Research

State Tax Changes as of July 1, 2019

State Throwback and Throwout Rules: A Primer

The “Cadillac” Tax and the Income Tax Exclusion for Employer-Sponsored Insurance

The Cadillac tax offers one way that policymakers can work to rein in our tax code’s subsidization of the health-care industry, which has increased the price of health-care services.

Summary and Analysis of the OECD’s Work Program for BEPS 2.0

From a broad standpoint, agreement at the OECD will require countries to give up some measure of their own tax sovereignty on policies they have designed to minimize the distortionary effects of the corporate income tax. Over the years tax competition has led to some countries adopting policies that are attractive to businesses because they have a more neutral rather than distortionary approach to taxing corporate income. This project could directly undermine that progress by introducing new levels of complexity and distortion that would ultimately have a negative impact on global trade and growth.

Switzerland Referendum Approves Tax Reform

Modernizing Utah’s Sales Tax: A Guide for Policymakers

By almost any measure, Utah is, and deserves to be, the envy of its peers. Utah leads the country in job growth, and the state’s economy has grown at twice the rate of the nation at large. Utah’s income tax reforms adopted in 2007 established a model for other states to follow. But today, some of these gains are being undone—not by conscious policy choices, but by their absence.

Measuring Opportunity Zone Success

The U.S. Tax Burden on Labor, 2019

A Comparison of the Tax Burden on Labor in the OECD, 2019

The Earned Income Tax Credit (EITC): A Primer

New Details on the Austrian Tax Reform Plan

Anti-Base Erosion Provisions and Territorial Tax Systems in OECD Countries

The U.S. decision to adopt a territorial tax system is certainly an improvement over having a worldwide system. However, in moving to a territorial system some of the new features created with the TCJA increased the complexity of the system.

An Analysis of Senator Warren’s ‘Real Corporate Profits Tax’

Sen. Elizabeth Warren introduced a 7 percent surtax on corporate profits called the “Real Corporate Profits Tax.” We estimate that this tax would reduce the incentive to invest in the United States, and result in a 1.9 percent smaller economy, a 3.3 percent smaller capital stock, and 1.5 percent lower wages. The surtax would raise $872 billion between 2020 and 2029 on a conventional basis and $476 billion on a dynamic basis. The tax would make the tax code more progressive, but it would fall on taxpayers in every income group.

An Overview of Capital Gains Taxes

Capital gains taxes create a burden on saving because they are an additional layer of taxes on a given dollar of income. The capital gains tax rate cannot be directly compared to individual income tax rates, because the additional layers of tax that apply to capital gains income must also be part of the discussion.

The Alternative Minimum Tax Still Burdens Taxpayers with Compliance Costs

Although Congress intended the AMT to be a tax on wealthy taxpayers, for much of its history it has subjected middle-income taxpayers in high-tax states to heavy compliance burdens. TCJA reforms that have increased the AMT’s exemption and exemption phaseout threshold will shield some taxpayers from the AMT through 2025, but the number of taxpayers impacted will increase in 2026 when the TCJA’s individual income tax reforms expire.

Tax Policy and Entrepreneurship: A Framework for Analysis

A key element of America’s dynamism problem is a drop in entrepreneurship. Removing tax barriers for entrepreneurs would improve America’s dynamism while making America’s tax code more neutral, efficient, and simple for all taxpayers.

Capital Cost Recovery across the OECD, 2019

Capital cost recovery, though often overlooked, can have a significant impact on investment decisions—with far-reaching economic consequences.

Reforming Rental Car Excise Taxes

The growing number of options that travelers have for rental cars, including peer-to-peer car-sharing arrangements, is an opportunity for policymakers to revisit the policy rationale for these discriminatory taxes.

Tax Treatment of Worker Training

Testimony: Temporary Policy in the Federal Tax Code

Tax policy can increase the size of the economy by having a positive impact on the incentives to work and invest. However, when tax policy is temporary or retroactive, these positive effects are muted, and policies do not effectively incentivize the intended activity.