Taxes

Today’s map shows states’ rankings on the property tax component of our 2022 State Business Tax Climate Index. The Index’s property tax component evaluates state and local taxes on real and personal property, net worth, and asset transfers. The property tax component accounts for 14.4 percent of each state’s overall Index score. Property taxes matter to businesses for several reasons. First, businesses own a…

Key Findings Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code. The existing U.S. tax code is biased against capital investment and it is scheduled to worsen over the next decade. The tax bias against domestic investment…

Key Findings Sales taxes account for 29.52 percent of state tax revenue, but most sales taxes are imposed on narrow—and still-narrowing—bases, with average sales tax breadth of only 29.71 percent and a median of 35.72 percent. Sales tax bases range from 19.32 percent of personal income in Massachusetts to 93.89 percent in Hawaii; the Massachusetts…

At a moment when we are seeing clear weaknesses in supply chains and needs for gearing production toward more environmentally friendly approaches, capital investment is critical. Policymakers have an opportunity to change a coming decline in investment incentives by adopting permanent policies to support growth. Expiring tax policies in major economies could create a setback…

Among the many achievements in the illustrious career of former Sen. Orrin Hatch (R-UT), who passed away Saturday at 88, was his commitment to tax reform. The longest-serving Republican senator in history helped shepherd passage of the Tax Cuts and Jobs Act of 2017, when he was chairman of the Senate Finance Committee. The Tax…

Today’s map examines another major component of our 2022 State Business Tax Climate Index: unemployment insurance (UI) taxes. Compared to individual, corporate, sales, and property taxes, UI taxes are less widely understood, but they have important implications for a state’s business climate. A state’s performance on the UI tax component accounts for 9.8 percent of that…

Today, the U.S. Food and Drug Administration (FDA) unveiled long-anticipated proposed regulations banning the sale of menthol cigarettes and flavored cigars, part of ongoing efforts to support smoking cessation. Critics doubt, however, whether banning mentholated cigarettes will reduce smoking or instead simply channel menthol smokers toward other tobacco products—or smuggled menthols. And states have yet…

Tax Day came and went on April 18th with the regular tax filing deadline, and the Internal Revenue Service (IRS) is facing difficulties. It struggled to manage a deluge of 282 million calls made in fiscal year 2021, only answering 11 percent, and a backlog of several million returns from 2021 were left to be…

In more than a century of state income taxes, only four states have ever transitioned from a graduated-rate income tax to a flat tax. Another four may adopt legislation doing so this year. In what is already a year of significant bipartisan focus on tax relief, 2022 is also launching something of a flat tax…

Key Findings A capital allowance is the amount of capital investment costs a business can deduct from its revenue through the tax code via depreciation. Ideally, countries should provide higher capital allowances, as they can boost business investment which, in turn, spurs economic growth. The average of OECD countries’ capital allowances gradually decreased between 2000…

This legislative session, the sales tax on food has garnered a great deal of attention in Kansas, with policymakers on both sides of the aisle proposing the removal of groceries from the sales tax base. While this issue has long been a subject of debate in Kansas, it has gained increased attention this year in…

“New own resources should fulfil the criteria of simplicity, transparency, predictability, and fairness.” One would think that the above recommendation came from a Tax Foundation report on principled EU own resources policy. While we would like to claim credit, the recommendation, rather, comes from the EU’s own 2016 Monti report and more recently, the EU’s…