The Deduction

By Tax Foundation

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Description

The Deduction is your independent guide to the complicated world of tax and economics. From the impacts of tariffs and trade wars to debates over who pays and how much, each episode, our experts untangle another aspect of the tax code. Listen to the leading tax podcast!

Episode Date
Meet Daniel Bunn (again), Tax Foundation's New President & CEO
1585

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/danieldbunn
https://www.linkedin.com/in/danielbunn

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Dec 01, 2022
Post-Election Breakdown
1230

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/

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Nov 17, 2022
The UK’s Tax Battles, Part One: How We Got Here
2142

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/mailbag
https://cps.org.uk/our-team/tom-clougherty/
https://taxfoundation.org/uk-capital-allowances-super-deduction/
https://taxfoundation.org/2022-international-tax-competitiveness-index/

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Oct 18, 2022
The Woes of Temporary Tax Policy
1234

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/

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Sep 29, 2022
Unpacking the State and Local Tax Toolkit
1450

Maine has blueberry taxes. Alabama has mosquito taxes. Each state and county has its tax quirks. But when state and local governments want to raise revenues, there are four key taxes they turn to. Depending on where you live, the differences in these taxes between states can be significant. 

Katherine Loughead, senior policy analyst, joins Jesse Solis to discuss trends we are currently seeing in state and local taxes and to break down how stable these revenue sources are for the places we call home.

Links: 
https://taxfoundation.org/state-local-tax-collections/
https://taxfoundation.org/mailbag

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Sep 15, 2022
Accounting for the New Book Minimum Tax
1954

The Inflation Reduction Act, signed into law recently by President Biden, includes a book minimum tax, which is raising the eyebrows of accountants everywhere.

This new policy–a 15 percent tax applied to the financial statement income that companies report to their investors–is one of the law’s largest revenue raisers and joins plenty of other “minimum” taxes for multinational corporations, including GILTI and the OECD global minimum tax.

Scott Dyreng, a professor of accounting at Duke University, and Daniel Bunn, executive vice president at the Tax Foundation, join Jesse to discuss how these minimum taxes work and, more importantly, how the accounting will work as companies aim to comply with all these new complex rules and tax increases.

Links:
https://taxfoundation.org/inflation-reduction-act/
https://taxfoundation.org/book-minimum-tax-analysis/
https://taxfoundation.org/inflation-reduction-act-minimum-tax/
https://taxfoundation.org/inflation-reduction-act-accelerated-depreciation/

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Sep 01, 2022
IRS Funding and Technology
2136

The Internal Revenue Service (IRS) finds itself under fire often. Outdated technology, millions of unanswered calls, and cafeterias full of paper returns--it's clear that America’s tax collector needs improvement.

In the same way that technology has helped shape the tax policy debate, tech also has a role to play in advancing tax administration.

Jesse is joined by Courtney Kay-Decker and Jared Ballew, chair and vice chair (respectively) of the Electronic Tax Administration Advisory Committee (ETAAC). They discuss ETAAC's annual report that lays out what the IRS is doing right, and what it's doing wrong, as the agency continues to see its duties grow. They also discuss the IRS funding in the Inflation Reduction Act, and define what steps the agency and Congress should take in order to truly keep the IRS focused on serving taxpayers.

Links:

https://www.irs.gov/tax-professionals/electronic-tax-administration-advisory-committee-etaac
https://www.irs.gov/pub/irs-pdf/p3415.pdf
https://taxfoundation.org/inflation-reduction-act/
https://taxfoundation.org/tax-season-reform/
https://taxfoundation.org/inflation-reduction-act-irs-funding/
https://taxfoundation.org/tax-gap/

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Aug 17, 2022
House Votes on the Inflation Reduction Act
826

The House of Representatives is set to pass the Inflation Reduction Act, the latest iteration of President Biden’s tax and climate agenda.

The road to get to this final package has been anything but easy--with congressional Democrats drastically scaling back the initial $3 trillion Build Back Better agenda.

Garrett Watson joins Jesse to discuss what sacrifices were made by key lawmakers to bring this bill to the finish line. They also look at what the economic impact of this proposal would be as the country continues to face historic rates of inflation.

