A Primer on Marginal Tax Rates, Part IV: The Combined Burden of Levies on Income, Payroll, and Consumption

When I think of the world’s most mistreated taxpayers, a few options come to mind. Cam Newton, the quarterback who faced a marginal tax rate of nearly 200 percent on his Super Bowl bonus. The 8,000 French households who had to surrender more than 100 percent of their income in 2012. The unfortunate Spanish laborer […]

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Another Reason to Defend Trump’s Tax Reform

Guided by the principles of good tax policy, I have mostly focused on two important provisions when writing about Trump’s 2017 Tax Cut and Jobs Act (TCJA). Reducing the federal corporate tax rate from 35 percent to 21 percent, thus improving incentives for growth and making the United States more competitive for business activity. Scaling […]

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The United Nation’s Hypocritical Opposition to Higher Taxes

Like other international bureaucracies (most notably the IMF and OECD), the United Nations routinely advocates for higher taxes. According to the bureaucrats, we are supposed to believe that higher taxes are necessary because a bigger burden of government will increase growth. I’m not joking. The Center for Freedom and Prosperity produced a video outlining – […]

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Dishonest Pimping for a Global Wealth-Tax Cartel

Everything you need to know about wealth taxation can be summarized in two sentences. The biggest problem with most tax systems is the pervasive tax bias against income that is saved and invested, which discourages the accumulation of capital that helps to finance future growth. Wealth taxes would dramatically increase the tax bias against saving […]

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Trudeau’s Class-Warfare Tax Policy Is Bad News for Canada

The tax bias against saving and investment is a major problem in the United States and many other nations. According to the latest-available data from the Tax Foundation, the worst of the worst is Canada. So how does Canada’s dilettante Prime Minister respond? By proposing a big increase in the capital gains tax. I’m not […]

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Comparing Taxation in Sweden and the United States

I already shared my thoughts about the value-added tax when discussing fiscal policy with an economist at the Confederation of Swedish Enterprise. Here’s some of what I said about tax progressivity and the welfare state. The bottom line is that the American tax system targets the rich. But that’s not the case in Sweden. If […]

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Norway’s Class-Warfare Tax Policy is Backfiring

Class-warfare tax policy is bad news. Last year, I warned that, “rich people are not sheep, patiently waiting to be sheared. If their fiscal torture is too extreme, they will leave.” Norway is a powerful example. Here’s a chart showing the rate at which Norwegians are moving to Switzerland. You may be wondering what caused […]

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Leftist Governments (and the IMF) Pushing Global Wealth Tax

When Joe Biden began his push for a global corporate tax cartel back in 2021, I explained why the idea was very bad news for the world’s workers, consumers, and shareholders. And I pointed out it was specifically bad news for developing nations since they would be prevented from using good tax policy to encourage […]

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Trump and the Flat Tax?

There’s going to be a big tax fight in Washington next year, regardless of who wins the House, the Senate, and/or the presidency. That’s because major portions of Trump’s 2017 Tax Cuts and Jobs Act will expire on December 31, 2025. Will those tax cuts be extended? Will they be expanded? Will they be curtailed? […]

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Dumbest Tax Loophole, or Most Self-Serving Loophole?

When asked about tax loopholes, my first reaction is to determine whether something is an actual tax preference or merely a mitigation of a tax penalty. And that means understanding the “tax base.” For instance, IRAs and 401(k)s are not loopholes. They are a way for taxpayers to protect their savings from double taxation. Similarly, […]

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Everything You Need to Know about the Value-Added Tax

While in Sweden last week, I wrote several columns (here, here, and here) about that nation’s fiscal policy. But I also had a discussion about American fiscal policy with one of the tax experts at the Confederation of Swedish Enterprise. That included a discussion of the value-added tax (VAT). If you don’t want to spend […]

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Tax Day Humor

I used to write serious columns every April 15, but that’s too depressing. This decade (2021, 2022, 2023), I switched to sharing tax humor to commemorate the deadline for filing taxes in the United States. Sticking with that new tradition, let’s start with this look at parasites. Though, the real parasites are the interest groups […]

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Swedish Tax Policy: From Good to Horrible to Bad

Since I’m currently in Stockholm and just gave a speech about fiscal policy, let’s take a look at Swedish taxation. Like most western nations, Sweden became a rich nation in the 1800s and early 1900s when taxes were modest and the burden of government was very small. How small? Government spending consumed less than 10 […]

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Fiscal Fights with Friends: Tax Increases Don’t Improve National Well-Being

Last year, I filled out a do-it-yourself federal budget prepared by the Washington Post and another one put together by the Committee for a Responsible Federal Budget. In both cases, my main complaint was that they did not give enough options to shut down counterproductive departments and/or offer enough proposals for much-needed entitlement reform. Today, […]

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The Tax-Cartel Crowd Now Wants a Global Wealth Tax

When I give speeches about the global fight between tax competition and tax harmonization, especially when speaking in jurisdictions with good tax policy, I usually point out that that compromise is a bad idea. To be sure, politicians from high-tax nations can put a lot of pressure on low-tax jurisdictions. Especially the threat of financial […]

