In the United States, individual income taxes (federal, state, and local) are the primary source of tax revenue, followed by social insurance taxes (including payroll taxes for Social Security and Medicare), consumption taxes, property taxes, and corporate income taxes.
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Our experts are providing the latest details and analysis of proposed federal tax policy changes.
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Our preliminary analysis finds the tax provisions increase long-run GDP by 0.8 percent and reduce federal tax revenue by $4.0 trillion from 2025 through 2034 on a conventional basis before added interest costs.
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Republicans have advanced legislation to extend many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) alongside dozens of new provisions. Any comprehensive tax legislation is going to have its wrinkles, and the “One, Big, Beautiful Bill” is no different.
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Developed countries raise tax revenue through individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes—the combination of which determines how distortionary or neutral a tax system is.
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For owners of pass-through businesses, the reconciliation package (1) raises the state and local tax (SALT) deduction cap, (2) denies the benefit of pass-through entity-level taxes that had previously worked around the SALT cap for such pass-through businesses, and (3) increases the Section 199A deduction for qualifying pass-through entities.
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Letting the SALT cap slip further upwards would undercut the TCJA’s long-term legacy, worsening the fiscal outlook of the tax package and providing an unneeded benefit to higher earners.
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We break down the House GOP’s One, Big, Beautiful Bill—a sweeping tax package designed to extend key parts of the 2017 Tax Cuts and Jobs Act before they expire in 2026.
According to the latest economic data from the US Census Bureau, the average per capita state and local tax burden is $7,109. However, collections vary widely by state, reflecting differences in tax rates and bases, natural resource endowments, the scale and scope of taxable economic activity in each state, and residents’ political preferences.
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Pairing permanent TCJA individual tax cuts with new limits on business SALT deductions would shrink the economy, reduce American incomes, and increase the federal budget deficit, undermining the policy goals of TCJA permanence.
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As Congress debates expensing and other policies impacting business investment, lawmakers should consider the importance of business investment in research and development (R&D) as a driver for economic growth. Recent studies suggest that the economic benefits of R&D spending are even greater than previously understood.
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Does your state have a small business exemption for machinery and equipment?
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President Trump has repeatedly floated the idea of entirely replacing the federal income tax with new tariffs. Recently, he has said that when tariff revenues come in, he will use them to replace or substantially cut income taxes for people making under $200,000.
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Without businesses as their taxpayers and tax collectors, governments would not have the resources to provide even the most basic services.
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One area of the tax code in which extreme complexity and low compliance go hand-in-hand—and where reform is desperately needed—is in states’ nonresident individual income tax filing and withholding laws.
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The flat tax trend is gaining momentum nationwide, and Missouri lawmakers are right to identify income tax rate reductions as particularly pro-growth.
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Short FormThe better we understand taxes, the better we can manage our finances, but it starts with familiarizing ourselves with basic tax concepts like how tax brackets work.
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The trend of tax exemptions on tips, overtime, and bonuses may sound like a win for workers, but it is a shortsighted fix with long-term drawbacks.
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Twenty-four out of the 35 European countries covered in this map currently levy estate, inheritance, or gift taxes.
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With a wealth tax, property tax increases, and this new payroll tax on the agenda, Washington lawmakers have reason to fear that many employers could be looking for the exits.
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