Policy Areas: Tax System

Though few people like to pay them, taxes play a fundamental role in the functioning of all market transactions, providing the incentives that determine demand for products and paces of innovation. Unlike many other forms of government regulations - which act to set up constraints on the market for the purpose of furthering specific policy preferences - taxation is an inherent feature of the marketplace, determining not only the preferred policy ends but also the operational means businesses and consumers use to achieve them. For example, taxes on inherited property and value-added sales taxes influence both the willingness of inventors to commercialize their ideas of the ability of the public to purchase them. In the same way, tax credits can promote long-term reinvestment by small businesses and incentivize spending on research that produces new inventions. For these reasons, legislation establishing and regulating tax systems is perhaps some of the most important lawmakers can make in crafting social institutions that promote entrepreneurial activity. Poorly crafted policy can insulate an economy from robust changes in the marketplace, while optimal tax rules can advance economic growth and lower the barriers for technological innovation.

Issues include:

• Corporate Taxation

• Investment Subsidy

• Dividend Taxation

• R&D Tax Credit

• Accelerated Depreciation

• Capital Gains

• Alternative Minimum Tax

• Expense Allowances

• Tax Deferral to Foreign Holdings

CRS Issue Brief for Congress

• Using Business Tax Cuts to Stimulate the Economy
  by Jane G. Gravelle, Congressional Research Service

• Small Business Expensing Allowance: Current Status, Legislative Proposals, and Economic Effects
  by Gary Guenther, Congressional Research Service

• Flat Tax Proposals and Fundamental Tax Reform: An Overview
  by James M. Bickley, Congressional Research Service

Articles & Reports

• Small Business and Marginal Income Tax Rates

• The Impact of Tax Expenditure Policies on Incorporated Small Business

:: View all articles ::

Useful Resources

• Heritage Foundation - Tax Research

• Cato Institute - Tax Policy

• American Enterprise Institute - Tax and Other Fiscal Policy

:: View all resources ::

POLICY AREAS

E-Commerce

Entrepreneurship Education

Financing

Intellectual Property

Minorities

Regulatory Burdens

Stock Options

Tax System

Technology Transfer

Women

Worker Benefits

Workforce Training