Taxes

America’s tax code needs reform. Today’s tax system discourages saving, investment, and entrepreneurship. It’s a drag on productivity, job growth, international competitiveness, and wages. It’s complicated beyond belief, and it needs to change. Under the New Flat Tax, part of Heritage’s Saving the American Dream plan, American taxpayers would pay a one simple tax with a single tax rate. The New Flat Tax would tax individual income only once thereby eliminating the tax bias against saving and personal economic security, present businesses with an investment-friendly tax, and replace all federal income taxes, all of today’s payroll taxes, and nearly all excises.

HIGHLIGHTS

  • Taxmageddon: Massive Tax Increase Coming in 2013 Taxmageddon: Massive Tax Increase Coming in 2013

    If President Obama and Congress fail to act this year, an enormous, unprecedented tax increase will fall on American taxpayers starting on January 1, 2013. Read More.

  • What Tax Day will be Like in 2013 What Tax Day will be Like in 2013

    American households can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving them with $346 billion less to spend. Read More.

  • Tax Policy in 2012 Elections Tax Policy in 2012 Elections

    Issues 2012 provides candidates for elected office the ability to quickly identify the key issues of the day and present clear policy recommendations, supported by facts, for addressing them. Read More.

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  • Backgrounder posted June 1, 2004 by Arthur Laffer The Laffer Curve: Past, Present, and Future

    The story of how the Laffer Curve got its name begins with a 1978 article by Jude Wanniski in The Public Interest entitled, "Taxes, Revenues, and the 'Laffer Curve.'"1 As recounted by Wanniski (associate…

  • Backgrounder posted March 16, 2009 by Brian Riedl The Obama Budget: Spending, Taxes, and Doubling the National Debt

    During his presidential campaign, President Barack Obama promised the American people a "net spending cut."1 Instead, he signed a "stimulus" bill that spends $800 billion, and he has proposed a budget that would: Increase spending by $1 trillion over…

  • Special Report posted May 10, 2011 by Stuart Butler, Ph.D., Alison Acosta Fraser, William Beach Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity

    Saving the American Dream is The Heritage Foundation’s plan to fix the debt, cut spending and, above all, restore prosperity. It balances the nation’s budget within a decade—and keeps it balanced. It reduces the debt and cuts government…

  • Backgrounder posted July 7, 2005 by Daniel Mitchell, Ph.D. A Brief Guide to the Flat Tax

    This key research from 2005 has been updated in J.D. Foster's paper "The New Flat Tax—Easy as One, Two, Three" There is widespread consensus that the current tax system is a complicated failure that hinders the…

  • WebMemo posted May 12, 2011 by Nicolas Loris, Curtis Dubay What’s an Oil Subsidy?

    In his fiscal year (FY) 2012 budget request, President Obama proposed to end subsidies for oil companies by eliminating tax breaks, including accelerated depreciation options. A growing number of policymakers have echoed that call. Though the President’s anti-subsidy rhetoric is on track, there are several fundamental problems…

  • Backgrounder posted April 14, 2010 by Curtis Dubay Obamacare: Impact on Taxpayers

    Abstract: The hodgepodge of new taxes that have already or will soon take effect as a result of the Patient Protection and Affordable Care Act may not all show up in the income tax tables, but their huge cost is still very real. This…

  • WebMemo posted January 20, 2011 by Curtis Dubay Obamacare and New Taxes: Destroying Jobs and the Economy

    The Patient Protection and Affordable Care Act (PPACA)[1] imposes numerous tax hikes that transfer more than $500 billion over 10 years—and more in the future—from hardworking American families and businesses to Congress for spending on new entitlements and subsidies. In addition, higher tax rates on working and investing…

  • Backgrounder posted January 29, 2007 by Brian Riedl Ten Myths About the Bush Tax Cuts

    The Democratic majority in the U.S. House of Representatives must decide whether to write a budget extending, expiring, or repealing the Bush tax cuts. These tax cuts have provided a convenient scapegoat for the nation's budget and economic challenges. Despite a 42 percent spending increase in 2001, critics charge that…

  • WebMemo posted May 20, 2010 by Robert Moffit, Ph.D. Obamacare: Impact on Seniors

