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Taxes and the Economy

The research below explores the economics of tax policy and the intellectual underpinnings of our efforts to quantify tax changes using our dynamic Taxes and Growth (TAG) macroeconomic model.

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Who bears the burden of corporate taxes? Learn more about who bears the burden of the corporate income tax (who actually pays corporate taxes) and the corporate tax burden

Who Bears the Burden of Corporation Taxation? A Review of Recent Evidence

The Biden administration has pledged to not raise taxes on anyone earning less than $400,000 a year. However, the administration’s corporate tax proposals would likely violate that pledge, given that corporations are comprised of people who also might earn less than $400,000.

3 min read
Vehicle miles traveled tax VMT tax, motor fuel tax, transportation funding, highway trust fund economic impact of increased infrastructure spending

Cautionary Notes from CBO on the Effects of Federal Investment

Based on the CBO’s assessment of the economic and budgetary effects of federal investment, lawmakers should look to spur private sector investment rather than try to enact a massive federal infrastructure bill.

5 min read

Not All Taxes Are Created Equal

Discover why there are better and worse ways for governments to raise a dollar of revenue. Compare the economic impact of the three basic tax types—taxes on what you earn, buy, and own—including three specific taxes within each category. Learn about the basics of “dynamic scoring,” one tool economists can use to compare the economic and revenue impact of different tax policies.

The Tax Foundation’s Taxes and Growth Model

In an attempt to provide a realistic, data-driven analysis of federal tax policy, the Tax Foundation has developed a General Equilibrium Model to simulate the effects of tax policies on the economy and on government revenues and budgets.

6 min read
Corporate tax incidence, dynamic scoring

Measuring Marginal Tax Rate on Capital Assets

This study demonstrates how Tax Foundation’s TAG model calculates the weighted average METRs for different capital assets in the corporate and noncorporate sectors. The high marginal rates of up to 53 percent in the corporate sector illustrate why there is an urgent need for business tax reform.

12 min read