Individual and Consumption Taxes

Watch: Economic Recovery After Coronavirus

What are the best tax policies to encourage a smooth transition and strong economic recovery? How should goals of economic recovery and growth be balanced with revenue needs?

Legal Sports Betting One Step Closer in Ohio

EU: The Next Generation

The European Commission announced new budget plans including loans, grants, and some revenue offsets. The proposals follow other support mechanisms for workers and businesses that were designed in response to the Covid-19 pandemic and economic shutdown.

To What Extent Does Your State Rely on Property Taxes?

Lessons from Alberto Alesina for U.S. Lawmakers

Alesina’s work suggests that raising taxes to reduce the federal deficit and national debt would be an economic mistake. The less economically damaging path is to cut spending, what some have called austerity policies.

In Some States, 2020 Estimated Tax Payments Are Due Before 2019 Tax Returns

To prevent confusion and to ensure taxpayers receive the full benefit of the extended federal deadline, states should consider extending first- and second-quarter estimated tax payment due dates to July 15 or later.

Tax Relief for Families in Europe

Most countries provide tax relief to families with children—typically through targeted tax breaks that lower income taxes. While all European OECD countries provide tax relief for families, its extent varies substantially across countries.

To What Extent Does Your State Rely on Sales Taxes?

Consumption taxes, like sales taxes, are more economically neutral than taxes on capital and income because they target only current consumption.

HEROES Act Dependent Expansions Come with Major Drawbacks

The HEROES Act adds to the confusion and instability already inherent in the tax code with multiple expiring provisions and reduced filing guidelines.

HEROES Act Temporarily Increases Dependent Credit Generosity

The HEROES Act would make notable expansions to all three dependent-related credits, increasing maximum credit amounts, refundability, and income eligibility phaseouts. Practically, this means that certain filers could expect to receive a larger refund for each additional hour of work, eligible dependent, and dependent care expenses if the bill became law.

Breaking Down State and Local Aid under the SMART Act

The SMART Act, sponsored by Senators Bob Menendez and Bill Cassidy and Rep. Mikie Sherrill, would provide $500 billion in flexible funding to state and local governments.

HEROES Act First Bid to Provide Phase 4 Relief for Businesses and Individuals

The HEROES Act, the $3 trillion relief package proposed by House Democrats, is the first bid to provide additional phase 4 aid for businesses and individuals amid the coronavirus pandemic.

The U.S. Tax Burden on Labor, 2020

Although the U.S. has a progressive tax system and a relatively low tax burden compared to the OECD average, average-wage workers still pay about 30 percent of their wages in taxes.

To What Extent Does Your State Rely on Individual Income Taxes?

While the current crisis has caused consumption to drop dramatically, it is generally true that income taxes are more volatile than consumption taxes in an economic downturn and income taxes tend to be more harmful to economic growth than consumption taxes and property taxes.

Under the HEROES Act, State Budgets Could Soar as the Economy Suffers

The HEROES Act, proposed by House Democrats as a next round of fiscal relief during the coronavirus outbreak, contains about $1.08 trillion in aid to states and localities. That would bring the pandemic total to $1.63 trillion—an amount so large that it might overwhelm their ability to spend it and could reward fiscal irresponsibility.

How the HEROES Act Would Allocate State and Local Aid for Coronavirus Relief

The HEROES Act would provide more than $1 trillion to state and local governments. Here’s how funding would be distributed and provisional estimates of how much aid each state would receive.

A Comparison of the Tax Burden on Labor in the OECD, 2020

A higher tax burden on labor often leads to lower employment rates and wages. That’s important for policymakers to remember as they look for ways to help their economies recover from coronavirus-induced shutdowns. If their goal is to encourage employment, policies that lower the tax burden on labor could prove a powerful tool.

California the Latest to Propose Higher Vapor Taxes

Designing a State and Local Government Relief Package

The COVID-19 pandemic and accompanying economic downturn will wreak havoc on state and local tax revenues, with projections of a 15-20 percent decline in state revenues. Our new report provides a framework for how to design an effective state and local relief package.

Alabama, Missouri Bills Would Exempt CARES Relief from Income Tax Calculation

Alabama and Missouri are considering excluding the CARES Act Economic Impact Payments from being taxed and exclude them from state income tax calculations.