Links:
https://taxfoundation.org/inflation-reduction-act/
https://taxfoundation.org/tax-on-stock-buybacks/
https://taxfoundation.org/inflation-reduction-act-accelerated-depreciation/
https://taxfoundation.org/inflation-reduction-act-corporate-taxes/
https://taxfoundation.org/book-minimum-tax-analysis/

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Aug 12, 2022
The Inflation Reduction Act, What to Know
1153

After months of stalled negotiations, Sen. Joe Manchin (D-WV) announced that he has reached a deal with Senate Democrat leadership on a reconciliation package.

Called the Inflation Reduction Act, the legislation would raise taxes on corporations and top earners with the goal of funding a number of programs to reduce carbon emissions, address prescription drug costs, and spur the economy.

Garrett Watson joins Jesse Solis to talk through what these tax changes would mean for the economy: Will they reduce inflation, and do they break the President's pledge not to raise taxes on those earning less than $400,000?

Links:
https://taxfoundation.org/biden-corporate-minimum-book-tax/
https://taxfoundation.org/prescription-drug-pricing-reform/
https://taxfoundation.org/tax-gap/
https://taxfoundation.org/tax-reform-options/?option=28

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Aug 02, 2022
Technology and Taxes
1862

Technology is moving rapidly--especially when it comes to taxes. With advancements in AI and machine learning, we are seeing technology being utilized in every corner of the tax world.

From policy to filing, from accounting to compliance: technology is truly shaping the future of taxes. Jesse chats with Ben Alarie, CEO of Blue J, and Garrett Watson, Senior Policy Analyst at the Tax Foundation, about how companies are utilizing technology to comply with new innovations in the tax code and how policymakers can use technology to advance tax laws that support an ever-evolving economy.

Links:
https://www.bluej.com/
https://taxfoundation.org/overview-tax-foundations-taxes-growth-model/ 

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Jul 27, 2022
Global Deal or No Deal
1148

On July 1st, 2021, over 130 countries agreed to a sweeping overhaul of the global tax system.

This agreement -- on a 15% global minimum tax -- was unprecedented, taking on over a century of how international tax competition has been done.

One year later, the deal appears stuck. Countries are moving ahead with caution before codifying this new tax into their laws.

Daniel Bunn, Tax Foundation's executive vice president, joins Jesse to discuss what this delay means for countries and multinational corporations, and what the path ahead looks like for global tax policy and competition.

Intro: 00:02
Overview: 01:15
Myths and Misconceptions: 12:54
Key Takeaways: 15:45
Outro: 17:50

Links: https://taxfoundation.org/global-minimum-tax-us-international-tax/

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Jul 07, 2022
Windfall Profits Taxes?
818

Oil prices have skyrocketed, posing a new risk to the post-pandemic recovery. Feeling the pressure to respond, policymakers have proposed everything from gas tax holidays, tapping into strategic reserves, and even rebate cards. One idea that has crawled back from the dead: “Windfall Profits Taxes.”

This idea is seemingly simple: legislation targeted at the “excess” profits of oil companies. However, as with anything in tax policy, the reality is much more complicated.

But why exactly have windfall profits taxes risen from the grave, and what put them there in the first place? Host Jesse Solis sits down with Tax Foundation policy analyst Alex Muresianu to find out more.

Links: https://taxfoundation.org/windfall-profits-tax-oil-company-profits/

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Jun 28, 2022
Clean Up on the Grocery Tax Aisle
1161

Amidst soaring inflation, policymakers across the political spectrum proposed many ideas to soften the blow of higher prices—especially for low-income workers and families.

One idea that caught on quickly: sales tax relief on groceries.

The idea had its merits, but Tax Foundation research shows that it may have missed the mark. Tax Foundation Vice President of State Projects Jared Walczak joins Jesse Solis to discuss how grocery sales tax relief became a popular idea, and why it is so hard to nail down progressive vs. regressive tax policy.

