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History of Attempted Changes to Step-Up in Basis Shows Perilous Road Ahead
As Congress considers President Biden’s proposal to tax unrealized capital gains at death, the history of previous efforts suggests it faces a perilous road ahead. Lawmakers must resolve tricky design and implementation details that derailed past attempts to change how capital gains are treated when assets are passed from one generation to the next.
4 min read
U.S. Corporate Income Faces Third-Highest Integrated Tax Rate in OECD Under Ways and Means Plan
Under the House Ways and Means tax plan, the United States would tax corporate income at the third-highest integrated tax rate among rich nations, averaging 56.6 percent.
3 min read
Federal Judge Rules Against ARPA’s Tax Mandate
Kentucky and Tennessee won an important legal victory Friday when a federal court ruled that the American Rescue Plan Act (ARPA)’s restrictions on state fiscal autonomy were unconstitutional and enjoined (blocked) the enforcement of those provisions against both states.
7 min read
Latest White House Report Tells Incomplete Story on Average Tax Rates for Wealthy
The White House Council of Economic Advisors (CEA)’s recent report estimates the average federal individual income tax rate for the top 400 wealthiest households in the U.S to be 8.2 percent, lower than typically estimated for top earners.
4 min read
2021 Spanish Regional Tax Competitiveness Index
The Spanish Regional Tax Competitiveness Index allows policymakers, businesses, and taxpayers to evaluate and measure how their regions’ tax systems compare and serves as a road map for policymakers to reform their tax systems and make their regions more competitive and attractive for entrepreneurs and residents.
7 min read
Federal Tobacco Tax Proposal Could Result in 50% Increase in State Taxes
The potential federal tax increase of over 1,600 percent on dipping tobacco as a result of the House Democrats’ proposal could result in state taxes and retail prices increasing by more than 50 percent in certain states.
4 min read
Yes, the U.S. Tax Code Is Progressive
As Congress considers several tax proposals designed to raise taxes on high-income earners, it’s worth considering the distribution of the existing tax code.
2 min read
Top Tax Rate on Pass-through Business Income Would Exceed 50 Percent in Most States Under House Dems’ Plan
Under the House Democrats’ reconciliation plan, the top tax rate on pass-through business income would exceed 50 percent in most states. Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses and majority of private sector employment in the United States.
3 min read
House Tobacco Proposals Defy Biden’s Tax Pledge and Undermine Harm Reduction Efforts
House Democrats’ newly released $3.5 trillion tax legislation includes a tax increase on tobacco, nicotine, and vapor products levied on tobacco manufacturers. But ultimately it would fall heavily on tobacco consumers—many of the group that earns less than $400,000 that President Biden pledged would not see a tax increase.
6 min read
What If We Taxed Churches?
Whether spurred by a belief that government is improperly favoring religious institutions, an antipathy to wealthy celebrity pastors, or a hope that taxing houses of worship could bring down personal tax bills, the taxation of religious bodies is hotly debated online, but barely on the radar of actual elected officials. But is that true? How much, if any, tax revenue is forgone, and what do the policies look like?
7 min read
Tax Reform and Infrastructure Investment: The Two Theories
The Biden administration does have a point about how some components of the infrastructure bill could put downward pressure on inflation in the long term. However, the taxes chosen to pay for those investments would counteract those effects, by reducing investment and productivity growth.
4 min read
Reviewing Wyden’s Reconciliation Tax Policy Proposals
Congressional lawmakers are putting together a reconciliation bill to enact much of President Biden’s Build Back Better agenda. Many lawmakers including Senate Finance Committee Chair Ron Wyden (D-OR), however, want to make their own mark on the legislation.
5 min read
Wyden’s Financial Services Tax Proposals Would Put “Mark-to-Market” to the Test
Mark-to-market is not simple to implement, as it involves new administrative and compliance challenges for taxpayers. Mark-to-market levies tax on phantom income, requiring some taxpayers to engage in some degree of liquidation, ultimately suppressing incentives to save and invest. The limited tax revenues that could result from these proposals are not worth the risk.
5 min read
Temporary Policies Complicate the Child Tax Credit’s Future
Over the next ten years, the structure of the Child Tax Credit (CTC) is scheduled to change, complicating efforts to extend enhanced CTC benefits or reform the CTC for the long-term. Rather than take an all-or-nothing approach or kick the can down the road by relying on temporary expansions, lawmakers could consider alternative options that better target low-income households, retain work incentives, reduce the impact on federal revenue, and provide taxpayers with a stable, consistent tax code.
8 min read
Cigarette Taxes in Europe
Ireland and France levy the highest excise duties on cigarettes in the EU, at €8.42 ($9.60) and €6.61 ($7.53) per 20-cigarette pack, respectively. This compares to an EU average of €3.34 ($3.80). Bulgaria (€1.81 or $2.06) and Poland (€2.08 or $2.37) levy the lowest excise duties.
2 min read
Tax Foundation Comments to the Cannabis Administration and Opportunity Act
Taxes will play an important role in the success or failure of federal cannabis reform. Since the federal government is late to the party, it should proceed with caution when imposing new taxes.
24 min read
Property Taxes by County, 2021
The six counties with the highest median property tax payments all have bills exceeding $10,000—Bergen, Essex, and Union Counties in New Jersey, and Nassau, Rockland, and Westchester counties in New York. All six are near New York City, as is the next highest, Passaic County, New Jersey ($9,881).
3 min read