The federal government distributes grants to states and localities for many purposes. Some grants are delivered directly to these governments, but others are “pass-through” grants that first go to ...

Taxpayers who itemize deductions on their federal income tax returns can deduct state and local taxes--specifically property taxes plus either income taxes or general sales taxes. However, the Tax ...

Unemployment insurance assists workers who become involuntarily unemployed and meet specified eligibility requirements. Unemployment insurance programs are run as federal-state partnerships financed ...

At current tax rates, the direct revenue loss from cutting tax rates almost always exceeds the indirect gain from increased activity or reduced tax avoidance. Cutting tax rates can, however, partly ...

While any tax system with flat rates could be called a flat tax, the name is usually reserved for a system developed by Robert Hall and Alvin Rabushka in 1985. Their flat tax is really a two-part VAT: ...

Severance taxes are taxes on the extraction of natural resources such as oil and natural gas. State and local governments collected a combined $11.8 billion in revenue from severance taxes in 2021.

Fiscal stimulus can raise output and incomes in the short run. To have the greatest impact with the least long-run cost, the stimulus should be timely, temporary, and targeted. Fiscal stimulus, such ...

For a “zero-rated good,” the government doesn’t tax its sale but allows credits for the value-added tax paid on inputs. If a good or business is “exempt,” the government doesn’t tax the sale of the ...

Most countries with a value-added tax use the credit-invoice method. Under this method, businesses are taxed on their sales at each stage of production but obtain credits for the taxes they paid on ...

The Medicare trust fund finances health services for beneficiaries of Medicare, a government insurance program for the elderly, the disabled, and people with qualifying health conditions specified by ...

Policymakers can directly increase revenues by increasing tax rates, reducing tax breaks, expanding the tax base, improving enforcement, and levying new taxes. They can indirectly increase revenues ...

Primarily through their impact on demand. Tax cuts boost demand by increasing disposable income and by encouraging businesses to hire and invest more. Tax increases do the reverse. These demand ...