Individual Tax Compliance and Complexity

Return-Free Filing: A Better Fit for a Better Tax Code

Return-free filing could reduce compliance costs for many taxpayers, but would only be as good as the system it is administrating.

Here’s How Louisiana’s Tax Plan Would Simplify the Tax Code and Benefit Residents

Louisiana legislators passed a tax reform plan that has received overwhelming support in both the House and Senate, but voters will get the ultimate say on whether that plan succeeds. In light of this, it may be valuable to walk through what is included in these reforms and what effect the changes will have on taxpayers.

Simplifying the Tax Code and Reducing the Tax Gap: What Can Be Achieved?

Reducing the tax gap is, on the margin, a good way to raise revenue, but is not without costs. Policymakers should consider compliance costs for law-abiding taxpayers as well as administrative costs for the IRS when evaluating measures to reduce the tax gap.

Households Earning $75,000 or Less Paid Majority of Individual Mandate Penalties

Last month, the Supreme Court turned back a challenge to the Affordable Care Act (ACA), allowing to stand the Individual Mandate it created that penalizes taxpayers for not having proper health insurance and opening the way for President Biden and Congress to reimplement it.

Census Data Shows Households Saved Economic Impact Payments

In 2020 and 2021, Congress enacted three rounds of economic impact payments (EIPs) for direct relief to households amidst the pandemic-induced downturn. Survey data from the U.S. Census Bureau indicates that households increasingly saved their EIPs or used them to pay down debt rather than spend them.

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Unanswered Questions about Upcoming Advance Child Tax Credit Payments

Amidst the outstanding questions, potential confusion over how advanced child tax credit payments will affect tax refunds, and an incomplete portal to update taxpayer information, the IRS will begin sending payments to millions of households this month.

Exploring How Remote Work Could Impact the Way Countries Tax Individuals

A question for policymakers to consider is how this new era of worker mobility will impact the fiscal landscape, and what changes must be made to address resulting revenue and compliance concerns.

What’s in Arizona’s Tax Reform Package?

After weeks of deliberations, Arizona Gov. Doug Ducey signed into law a budget for fiscal year (FY) 2022 that reduces the state’s individual income tax rates and consolidates brackets, a plan that will help restore Arizona’s reputation as a low-tax alternative to California.

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The Impact of the Biden Administration’s Tax Proposals by State and Congressional District

The redistribution of income from the Biden administration’s tax proposals would involve many winners and losers, not only across different types of taxpayers but also geographically across the country. Launch our new interactive map to see average tax changes by state and congressional district over the budget window from 2022 to 2031. 

How the Tax Code Handles Inflation (and How It Doesn’t)

While parts of the U.S. tax code can handle inflation, full expensing of capital investment would be a major improvement along these lines.

Details and Analysis of President Biden’s FY 2022 Budget Proposals

Explore President Biden budget proposals, including tax and spending in American Jobs Plan and American Families Plan. See Biden tax and spending proposals.

Tracking the 2021 Biden Tax Plan and Federal Tax Proposals

Taxes are once again at the forefront of the public policy debate as legislators grapple with how to fund new infrastructure spending, among other priorities. Our tax tracker helps you stay up-to-date as new tax plans emerge from the Biden administration and Congress.

House and Senate Proposals Would Make Incremental Reforms to Retirement Savings

While falling short of comprehensively reforming the complex U.S. retirement savings system, House and Senate lawmakers have proposed bipartisan bills to help simplify and expand access to retirement savings accounts to more workers.

Louisiana Fiscal Session Finishes Strong with Tax Reform

It took until the last day of the session, but Louisiana lawmakers succeeded in passing a tax reform package Thursday that would simplify a complicated tax code and make the state more economically competitive.

Taxing Consumption Progressively Is a Better Way to Tax the Wealthy

Policymakers concerned about the current tax treatment of unrealized capital gains would be better off exploring policy solutions like consumption taxes rather than tried-and-failed strategies.

A Closer Look at Eliminating the AMT

In our new Options for Reforming America’s Tax Code 2.0, there are several options that would simplify the tax code, including eliminating the alternative minimum tax (AMT). While this move would remove a source of complexity, policymakers should also consider reforming the deductions that created a justification for the AMT in the first place.

Biden Proposals Would Significantly Expand Benefits Administered Through the Tax Code

The Biden administration will have to balance the desire to increase social spending through the tax code with the need to collect revenue and have a tax system that is transparent and easy to understand.

Tax Foundation Webinar Recaps the Complexities of the 2021 Tax Filing Season

During the pandemic, economic relief administered through the tax code exploded as Congress passed nearly $6 trillion of legislation into law. That left the 2021 tax filing season, which ended May 17, with complications that still linger.