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IMF Tax Proposals: Shrink Inequality or Sink Post-Pandemic Recovery?

Countries face twin economic challenges with the COVID-19 pandemic: maintain fiscal support to businesses that have been affected by the pandemic and prepare for an uneven and uncertain economic recovery, and work towards budgetary stability and reduce the risks associated with growing public debt. However, moving too fast towards budgetary stability either through tax hikes […]

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How High Are Vapor Taxes in Your State?

Several states are considering introducing or increasing taxes on vapor products to make up declining tax revenue from traditional tobacco products or to fill budget holes in the wake of the coronavirus pandemic. However, lawmakers should approach the issue carefully because flawed excise tax design on vapor products could drive consumers back to more harmful […]

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14.8% Individual Income Tax and 16.1% Corporate Income Tax Coming To New York City?

Ten months into New York’s just-ended fiscal year (most recent data), state tax revenue was actually up year-over-year. By a miniscule amount—it’s probably best to see FY 2021 revenue as essentially flat—but up nonetheless, it’s a curious backdrop for a proposal to raise both individual and corporate income taxes. If a tentative budget agreement goes […]

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ARPA’s Tax Cuts Limitation Is a Problem for More States Than You Think

What do Alabama, Kansas, Nebraska, Rhode Island, and South Dakota have in common? They’re the only states that did not adopt or implement some sort of tax cut in 2019 or 2020, based on NCSL tables on new revenue negative tax provisions (43 states) and Tax Foundation research on the implementation of previously-adopted phased tax […]

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President Biden’s Infrastructure Plan Raises Taxes on U.S. Production

Was this page helpful to you? Thank You! The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work? Contribute to the Tax Foundation Share This Article! Let us know how we can better serve you! […]

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ARPA Allocates $2 Billion to Nonexistent County Governments

The government of Hartford County, Connecticut is in line to receive $173 million in local aid under the American Rescue Plan Act (ARPA). There’s only one problem: the government of Hartford County doesn’t exist, nor do any of Connecticut’s other counties have county-level government despite being allocated a collective $691 million under the bill. The […]

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Does Your State Levy a Capital Stock Tax?

This week’s map looks at another barrier to business and consumer recovery: state capital stock taxes. These taxes impair economic growth in the best of times, but during an economic contraction they are particularly harmful to businesses struggling to remain viable. As many businesses may need time to return to profitability after the pandemic crisis, states should prioritize reducing reliance […]

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How the CARES Act Shifted the Composition of Tax Expenditures Towards Individuals

In November 2020, the Joint Committee on Taxation (JCT) released its annual report on expenditures in the tax code, showing a total of almost $1.8 trillion in 2020, up from $1.5 trillion in 2018. Much of that roughly $1.8 trillion was due to tax relief provided by the CARES Act—and reflect the policy choice to […]

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A Neutral Tax Code Counts Unemployment Compensation as Taxable Income

During the pandemic, implementation issues in some states resulted in underwithholding income tax due on enhanced unemployment benefits, and surprise tax bills, for many jobless workers. For instance, in California, when workers opted to withhold 10 percent of their unemployment compensation for taxes, that only applied to state benefits and not enhanced federal benefits. The […]

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The EU Determined to Reform the Business Tax

The European Union (EU) recently launched a consultation to reform the EU business tax system, which the European Commission considers is ill-equipped to face the challenges posed by globalization, climate change, digitalization, and population aging. This consultation could lead to proposals for taxes that raise general funds for the EU rather than individual member states. […]