Taxes

Policy and economic differences among OECD countries have created variances in how they raise tax revenue, with the United States deviating substantially from the OECD average on some sources of revenue. Different taxes create different economic impacts, so policymakers should always consider how tax revenue is raised and not just how much is raised. This

A group of lawmakers in Ohio have proposed to repeal the state’s gross receipt tax (GRT), also known as the commercial activity tax (CAT). House Bill 234 would phase out the tax over five years. Ohio’s CAT, implemented in 2005 as part of tax reform that lowered and consolidated business taxes, is one of only a

Table of Contents Key Findings Individual income taxes are a major source of state government revenue, accounting for 36 percent of state tax collections in fiscal year 2020, the latest year for which data are available. Forty-two states levy individual income taxes. Forty-one tax wage and salary income, while one state—New Hampshire—exclusively taxes dividend and

Alabama lawmakers are acting to ensure that federal relief from the American Rescue Plan Act (ARPA) does not increase tax liabilities in the state. Senate Bill 152, which addresses the issue, recently passed and has been referred to the Ways and Means Committee. This unusual issue is a consequence of Alabama offering a state-level deduction

Developed countries raise tax revenue through a mix of individual income taxes, corporate income taxes, social insurance taxes, taxes on goods and services, and property taxes. The mix of tax policies can influence how distortionary or neutral a tax system is. Taxes on income can create more economic harm than taxes on consumption and property.

The economic harms of the gross receipts tax (GRT) were well understood by the early 20th century. Not only is the tax inequitable, but it is also inefficient and distortionary. That is why most states abandoned GRTs in the early 1900s, as states developed the capacity to administer less harmful taxes. Unfortunately, some policymakers in

Amid record surpluses, Michigan lawmakers are looking to give relief to taxpayers and enhance the state’s competitive standing. Senate Bill 786, which recently reported from committee, would reduce both the corporate and individual income tax rates to 3.9 percent as of January 1, 2022. It would also create a tax credit of $500 for each

Raising kids is expensive. Thankfully, becoming a parent comes with some valuable tax breaks — most notably, the Child Tax Credit (CTC). What is the Child Tax Credit? The CTC is a tax credit for parents of dependent children designed to help offset the cost of raising kids. For tax year 2021, the CTC is

Most countries’ personal income taxes have a progressive structure, meaning that the tax rate paid by individuals increases as they earn higher wages. The highest income tax rate individuals pay differs significantly across European OECD countries—as shown in today’s map. The top statutory personal income tax rate applies to the share of income that falls

The Internal Revenue Service has started sending letters to taxpayers who received advance Child Tax Credit (CTC) payments or the third round of stimulus checks. If you received both or either of these payments, keep an eye on your mailbox and hold onto these IRS letters! They will help you file an accurate income tax

If you received advance Child Tax Credit (CTC) monthly payments last year, you should be getting Letter 6419 from the IRS. This letter details the total advance payments you received last year and lets you know how much of the credit you can still expect to claim when filing your 2021 tax return. However, the

During the pandemic, policymakers relied on the Internal Revenue Service (IRS) to administer business relief through the tax code. The emergency relief, including business tax refunds for net operating losses (NOLs), was intended to quickly help businesses that lost their source of income during the pandemic. A new report from the Government Accountability Office (GAO)

New to small business taxes and all they entail? In this article, we’ll cover some of the most frequently asked small business tax questions, such as what you can and can’t deduct on your tax return, how to save for retirement, and more. Let’s dive right in! What small business expenses can I deduct? As

Key Findings Forty-five states and the District of Columbia collect statewide sales taxes. Local sales taxes are collected in 38 states. In some cases, they can rival or even exceed state rates. The five states with the highest average combined state and local sales tax rates are Louisiana (9.55 percent), Tennessee (9.547 percent), Arkansas (9.48

Earlier this month, JAMA Internal Medicine published a study about the impact of banning flavored tobacco products in Massachusetts. The study found, not surprisingly, that the sale of flavored tobacco decreased following the ban. By comparing sales in Massachusetts with sales across 27 other states, the authors observed that sales had decreased more in Massachusetts

Curious about the business tax deadlines that you should mark on your calendar this tax season? Here’s what small business owners need to know. Deadlines for filing small business tax returns There are different filing deadlines to be aware of depending on what type of business you have. Below are the key tax calendar dates

More than 300 billion cigarettes are sold each year in Indonesia—making it the world’s second-largest cigarette market to China. As such, it is important how Indonesia taxes tobacco products. Last year, I wrote about the counterproductive complexity of the country’s tobacco tax system, but in December, Indonesia announced some positive changes to the design. Effective

Ever since the U.S. first introduced the Child Tax Credit (CTC) in 1997, Puerto Rican residents with taxable income have been eligible to claim payments for their children — but there was a catch. In previous years, families in Puerto Rico also needed to have at least three children to qualify for the credit. This

If 2021 was a big year for state tax reform, 2022 may give it a run for its money. With January now in the books, the 40 states which have convened their legislative sessions—six more will join them, while four states’ legislatures do not meet in odd-numbered years—already show a flurry of activity on taxes,

During last year’s legislature’s special session in Maine, two bills, H.P. 1039 and H.P. 1258, would have doubled the excise tax on cigarettes to $4.00 a pack. Neither bill passed, but both have carried over to this year’s session and H.P 1258 will be heard by the Health and Human Services Committee in February. These proposals will not