The Surprising Regressivity of Grocery Tax Exemptions
Exempting groceries from the sales tax base reduces economic efficiency without achieving its objective of enhancing tax progressivity.
19 min readExempting groceries from the sales tax base reduces economic efficiency without achieving its objective of enhancing tax progressivity.
19 min readPolicymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.
50 min readBy reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.
40 min readWell-designed Net Operating Loss (NOL) provisions benefit the economy by smoothing business income, which mitigates entrepreneurial risk and helps firms survive economic downturns.
24 min readTwenty-one states and D.C. had significant tax changes take effect on January 1, including five states that cut individual income taxes and four states that saw corporate income tax rates decrease.
17 min readStates are unprepared for the ongoing shift to remote and flexible work arrangements, or for the industries and activities of today, to say nothing of tomorrow. In some states, moreover, existing tax provisions exacerbate the impact of high inflation and contribute to the supply chain crisis.
40 min readOur new study identifies a number of deficiencies in Oklahoma’s tax code and outlines possible solutions for reform that would create a more neutral tax code and encourage long-term growth in the state.
6 min readA well-structured tax code (that’s both competitive and neutral) is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
40 min readTaxes and fees on the typical American wireless consumer increased again this year, to a record 24.96 percent.
32 min readPolicymakers should carefully analyze tax expenditures before categorizing one as a loophole—some tax expenditures are important structural elements of the tax code while others are unsound.
14 min readGiven the restrictions on the use of federal relief funding, and the significantly higher tax burdens on employment that will result if trust funds are not replenished, applying federal aid to these trust funds should be an urgent priority.
10 min readThe Biden administration’s international tax proposals would impose a 7.7 percent surtax on the foreign profits of U.S. multinationals, resulting in a net increase in profit shifting out of the U.S.
60 min readReducing 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.
33 min readAlthough state budgets may be in unusual places this year, sales tax holidays remain the same as they always have been—ineffective and inefficient.
3 min readAs states close their books for fiscal year 2021, many have much more revenue on hand than they anticipated last year. Eleven states have responded by reducing income tax rates and making related structural reforms as they strive to solidify a competitive advantage in an increasingly competitive national landscape.
29 min readFrom a policy perspective it is appropriate to combat base erosion and profit shifting, but policymakers need to keep in mind the need for simplicity to avoid increasing the compliance burden on taxpayers and administrative burdens on tax authorities.
68 min read