Individual Income and Payroll Taxes

Wealth Taxes in Europe, 2026

Wealth taxes not only collect little revenue and create legal uncertainty, but an OECD report argues that they can also disincentivize entrepreneurship, harming innovation and long-term growth.

Overview of the Tax Foundation’s General Equilibrium Model

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.

Uncapping the Payroll Tax Would Be the Largest Tax Increase in Decades—and Still Wouldn’t Save Social Security

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.

US Has Most Progressive Tax System in OECD, New Index Shows

A study from the Fraser Institute finds the US tax code is highly progressive relative to other OECD countries.

Reform UK Proposal to Exempt Overtime from Income Tax Sounds Appealing but Is Highly Flawed

The Reform UK proposal to exempt overtime pay from income tax—framed as a “hard work bonus”—may be politically appealing, but it’s a flawed idea that undermines economic fairness, distorts labor markets, and jeopardizes tax revenues.

Targeting High Earners is Misguided and Will Worsen States’ Fiscal Positions

Policies that increase the tax burden on high earners makes states less competitive, increase revenue volatility, discourage investment, and risk accelerating outmigration of talent and capital. Many top-earners are already leaving high-tax states for Florida, North Carolina, and other low-tax jurisdictions.

The Risks the Wealth Tax Advocates Are Ignoring

Voters in California this fall will have to determine whether the state will institute a billionaire tax. Advocates of this proposal have been pushing for these kinds of money grabs for decades—and their arguments often run the same. The base is narrow, the lifespan is limited, the cause is sympathetic.

Don’t Blame the Messenger—the CBO—for Our Current Fiscal Problems

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.

Mid-Year Movers and the California Wealth Tax

If approved by voters, the wealth tax will face a flurry of serious legal challenges—some to its overall constitutionality, and some regarding who can be taxed and to what degree if the tax survives broader legal scrutiny.

Tax Trigger Happy: Design Hits and Misses in Georgia, South Carolina, and West Virginia

A well-designed tax trigger can be a highly valuable tool for lawmakers seeking both tax reform and revenue stability. States should embrace established baselines adjusted for inflation, use collections instead of projections as benchmarks, and prioritize contributions to their rainy day funds.

Arkansas Cuts Income Tax Rates for the Fourth Time in Four Years

During a recent special session called by Gov. Sarah Huckabee Sanders (R), Arkansas policymakers cut the state’s top individual and corporate income tax rates, continuing Arkansas’s years-long tax reform streak and making the Razorback State one of five states to cut income taxes so far in 2026.

State and Local Tax Collections Per Capita by State, 2026

Tax collections vary widely by state, making per capita collections figures—a measure of collections per person—especially useful, as they allow comparisons across differences in tax rates and bases, economic capacities, and policy decisions that impact the size and scope of government.

Testimony: A High-Earner Surtax Would Hurt Rhode Island’s Small Businesses

The economic literature overwhelmingly finds that an income tax increase of this magnitude would negatively affect economic growth and opportunity in Rhode Island.

Minnesota Should Learn from Europe: Wealth Taxes Are a Failed Experiment

A new bill introduced in the Minnesota House seeks to tax non-real assets, imposing an annual tax of 1 percent on “taxable wealth” exceeding $10 million for individuals and trusts from tax year 2026 onward.

The State Race for Wealth Taxes Will Fail. Just Ask Europe.

These debates are often framed in terms of fairness. Raise taxes on a few to provide benefits for most, the thinking goes. But in policy, the more important question should focus on mechanics: will this change achieve its stated goal?

Can Tax Reform Solve the Debt Problem—or Just Slow It?

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. 

Minnesota Should Not Pay for Bad Tax Policy with More Bad Tax Policy

A pair of bills introduced in the Minnesota House—HF 3954 (overtime) and HF 3955 (tips)—would further erode the state’s tax climate by exempting certain overtime pay and tip income from Minnesota’s income tax.

Testimony: Illinois “Millionaire’s Tax” Would Hurt Small Businesses, Exacerbate Outmigration

Illinois’ proposed Millionaire’s Tax would raise taxes on Illinois families and businesses in an economically damaging way, further harming the state’s competitiveness and reducing economic opportunity even for those Illinois residents who would not owe the tax directly.

Flat Tax

Tax Burden on Labor in Europe, 2026

To make the taxation of labor more efficient, policymakers should understand their country’s tax wedge and how their tax burden funds government services.