Lawmakers in Washington are exploring an unusual way to affect nicotine consumption and increase taxes on tobacco products sold in the state. Instead of increasing the excise tax rate, which is currently $3.025 per pack of 20 cigarettes, sponsors of HB 1550 are suggesting increasing the Business & Occupations (B&O) tax on tobacco manufacturers and…

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Families with children will see a significant increase in their maximum child tax credit (CTC) in 2021 thanks to the American Rescue Plan Act (ARPA) expanding child-related tax benefits. President Biden is now exploring how to make the ARPA’s temporary expansion of the CTC permanent. Whether and how lawmakers choose to finance a permanent expansion…

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Democratic members of Congress are interested in changing tax rules for foreign earnings of U.S. multinational companies. They claim the current rules incentivize U.S. businesses to outsource and offshore what would otherwise be U.S. jobs and investment. However, closer inspection shows these claims do not fit with the way the rules have been working. Some…

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Key Findings In calendar year 2019 (the latest economic data), state-local tax burdens averaged 10.3 percent of national income. Burdens rose slightly over the previous year because tax collections modestly exceeded income growth. Taxpayers remit taxes to their home state and to other states, and about 21 percent of state tax revenue comes from nonresidents.…

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The 2007-2008 financial crisis triggered a global debate on whether, and if so how, taxation can be used as an instrument to stabilize the financial sector and to generate revenue to partially cover the costs associated with the recent and potential future crises. Three approaches were mainly discussed, namely financial stability contributions (levied on financial…

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After Congress passed the American Rescue Plan Act last week, infrastructure spending—and its funding—is taking center stage. For example, the federal excise tax rate on motor fuels has not been changed since 1993, and the tax has not raised sufficient revenue to cover expenditures since 2008. Several states also are in this position and are…

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