Top Personal Income Tax Rates in Europe, 2023
Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) have the highest top statutory personal income tax rates among European OECD countries.
2 min read
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Sources of Government Revenue in the OECD, 2023 Update
Designing tax policy in a way that sustainably finances government activities while minimizing distortions is important for supporting a productive economy.
5 min read
Local Income Taxes: A Primer
Most states avoid municipal income taxes for good reason. These taxes are more volatile and less economically competitive than other forms of taxation available to local governments, and add substantial complexity for governments and taxpayers alike.
23 min read
A Look at Local Income Taxes
Levied in thousands of cities, counties, school districts, and other localities, local income taxes are often used to either lower other taxes (like property taxes) or raise more revenue for local services. While they may make sense on paper, local income taxes come with more challenges than other local revenue sources.
State Individual Income Tax Rates and Brackets, 2023
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
9 min read
Deteriorating Federal Budget to Run $1.4 Trillion Deficit in 2023, CBO Projects
Immediately balancing the $20 trillion budget shortfall would take drastic, unwanted policy changes. Instead, lawmakers should target a more achievable goal, such as stabilizing debt and deficits with an eye toward comprehensive tax reform that can produce sufficient revenue with minimal economic harm.
4 min read
State of the Union Reaction 2023
President Biden shared his policy aspirations during the State of the Union address, outlining three tax proposals in his remarks: quadrupling the brand-new excise tax on stock buybacks, instituting a “billionaire minimum tax,” and extending the now-lapsed expanded Child Tax Credit. We discuss the prospects of major tax changes becoming law in a divided government and what these proposals signal about how President Biden thinks about tax policy as he enters the latter half of his first term.
Will the Federal Government Tax Your State Tax Rebate?
If your state issued tax rebates last year, you might have to pay federal income tax on the rebate you received. Maybe. Who knows? Unfortunately, not the IRS—at least not yet.
5 min read
Fair Tax FAQ
The FairTax is a proposal to replace all major sources of the federal government’s revenue—the individual income tax, corporate income tax, estate and gift taxes, and payroll tax—with a national sales tax and rebate, abolishing the IRS in the process.
7 min read
Georgia Should Reinforce Its Tax Reform Intentions
By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.
3 min read
Frustration and Delays as the 2023 Tax Filing Season Begins
A combination of long-standing IRS operational deficiencies, the agency’s temporary closure due to the pandemic, and the now-expired pandemic relief produced a perfect recipe for a paper backlog.
4 min read
State Tax Changes Taking Effect January 1, 2023
Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.
20 min read
Improved Tax Treatment of Saving Included in Year-End Federal Spending Deal
The year-end omnibus federal spending package makes a number of reforms to retirement savings accounts.
3 min read
The Efficiency of State Administration of Local Taxes
The logic that has prevailed for local sales taxes should apply equally to other taxes that localities impose on multijurisdictional businesses, including local tourism taxes. The evidence is clear that central administration of local taxes reduces compliance costs without sacrificing local revenue.
15 min read
Do Unto Others: The Case for State Income Tax Reciprocity
Remote and flexible work opportunities are here to stay, whether states like it or not. With enhanced opportunities to take their job with them wherever they please, more workers can factor tax burdens into their decision of where to live.
15 min read
Shaky Economic and Fiscal Outlook Requires Stable and Pro-Growth Tax Extenders Policy
Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.
6 min read
Comparing Europe’s Tax Systems: Individual Taxes
France’s individual income tax system is the least competitive among OECD countries. France’s top marginal tax rate of 45.9 percent is applied at 14.7 times the average national income. Additionally, a 9.7 surtax is applied to those at the upper end of the income distribution. Capital gains and dividends are both taxed at comparably high top rates of 34 percent.
2 min read
Putting a Face on America’s Estate Tax Returns
While supporters of the federal estate tax may be correct that only a fraction of estate tax returns eventually pays the estate tax, IRS data shows that it disproportionately impacts estates tied to successful privately owned businesses. Thus, it acts as a second or third layer of federal tax on these successful businesses over the owners’ lifetime.
9 min read
Spain’s Race to the Bottom in the International Tax Competitiveness Index
Since 2020, Spain has dropped from 26th to 34th on the International Tax Competitiveness due to multiple tax hikes, new taxes, and weak performances in all five index components.
7 min read
A Flat Tax in Wisconsin Can Deliver Tax Relief for Everyone
With increases to the standard deduction, a flat tax could provide a net tax cut to taxpayers of all income levels, providing both short-term and long-term relief to taxpayers across the income spectrum. It would also simplify the tax code in ways that encourage greater investment and economic growth, particularly by ensuring that the marginal rate on small business investment is competitive with peer states.
4 min read