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55c984159366576a63f030510a9f1307 Archive

The Good, the Bad, and the Ugly

TweetShareSharePin0 Shares The latest version of the Biden Build Back Better agenda, released last week by the House Ways and Means committee (see our estimates of the budgetary, economic, and distributional impacts), is dense, with too many provisions to flesh out completely. Here’s a rundown of the good, the bad, and the ugly of it.

Federal Tobacco Tax Proposal May Result in 50% Increase in State Taxes

TweetShareSharePin0 Shares Much has been written about the House Democrats’ proposal to increase tobacco and nicotine products taxes over the last week. The proposal, which would double the tax on cigarettes while taxing every other tobacco and nicotine product at comparable rates, would have significant implications on the availability of non-cigarette tobacco products. And the

How Progressive is the US Tax System?

TweetShareSharePin0 Shares As Congress considers several tax proposals designed to raise taxes on high-income earners, it’s worth considering the distribution of the existing tax code. While the image that rich Americans pay little taxes is popular, it’s a misconception: high-income individuals already pay a large share of taxes, even when compared to their share of

House Democrats Pass-Through Business Tax

TweetShareSharePin0 Shares Under the House Democrats’ reconciliation plan, the top tax rate on pass-through business income would exceed 50 percent in most states. Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses and majority of private sector employment in the United States. The owners of these firms pay individual income tax on income derived

$3.5 Trillion Budget Reconciliation Bill

TweetShareSharePin0 Shares Preliminary Revenue and Economic Estimates Revenue (Trillions) Long-run GDP Wages FTE Jobs Source: Tax Foundation Taxes and Growth Model, September 2021. Democratic lawmakers on the House Ways and Means Committee have advanced legislation containing the tax elements of President Biden’s Build Back Better agenda. The draft legislation could be modified by the House

Top Combined Capital Gains Tax Rates Would Average 36.8 Percent Under House Dems’ Plan

TweetShareSharePin0 Shares House Democrats’ reconciliation legislation proposes raising the long-term capital gains tax rate to 25 percent and applying a new 3 percentage point surcharge on all income above $5 million of modified adjusted gross income. When including the net investment income tax of 3.8 percent under current law, the top marginal capital gains tax

A 15% VAT Rate Is Possible by Scrapping Reduced Rates

TweetShareSharePin0 Shares The European Parliamentary Research Service recently released a report evaluating the compliance costs for businesses and consumers of the current value-added tax (VAT) system and analyzing the environmental and social effects of reduced VAT rates. The report concludes that reducing the VAT gap—the difference between the tax collected and the tax that should

House Tobacco Proposals Defy Biden’s Tax Pledge

TweetShareSharePin0 Shares House Democrats’ newly released $3.5 trillion tax legislation includes a tax increase on tobacco, nicotine, and vapor products levied on tobacco manufacturers. But ultimately it would fall heavily on tobacco consumers—many of the group that earns less than $400,000 that President Biden pledged would not see a tax increase. According to the Joint
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