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Making the Expanded Child Tax Credit Permanent Would Cost Nearly $1.6 Trillion

Families with children will see a significant increase in their maximum child tax credit (CTC) in 2021 thanks to the American Rescue Plan Act (ARPA) expanding child-related tax benefits. President Biden is now exploring how to make the ARPA’s temporary expansion of the CTC permanent. Whether and how lawmakers choose to finance a permanent expansion […]

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Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

Table of Contents Key Findings President Joe Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations. The proposals are being considered to raise revenue for new spending […]

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Changes to the Tax Base Matter When Evaluating the Impact of Tax Reforms

In December, scholars David Hope and Julian Limberg released a study with the London School of Economics (LSE) examining the economic effects of reducing tax rates for high-income individuals and corporations. The paper illustrates how overlooking an important element of the tax system—the structure of the tax base—can lead to an incomplete understanding of how […]

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Three New Year’s Resolutions for Tax Policymakers

The world is ready to close the book on 2020 and start fresh in 2021, awaiting widespread vaccination, an end to the pandemic, and the beginning of a new chapter of economic recovery. With a fresh start in mind, and a healthy dose of optimism, here are three New Year’s resolutions for crafting better tax […]

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Walter Williams, RIP

Walter Williams, who taught millions of people economics throughout his long career, has died. He was the author of over 150 publications and a syndicated columnist, writing on many topics including tax, and often cited our research. He was a professor of economics at George Mason University, and I attended his microeconomics class nearly 20 […]

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Biden Could Provide Business and Household Relief by Eliminating Trump Tariffs

One of President Donald Trump’s signature policy actions has been to engage in a tit-for-tat tariff war with America’s trading partners, and one of the big questions is what President-elect Joe Biden will do about that. First, a brief review of where things stand. Relying on rarely used sections of trade law, President Trump used […]

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Details and Analysis of Democratic Presidential Nominee Joe Biden’s Tax Plan

October 2020 Update: Since our September analysis of the Biden plan, we have included the campaign proposal to expand the estate and gift tax by reducing the exemption amount to $3.5 million and increasing the top rate for the estate tax to 45 percent, which has impacted our economic, revenue, and distributional estimates. We have also […]

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Placing Joe Biden’s Tax Increases in Historical Context

Supporters and critics of Democratic presidential nominee Joe Biden’s tax plan have made a variety of claims about the size of the tax proposals, ranging from “not big enough” to the “biggest tax increase in history.” Comparing his tax proposals—which include higher taxes on high-income earners and businesses paired with more generous provisions for households […]

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Details and Analysis of The CREATE JOBS Act

Today, Senators Ted Cruz (R-TX) and Martha McSally (R-AZ) introduced the CREATE JOBS Act (Cost Recovery and Expensing Acceleration to Transform the Economy and Jumpstart Opportunities for Businesses and Startups) that would make two significant changes to incentivize investment in the United States. The proposal would prevent scheduled changes that would worsen the tax treatment […]

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Estimated Impact of Improved Cost Recovery Treatment by State

Removing the tax code’s bias against long-term investment by implementing a neutral cost recovery system (NCRS) for structures and full expensing for other assets is estimated to increase economic growth and job creation. Using the Tax Foundation General Equilibrium Model, we estimate that permanent full expensing and neutral cost recovery for structures will add more […]