The U.S. Congress is back in session this week, and corporate tax reform is reportedly among the top items on the agenda. Of course, that doesn’t mean it’s likely to happen. While nearly everyone agrees reform is needed, individual aspects of the tax code often benefit specific companies and industries, which makes passing legislation difficult. Nonetheless, many experts agree in principle on some of the major problems with the U.S. corporate tax code, and even to some degree on how it could be improved. Here are the major issues, from how the system works today, to what reform might look like.
Conflicts over federal government spending have been a defining feature of 21st-century American politics. It is not surprising that a general uptick in opposition to spending should follow a global economic crisis like the Great Recession. But the dynamics of the conflict are curious — in particular, fierce critiques of spending have come from areas of the U.S. that rely more heavily on federal money.
In a paper recently published in American Politics Research, we document and analyze this phenomenon, which we call the federal spending paradox. We began by calculating each state’s ratio of spending to taxes, dividing the average amount of federal money received by each state per year from 2001 to 2010 by the average taxes paid by each state per year over that decade. We used data on spending from the Census Bureau’s Consolidated Federal Funds Report and data on taxes from the Internal Revenue Service. States with
What is “infrastructure” actually? In the 19th and 20th century, that usually meant the transportation systems supporting roadways, airports, trains… but we don’t even really know yet what it might potentially mean in the age of rapidly changing technology, autonomous …
The current U.S. presidential administration and congressional leadership have spent months talking about tax reform. The next several months will determine whether such a reform will materialize and what it might include. Unfortunately, the prospects for reform are not promising. Instead of reform, we may see a tax cut — and that is not the same thing.
The two central questions in tax policy are how much revenue to raise and how to allocate the tax burden among income groups. The answer to the first question determines how much of the nation’s resources will be devoted to public purchases — such as defense, infrastructure, public health, education, and social safety net programs — and how much to private uses.
These are political choices, not just economic ones, though economists can help educate policy makers about the trade-offs they face. We can estimate the budgetary and distributional effects of various tax changes.
From his time working as the wunderkind pollster for Barack Obama’s 2008 presidential campaign to the launch of his new startup, Elucd, Michael Simon has believed in the power of community feedback. At Elucd, which is graduating from the latest batch of Y Combinator startups, Simon is looking to take the skills he’d honed on the campaign trail and apply them to one of the… Read More