Inflation

Are Tax Rebates a Good Way to Provide Relief from Rising Prices?

States are flush with cash, but taxpayers’ purchasing power is being eroded by high inflation. Tax rebates, gas tax holidays, and other temporary tax expedients have the potential to add to existing inflation—but good intentions do not always make for good policy.

Inflation-Indexing a Useful Tool to Protect New Jersey Taxpayers

Households across the country are struggling with the effects of high inflation. Lawmakers in New Jersey are looking to combat an unlegislated tax increase by indexing the state’s individual income tax code for inflation, something all states should consider.

Gas Tax

Taxes, Tariffs, and Industrial Policy: How the U.S. Tax Code Fails Manufacturing

Policymakers actively marginalized the manufacturing sector by saddling them with cost recovery rules that prevent them from deducting the full cost of investment in physical plant and equipment. Going forward, policymakers should avoid haphazard fixes, targeted measures, and protectionism.

Inflation

Georgia Income Tax Reform Would Improve Standing Among Neighbors, Country

In a time of increased mobility and tax competition, a lower rate and simpler tax structure would help Georgia stand out among states. Lawmakers would be wise to consider reforming the state’s income tax to improve the state’s competitiveness.

Federal Gas Tax Holiday? Suspending the Gas Tax Is a Mistake

If policymakers are looking to change the tax code to help fight inflation, they should pump the brakes on the federal gas tax holiday and instead consider structural reforms to raise the economy’s productive capacity in the long term.

10 Tax Reforms for Growth and Opportunity

By reducing the tax code’s current barriers to investment and saving and simplifying its complex rules, lawmakers would greatly enhance the ability of Americans to pursue new ideas, create more opportunities, and build financial security for themselves and their families.

Mississippi Nears Income Tax Repeal but Additional Work Is Necessary

Before declaring victory, it is imperative to get the details right. The latest proposal is a drastic improvement over the last one, but there is still more work to be done if the Magnolia State is to sustain the intended transformation.

Taxes, Fiscal Policy, and Inflation

Consumer prices rose by 7 percent in 2021, the highest annual rate of inflation since 1982. Where did this inflation come from and what might its impacts be? Tax and fiscal policy offer important clues.

Who Really Pays the Tariffs? US Firms and Consumers, Through Higher Prices

The bulk of economic evidence shows for most of the new tariffs imposed under the Trump administration, US firms or consumers bore 100 percent, or even more, of the burden through lower profits or higher retail prices.

Build Back Better Budget Deficits Could Mean More Inflation, More Policy Uncertainty

As the Senate weighs changes to the spending and tax portions of the Build Back Better Act, the Congressional Budget Office (CBO) and Tax Foundation find the bill would increase the cumulative budget deficit over the next 10 years—contrary to claims the legislation is “fully paid for.”

House Build Back Better Act: Details & Analysis of Tax Provisions in the Budget Reconciliation Bill

Learn more about the House Build Back Better Act, including the latest details and analysis of the Biden tax increases and reconciliation bill tax proposals.

How Will Build Back Better Impact Inflation?

The persistently high inflation in recent months has made some lawmakers question the need for additional deficit spending, In the short term, the Build Back Better Act would likely contribute to inflation, but the magnitude of that contribution is unclear.

2022 Tax Brackets

The IRS recently released the new inflation adjusted 2022 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.

Comparing Tax Provisions in Different Versions of the House Build Back Better Act

The most recent versions of President Biden’s Build Back Better plan are improvements on the original proposal, but would still reduce economic growth and average after-tax incomes for the top 80 percent of earners in the long run.

As Inflation Rises, So Will Tax Bills in Many States

Inflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.

The Good, the Bad, and the Ugly of the Ways and Means Plan

The latest version of the Biden Build Back Better agenda, released last week by the House Ways and Means committee, is dense, with too many provisions to flesh out completely. Here’s a rundown of the good, the bad, and the ugly of it.

Tax Reform and Infrastructure Investment: The Two Theories

The Biden administration does have a point about how some components of the infrastructure bill could put downward pressure on inflation in the long term. However, the taxes chosen to pay for those investments would counteract those effects, by reducing investment and productivity growth.

How the Tax Code Handles Inflation (and How It Doesn’t)

While parts of the U.S. tax code can handle inflation, full expensing of capital investment would be a major improvement along these lines.