The House Budget Committee has released a budget resolution that specifies large reductions in both taxes and spending over the next decade, paving the way to extend the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially cut other taxes.
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As Republicans look for ways to offset the budgetary cost of extending the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and potentially enacting other tax cuts, the latest estimates indicate several trillion dollars could be raised by reducing tax credits and other preferences in the tax code.
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Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
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As we prepare for the tax code’s “move,” it’s time to start cleaning out the proverbial attic of our messy system. For the sake of our economy, moves toward growth must win the day.
Fiscal pressures are likely to weigh heavily on lawmakers as they craft a tax reform package. That increased pressure could result in well-designed tax reform that prioritizes economic growth, simplicity, and stability, or it could encourage budget gimmicks and economically harmful offsets. Lawmakers should avoid the latter.
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Spain’s central government could learn some valuable lessons from its regional governments and other European countries about sound tax policy.
7 min read
Even though energy prices have declined from their recent peak, the United Kingdom is one of the few countries in Europe continuing to rely on windfall profits taxes to support households with the rising cost of living.
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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We estimate Trump’s proposed tariffs and partial retaliation from all trading partners would together offset more than two-thirds of the long-run economic benefit of his proposed tax cuts.
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Spain’s central government is considering making its windfall taxes on energy companies and the banking sector permanent.
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While federal tax collections—especially corporate taxes—have reached historically high levels, these gains have not kept pace with escalating spending, particularly on debt interest, leading to a substantial and concerning budget deficit in FY24.
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As the geopolitical scene continues to change, policymakers in Europe should focus on lowering effective marginal tax rates to drive much-needed investment and long-term economic growth.
6 min read
Focusing on competitiveness, neutrality, and efficient policies to raise revenue would go a long way in increasing economic growth and stabilizing public finances over the long term.
7 min read
Estimating the economic effects of different types of taxes informs policymakers about the trade-offs of raising revenue in a given way.
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Growing levels of waste and pollution, paired with increasing burdens on taxpayers to address environmental problems, have spurned policymakers in the US and abroad to encourage producers to be responsible, either financially or operationally, for the end-life of their products.
34 min read
The stakes for next year’s expiring tax provisions are quite high. If Congress does nothing, then 62 percent of households will see their taxes go up in January of 2026.
The flawed design of these windfall profits taxes has created problems in countries that implemented them.
4 min read
Rather than pursuing temporary policies, policymakers should implement long-term, pro-growth tax reforms that stimulate economic activity and incentivize energy diversification by supporting private investment through full expensing.
19 min read
If lawmakers are convinced that new revenues must be part of any long-term effort to solve the budget crisis or offset the cost of extending the TCJA, they must choose the least harmful ways of raising new revenues or else risk undermining their efforts by slowing economic growth.
7 min read
Gas and diesel taxes continue to be prominent policy issues throughout Europe. As the EU undergoes sweeping changes for its green transition, fuel taxes are likely to be a crucial aspect of policy discussions.
3 min read