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Testimony: Pennsylvania Should Respond to Inflation with Structural Tax Reforms

Note: The following is Tax Foundation testimony regarding how Pennsylvania can mitigate challenges of inflation through structural tax reforms. It was presented, by request, to the Pennsylvania House Majority Policy Committee on June 21, 2022. Good morning, Chairman Causer and Members of the Committee, My name is Timothy Vermeer, and I am a Senior Policy […]

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Carbon Taxes and the Future of Green Tax Reform

Key Findings By driving changes to the climate, carbon emissions will impose major long-term economic costs, both here in the U.S. and around the world. Carbon taxes are an option to make the market reflect future costs of carbon emissions, discouraging emissions and incentivizing development and implementation of clean technology. Carbon taxes also come with […]

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Policies Critical to Economic Recovery Set to Expire Soon

At a moment when we are seeing clear weaknesses in supply chains and needs for gearing production toward more environmentally friendly approaches, capital investment is critical. Policymakers have an opportunity to change a coming decline in investment incentives by adopting permanent policies to support growth. Expiring tax policies in major economies could create a setback […]

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Capital Cost Recovery across the OECD

Download Data Key Findings A capital allowance is the amount of capital investment costs a business can deduct from its revenue through the tax code via depreciation. Ideally, countries should provide higher capital allowances, as they can boost business investment which, in turn, spurs economic growth. The average of OECD countries’ capital allowances gradually decreased […]

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Improving Tax Treatment of Structures Offers Commonsense Way to Boost Competitiveness

While much of Washington is focused on negotiations over a government spending bill on competitiveness with China, Reps. Jackie Walorski (R-IN) and Jim Banks (R-IN) introduced a commonsense policy to boost U.S. competitiveness. The Renewing Investment in American Workers and Supply Chains Act would improve the tax treatment of investments in structures, such as factories […]

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Taxes, Tariffs, and Industrial Policy: How the U.S. Tax Code Fails Manufacturing

Key Findings Policymakers on both the left and right have brought industrial policy back into focus after slow growth over the past few decades and growing concern over the state of America’s manufacturing sector. In the context of the tax code, industrial policy usually comes in the form of non-neutral subsidies for specific industries or […]

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10 Tax Reforms for Growth and Opportunity

Key Findings The waning pandemic and robust economic recovery have come with many benefits—plentiful jobs and fast-growing (nominal) incomes—but also serious challenges such as high and rising inflation. Rather than pushing for more fiscal stimulus or leaving it to the Federal Reserve to handle inflation through higher interest rates, policymakers should focus on boosting the […]

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Taxes, Fiscal Policy, and Inflation

Consumer prices rose by 7 percent in 2021, the highest annual rate of inflation since 1982. Where did this inflation come from and what might its impacts be? Tax and fiscal policy offer important clues. Initially thought to be “transitory” and largely the result of pandemic-related supply-chain issues, many economists at the Federal Reserve and […]

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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. […]