Tax Foundation

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Tax Foundation
Tax-Foundation-logo.png
Motto Educating Taxpayers Since 1937
Formation 1937
Type Think tank
Headquarters 1325 G Street NW, Suite 950
Location
  • Washington, D.C., United States
President
Scott A. Hodge
Revenue (2014)
$3,675,132[1]
Expenses (2014) $2,971,778[1]
Website www.taxfoundation.org

The Tax Foundation is an independent Washington, D.C.-based think tank, founded in 1937, that collects data and publishes research studies on U.S. tax policies at both the federal and state levels.[2][3] The Foundation's stated mission is to "educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government."[4] The Tax Foundation is organized as 501(c)(3) tax-exempt non-profit educational and research organization.

The organization is organized into three primary areas of research, carried out by the Foundation's Center for Federal Fiscal Policy, the Center for State Fiscal Policy[5] and the Center for Legal Reform.[6] The group is known for its annual reports such as "Facts & Figures: How Does Your State Compare"[7] which was first produced in 1941[8] and Tax Freedom Day for the United States, which it has produced since the early 1970s.

History[edit]

The Tax Foundation was organized on December 5, 1937 in New York City by Alfred P. Sloan, Jr., Chairman of the General Motors Corporation; Donaldson Brown, GM Financial Vice President; William S. Farish, President of Standard Oil Company of New Jersey (Exxon); and Lewis H. Brown, President of Johns-Manville Corporation, who later became the first Chairman of the Board of The Tax Foundation.[9] The stated goal of the organization was "to monitor the tax and spending policies of government agencies".[10] Its offices were located at 50 Rockefeller Plaza and later 30 Rockefeller Plaza.

The Tax Foundation's first project was a successful effort to stop a tax increase in Westchester County, New York, where they provided research and analysis (including an "Expenditure Survey" of state spending) to local activists.[10] By 1943, the Tax Foundation had helped set up taxpayers associations and expenditure councils in 35 states.[10]

During World War II, Tax Foundation research emphasized restraining government spending domestically to finance wartime expenditures. In 1948, the Tax Foundation opened an office in Washington, D.C., and in 1978 relocated there completely.[10] Its research and analysis has historically emphasized publicizing federal and state financial information, arguing against the use of tax systems for "social engineering," and urging "broad bases and low rates" tax reform.[10]

Beginning in 1990, the Tax Foundation "operate[d] as a separate unit" of Citizens for a Sound Economy.[11] By July 1991, the Tax Foundation was again operating as an independent 501(c)(3) organization.[12]

Beginning in 2009, The Tax Foundation's offices were located in the National Press Building in Washington, D.C.[13] In 2015, the Tax Foundation left the National Press Building.[14]

Goals and principles[edit]

The Tax Foundation states that its research is guided by what it calls the principles of sound tax policy: simplicity, transparency, neutrality, stability, no retroactivity, broad bases and low rates.[15]

Tax Foundation research is generally critical of tax increases,[16][17][18][19] high business taxes,[20] excise taxes,[21] tax preferences for the housing industry,[22] and use of tax credits (which the Foundation views as "picking winners and losers").[23][24] The Foundation has spoken favorably of efforts to balance the federal budget with tax reform and significant spending cuts, such as the Bowles-Simpson plan,[25] the Ryan Plan,[26] and the Wyden-Coats plan.[27]

Organizational overview[edit]

Ideology[edit]

The Tax Foundation describes itself as an "independent tax policy research organization".[28] They are cited in the media as a nonpartisan or bipartisan organization,[29][30][31][32][33][34][35][36] and are also described as business-friendly or conservative.[37][38][39]

Board of directors[edit]

As of 2016, the organization's board of directors consists of David P. Lewis (Chairman), James W. Lintott, Bill Archer, Philip English, Douglas Holtz-Eakin, Stephen Kranz, Sarah McGill, and Pamela F. Olson, Tom Roesser, and Scott Hodge.[40]

Finances[edit]

The Tax Foundation accepts grants from foundations, corporations, and individuals. It does not solicit or accept funds from government sources.[41] The Tax Foundation has earned a 3 out of 4 star financial rating and 4 out of 4 star accountability and transparency rating from Charity Navigator.[42]

Year Revenues Expenses
2014[1] $3,675,132 $2,971,778
2013[43] $2,953,060 $2,469,668
2012[44] $2,192,620 $1,900,821
2011[45] $1,885,201 $1,768,828
2010[45] $1,854,135 $1,925,936


