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.
The Tax Foundation uses and maintains a General Equilibrium Model, known as our Taxes and Growth (TAG) Model to simulate the effects of government tax and spending policies on the economy and on government revenues and budgets.
9 min read
The Tax Foundation models tax policy using our proprietary Taxes and Growth model, illustrating the economic, revenue, and distributional impacts of different changes to the federal tax code. We’ve recently implemented improvements to the model that have been underway for the past several years, and we will be detailing them further in our forthcoming model methodology update.
4 min read
Lawmakers should use the most comprehensive analytical tools available to them—like dynamic scoring—to make informed decisions about policy changes.
5 min read
Recent empirical evidence shows that workers bear upwards of 70 percent of the corporate income tax burden, much more than popular tax models claim, which make errors in how they account for super-normal returns and the openness of our economy.
50 min read
Some tax hikes are more damaging than others, according to Congressional Budget Office (CBO) and new Tax Foundation economic modeling.
5 min read
Short FormEconomics isn’t just a course with supply and demand graphs and a quirky usage of “guns and butter.” It’s a discipline focused on incentives and responses, and we can see its impact all around us, shaping our world and our choices.
3 min read
The debt limit is one of Congress’s few chances to debate unsustainable borrowing, and reforms should create more room for bipartisan deficit reduction, not less.
6 min read
A new paper shows raising top income tax rates on the current tax base may not yield as much revenue as previously estimated, due to opportunities to shift income to different tax bases within the tax code.
5 min read
If we want to ensure that AI raises economic growth, we shouldn’t be pursuing tax policies that are stuck in the past and represent some of the worst ideas from the early internet age.
As scrutiny over data center investment and AI rises, some commentators are concerned about how expensing interacts with these ongoing investments. Most of these concerns misunderstand what expensing does.
5 min read
The federal government’s debt burden and interest on the debt are near record levels and headed higher, raising legitimate concerns about an eventual debt crisis. Given the increasingly dysfunctional budget process, the most viable option on the table to stave off such a crisis is a statutory bipartisan fiscal commission with buy-in from leaders of both parties.
6 min read
Economists and journalists have been pointing to a labor share of income series from the Bureau of Labor Statistics (BLS) as evidence that capital is taking an ever-increasing slice of the economic pie. But a closer look at the national income accounts shows a different story.
7 min read
The Tax Foundation uses and maintains a General Equilibrium Model, known as our Taxes and Growth (TAG) Model to simulate the effects of government tax and spending policies on the economy and on government revenues and budgets.
9 min read
AI may be a transformative technology, but that is not a good justification for throwing core principles of tax policy out the window.
What do beards, chickens, and windows have in common? Surprisingly, taxes.
Short FormWhen you hear about tax policy, you may think of the IRS, the agency responsible for collecting federal taxes. But who is responsible for drafting, reviewing, assessing, and passing tax legislation at the federal level?
4 min read
Contrary to the president’s promises, the tariffs will cause short-term pain and long-term pain, no matter the ways people and businesses change their behavior.
5 min read
The Tax Foundation models tax policy using our proprietary Taxes and Growth model, illustrating the economic, revenue, and distributional impacts of different changes to the federal tax code. We’ve recently implemented improvements to the model that have been underway for the past several years, and we will be detailing them further in our forthcoming model methodology update.
4 min read
While tariffs are often presented as tools to enhance US competitiveness, a long history of evidence and recent experience shows they lead to increased costs for consumers and unprotected producers and harmful retaliation, which outweighs the benefits afforded to protected industries.
If lawmakers are serious about pro-growth policies and fiscal responsibility, they will need to put policies forward that achieve those goals. Simply adjusting the baseline doesn’t reduce actual deficits in the coming years.
7 min read
Using tariff policy to reallocate investment and jobs is a costly mistake—that’s a history lesson we should not forget.
6 min read
Estimating the economic effects of different types of taxes informs policymakers about the trade-offs of raising revenue in a given way.
5 min read
The gap between statutory rates and average effective tax rates for personal income tax in the European Union varies significantly, affecting the efficiency and simplicity of the tax system.
32 min read
Lawmakers should prioritize creating a tax system that supports investment more broadly rather than subsidizing specific industries and allowing broad, neutral pro-investment provisions to expire.
3 min read
Lawmakers should simplify the tax code so that taxpayers can understand the laws and the IRS can administer them with minimum cost and frustration.