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How Will Build Back Better Impact Inflation?

Last week, the Bureau of Labor Statistics (BLS) announced that prices had risen 6.2 percent in the year up to October 2021, the fastest rate since 1990. The persistently high inflation in recent months has made some lawmakers question the need for additional deficit spending. In the short term, the Build Back Better Act (BBBA) […]

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CBO Report on R&D and Tax Policy in the Pharmaceutical Industry

The importance of research and development (R&D) spending by the pharmaceutical industry and its resulting innovations is clearer than ever as millions of people are getting vaccinated against COVID-19. In a new report, the Congressional Budget Office (CBO) analyzes federal policies that influence R&D spending in the pharmaceutical industry. The report highlights how taxes affect […]

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Joint Committee on Taxation Data Shows Federal Tax System Is Progressive

The Joint Committee on Taxation (JCT) recently released data on taxes paid at various levels of income, indicating the federal tax system is progressive, consistent with similar analysis by the Congressional Budget Office (CBO), and the Organisation for Economic Co-operation and Development (OECD). The JCT found that the bottom 50 percent of taxpayers faced an […]

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Financing Infrastructure Spending with Corporate Tax Increases Would Stunt Economic Growth

The Biden administration’s American Jobs Plan (AJP) proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, […]

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Testimony: Tax Fairness, Economic Growth, and Funding Government Investments

Note: The following is the testimony of Scott A. Hodge, President of the Tax Foundation, prepared for the Senate Finance Committee (Subcommittee on Fiscal Responsibility and Economic Growth of the Committee on Finance) for a hearing on April 27, 2021, titled, “Creating Opportunity Through a Fairer Tax System.” Table of Contents Thank you, Madame Chairman, […]

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Latest CBO Report on Incomes and Taxes Shows that the Federal Fiscal System is Very Progressive

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 […]

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Congressional Budget Office Releases 2017 Data on Household Income and Tax Burdens

Last week, the Congressional Budget Office (CBO) published an updated analysis of the distribution of American households’ income and tax burdens for 2017. The new CBO data reinforces existing trends in household income and tax burdens, showing that the federal tax system is progressive and incomes continued to rise in 2017 as part of the […]

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CBO Releases New Long-term Budget Outlook

This week, the Congressional Budget Office (CBO) released its extended baseline projections, an annual update of what federal deficits, debt, spending, and revenues would look like over the next 30 years if current laws remain unchanged. These latest projections take into account the effects of the coronavirus pandemic and resulting economic disruption on revenues and […]