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Minimum Book Tax: Flawed Revenue Source, Penalizes Pro-Growth Cost Recovery

As the U.S. Senate races to consider the Inflation Reduction Act (IRA), a centerpiece of the proposed tax increases is the 15 percent minimum book tax on corporate income for firms earning over $1 billion, making up about 60 percent of the net revenue in the IRA. The minimum book tax puts one of the […]

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Reminder that Corporate Taxes Are the Most Economically Damaging Way to Raise Revenue

In the rush to pass the Inflation Reduction Act, which features an ill-conceived tax on the book income of U.S. corporations, it is worth reminding policymakers of a well-established finding in the economic literature: that among all the major ways to raise revenue, increasing the corporate tax is the most economically destructive due to its […]

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Details & Analysis of the Senate Inflation Reduction Act Tax Provisions

Preliminary Revenue and Economic Estimates Net Revenue Long-run GDP Wages FTE Jobs Source: Tax Foundation General Equilibrium Model, July 2022. Last-week’s Democrat-sponsored Inflation Reduction Act (IRA), successor to the House-passed Build Back Better Act of late 2021, has been touted by President Biden to, among other things, help reduce the country’s crippling inflation. Using the […]

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How Does Inflation Reduction Act Minimum Tax Compare to Global Minimum Tax?

Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules. Before getting too far into the weeds, it […]

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2022 Sales Tax Holidays: Bad Policy Any Year, But Especially in Response to High Inflation

Key Findings Seventeen states will hold a sales tax holiday in 2022, down from a peak of 19 in 2010 and unchanged from last year. Sales tax holidays do not promote economic growth or significantly increase consumer purchases; the evidence (including a 2017 study by Federal Reserve researchers) shows that they simply shift the timing […]

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3 Observations on the CBO Long-Term Budget Outlook

As the reality of a second quarter of negative economic growth settles in Washington, the Congressional Budget Office (CBO) released its own sobering report on the government’s long-term finances. The CBO long-term budget outlook report shows widening deficits over the next three decades as both federal spending and tax revenues are expected to rise above […]

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Indiana Should Use Surplus to Expedite Rate Cuts, Index Exemptions for Inflation

With the Indiana General Assembly gaveled in this week for a special session called by Gov. Eric Holcomb (R), one of the issues is how to allocate portions of the $6.1 billion budget surplus for the fiscal year that ended June 30. The House, Senate, and governor agree that some of the extra revenue should […]

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Taxes and the Tory Leadership Election

The Conservative Party in the United Kingdom is in the process of determining its new leader as Prime Minister Boris Johnson exits the stage. The new Conservative Party leader will be the next UK Prime Minister. The process has narrowed the field to two candidates: former Chancellor of the Exchequer Rishi Sunak and Foreign Secretary Liz […]

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Push for Higher Taxes is Misguided During a Time of Inflation and Looming Recession

Efforts to raise taxes on corporations and high-income earners recently hit a brick wall when U.S. Senator Joe Manchin (D-WV) once again expressed concerns about inflation and a potential recession. That would seem to be the end of the story, as there is no reason to think inflation will be going away anytime soon and […]

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Idaho’s Tax Hiking Ballot Measure Is Riddled With Mistakes

A pending tax ballot measure in Idaho may take the prize for gaffe-riddled drafting. Proponents had a straightforward goal: to create a new top marginal individual income tax rate of 10.925 percent on high earners. That is dubious enough, as it would create the highest rate between New York and California. But through a series of […]