Our new report explores carbon taxes in theory and in practice.

🧵 Some key findings:

hubs.ly/Q01NmxVp0 @ahardtospell The carbon tax is the most efficient approach to tackle climate change—in theory. In practice, however, the policymaking process can interfere and water down the policy.

States with an estate tax:

- Connecticut
- DC
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Minnesota
- New York
- Oregon
- Rhode Island
- Vermont
- Washington

States with an inheritance tax:

- Iowa
- Kentucky
- Maryland
- Nebraska
- New Jersey
- Pennsylvania Estate taxes are paid by the decedent’s estate before assets are distributed to heirs and are thus imposed on the overall value of the estate.

Inheritance taxes are remitted by the recipient of a bequest and are thus based on the amount distributed to each beneficiary.

The latest inflation report confirms that prices for just about everything continue to rise, with the Consumer Price Index (CPI) up 8.3 percent over the last year and many categories up even higher, including food (11.4 percent) and energy (23.8 percent).

taxfoundation.org/federal-tax-co… While not part of the CPI, another measure of inflation is also surging: federal tax collections are up 23 percent over the last year, according to the latest data from the Congressional Budget Office (CBO).

cbo.gov/publication/58…

After the UK Super-Deduction: Assessing Proposals for the Reform of Capital Allowances

taxfoundation.org/uk-capital-all… @CPSThinkTank @kpomerleau @danieldbunn #uk With Liz Truss appointed Prime Minister, it’s clear that the headline rate of the corporation income tax, the most economically damaging type of tax, will remain at 19 percent.

taxfoundation.org/uk-prime-minis…

Federal tax collections are approaching an all-time high of 20.5 percent of GDP set in 1943 during World War II. The latest inflation report confirms that prices for just about everything continue to rise, with the Consumer Price Index (CPI) up 8.3 percent over the last year and many categories up even higher, including food (11.4 percent) and energy (23.8 percent).

The Inflation Reduction Act includes a 15 percent corporate minimum tax, drug price controls, IRS tax enforcement, and a tax hike on carried interest to pay for increased spending on energy and health insurance subsidies as well as deficit reduction.

[THREAD] The on-again-off-again negotiations over the proposed #BuildBackBetter tax increases on corporations and high-income earners appears to be… on again.

Sen. Joe Manchin (D-WV) is now expressing support for something called the #InflationReductionAct. (2/9)

The Senate has begun debate on the so-called Chips bill, which would provide $52 billion in grants and $24 billion in tax credits to supposedly strengthen the production of semiconductors in the U.S.

hubs.ly/Q01hGsvg0 @scottahodge .@scottahodge: If this measure passes, U.S. semiconductors will join wool, mohair, helium, soybeans, ethanol, steel, credit unions, and Amtrak as industries thought to be so important as to warrant taxpayer subsidies—forever.

🌎 2021 International Tax Competitiveness Index

taxfoundation.org/competition The most competitive tax systems in the OECD:

1. 🇪🇪 Estonia
2. 🇱🇻 Latvia
3. 🇳🇿 New Zealand
4. 🇨🇭Switzerland
5. 🇱🇺 Luxembourg
6. 🇱🇹 Lithuania
7. 🇨🇿 Czech Republic
8. 🇸🇪 Sweden
9. 🇦🇺 Australia
10. 🇳🇴 Norway

taxfoundation.org/competition

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.

Federal Policy Analyst Alex Muresianu explores the latest tax data ⬇️

taxfoundation.org/us-tax-system-… 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 national income.

taxfoundation.org/rich-pay-their…

President Biden's #AmericanJobsPlan looks to increase the federal corporate tax rate to 28%, which would raise the U.S. federal-state combined tax rate to 32.34%, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China. While President Biden’s #AmericanJobsPlan emphasizes making goods in America, the tax increases will raise the cost of production in the U.S, erode American competitiveness, and slow our economic recovery.

taxfoundation.org/biden-infrastr… #StateOfTheUnion

Deliberations which began well before the beginning of Louisiana’s legislative session have yielded a meaningful package of tax reform proposals.

taxfoundation.org/louisiana-tax-… @janellecamm #laleg Legislators aim to lower the state’s individual and corporate income tax rates, begin phasing out the capital stock tax, and bring sales tax centralization across the finish line—all goals that would improve the Pelican State’s tax code.

