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The bad news is that federalism has declined in the United States as politicians in Washington have expanded the size and scope of the national government. The good news is that some federalism still exists and this means Americans have some ability to choose the type of government they prefer by “voting with their feet.” […]

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I sometimes try to go easy on the IRS. After all, our wretched tax system is largely the fault of politicians, who have spent the past 108 years creating a punitive and corrupt set of tax laws. But there is still plenty of IRS behavior to criticize. Most notably, the tax agency allowed itself to […]

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Biden’s tax agenda – especially the proposed increase in the corporate rate – would be very bad for American competitiveness. We know this is true because the Administration wants to violate the sovereignty of other nations with a scheme that would require all nations to impose a minimum corporate tax rate of 15 percent. Indeed, […]

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While Paul Krugman sometimes misuses and misinterprets numbers for ideological reasons (see his errors regarding the United States, France, Canada, the United States, Estonia, Germany, the United States, and the United Kingdom), he isn’t oblivious to reality. At least not totally. He’s acknowledged, for instance, that there is a Laffer Curve and that tax rates can become […]

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Back in 2013, the Tax Foundation published a report that reviewed 26 academic studies on taxes and growth. That scholarly research produced a very clear message: The overwhelming consensus was that higher tax rates were bad news for prosperity. Especially soak-the-rich tax increases that reduced incentives for productive activities such as work, saving, investment, and […]

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As explained here, here, here, and here, I don’t like Biden’s class-warfare tax policy. I’m especially concerned about his approach to business taxation. He wants to penalize American-based companies with the highest corporate tax rate among all developed nations. He wants to export that bad policy to the rest of the world with a “global […]

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About one week ago, I shared some fascinating data from the Tax Foundation about how different nations penalize saving and investment, with Canada being the worst and Lithuania being the best. I started that column by noting that there are three important principles for sensible tax policy. Low marginal tax rates on productive behavior No tax bias against capital […]

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Tax increases are bad fiscal policy, but that doesn’t necessarily mean that they are politically unpopular. Indeed, many voices in the establishment press are citing favorable polling data in hopes of creating an aura on inevitably for President Biden’s proposed tax hikes. That’s a very worrisome prospect. If Biden succeeds, the United States could wind […]

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There are three important principles for sensible tax policy. Low marginal tax rates on productive behavior No tax bias against capital (i.e., saving and investment) No tax preferences that distort the economy Today, let’s focus on #2. I’ve written many times about why double taxation is a bad idea. This occurs when governments – thanks […]

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Back in 2015, I joked that my life would be simpler if I had an “automatic fill-in-the-blanks system” for columns dealing with the Organization for Economic Cooperation and Development. Here’s what I proposed. We can use this shortcut today because the OECD has just churned out a report embracing the death tax. So all we […]

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The United States conducted an experiment in the 1980s. Reagan dramatically lowered the top tax rate on households, dropping it from 70 percent to 28 percent. Folks on the left bitterly resisted Reagan’s “supply-side” agenda, arguing that “the rich won’t pay enough” and “the government will be starved of revenue.” Fortunately, we can look at […]

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As an economist, I strongly oppose the wealth tax (as well as other forms of double taxation) because it’s foolish to impose additional layers of tax that penalize saving and investment. Especially since there’s such a strong relationship between investment and worker compensation. The politicians may tell us they’re going to “soak the rich,” but […]

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When I ask my left-leaning friends what they think about the flight of investors, entrepreneurs, and business owners from high-tax states, I tend to get three responses. It isn’t actually happening (these are my friends who apparently don’t know how to read). It’s happening, but it doesn’t matter (data from the IRS suggests it actually […]

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Because of the negative impact on competitiveness, productivity, and worker compensation, it’s a very bad idea to impose double taxation of saving and investment. Which is why there should be no tax on capital gains, and a few nations sensibly take this approach. But they’re outnumbered by countries that do impose this pernicious form of […]

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Whenever I’m asked about the “tax gap,” I point to the academic evidence, from multiple sources, and explain that lower tax rates and tax reform are the best way to get higher levels of tax compliance. Indeed, even the pro-tax International Monetary Fund has published research clearly identifying punitive tax policy as the leading cause […]