Links: https://taxfoundation.org/sales-tax-grocery-tax-exemptions/

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Jun 09, 2022
Pondering Property Taxes
1011

Property taxes are one of the most substantial tax burdens businesses face. In 2020 alone, property taxes accounted for almost 38 percent of all taxes paid by businesses to state and local governments.

These taxes are highly unpopular and can get extremely confusing. But when done right, property taxes can actually be quite good. Janelle Fritts, a state tax policy analyst, joins Jesse Solis to talk through what a well structured property tax should look like, which states have good property tax structures in place and which ones don't, and how these taxes impact a state's competitiveness in an increasingly mobile economy.

Links:
https://taxfoundation.org/ranking-property-taxes-2022/
https://taxfoundation.org/2022-state-business-tax-climate-index/
https://taxfoundation.org/tax-basics/property-tax/

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May 26, 2022
Clearing up Carbon Taxes
1253

Amidst bipartisan climate negotiations on Capitol Hill, there have been renewed calls for a carbon tax.

Carbon taxes have long been magnets for political controversy. But from an economic standpoint, they deserve to be taken seriously.

Federal policy analyst Alex Muresianu joins Jesse Solis this week to talk through the history of climate tax policy, how a pro-growth carbon tax could be designed, and what its chances in DC actually are as the climate crisis worsens.

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May 12, 2022
States' Taxes Go Flat
1048

Episode Description: State lawmakers have been on the move this year. One major trend that has been taking place? A push for flat taxes.

In more than 100 years of state income taxes, only four states have ever moved from a graduated-rate income tax to a flat tax. Another four may adopt flat tax legislation just this year.

Jared Walczak, vice president for state projects, joins Jesse Solis this week to discuss what flat taxes are, what they mean for taxpayers, and why so many states are making a push for them this year.

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Apr 28, 2022
Biden’s Budget Battle
1129

President Biden this week released his annual budget. In a letter to lawmakers, the 46th President said that this $5.8 trillion package would “[grow] our economy, while ensuring that the wealthiest Americans and the biggest corporations begin to pay their fair share.”

This week, Garrett Watson joins Jesse Solis to break down what the President is proposing for this upcoming fiscal year. Garrett discusses what the budget could actually means for the policy debate in D.C., as well as what its impact would be on the U.S. economy in the face of record-high inflation.

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Mar 31, 2022
Let’s Make a Global Tax Deal
1271

Late last year, over 130 countries agreed to a global minimum tax, a purported end-all and be-all to the "race to the bottom."

But this policy is complex, and countries are already struggling to implement these new rules. Daniel Bunn, Vice President of Global Projects, joins Jesse to talk through how this policy came to be, identify where problems are beginning to arise, and dispel some common myths about this emerging new tax system.


Support the show (https://taxfoundation.org/donate/)
Mar 17, 2022
A Gas Tax Holiday
748

The cost of gas is going up. To address this, policymakers have proposed suspending the gas tax as a way to give taxpayers immediate relief at the pump.

Alex Muresianu, a federal policy analyst at the Tax Foundation, argues that a gas tax holiday could actually make matters worse; that instead of lowering prices and easing inflation, it could have the opposite effect.

He joins Jesse Solis on this week's episode of The Deduction to discuss why suspending the gas tax would be a mistake and what lawmakers could do to help with the rising costs of gas.

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Mar 03, 2022
The Child Tax Credit Score
905

The expanded Child Tax Credit from the American Rescue Plan was touted as a once-in-a-lifetime achievement toward reducing child poverty. But it was passed as a temporary tax measure. Temporary tax policy makes tax filing confusing, and the IRS has shown that it isn’t able to keep pace with being a social administrator and a tax collector.

Senior economist Erica York joins Jesse Solis to discuss what taxpayers need to know about the ever-changing Child Tax Credit and how it may impact taxpayers’ this spring as they continue to file their taxes.

Support the show (https://taxfoundation.org/donate/)
Feb 17, 2022
States on the Move: Cutting Across Party Lines
888

After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done.

Jared Walczak, Vice President of State Projects, joins host Jesse Solis to discuss why exactly states are looking to make so many tax changes now and how these proposals might play out in statehouses.

