Federal Tax

As part of congressional negotiations this week over President Biden’s $1.9 trillion coronavirus relief package, the Senate Democrats’ compromise of faster phaseout rates to be eligible for checks will create high marginal tax rates on taxpayers over a narrow range of income. This change makes the direct payments more targeted to those in need but

Corporations in the United States pay federal corporate income taxes levied at a 21 percent rate. Many states also levy taxes on corporate income. Forty-four states and D.C. have corporate income taxes on the books, with top rates ranging from North Carolina’s single rate of 2.5 percent to a top marginal rate of 11.5 percent

The United States has never had a comprehensive wealth tax, and while some European countries have them, many more have repealed wealth taxes over the past several decades. That has not deterred Sen. Elizabeth Warren (D-MA) with Reps. Pramila Jayapal (D-WA) and Brendan Boyle (D-PA) from introducing legislation to create a tax on household net

Table of Contents Key Findings President Joe Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations. The proposals are being considered to raise revenue for new spending

In December, scholars David Hope and Julian Limberg released a study with the London School of Economics (LSE) examining the economic effects of reducing tax rates for high-income individuals and corporations. The paper illustrates how overlooking an important element of the tax system—the structure of the tax base—can lead to an incomplete understanding of how

Table of Contents Key Findings The U.S. joined many other developed nations in adopting territorial provisions and anti-base erosion rules as part of the 2017 tax reform. One major piece of that reform, that is not typical in other territorial systems, is a new definition of currently taxable foreign earnings, Global Intangible Low Tax Income

The Family Security Act, recently proposed by Sen. Mitt Romney (R-UT), would replace the Child Tax Credit (CTC) with  a monthly child allowance administered by the Social Security Administration, making the benefit more generous and accessible to low-income households without earned income. The goal of the proposal is to reduce child poverty while simplifying existing

The coronavirus relief legislation passed out of the House Ways and Means Committee last week would significantly expand the child tax credit (CTC) for 2021, from its current $2,000 maximum to a fully refundable $3,600 for children 6 and under and $3,000 for children over 6. Monthly payments would be provided based on income tax

A recent report on tax revenue sources shows the extent to which the United States and other OECD countries rely on different taxes for government revenues. Policy and economic differences among OECD countries have created variances in how they raise tax revenue, with the United States deviating substantially from the OECD average on some sources

As the House Ways and Means Committee continues working on the latest round of fiscal relief amid the pandemic, one curious provision in the legislation is a tax hike on multinational companies. One section of the legislation would repeal a provision in current law that allows U.S. multinationals to choose to allocate their interest costs

Recent discussions of a proposed wealth tax for the United States have included little information about trends in wealth taxation among other developed nations. However, those trends and the current state of wealth taxes in OECD countries can provide context for this new proposal. The OECD maintains detailed tax revenue statistics going back to 1965

The House Ways and Means Democrats’ just-released proposal to expand the child tax credit for one year represents a significant expansion of benefits but comes with several administrative challenges. It would be included in President Biden’s larger $1.9 trillion in economic relief package moving through the budget reconciliation process. The Child Tax Credit (CTC) would

Sen. Mitt Romney (R-UT) this week proposed the Family Security Act, which features a new, more generous child allowance for families with children while reforming other sources of aid for low-income individuals. Romney’s plan would replace the existing Child Tax Credit (CTC), which is subject to a minimum income requirement and other limitations, with a

The Internal Revenue Service (IRS) has released data on individual income taxes for tax year 2018, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.[1] The new data shows how taxes changed in the first tax year after passage of the Tax Cuts and Jobs Act (TCJA) in December

President Joe Biden is calling for a third round of economic impact payments to households as part of his $1.9 trillion American Rescue Plan. Under the plan, the payments would be $1,400 per person, topping off the recent round of $600 payments for a combined $2,000 per person. Senate Republicans have proposed payment amounts of

Newly published data from the Internal Revenue Service (IRS) shows that the first round of economic impact payments primarily benefited households earning less than $100,000. Lawmakers passed the first round of payments under the CARES Act in March 2020 and the Treasury Department began sending payments in early April 2020. The IRS sent more than

Key Findings Joe Biden has proposed an ambitious agenda that would make the federal fiscal system more progressive, and the huge budget deficits caused by the numerous COVID-19 relief packages could heighten the call for more tax revenues. What is needed are benchmark facts to guide these debates. A recent study by the Congressional Budget

As President Joe Biden and policymakers in Congress consider changes in tax policy over the coming year, the fate of the $10,000 state and local tax (SALT) deduction cap will be an ongoing part of the policy debate. Senate Majority Leader Chuck Schumer (D-NY) has expressed interest in repealing the SALT cap, which was originally

The Biden administration has made climate change one of the core challenges it plans to address over the next four years. One climate policy lawmakers have debated—and will likely continue to do—is a carbon tax. At the same time, the new Administration will have to tackle the severe, and likely continuing, economic fallout of the

In her recent confirmation hearing, economist Janet Yellen, President Biden’s choice for Treasury Secretary, sought to reassure markets that the new administration would not raise corporate taxes until the economy improves. At the same time, however, she sent a troubling signal that when they do push for higher corporate tax rates, they would do so