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My views on the value-added tax are very straightforward. Washington taxes too much today and wastes too much money today. Giving D.C. politicians even more tax revenue will encourage more fiscal profligacy. It is profoundly naive to think a VAT will lead to lower deficits and less debt. It is profoundly naive to think politicians […]

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Just like last year, April 15 isn’t the official deadline this year for filing your annual tax return. But we’re still going to “celebrate” with some memes about the income tax and the IRS. We’ll start with something that has always bothered me, which is the fact that many people look forward to filing their […]

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Way back in 2007, I narrated this video to explain why tax competition is very desirable because politicians are likely to overtax and overspend (“Goldfish Government“) if they think taxpayers have no ability to escape. The good news is that tax competition has been working. As explained in the above video, there have been big […]

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There are two big policy debates about business profits. The first is whether profits are good or evil. I pick the former. Profits are something to applaud, assuming they are earned honestly (i.e., not the result of subsidies, industrial policy, protectionism, or other forms of cronyism). The second is how profits should be taxed, and […]

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It’s simple to mock Democrats like Joe Biden, Alexandria Ocasio-Cortez, and Bernie Sanders. One reason they’re easy targets is they want people to believe that America can finance a European-style welfare state with higher taxes on the rich. That’s nonsensical. Simply stated, there are not enough rich people and they don’t earn enough money (and […]

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I have a four-part series (here, here, here, and here) about the conceptual downsides of Joe Biden’s class-warfare approach to tax policy. Now it’s time to focus on the component parts of his agenda. Today’s column will review his plan for a big increase in the corporate tax rate. But since I’ve written about corporate […]

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As part of a video debate last year (where I also discussed wealth taxation, poverty reduction, and the inadvisability of tax increases), I pontificated on the negative economic impact of class-warfare taxation. To elaborate, I’m trying to help people understand why it is a mistake to impose class-warfare taxes on high-income taxpayers. Back in 2019, […]

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Thanks to globalization (as opposed to globalism), jobs and investment are now very mobile. This means the costs of bad policy are higher than ever before, and it also means the benefits of good policy are higher than ever before. Which is why it’s very useful to look at various competitiveness rankings, most notably the […]

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For the past couple of decades, I’ve been warning (over and over and over and over again) that politicians want to curtail tax competition so that it will be easier for them to increase tax burdens. They’ve even been using an international bureaucracy – the Paris-based Organization for Economic Cooperation and Development – in an […]

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Last summer, I provided testimony to the United Nations’ High-Level Panel on Financial Accountability Transparency & Integrity. I touched on many issues, but my testimony  focused on some core principles of sensible taxation. Low marginal tax rates on productive behavior. No bias in the tax code against saving and investment. No corrupt preferences that distort economic […]

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I’m not a big fan of the Organization for Economic Cooperation and Development. Simply stated, the Paris-based international bureaucracy represents the interests of governments, and that means the OECD often pushes policies that serve the interests of politicians at the expense of taxpayers and consumers. I’m particularly irked that OECD bureaucrats spend so much time […]

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When politicians target “the rich” with class-warfare schemes like wealth taxes, it’s often ordinary people that bear the costs. For a painful example of how this works in the real world, check out the first 42 seconds of this video. From an economic perspective, this is a story about secondary or indirect effects. Or, as […]

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On the rare occasions when I write about the Supreme Court, it’s usually to grouse that the Justices don’t defend the Constitution’s limits on the federal government. For example, the Court engaged in tortured reasoning to rule in favor of Obamacare even though there’s nothing in Article 1, Section 8, that gives Washington the power […]

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I’ve shared three reasons why Biden’s tax plan is misguided (the tax code is biased against rich taxpayers, the tax hike would have Laffer-Curve implications, and it would saddle America with the world’s highest corporate tax burden). For Part IV of the series, let’s explain why every piece of his plan will backfire. There are […]

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In Part I of this series, I explained that President-Elect Biden’s soak-the-rich agenda didn’t make sense because the internal revenue code already is very biased against upper-income taxpayers. Indeed, the U.S. tax system is even more weighted against the rich than the tax codes of nations such as France and Sweden. In Part II of […]

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