Taxes

All taxes create a drag on the economy, slow growth and cost jobs. In light of this heavy toll Congress should construct a tax code that creates the least amount of economic drag possible. The current tax code falls well short of this standard. It imposes an enormous burden on the economy and badly needs fundamental reform. A better tax system would apply lower rates to a simply defined base that is not eroded by an overabundance of exemptions, credits, and deductions.

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.

Our Research & Offerings on Taxes
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  • 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…

  • 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…

  • 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…

  • Backgrounder posted March 1, 2001 by Peter Sperry The Real Reagan Economic Record: Responsible and Successful Fiscal Policy

    See also: The Truth About Tax Rates and The Politics of Class Warfare by Daniel J. Mitchell, Ph.D. After President George W. Bush sent Congress an outline of his tax reform plan on February 8, some critics immediately began to attack…

  • 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…

  • Backgrounder posted December 13, 2011 by J.D. Foster, Ph.D. The New Flat Tax—Easy as One, Two, Three

    Abstract: The current tax system discourages saving. It discourages investment. It discourages entrepreneurship. It causes decision makers to misallocate the nation’s resources, limiting productivity gains, wage gains, and the nation’s overall level of international competitiveness. And, it is far, far too complicated. The New Flat Tax is the remedy.…

  • Factsheet on January 19, 2012 THE NEW FLAT TAX: Encourages Growth and Job Creation

    Fundamental Tax Reform Is Needed Now A Drain on the Economy: High marginal…

  • 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…

  • 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 March 4, 2008 by J.D. Foster, Ph.D. Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom

    When pressed about the harmful effects on the economy, proponents of higher taxes often fall back on what can be called the "Clinton defense." President Bill Clinton pushed a major tax increase through Congress in 1993, and, so the story goes, the economy boomed. How, then, can tax increases be…

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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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