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Jan 13, 2025 | 
aei.org | Alex Brill |Kyle Pomerleau |Julia Cataneo
The individual provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025. The Republican-controlled Congress intends to extend these tax cuts but some Republican lawmakers are demanding changes. Last week, incoming Trump administration officials met with a handful of Republican lawmakers to discuss raising the cap on the state and local tax (SALT) deduction. Under current law, all taxpayers can claim a SALT deduction up to $10,000 if they itemize their deductions.
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Oct 30, 2024 | 
aei.org | Alex Brill |Zichu Yang
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Oct 29, 2024 | 
aei.org | Alex Brill |Zichu Yang
Next week, Oregon voters will weigh in on a tax-related ballot measure with concerning repercussions. Measure 118 would impose a three percent turnover, or gross receipts, tax on corporations with revenues above $25 million and disperse the tax revenues as an annual “rebate” to residents. This tax will burden households, distort supply chains, and could have a negative impact on the healthcare industry.
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Oct 21, 2024 | 
aei.org | Alex Brill |Kyle Pomerleau |Stan Veuger |Zichu Yang
JD Vance and Kamala Harris have at least one thing in common: proposals to expand the child tax credit (CTC). Currently, the CTC offers households up to $2,000 per child under the age of 17. It phases in as wages exceed $2,500 (an incentive to work) and phases out for high-income workers (a disincentive to work). After 2025, the credit is scheduled to drop to $1,000 per child. In a recent Tax Notes article, we compared the expansion proposals and noted three important distinctions:1.
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Oct 16, 2024 | 
aei.org | Alex Brill |Kyle Pomerleau |Stan Veuger |Zichu Yang
During a recent speech at the Detroit Economic Club, former President Donald Trump proposed partially renewing a tax policy in effect prior to the Tax Reform Act of 1986 that allowed taxpayers to fully deduct interest expense on auto loans.
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Oct 7, 2024 | 
aei.org | Alex Brill |Kyle Pomerleau |Stan Veuger |Zichu Yang
Last month, former President Donald Trump declared, “If you’re an overtime worker, when you’re past 40 hours a week . . . your overtime hours will be tax-free.” If kept, this promise, though as vague as many of the proposals coming from the Trump campaign, risks creating compliance and administrative burdens, not to mention significantly reducing revenue. However, there is also notable logic behind the proposal. First, the good news.
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Oct 7, 2024 | 
aei.org | Alex Brill |Kyle Pomerleau |Stan Veuger
By Alex M. Brill, Kyle Pomerleau, and Stan VeugerThe Trump-Vance and Harris-Walz presidential campaigns have each recently proposed large expansions to the child tax credit (CTC). Both proposals might be intended to appeal to similar voters, but they vary significantly regarding budgetary cost, distribution of benefits, and effect on work incentives. This article compares the proposed expansions with the current Tax Cuts and Jobs Act CTC and the scheduled post-TCJA CTC. Read the full PDF here.
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Aug 16, 2024 | 
aei.org | Alex Brill |Kyle Pomerleau |Stan Veuger |Julia Cataneo
Earlier this week, Vice President Kamala Harris, campaigning in Nevada, endorsed exempting tips from the individual income tax. This follows former President Donald Trump’s proposal last month to do the same. This policy has obvious political appeal to bartenders, waitstaff, hairdressers, Uber drivers, and others, but it is not good tax policy. Under current law, tips are considered ordinary income and subject to both the individual income and payroll tax.
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Jun 17, 2024 | 
aei.org | Alex Brill |Lauren MacDonald
Former President Trump trotted through Washington last week leaving a trail of policy proposals behind him. Two revenue proposals are worth noting. First, in an appeal to corporate executives, Trump indicated a desire to lower the corporate income tax rate from 21 percent to 20 percent. The New York Times reported that he made three arguments in favor of the cut: (1) it’s a “round number,” (2) it improves the competitiveness of US businesses, and (3) it creates jobs.
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Jun 7, 2024 | 
aei.org | Alex Brill |Lauren MacDonald
Over at the Daily Caller, JD Foster recently took aim at an article I wrote about the impending expiration of major provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) on December 31, 2025. In that article, I make the point that, while TCJA did many good things, extending it would be quite costly. I argue that lawmakers should see the upcoming tax cliff as an opportunity for revenue-neutral tax reform that further broadens the tax base and keeps the best parts of TCJA.
