We have a new @TaxFoundation report out today detailing how a permanent overhaul of the income tax system could reduce economic, administrative, and compliance costs and lead to improvements in the well-being of families and children. Improvements in the long-run standard of living largely depend on peoples’ willingness to work and ability to invest in capital. And while all tax systems contain features that affect such decisions, income taxes tend to impose steeper economic costs than consumption taxes.

Happy Tax Day! Here are some stats on taxes in the United States. 🧵 IRS data on individual income taxes shows the federal income tax system is progressive, as high-income taxpayers pay the highest average income tax rates.

🧵Biden’s budget contains $4.7 trillion in tax increases on businesses and high-net-worth individuals and would result in top tax rates that are out of step with international averages. New with @GS_Watson and @alex_durante_

taxfoundation.org/biden-budget-t… Corporate taxes ⬆️ $2.9 trillion

Individual and pass-through business taxes ⬆️ $1.8 trillion

President Biden's budget will contain two changes to Medicare taxes.

1) Increase Medicare tax rates from 3.8% to 5% on income above $400,000
2) Expand the tax base of the NIIT to apply to active pass-through business income above $400,000

whitehouse.gov/briefing-room/… Currently, earnings and investment income (like cap gains, dividends, passive business income) above $200K face a 3.8% tax.

The tax on earnings is made up of a 2.9% Health Insurance (HI) tax split between employers and employees plus the 0.9% Additional Medicare Tax above $200K

I'll be tuning in and live tweeting today's Senate Finance Committee hearing titled "Made in America: Effect of the U.S. Tax Code on Domestic Manufacturing" starting at 10am 👇

finance.senate.gov/hearings/made-… Witnesses:

George S. Davis
EVP CFO Intel Corporation

Jonathan Jennings
VP Ford Motor Company

Jay Timmons
President & CEO National Association of Manufacturers

Michelle Hanlon Ph.D.
Howard W. Johnson Professor MIT

Donnie Blatt District Director United Steelworkers

Goods imports from Mexico totaled $346.5 billion in 2018 (ustr.gov/COUNTRIES-REGI…)

A 5% tariff on that flow of goods amounts to a $17 billion tax increase. In 2018, we imported $93 billion of vehicles, $64 billion of electrical machinery, $63 billion of machinery, $16 billion of mineral fuels, and $15 billion of optical and medical instruments from Mexico.