    According to surveys, no group of Americans is more skeptical of Obamacare than senior citizens[1]—and with good reason. While bits and pieces of the massive law are designed to appeal to seniors—more taxpayer subsidies for the Medicare drug benefit, for example—much of the financing…

  • WebMemo posted August 13, 2003 by Daniel Mitchell, Ph.D. The Historical Lessons of Lower Tax Rates

    There is a distinct pattern throughout American history: When tax rates are reduced, the economy's growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax…

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  • Issue Brief posted May 17, 2012 by J.D. Foster, Ph.D. Preventing Taxmageddon Is Congress’s Summer Job

    Conventional wisdom says that Congress and the President will get nothing done in 2012 until after the elections. Conventional wisdom appears to be at least mostly correct, but in one respect Congress should not fall prey to conventional wisdom: preventing Taxmageddon. Too much is at stake…

  • Issue Brief posted May 9, 2012 by J.D. Foster, Ph.D. The 2012 Tax Policy Two-Step: Taxmageddon, Then Tax Reform

    The nation faces an unprecedented tidal wave of tax hikes on January 1, 2013. Aptly called “Taxmageddon,” at nearly $500 billion the tax hike is so massive that it has accomplished what many regarded as impossible: consensus.[1] There is broad agreement that at least most of this tax…

  • Issue Brief posted May 8, 2012 by Curtis Dubay Student Loan Payroll Tax Increase: Another Attack on Small Business

    President Obama is campaigning heavily for Congress to prevent the lapsing of a special low-interest rate on student loans. Specifically, unless deferred, the interest rate will rise from 3.4 percent to 6.8 percent on federal Stafford student loans issued after July 1.[1] Senate Majority…

  • Issue Brief posted May 1, 2012 by J.D. Foster, Ph.D. Tax Extenders Review Needs a Framework

    The House Ways and Means Committee is performing an important public service in laboriously working through the “tax extenders.” Specifically, the Subcommittee on Select Revenue Measures under Chairman Pat Tiberi (R–OH) is compelling supporters to come forward and make the case why their provision merits extension. …

  • Issue Brief posted April 24, 2012 by Edward Gresser, Bryan Riley Give Shoe Taxes the Boot

    Liberals and conservatives have plenty to disagree about. But faced with continuing high levels of unemployment and slow economic growth, they should agree on a few things—and one is that Congress should find ways to help Americans at the bottom rung of the economic ladder. The Affordable Footwear Act (AFA)…

  • Backgrounder posted April 6, 2012 by David Addington Congress Should Not Authorize States to Expand Collection of Taxes on Internet and Mail Order Sales

    Abstract: The U.S. Supreme Court’s landmark 1992 decision in Quill Corporation v. North Dakota protects out-of-state businesses in the Internet era from overreaching by revenue-hungry states. The Court’s decision prevents a state from forcing an out-of-state business to serve as the state’s sales tax…

  • Issue Brief posted April 4, 2012 by Curtis Dubay Taxmageddon: Massive Tax Increase Coming in 2013

    If President Obama and Congress fail to act this year, an enormous, unprecedented tax increase will fall on American taxpayers starting on January 1, 2013. The Washington Post called the looming tax increase “Taxmageddon,”[1] and Federal Reserve chairman Ben Bernanke called it a “massive fiscal cliff.”[2] …

  • Issue Brief posted March 21, 2012 by Alison Acosta Fraser, Patrick Louis Knudsen The Ryan Budget: Confronting the Nation’s Spending Crisis

    In the few months since Washington’s dramatic debt ceiling confrontation, America’s fiscal situation has only worsened. Federal spending is set to soar past previous record-shattering levels, endangering the economic future of the nation. This is a moral issue because younger generations will be forced to bear either staggering levels of…

  • Backgrounder posted March 19, 2012 by Curtis Dubay Obama FY 2013 Budget Violates Basic Principles of Tax Reform

    Abstract: The current tax code is an enormous burden on the economy, preventing it from reaching its full potential. Tax reform is long overdue. After initial reluctance, President Obama now agrees that the economy needs tax reform. He…

  • Issue Brief posted March 14, 2012 by David Addington Federal Budget: What Congress Must Do to Control Spending and Create Jobs

    As the national debt races toward $17 trillion and nearly 13 million Americans search fruitlessly for work, America needs bold changes from its leaders. Congress must get federal spending and borrowing under control and get out of the way of job creation in the private sector. …

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