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Feb 03, 2022
Tax Season's Greetings
892

The 2022 tax filing season is about to begin. But before the first returns have even been processed, the IRS is warning Americans to prepare for the worst.

With expected delays, pandemic-related troubles, and a backlog of over 8 million unprocessed returns from the 2021 tax filing season, Garrett Watson joins Jesse Solis to discuss what all these troubles will mean for taxpayers in what is shaping up to be a chaotic spring.

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Jan 20, 2022
A Stimulating COVID-19 Discussion
830

New research shows that the United States had the second largest fiscal response to the COVID-19 pandemic globally. But did this magnitude of stimulus have the economic impact policymakers were hoping for? Alex Durante, economist at the Tax Foundation, joins host Jesse Solis to take a deeper dive into what these fiscal measures actually achieved and what Capitol Hill might do next in response to the omicron variant.

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Jan 13, 2022
Taxing Decisions, 2021: Minisode 4 Waiting on the Senate
794

The House has passed the Build Back Better Act, a multi-trillion-dollar package funding a number of social programs that President Biden has made tenets of his agenda. Its chances are still shaky in the Senate, where Democratic leaders have pressed for urgency while moderates have called for a pause. Senior policy analyst Garrett Watson joins host Jesse Solis to discuss the bill's prospects and what tax changes--ranging from SALT to the Child Tax Credit--could change in order to gain enough support for passage.

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Dec 02, 2021
Taxing Decisions, 2021: Minisode 3 Revenge of the SALT
900

Infrastructure has made its way across the finish line, but the tax debate is far from over on Capitol Hill. Senior policy analyst Garrett Watson joins host Jesse Solis to walk us through the latest iteration of Democrats' trillion-dollar reconciliation package and the myriad tax changes that are being proposed to finance this deal.

Support the show (https://taxfoundation.org/donate/)
Nov 11, 2021
Taxing Decisions, 2021: Minisode 2
740

We have a new framework! President Biden and Congressional Democrats introduced a scaled-back proposal of their reconciliation package this week, with House leadership saying they hope to vote on this new trillion-dollar package ASAP.

Senior policy analyst Garrett Watson joins host Jesse Solis to talk through what made it into the deal, what was cut, and what the impact of these tax changes would be.

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Oct 28, 2021
Wireless with Strings Attached
1463

As of 2020, there were more active cell phone and wireless plans in the U.S. than there were Americans—about 448 million, to be precise. The taxes on those plans brought in approximately $11.3 billion and constituted a record 24.96 percent of the cost of an average cell phone bill.

One thing is clear, these increasing taxes aren't being used to fund fewer robocalls, so what are they for?

On this episode of The Deduction, host Jesse Solis and Tax Foundation excise tax expert Ulrik Boesen discuss why wireless taxes are climbing, the places they're the highest, the consumers they impact the most, and how things can be improved.

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Oct 18, 2021
Federal Policy is Hard
1220

Federal policy is hard. Federal health care policy during reconciliation while governing with razor-thin margins is really, really hard. This week, senior economist Erica York joins host Jesse Solis to break down the debate on Capitol Hill over drug pricing. They discuss why this policy found its way into the $3.5 trillion reconciliation package and what the tradeoffs would be of having the federal government set prescription drug prices.

Support the show (https://taxfoundation.org/donate/)
Oct 01, 2021
Taxing Decisions, 2021: Minisode 1
755

The reconciliation process on Capitol Hill is underway. Senior policy analyst Garrett Watson joins host Jesse Solis this week to give an update on where the package stands. The two also talk through recent Tax Foundation modeling of the proposal, which found that the plan may not have the economic boost its proponents have claimed.

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Sep 24, 2021
Wake Me Up when Reconciliation Ends
2250

Reconciliation. One word that drives D.C. crazy, yet has been the way some of Congress’s most monumental bills have become law.

On this episode, host Jesse Solis is joined by federal tax policy experts Erica York and Garrett Watson to discuss why this complex budget process is back in the mix as Congress gears up to advance President Biden’s multi-trillion-dollar tax agenda.

Support the show (https://taxfoundation.org/donate/)

Sep 14, 2021