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Net Operating Loss Provisions: State Treatment and the Economic Benefits

Key Findings Well-designed Net Operating Loss (NOL) provisions benefit the economy by smoothing business income, which mitigates entrepreneurial risk and helps firms survive economic downturns. Forgoing tax revenue in the short term affords businesses the opportunity to prioritize human and physical capital investment. Start-ups and industries with profits highly correlated to the business cycle are […]

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U.S. Fiscal Response to COVID-19 Among Largest of Industrialized Countries

As the Omicron variant continues to sweep through the world, it is possible there will be renewed talks of fiscal support if economic growth declines. For this reason, it is worth reviewing how various countries responded to the pandemic over the past two years. One thing stands out: The U.S. fiscal response was among the […]

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Norway’s New Budget Adds Unnecessary Complexity

Norway’s new center-left government that took power on October 14 has set out its 2022 budget proposals, amending the 2022 budget proposal announced last month by the outgoing conservative government. The new budget comes with several tax cuts and a handful of tax hikes. While the new proposal cuts indirect taxes by $270 million it […]

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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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States Have $95 Billion to Restore their Unemployment Trust Funds—Why Aren’t They Using It?

Key Findings States have paid out $175 billion in unemployment benefits since the start of the pandemic, with the federal government providing an additional $660 billion. Taking debt into account, state trust funds now have a negative aggregate balance of -$11 billion and are $115 billion shy of minimum adequate solvency levels. States are authorized […]

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COVID-19 Tax Relief Added to Increasing Share of Households Paying No Income Tax

On Wednesday, the Tax Policy Center (TPC) released estimates on the portion of households with no federal income tax liability, finding that in 2020, about 60.6 percent of households did not pay income tax, up from 43.6 percent of households in 2019. Much of the 2020 increase was due to pandemic-related factors, but the growing […]

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The Bipartisan Infrastructure Plan Avoids Tax Increases, Undermines User-Pay Principle, and Misses Chance to Modernize Obsolete Programs

The Senate has begun deliberations over a bipartisan plan to provide $550 billion in new spending for a wide range of infrastructure projects, including roads, bridges, public transit, broadband, and the electrical grid. The good news is that lawmakers avoided raising taxes to cover the cost of the new spending and instead used some reasonable […]

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Census Data Shows Households Saved Economic Impact Payments

In 2020 and 2021, Congress enacted three rounds of economic impact payments (EIPs) for direct relief to households amidst the pandemic-induced downturn. Survey data from the U.S. Census Bureau indicates that households increasingly saved their EIPs or used them to pay down debt rather than spend them. While the data indicates that debt and saving became more common uses […]

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Insights from the UN World Investment Report for Global Tax Reform

The United Nations (UN) recently released its annual “World Investment Report,” which shows the dramatic fall in global foreign direct investment (FDI) caused by the COVID-19 crisis. A partial recovery is expected for 2021, with the most optimistic scenario showing a return to 2019 FDI levels by 2022. However, uncertainty remains high, with the ongoing […]

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Ohio Lawmakers Agree on Income Tax Cuts and Remote Work Tax Relief

A rosy revenue outlook has allowed Ohio to join eight other states (Arizona, Idaho, Iowa, Louisiana, Montana, Nebraska, New Hampshire, and Oklahoma) in providing tax relief this legislative session. The legislature agreed on a two-year budget ahead of today’s deadline, and the budget is now awaiting Gov. Mike DeWine’s (R) signature. It includes individual income […]