Categories
Uncategorized

Tax Reform and Infrastructure Investment: The Two Theories

On August 23rd, Jared Bernstein and Ernie Tedeschi, two members of the president’s Council of Economic Advisers, released a blog post arguing that the Biden administration’s spending agenda would help keep long-term inflation in check. Their theoretical argument is sound: in the long run, productivity enhancements should put downward pressure on prices. However, the major […]

Categories
Uncategorized

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 […]

Categories
Uncategorized

How Did We Ever Agree to Fund Infrastructure Investments?

Policymakers broadly agree that investments by the federal government in highways, mass transit, and other modes of transportation are crucial to facilitate the nation’s economic activity, but they can’t seem to agree on how to fund such investments. The current debate is over corporate income taxes, and therein lies the problem. The standard approach long […]

Categories
Uncategorized

Dynamic Scoring of Infrastructure Spending Proposals Offsets Small Portion of the Cost

As Congress considers turning the $579 billion bipartisan infrastructure deal and President Joe Biden’s $2.2 trillion American Jobs Plan (AJP) into legislative text, policymakers may consider using additional tax revenue generated from infrastructure spending to offset the plans’ deficit impact. Applying dynamic scoring to the spending side of the proposals would only generate a small […]

Categories
Uncategorized

Expensing Is Infrastructure, Too

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be […]

Categories
Uncategorized

Infrastructure Funding for Highways Digs into Issues of Outdated Taxes and Narrow Bases

As spending priorities are dividing lawmakers trying to negotiate among the various federal infrastructure plans, less time is being spent on the funding of one of the key components—our highways, both current and future taxes and fees. One of the current taxes, a federal excise tax on heavy commercial vehicles and trailers, is an important […]

Categories
Uncategorized

Broad-Based Taxes on Consumption and User Fees Are Efficient Ways to Raise Federal Revenue for Infrastructure

One of the themes within Tax Foundation’s Options for Reforming America’s Tax Code 2.0 is that taxes on consumption tend to be a more economically efficient revenue source than taxes on income and capital that reduce the incentive to work and invest. Comparing the economic effects of taxes on consumption and income can apply to […]

Categories
Uncategorized

Details and Analysis of President Biden’s American Jobs Plan

Table of Contents Launch Resource Center: President Biden’s Tax Proposals The Biden administration’s proposed American Jobs Plan (AJP) would increase federal spending by about $2.2 trillion over 10 years, including $1.7 trillion for infrastructure, partially funded with permanently higher corporate taxes of about $1.7 trillion over 10 years (conventionally estimated). Using the Tax Foundation General […]

Categories
Uncategorized

Some Corporations Pay Zero Federal Income Taxes—and That Is Not a Problem

President Biden has privately pitched dropping his proposed 28 percent corporate tax rate from an infrastructure package and funding it through his proposed minimum tax on corporate book income. However, the proposal for a minimum book tax misunderstands the important reasons why a corporation may not owe federal tax liability in a given year. Recently, […]

Categories
Uncategorized

Financing Infrastructure Spending with Corporate Tax Increases Would Stunt Economic Growth

The Biden administration’s American Jobs Plan (AJP) proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, […]