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State Tax Changes Effective January 1, 2022

Key Findings Twenty-one states and the District of Columbia had significant tax changes take effect on January 1, 2022 Five states (Arizona, Arkansas, Louisiana, North Carolina, and Oklahoma) cut individual income taxes effective January 1. The District of Columbia was the only jurisdiction to increase income taxes. Four states (Arkansas, Louisiana, Nebraska, and Oklahoma) saw […]

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Why Washington State Can’t Claim Its Capital Gains Tax Is an Excise Tax

When is an income tax an excise tax? And for that matter, what exactly is an excise tax? The fate of Washington’s capital gains tax, currently in litigation, rests at least in part on the answer to these questions. By way of background, Washington’s supreme court has repeatedly held that the state’s constitution functionally prohibits […]

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2022 Tax Brackets

See 2021 Tax Brackets On a yearly basis the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflation to prevent what is called “bracket creep.” Bracket creep occurs when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in […]

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Lawmakers Consider Untested and Complex Policies to Fund Reconciliation Bill

Tax reform should simplify the tax code. Instead, Congress is debating new ways to raise revenue that would make the tax code more complex and more difficult to administer. The new proposals—imposing an alternative minimum tax on corporate book income, applying an excise tax on stock buybacks, levying a surcharge on higher earners, and, at […]

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State Tax Ballot Measures to Watch on Election Day 2021

Election Day will be a modest affair in 2021, perhaps a welcome respite from the inflamed politics of recent years. Despite few statewide races, however, voters in some states will decide important questions by ballot measure. Of particular note, through 10 ballot measures across four states—Colorado, Louisiana, Texas, and Washington—voters will decide significant questions of […]

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The Rich Are Not Monolithic and Taxing Their Wealth Invites Tax Collection Volatility

Congressional Democrats are reported to be weighing a special tax on the assets of billionaires to raise revenues to pay for their Build Back Better spending plan. There are two fundamental challenges to such a plan. First, the incomes and wealth of such individuals are anything but stable; they rise and fall with the economy […]

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As Inflation Rises, So Will Tax Bills in Many States

Inflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power. This phenomenon is called “bracket creep,” and it’s far creepier than the décor beginning to pop up in people’s front yards as we enter […]

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Proposed Top Combined Marginal Capital Gains Tax Rate Would Be Third-Highest in OECD

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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History of Attempted Changes to Step-Up in Basis Shows Perilous Road Ahead

As Congress considers President Biden’s proposal to tax unrealized capital gains at death, the history of previous efforts suggests it faces a perilous road ahead. Lawmakers must resolve tricky design and implementation details that derailed past attempts to change how capital gains are treated when assets are passed from one generation to the next. Under […]

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U.S. Corporate Income Faces Third-Highest Integrated Tax Rate in OECD Under Ways and Means Plan

Under the House Ways and Means tax plan, the United States would tax corporate income at the third-highest integrated tax rate among rich nations, averaging 56.6 percent. The integrated tax rate reflects the two layers of tax that apply to income earned through corporations: the entity-level corporate income tax and the shareholder-level capital gains and […]