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The Practical Case Against Higher Taxes

As clearly shown by the Congressional Budget Office, America’s long-run fiscal challenge is an ever-growing burden of federal spending. Particularly entitlement programs. Moreover, because the tax burden is projected to gradually increase (largely because of “real bracket creep“), it is accurate to say that more than 100 percent of America’s fiscal problem is excessive government […]

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Promote U.S. Prosperity by Rejecting the OECD Tax Cartel

I support tax competition because it is our best hope of avoiding “goldfish government.” As such, I’m very opposed to tax harmonization schemes, all of which are designed to make it easier for politicians to impose higher tax burdens. . That’s why I’m so hostile to the Organization for Economic Cooperation and Development. Politicians from […]

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The Case for a Flat Tax

I explained the benefits of a flat tax in a video 14 years ago. And I’ve since shared two videos (here and here) of Steve Forbes arguing for a flat tax. If those are not enough, here’s a recent presentation I made about tax reform for Argentina’s Fundacion Internacional Bases. I was one of three […]

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The Simple Recipe for Abolishing a State Income Tax

The good news is that Louisiana voters recently voted to lower their state’s top income tax rate. The bad news is that Louisiana’s economic policy still leaves much to be desired. Ranked #40 by the Tax Foundation. Ranked #26 by the Fraser Institute. Ranked #30 by the Cato Institute. But there are signs of hope. […]

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Why Is Someone at AEI Proposing a Massive Tax Increase to Finance Ever-Growing Government, Part II?

I wrote yesterday to criticize Andrew Biggs of the American Enterprise Institute and Alicia Munnell of Boston College for suggesting a $3 trillion 10-year tax increase on IRAs and 401(k)s. My column explained that more double taxation was a bad idea, and I also pointed out that shifting to a savings-based system was the right […]

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Why Is Someone at AEI Proposing a Massive Tax Increase to Finance Ever-Growing Government, Part I?

Serious and responsible people (in other words, not Trump or Biden) know that Social Security has a massive long-run problem. A fast-growing number of seniors are expecting future benefits but only a slow-growing number of workers will be paying into the system. But even if this demographic problem didn’t exist, there is the underlying flaw […]

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Not All Tax Cuts Are Created Equal

There are three reasons to be a knee-jerk supporter of tax cuts (or to be a knee-jerk opponent of tax increases). The morality-driven libertarian argument that people should be able to keep the income they earn. The starve-the-beast argument that less revenue at some point may translate into less spending. The economic argument that lower […]

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Blue-to-Red Tax Migration, Part V

Time for the final segment of my five-part series for 2023 on blue-to-red tax migration (previous versions here, here, here, and here). We’ll start with this table showing what has happened in America’s 10-largest states. You should notice a pattern. The table comes from a column for National Review written by Dan McLaughlin. He explains […]

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Great Moments in Tax Avoidance

Since governments have a terrible tendency to waste money, I’m a big fan of tax avoidance. For instance, even though I don’t like itemized deductions for things like charitable contributions and home mortgage interest, I am glad when taxpayers are able to use those tax preferences to reduce the amount of money going to the […]

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Senator Bill Cassidy, Senator Lindsey Graham, and other Pro-Tax Republicans

I’m a fan of the no-tax increase pledge for the simple reason that our greatest economic threat is the rising burden of government spending. And since there are only three ways that politicians can finance spending (taxes, borrowing, and money-printing), I’m in favor of making those options more difficult. Sadly, some GOP politicians don’t understand […]

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Why – and How – to Squeeze Tax Loopholes

Public-finance economists generally agree about three principles of good tax policy. Avoid high marginal tax rates on productive behaviors such as work. Don’t have extra layers of tax on income that is saved and invested. Eliminate tax loopholes that cause harmful economic distortions. For what it’s worth, I would add a fourth bullet point about […]

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Corporate Taxation, Ireland, and Jealousy

Two months ago, I wrote about a remarkable example of the Laffer Curve, involving Ireland’s low 12.5 percent corporate tax rate. According to the New York Times, Ireland was collecting so much corporate tax revenue that the government was having a hard time figuring out what to do with all the money (as you might […]

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The Non-Relationship Between Tax Cuts and Inflation

The British economy recently has been hammered by rising prices for the same reason that the American economy and the Eurozone economies were hurt by inflation. Simply stated, central bankers engaged in reckless monetary policy. And the Bank of England was no exception (even if it doesn’t want to accept responsibility for the damage it […]

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A Primer on Marginal Tax Rates, Part III: Hidden Taxes

In Part I of this series, we explained why marginal tax rates matter. In Part II, we emphasized that low marginal tax rates are important. Today, in Part III, let’s consider the role of payroll taxes, especially hidden payroll taxes. To be more specific, governments often hide part of these levies (sometimes known as social […]

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Blue-to-Red Tax Migration, Part IV

State-to-state migration is an underappreciated issue, for both economic and political reasons. And I’ve explained that taxes play a huge role. In Part I of this series, we looked at how people – and taxable income – are moving from high-tax states to low-tax states. In Part II of this series, we reviewed how tax-motivated […]

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