher prices.
7 min read
Senators Chris Van Hollen (D-MD) and Cory Booker (D-NJ) have each introduced proposals aimed at cutting taxes for lower- and middle-income taxpayers and raising them on high-income taxpayers.
9 min read
The tariffs now in effect threaten to offset much of the GDP growth from the tax cuts, while falling short of paying for them.
3 min read
Notably, the OBBBA makes permanent the individual tax changes first put in place by the TCJA, which avoids a tax hike on an estimated 62 percent of tax filers in 2026.
4 min read
The pass-through business sector—including partnerships, S corporations, and sole proprietorships—employs most of the private-sector workforce in the US and accounts for about half of US business income.
34 min read