Activities[edit]

Since 2013, the Tax Foundation has offered guidance to same-sex married couples filing income taxes at the state level, where local laws recognizing same-sex marriage can vary considerably.[46][47]

Every year, the Tax Foundation calculates and announces Tax Freedom Days in the United States. These studies have been criticized by the Center on Budget and Policy Priorities (CBPP), a progressive think tank, and in turn the Tax Foundation has responded to or criticized CBPP reports.[48][49][50][51] However, the two groups have worked together on analysis of the marriage penalty in the US federal income tax.[52]

Criticism from Paul Krugman[edit]

In opinion editorials for the New York Times, economist Paul Krugman has characterized the Tax Foundation as "not a reliable source" while criticizing a report by the Tax Foundation comparing corporate tax rates in the United States to those in other countries.[53] Krugman has also accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act.[54] The Tax Foundation has published various responses to Krugman's criticisms.[55][56]

See also[edit]

References[edit]

  1. ^ a b c "Tax Foundation". GuideStar. Internal Revenue Service. Retrieved 15 September 2016. 
  2. ^ Barro, Josh (October 29, 2015). "Fact-Checking Republicans on Tax Plans". New York Times. Retrieved 15 September 2016. 
  3. ^ Sloan, Allan (August 17, 2016). "The whopping $1.2 trillion omission in Trump's tax reform plan". Washington Post. Retrieved 15 September 2016. 
  4. ^ "About the Tax Foundation". Retrieved 2016-09-15. 
  5. ^ "Tax Research Areas > State Tax and Spending Policy". The Tax Foundation. Retrieved 2012-04-05. 
  6. ^ "Tax Research Areas > Tax Law". The Tax Foundation. Retrieved 2012-04-05. 
  7. ^ "Facts & Figures Handbook: How Does Your State Compare?". The Tax Foundation. 2012-02-15. Retrieved 2012-04-05. 
  8. ^ "The Tax Foundation". The Tax Foundation. Retrieved 2012-04-05. 
  9. ^ "Tax Foundation, Celebrating Our 65th Year". Taxfoundation.org. 2002-09-01. Retrieved 2012-04-05. 
  10. ^ a b c d e "Tax Foundation 1937–1987: The First Fifty Years" (PDF). Tax Foundation. 1987. 
  11. ^ "Tax Features" (PDF). Tax Foundation. January 1990. Retrieved September 8, 2014. 
  12. ^ "Tax Features" (PDF). Tax Foundation. July 1991. Retrieved September 8, 2014. 
  13. ^ "Tax Foundation, Contact Us". Taxfoundation.org. Retrieved 2012-04-05. 
  14. ^ "Tax Foundation, Office Warming Reception". Taxfoundation.org. Retrieved 2015-04-09. 
  15. ^ "Principles of Sound Tax Policy". Taxfoundation.org. August 20, 2007. Retrieved August 31, 2012. 
  16. ^ "Portland Business Journal, Tax Foundation Criticizes State Tax Hikes". Taxfoundation.org. 2009-07-09. Retrieved 2012-04-05. 
  17. ^ "Tax Foundation, Maryland Tax Increases Can't Keep Up With Spending Increases". Taxfoundation.org. 2008-12-29. Retrieved 2012-04-05. 
  18. ^ "Tax Foundation, The Economic Cost of High Tax Rates". Taxfoundation.org. 2009-07-29. Retrieved 2012-04-05. 
  19. ^ "Tax Foundation, Oregon's Wave of Tax Increases and New Spending". Taxfoundation.org. 2009-07-09. Retrieved 2012-04-05. 
  20. ^ "Tax Foundation CompeteUSA Project". Taxfoundation.org. Retrieved 2012-04-05. 
  21. ^ "Excise Taxes". Tax Foundation. Retrieved 2012-04-05. 
  22. ^ "Tax Foundation, Giuliani Wrong on Mortgage Interest Deduction". Taxfoundation.org. 2007-12-03. Retrieved 2012-04-05. 
  23. ^ "Tax Foundation, Louisiana Tax Credits: Politicians Picking Winners and Losers". Taxfoundation.org. 2009-07-11. Retrieved 2012-04-05. 