Under President Biden's tax plan, 13 states and D.C. would have a top combined capital gains tax rate at or above 50%:

56.7% CA
54.3% NY
54.2% NJ
53.3% OR
53.3% MN
52.4% DC
52.2% VT
50.7% HI
50.6% ME
50.4% CT
50.3% ID
50.2% NE
50.2% MT
50.0% DE

(58.2% NYC)
(57.3% Portland, OR) President Biden’s #AmericanFamilyPlan will likely include a large increase in the top federal tax rate on long-term capital gains and qualified dividends, from 23.8% today to 39.6% for higher earners.

Top combined capital gains tax rates under President Biden’s tax plan:

56.7% -- California
54.3% -- New York
54.2% -- New Jersey
53.3% -- Oregon
53.3% -- Minnesota

taxfoundation.org/biden-capital-… @ericadyork @GS_Watson President Biden’s #AmericanFamilyPlan will likely include a large increase in the top federal tax rate on long-term capital gains and qualified dividends, from 23.8% today to 39.6% for higher earners.

𝗪𝗵𝗮𝘁 𝗶𝘀 𝗮 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗚𝗮𝗶𝗻𝘀 𝗧𝗮𝘅?

A capital gains tax is levied on the profit made from selling an asset and is often in addition to corporate income taxes, frequently resulting in double taxation.

taxfoundation.org/tax-basics/cap… Capital gains taxes create a bias against saving, leading to a lower level of national income by encouraging present consumption over investment.

taxfoundation.org/capital-gains-…

NEW: Modernizing rental car and peer-to-peer car sharing taxes for a post-pandemic future: buff.ly/3xbDjxP @GS_Watson As state economies reopen and travelers consider options for their first travel experience since the pandemic started, states should ensure that their tax codes and revenue options don't stand in the way of a robust recovery.

Raising the U.S. corporate tax rate to 28 percent would reduce GDP by $720 billion over ten years: analysis buff.ly/3n62Bsu @ericadyork In our new book, Options for Reforming America’s Tax Code 2.0, we illustrate the economic, distributional, and revenue trade-offs of 70 tax changes, including President Biden’s proposal to increase the corporate tax rate to 28 percent.

taxfoundation.org/tax-reform-opt…

How much of road spending is funded with user taxes in your state?

taxfoundation.org/state-infrastr… Both the federal government and the states raise revenue for infrastructure spending through taxes on motor fuel and vehicles. States also collect fees from toll roads and other road charges.

The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation.

Currently, 16 states and D.C. have passed bills or approved ballot measures that allow for the sale of recreational marijuana: tax.foundation/3cFu2Wm Alaska, Arizona, California, Colorado, D.C., Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, Oregon, South Dakota, Vermont, Washington have passed bills or approved ballot measures that allow for the sale of recreational marijuana.

The government of Hartford County, Connecticut is in line to receive $173 million in local aid under the American Rescue Plan Act.

There’s only one problem: the government of Hartford County doesn’t exist.

buff.ly/3dle6rn @JaredWalczak Nor do any of Connecticut’s other counties have county-level government despite being allocated a collective $691 million under the bill.

Our new study outlines how several OECD countries allowed businesses to more quickly expense investments during the pandemic: buff.ly/39xKzto @ElkeAsen While the temporary nature of most of these expensing and accelerated depreciation provisions reduces their tax revenue impact in the long run, it also limits their long-run economic benefits.

Income tax repeal is on the agenda in West Virginia, with Gov. Jim Justice and Republicans in both the House and Senate releasing plans for dramatically lowering or eliminating the state’s individual income tax. buff.ly/3fEia9d @JaredWalczak #wvleg Despite their shared aims, these plans represent vastly different approaches. They are not even aligned on which income should benefit from rate reductions.