Federal Tax

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 of revenue. Different taxes create different economic impacts, so policymakers should always consider how tax revenue is raised and not just how much is raised. This

When the Trump administration imposed tariffs on various imports in 2018, the stated purpose was to boost U.S. industries and punish foreign exporters. But rather than hurting foreign exporters, the economic evidence shows it is American firms and consumers hardest hit by the Trump tariffs. The tariffs resulted in higher prices for a wide variety

Boosting American industry is a policy objective shared by many lawmakers and is a key issue at debate in the Build Back Better Act as well as other year-end legislation. Missing from the debates is how the tariffs put in place by the Trump administration, and largely maintained by the Biden administration, are negatively affecting

President Biden’s Build Back Better agenda has changed several times in the past few months. In September, the House Ways and Means Committee released a draft that included $3.5 trillion in spending and tax credits, paired with roughly $2.1 trillion in tax increases (resulting in a net tax increase of about $1 trillion). On October

One way employees can be compensated for their work, in addition to wages, salaries, and benefits, is through awards of company stock. The tax treatment of stock-based compensation has received attention for contributing to the gap between corporate taxable income and book income reported on financial statements, which President Biden has proposed targeting with a

In an effort to raise revenue, House Democrats have proposed increasing federal tobacco taxes and creating a new tax on other nicotine products in the Build Back Better Act. While the proposed increase on cigarettes is dramatic, it is relatively simple: an additional dollar per pack of 20 cigarettes. On the other hand, simplicity is

One way to put the House Build Back Better Act’s tax increases in historical context is to compare them to previous tax increases as a share of gross domestic product (GDP). Compared to previous tax changes, this House tax plan would impose the largest gross tax increase since President Lyndon Johnson’s tax hike to help

Last week, The New York Times reported that in opposing corporate or individual income tax increases, Senator Kyrsten Sinema (D-AZ) has pushed other Senate Democrats, such as Senator Ron Wyden (D-OR), to consider a carbon tax to finance some of the infrastructure package. A carbon tax would be a less economically harmful pay-for than either

Under the House Ways and Means tax plan, the United States would tax corporate income at the third-highest integrated tax rate among rich nations, averaging 56.6 percent. The integrated tax rate reflects the two layers of tax that apply to income earned through corporations: the entity-level corporate income tax and the shareholder-level capital gains and

Key Findings Policymakers 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. Generally, if a provision is broadly available and helps to eliminate the double taxation of saving, or broadly contributes to a consumption tax base, it is sound

The latest version of the Biden Build Back Better agenda, released last week by the House Ways and Means committee (see our estimates of the budgetary, economic, and distributional impacts), is dense, with too many provisions to flesh out completely. Here’s a rundown of the good, the bad, and the ugly of it. The Good

The International Tax Competitiveness Index has been used to compare the tax systems of OECD countries since 2014. At that time, the United States ranked 28th out of 36 countries in the Index. Following the 2017 tax reform, the rank improved dramatically, to 20th, and the U.S. now ranks 21st. The legislation put forward by

House Democrats’ newly released $3.5 trillion tax legislation includes a tax increase on tobacco, nicotine, and vapor products levied on tobacco manufacturers. But ultimately it would fall heavily on tobacco consumers—many of the group that earns less than $400,000 that President Biden pledged would not see a tax increase. According to the Joint Committee on

Sen. Ron Wyden (D-OR) has introduced a series of proposals that may be considered in the budget reconciliation process, including two bills that would change the tax treatment of financial services: derivatives and carried interest. Notably, both proposals would enact “mark-to-market” taxation for derivatives and carried interest, which could be a precursor to broader taxation

The technological advancements that allowed many employees to work from home and patients to seek medical care remotely throughout the COVID-19 pandemic would have been impossible without earlier investments in research & development (R&D). Likewise, thanks to decades of R&D in the pharmaceutical industry and the resulting technological breakthroughs, nearly every adult in the United

President Biden has proposed increases to corporate taxes as part of the fiscal year 2022 budget proposal. Using Tax Foundation data on how these tax proposals would impact each congressional district, we isolate the corporate changes to see which districts would have the largest change in tax liability over the next ten years if the

The Tax Foundation is pleased to submit comments on the cannabis excise tax provisions of the Cannabis Administration and Opportunity Act (CAOA). Tax Foundation is a nonpartisan, nonprofit research organization that has monitored fiscal policy at all levels of government since 1937. As a Section 501(c)(3) nonprofit, nonpartisan organization, we take no position on any

Key Findings: The Tobacco Tax Equity Act would double taxes on cigarettes and equalize rates on all other tobacco and nicotine products to match the new higher cigarette rate. The increase would result in substantial increases on chewing tobacco (2,034 percent), pipe tobacco (1,651 percent), and snuff (over 1,677 percent). Vapor products, which are not

As policymakers consider using the budget reconciliation process to make tax changes and enact new spending programs, they may be inclined to add to an already growing list of temporary tax provisions. New temporary tax policy should be avoided in reconciliation. Temporary policy creates uncertainty for taxpayers and scheduling more expirations will add to the

Increasing tax compliance is a major part of the Biden administration proposal to raise revenue for physical and social infrastructure. Reducing the tax gap—the difference between taxes owed and taxes paid—is a good way to raise revenue, but it doesn’t come without trade-offs, and it’s important to go about it in the right way. Point