Federal lawmakers re-introduced the MORE Act, the most significant federal legislative development on marijuana policy in 50 years. The MORE Act would impose a federal excise tax on marijuana at a rate from 5 to 8 percent.
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The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.
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There’s a useful contrast between two revenue options related to President Biden’s infrastructure push. The president’s American Jobs Plan includes a proposal to raise the corporate tax rate to 28 percent. Meanwhile, historically, the gas tax is the main revenue source for transportation funding.
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Economic research and Tax Foundation modeling indicate there is a negative trade-off between progressive taxes on capital income—such as the wealth tax, minimum book tax on corporate income, and a higher corporate tax rate—and economic growth.
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President Biden’s choice to fund new spending programs with increased corporate taxes comes with trade-offs for American output and incomes.
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The economic evidence shows that travelers and tourists are sensitive to price changes for rental cars and adjust their behavior to avoid the tax, harming state economies and the travel sector right as the industry is trying to recover from the effects of the coronavirus pandemic.
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Traditionally, revenue dedicated to infrastructure spending has been raised through taxes on motor fuel, license fees, and tolls, but revenue from motor fuel has proven less effective over the last few decades.
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Imposing the rental car excise tax on peer-to-peer car sharing would be a move in the wrong direction by expanding a costly and distortive tax for visitors whose business will help Texans recover post-pandemic.
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Although Tax Day has been pushed back this year, mid-April is still a good occasion to take a look at tax collections in the United States. Because differing state populations can make overall comparisons difficult, today’s state tax map shows state and local tax collections per capita in each of the 50 states and the District of Columbia.
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Lawmakers would be well-advised to consider changes to the federal excise tax on sports betting if the industry is to be successful competing against the large illicit market for wagers.
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Several states are considering introducing or increasing taxes on vapor products to make up declining tax revenue from traditional tobacco products or to fill budget holes in the wake of the coronavirus pandemic. However, lawmakers should approach the issue carefully because flawed excise tax design on vapor products could drive consumers back to more harmful combustible products like cigarettes.
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In West Virginia, both Senate Republicans and Gov. Justice have offered proposals for reductions to the state’s income tax. In both of the proposals, excise taxes on tobacco and nicotine products are part of the pay-fors that are supposed to make up revenue lost due to lower income tax rates.
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The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation. New York recently became one of the latest states to legalize it. Join us as we dive into the complex world of marijuana taxation and explain how policymakers should approach designing such taxes.
An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China.
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The economics is clear: If Biden wants to maximize the economic benefits of his $3 trillion in new infrastructure spending, he should cut $3 trillion in other government spending to pay for it.
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The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation.
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States which forgo income taxes have seen population and economic growth vastly outstripping their peers, and a post-pandemic culture that is friendlier to remote work will greatly enhance tax competition.
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Policymakers should be very cautious about relying too heavily on excise tax increases to pay down tax reductions elsewhere. Ideally, revenue offsets would come from more stable, broader-based revenue sources.
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Marijuana, betting, soda, ride-sharing—over the last decade, the excise tax family has grown significantly and it’s more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.
Limiting addiction to nicotine is a laudable goal, but lawmakers should exercise caution with the methods employed. Using gross receipts taxes on businesses to effectively levy an excise tax introduces complexity to an already flawed tax design. It is better to let the excise tax internalize externalities and the business tax raise general revenue.
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