Taxes

Key Findings Massachusetts’ tax advantage in New England is primarily driven by its competitive individual income tax rate and its sales and use tax structure. The graduated income tax amendment would be paid by many small businesses, in addition to wealthy individuals. The proposed surtax is likely to have negative economic effects that will impact

With record inflation now squeezing American household budgets, you can thank our Senior Fellow Emeritus Steve Entin for shielding U.S. workers from being pushed into higher tax brackets. If ever there was a paycheck protection program, defending people from bracket creep may be the most important one ever designed. It all started some 40 years

Most countries’ personal income taxes have a progressive structure where tax rates increase as individuals earn higher wages. However, if wages are pushed up by inflation, people may pay higher taxes even if their real earnings have not increased. This is known as bracket creep. In the first quarter of 2022, labor costs in the

A few weeks ago, I had the privilege of testifying before members of the New Mexico legislature regarding policies that could generate greater economic growth and promote more stable revenue streams for the state. That afternoon, I heard a particular comment raised more than once: there are many factors that influence why a business might

Whether you intended to be a landlord or you fell into it because you had vacant property you couldn’t or didn’t sell, owning rental property is a source of income and it affects your tax return. Knowing the rules can help you maximize the tax advantages of owning rental property and help you create a

Idaho Governor Brad Little (R) has called a special session for September 1, 2022, to consider another round of tax reform and relief legislation that would return surplus revenue to taxpayers while making the state’s tax code more economically competitive. House Bill 1 would move Idaho to a flat income tax structure, reduce the rate from

Gov. Mike Parson (R) has called the Missouri legislature into a special session beginning September 6th, with the goal of reducing the individual income tax from 5.4 percent to 4.8 percent and raising the standard deduction. An income tax reduction is a competitive move, especially in a rapidly changing tax landscape, but the legislature should

Key Findings 100 percent bonus depreciation allows firms an immediate tax deduction for investments in qualifying short-lived assets. The phaseout of 100 percent bonus depreciation, scheduled to take place after the end of 2022, will increase the after-tax cost of investment in the United States. Preventing the phaseout and making 100 percent bonus depreciation a

Your small business is your baby and choosing the right name for it is a big deal. But what happens when you need to change your business name for whatever reason? Here’s how to prepare and what to expect when you decide your business name needs an upgrade. Can you change the name of an

As cookout attendees around the country crack open a cold one on Labor Day weekend, take a minute to discover how much of your cash is actually going toward the cost of a brew. The United States collects an excise tax on beer at the federal level (ranging from $0.11 to $0.58 per gallon based on production,

If your hobby earns you income, the IRS wants to know about it. But how do you report hobby income and how does it differ from small business income? Is one better than the other when it comes to filing taxes? Why is it important to know the difference? Knowing the differences between hobby income

The Internal Revenue Service (IRS) was one of the biggest winners in the recently enacted Inflation Reduction Act (IRA). The new law approved roughly $80 billion in additional IRS funding over the next 10 years. This will boost the IRS budget from around $12 billion per year to roughly $20 billion, a 66 percent increase.

In response to high oil prices, Sen. Ron Wyden (D-OR) has proposed raising taxes on oil and gas companies in three ways. His “Taxing Big Oil Profiteers Act” would create an additional 21 percent tax on so-called excess profits earned over 10 percent of revenues of oil companies with annual revenues over $1 billion; levy

President Biden’s announcement of student loan debt forgiveness is already raising many questions. How much will it cost? Who will benefit the most? How will it contribute to inflation? Does the president even have the legal authority to implement this loan forgiveness? Here’s one more question to add to the mix: will states consider student

Key Findings Property taxes are the primary source of tax collections at the local level, responsible for 72.2 percent of local tax revenue in fiscal year 2020 (the most recent year for which data are available). Once a significant driver of state budgets as well, their share of state collections has dropped to a mere

In a pattern that has become all too common in recent decades, the newly enacted Inflation Reduction Act (IRA) added yet another layer of tax complexity to an already complex and burdensome federal tax code. While the Inflation Reduction Act increased the Internal Revenue Service (IRS) budget by roughly $80 billion over 10 years, it

Patent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP. Most commonly, eligible types of IP are patents and software copyrights. Depending on the patent box regime, income derived from IP can include royalties, licensing fees, gains on the sale of IP, sales

Imagine that a government provides subsidies to single parents that actually increase tax rates on additional work. This is the case for a Japanese single parent who earns a rough equivalent of US $39,981 and faces a 57 percent marginal tax rate. With just a small increase in pay of $599, she would face a

Perhaps one of the most controversial pieces of the Inflation Reduction Act (IRA) is the expansion of the Internal Revenue Service (IRS). There is a compelling case for strengthening the enforcement of existing taxes, rather than creating new ones, as a way to raise revenue. The economic costs of enforcing existing taxes are likely lower than

Tax Foundation has engaged constructively in the OECD Pillar One and Pillar Two process since it was launched in 2019. The consultation on the Progress Report on Pillar One provides another opportunity for that. However, at this point it is challenging to be constructive when the policy seems designed to fail. The Progress Report reveals