The Deduction

Affordable housing is an issue that has had long-standing bipartisan interest in D.C. But the path to increase the supply of affordable housing, though often well-intentioned, has created a bureaucratic nightmare.Large programs like the Low-Income Housing Tax Credit, and other initiatives like rehabilitation tax credits and grants, have created a web of complexity that makes these policies less helpful than they were meant to be.Garrett Watson, senior policy analyst, joins Jesse to break down the tax code’s relationship to affordable housing. He also discusses his testimony to the U.S. Senate about this topic, and where he thinks lawmakers should focus their efforts as they continue to debate these tax programs.Links:https://taxfoundation.org/expanding-affordable-housing/https://www.finance.senate.gov/hearings/tax-policys-role-in-increasing-affordable-housing-supply-for-working-familieshttps://taxfoundation.org/low-income-housing-tax-credit-lihtc/Follow us!https://twitter.com/deductionpodhttps://twitter.com/TaxFoundationhttps://twitter.com/GS_Watsonhttps://twitter.com/solisjesseSupport the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

Filing season is ramping up, as most of us are getting ready to file our state and federal income taxes.But in nearly a third of U.S. states, taxpayers pay some sort of local income tax too. Levied in thousands of cities, counties, school districts, and other localities, local income taxes are often used to either lower other taxes (like property taxes) or raise more revenue for local services.While they may make sense on paper, local income taxes come with more challenges than other local revenue sources. Janelle Fritts, policy analyst with Tax Foundation's Center for State Tax Policy, walks Jesse through the origin of local income taxes and the trade-offs lawmakers need to keep in mind when considering them.Links:https://taxfoundation.org/local-income-taxes-2023Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

On Tuesday, President Biden shared his policy aspirations during the State of the Union address. The commander in chief outlined three tax proposals in his remarks: quadrupling the brand-new excise tax on stock buybacks, instituting a “billionaire minimum tax,” and extending the now-lapsed expanded Child Tax Credit.Erica York and Alex Muresianu from the federal tax policy team joined Jesse to give a run-down of Tuesday night’s events. They discuss the prospects of major tax changes becoming law in a divided government and what these proposals signal about how President Biden thinks about tax policy as he enters the latter half of his first term.Links:https://taxfoundation.org/biden-state-of-the-union-tax-proposals/https://taxfoundation.org/inflation-reduction-act-stock-buybacks/https://taxfoundation.org/biden-billionaire-tax-unrealized-capital-gains/https://taxfoundation.org/child-tax-credit-reform/https://taxfoundation.org/biden-administration-tax-proposals/https://www.wsj.com/articles/why-does-the-u-s-tax-code-penalize-r-d-big-tech-innov[…]acturing-production-growth-inflation-silicon-valley-11674415751Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

Since 2021, 43 states have provided substantial tax relief for taxpayers and businesses. But this year, a new trend has emerged in the opposite direction: a push for states to tax investment.From coordinated wealth tax proposals to higher capital gains income taxes, some state legislatures are going after high earners.Jared Walczak, V.P. of State Projects at the Tax Foundation, joins Jesse to discuss how these measures would affect investment, job creation, and migration between states—and why they’re happening now.Links:https://taxfoundation.org/state-wealth-tax-proposals/https://taxfoundation.org/state-population-change-2022/https://taxfoundation.org/2023-state-tax-changes/Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

It’s a new year. And if one thing is certain, it’s that businesses are facing a lot of uncertainty.Key parts of the Inflation Reduction Act of 2022 are kicking into effect, including the new book minimum tax.Erica York, senior economist at the Tax Foundation, joins Jesse to discuss why this policy came into the fold. They discuss if this tax will really stop companies from paying zero in taxes, as the president claims, if the new Republican House will revisit this debate, and what the tax's impact will be on jobs and economic growth.Links:https://taxfoundation.org/book-minimum-tax-analysis/https://twitter.com/ericadyork/status/1610328115393216512https://taxfoundation.org/federal-tax-lame-duck-2022-midterms/https://taxfoundation.org/warren-corporate-book-tax/https://taxfoundation.org/companies-paying-no-income-taxes/https://open.spotify.com/episode/2b6jGfzvyEbFYicob0YuHn?si=ae929bfae71042bbSupport the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

When it comes to international economic competition, people often frame the argument as the U.S. versus China.But across the Atlantic, nation-states in the European Union have been working hard to show the world that they deserve to be considered an economic force.Rising up to this challenge for the EU is easier said than done. Sean Bray, EU policy analyst at the Tax Foundation, joins Jesse to talk through the EU's challenges--and potential--when it comes to tax and economic policy.Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

Tax Foundation recently announced that Daniel Bunn is our new president and CEO. In this special episode of The Deduction¸ Daniel chats with Jesse about how he got into tax policy. They discuss his time in the Senate, his plans for Tax Foundation’s future, and even his obsession with smoking meats.Links:https://taxfoundation.org/staff/daniel-bunn/ https://twitter.com/danieldbunnhttps://www.linkedin.com/in/danielbunnSupport the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

The 2022 midterm elections are wrapping up, and taxpayers are looking at a divided Congress for the next two years. Senior Policy Analyst Garrett Watson sits down with Jesse at Tax Foundation's headquarters to give a quick analysis of what these elections mean for tax policy. They talk through what we can expect from the approaching "lame-duck" session, what a Republican House and Democrat Senate could find agreement on, and what priorities the upcoming Congress should focus on.Links:https://taxfoundation.org/tax-extenders-2022/ https://taxfoundation.org/tax-cuts-jobs-act-business-tax-increases/Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

If you’ve been following taxes closely these past few months, you know that the UK is currently undergoing a drastic change.This episode of The Deduction is part one in our ongoing coverage of the UK’s tax battles. Jesse chats with Tom Clougherty, research director and head of tax at the Centre for Policy Studies in London. Tom talks us through what all went down in the UK this fall: from the leadership elections to the countless U-turns the new prime minister has made to try and reform the country’s tax code.Shortly after we finished recording this episode, news broke that Chancellor Kwasi Kwatern was being ousted, and Jeremy Hunt would take over the Exchequer, with the promise that, yet again, another U-turn would happen on the country’s budget.While this episode doesn’t get into that turn of events, it is still a very informative start showing how we got here and where the country should go on taxes.A quick British glossary for this episode—“Bugbear”: a cause of obsessive fear, irritation, or loathing.Links:https://www.taxfoundation.org/mailbaghttps://cps.org.uk/our-team/tom-clougherty/https://taxfoundation.org/uk-capital-allowances-super-deduction/https://taxfoundation.org/2022-international-tax-competitiveness-index/Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

From the Tax Cuts and Jobs Act in 2017 to the Inflation Reduction Act signed into law just this summer, lawmakers across the political spectrum are often tempted to implement temporary tax reforms.But is this how tax policy should be done?Garrett Watson joins Jesse to discuss the pros and cons of writing tax laws that have an end date and why we find ourselves having a debate at the end of each year about so many temporary provisions.Links:https://taxfoundation.org/making-the-tax-cuts-and-jobs-act-individual-income-tax-provisions-permanent/https://taxfoundation.org/economic-growth-opportunity-tax-reforms/https://taxfoundation.org/temporary-tax-policies-in-budget-reconciliation/https://taxfoundation.org/cbo-report-us-gdp-budget-deficit/https://taxfoundation.org/tax-extenders-expiring-tax-provisions-2021/Support the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show