Our analysis examines CAMT’s impact on corporate tax planning and estimated tax revenue, demonstrating that despite imposing substantial new compliance and planning costs, CAMT appears to have done little to change who pays corporate income tax or how much they pay.
California is considering a one-time tax on the wealth of billionaires. Two recent reports attempt to estimate the fiscal effects of the proposal.
A large body of empirical research demonstrates that taxing capital gains upon realization discourages investors from selling appreciated assets, thereby reducing capital mobility and potentially slowing economic growth. However, acknowledging the reality of lock-in does not mean indexing capital gains is a practical solution. The administrative and structural complications associated with indexing are substantial enough to outweigh its theoretical appeal.
Partnerships have become the dominant business structure in the U.S., outnumbering C corporations by more than 2-to-1 and representing over $50 trillion in assets. As flow-through entities with significant flexibility in allocating gains and losses among partners, partnerships play a central role in real estate, private equity, and professional services—yet they also contribute substantially to the tax gap and face historically low audit rates. This analysis examines partnership taxation, structural complexity, and enforcement challenges.
S corporations account for the majority of U.S. corporate entities, with 5.2 million filing returns compared to 1.6 million C corporations. Unlike C corporations, S corporations are flow-through entities where income passes to shareholders’ individual tax returns, avoiding double taxation. This analysis examines how S corporations are taxed, the eligibility restrictions they face, compensation rules for shareholder-managers, and the tax and non-tax tradeoffs that affect competitiveness and organizational choice.
Businesses face far more than just income taxes. From sales tax on supplies to payroll taxes on wages, property taxes on facilities, and dividend taxes on distributions, taxes touch nearly every stage of business operations. This analysis examines why governments tax businesses, walks through the full spectrum of business tax obligations using a simplified example, and compares the U.S. tax structure to other developed economies.
Corporate income taxes account for just 8.3% of federal revenue, but this figure tells an incomplete story. Most U.S. businesses operate as flow-through entities—sole proprietorships, partnerships, and S corporations—where income is taxed on individual returns rather than at the entity level. This analysis examines how business income is defined, measured, and taxed across different entity structures, and why understanding these distinctions is essential for evaluating tax policy debates.
Recent wealth tax proposals cite billionaire political influence as a key concern, arguing that reducing concentrated wealth would diminish political power. But would wealth taxes actually achieve this goal? This analysis examines whether the amounts required to influence elections and policy are large enough that wealth taxation would meaningfully constrain political spending by the very wealthy—and finds that political influence may be far cheaper than advocates assume.
“Fairness” is invoked across the political spectrum in tax debates, yet the word means fundamentally different things to different advocates—from keeping what you earn to redistributing resources. This analysis argues that the vagueness of “fairness” as a policy objective obscures real tradeoffs and leads to symbolic legislation designed to satisfy feelings rather than solve clearly defined problems. Examples include the Corporate Alternative Minimum Tax and stock buyback excise tax.
Wealth taxes have gained political momentum as a tool to address inequality and raise revenue. But setting aside practical implementation challenges, how do wealth taxes compare to income taxes in purely economic terms? This analysis examines a fundamental distinction: income taxes apply to realized profits, while wealth taxes effectively tax expected future earnings. The implications for investment incentives, industry distortions, risk-taking, and economic growth may be significant.