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A Holiday Tradition: Tax Extenders Slated to Expire at End of 2021

It’s that time of year when we review which items of the tax code are scheduled to expire or otherwise change in just a few days. An eclectic group of temporary tax policies approach their expiration dates, but at the last minute typically hitchhike onto must-pass legislation for another temporary extension. Not so this year, […]

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Patching Spain’s Tax Code Won’t Attract Investors

Three years after its initial announcement, Spain’s government has given a green light to the “start-up law” and sent it to parliament. The bill that could be approved by mid-2022 is part of the reform package that Spain and the European Commission agreed upon in order for Spain to receive the European Union recovery funds. […]

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Aligning Kentucky’s Tax Code for Growth

Executive Summary Overview Tax reform has been on Kentucky lawmakers’ minds for years, and while significant progress has been made recently, substantial work remains to be done. In 2018, the General Assembly made important strides in creating a more neutral, pro-growth tax structure even while generating a net increase in revenue. With its reduction in […]

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Bonus Depreciation Helps Disadvantaged Workers, Study Finds

One concern that some lawmakers and academics share is whether policies that incentivize investments in capital, such as full expensing or bonus depreciation, may hurt workers by encouraging firms to automate. A new paper casts doubt on that concern and finds the opposite—low-skilled workers are most helped by policies that encourage capital investments because those […]

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Pro-Growth Tax Reform for Oklahoma

Executive Summary Overview Oklahoma policymakers have been focused on tax reform for many years, always keeping an eye on the state’s neighbor to the south. Legislators succeeded in reducing rates for both individual and corporate income taxes, but Oklahoma is far from alone in this pursuit. In an increasingly mobile economy, states are rightly becoming […]

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Fixing Tax Treatment of Capital Investments Could Improve Supply Chain Resiliency

The breakdown of supply chains both domestically and worldwide currently dominates headlines. One strong explanation of supply chain failures is the dramatic increase in federal spending throughout the pandemic—raising aggregate demand—combined with the COVID 19-era shift of consumption from services to physical goods. That, coupled with preexisting issues that limit the ability of our ports […]

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What’s Next for Tax Competition?

The recent agreement on a global minimum tax and other changes to tax rules around the world have called into question the future of tax competition. It is difficult to anticipate how tax competition will ultimately be impacted by these changes, although I seriously doubt that the usefulness of Tax Foundation’s International Tax Competitiveness Index […]

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Three Reasons Why Full Cost Recovery Is Right Even if Assets Increase in Value

Critics of depreciation deductions for business expenses in the tax code occasionally argue that assets that can go up in value, like structures or sports teams, should not receive the same depreciation deductions as assets that decline in value. That criticism is driven by a deeper dispute over whether businesses should be taxed on the […]

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Policymakers Offer Proposals to Fix Three Upcoming Tax Changes

Three upcoming tax law changes scheduled by the 2017 Tax Cuts and Jobs Act (TCJA) to help offset its revenue losses would be canceled by proposed legislation that would prevent the tax treatment of investment from worsening over the coming years. Three Upcoming Tax Increases on Investment Policy Timing Requirement to amortize R&D expenses over […]

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Expensing Is Infrastructure, Too

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be […]