  24. ^ "Tax Foundation, Remarks to the Shaftesbury Society Luncheon". Taxfoundation.org. 2009-05-05. Retrieved 2012-04-05. 
  25. ^ "Draft from President's Deficit Commission Stirs the Fiscal Pot in Washington". Retrieved 2011-05-14. 
  26. ^ "Ryan Plan Smartly Marries Tax Reform with Spending Reform". Retrieved 2011-04-28. 
  27. ^ "Wyden-Coats Tax Reform Plan Adds to Debate But Needs Fixing". Retrieved 2011-05-14. 
  28. ^ "About Us". Tax Foundation. Retrieved 2016-09-15. 
  29. ^ "Donald Trump's new tax plan could have a big winner: Donald Trump's companies". Washington Post. Retrieved 2016-09-15. 
  30. ^ "Why Americans are giving up citizenship in record numbers". Washington Post. Retrieved 2016-09-15. 
  31. ^ Rosen, Jan M. (1988-12-05). "Tax Watch; Hidden Ways To Gain Revenue". The New York Times. ISSN 0362-4331. Retrieved 2016-09-15. 
  32. ^ Akst, Daniel (2001-02-04). "ON THE CONTRARY; How New Campaign Laws Would Help the Economy". The New York Times. ISSN 0362-4331. Retrieved 2016-09-15. 
  33. ^ O’shea, James (2010-02-26). "Looking to Taxes as Solution to a Crisis". The New York Times. ISSN 0362-4331. Retrieved 2016-09-15. 
  34. ^ Roberts, Sam (2014-07-20). "Wealthier New Yorkers Aren't Fleeing the City for Tax Havens, a Study Says". The New York Times. ISSN 0362-4331. Retrieved 2016-09-15. 
  35. ^ Sumerlin, Marc; Williams, Noah (2016-03-04). "The Partisan Tax Policy Center". Wall Street Journal. ISSN 0099-9660. Retrieved 2016-09-15. 
  36. ^ White, Gillian B. "Trump's Latest Economic Plan: New Promises, Same Old Problems". Retrieved 2016-09-15. 
  37. ^ "Trump's tax pitch". POLITICO. Retrieved 2016-09-15. 
  38. ^ Barro, Josh (October 29, 2015). "Fact-Checking Republicans on Tax Plans". New York Times. Retrieved 15 September 2016. 
  39. ^ Sloan, Allan (August 17, 2016). "The whopping $1.2 trillion omission in Trump's tax reform plan". Washington Post. Retrieved 15 September 2016. 
  40. ^ "Tax Foundation Board of Directors". The Tax Foundation. Retrieved 15 September 2016. 
  41. ^ "Tax Foundation, Funding". Retrieved 2015-04-09. 
  42. ^ "Charity Navigator Rating – Tax Foundation". Retrieved 2015-04-09. 
  43. ^ "2013 Form 990, Tax Foundation" (PDF). Foundation Center. Retrieved 2015-04-09. 
  44. ^ "2012 Form 990, Tax Foundation" (PDF). Foundation Center. Retrieved 2015-04-09. 
  45. ^ a b "2011 Form 990, Tax Foundation" (PDF). Foundation Center. Retrieved 2015-04-09. 
  46. ^ Joseph Henchman (2013-09-13). "Wisconsin Offers Constructive Tax Filing Guidance for Same-Sex Couples". Tax Foundation. Retrieved 2015-04-09. 
  47. ^ Joseph Henchman (2015-03-20). "10 Remaining States Provide Tax Filing Guidance to Same-Sex Married Taxpayers". Tax Foundation. Retrieved 2015-04-09. 
  48. ^ Brooks, Neil (2005). Tax Freedom Day: A Flawed, Incoherent and Pernicious Concept. Canadian Center for Public Policy Alternatives. p. 26. ISBN 9780886274382. 
  49. ^ Brunori, David (April 24, 2016). "Why Tax Freedom Day Matters". Forbes. Retrieved 16 September 2016. 
  50. ^ ""Tax Freedom Day" Analysis Can Give a Misleading Impression of Tax Burdens". Center on Budget and Policy Priorities. April 8, 2014. Retrieved 16 September 2016. 
  51. ^ Ahern, William (March 30, 2006). "Analysis Shows Center on Budget and Policy Priorities' Criticism of Tax Freedom Day Flawed and Inaccurate". Tax Foundation. Retrieved 16 September 2016. 
  52. ^ "Tax Day: Are You Receiving a Marriage Penalty or Bonus?". The New York Times. April 15, 2015. Retrieved September 5, 2015. 
  53. ^ Krugman, Paul (2008-08-24). "The Tax Foundation is not a reliable source". The Conscience of a Liberal blog, nytimes.com. Retrieved March 18, 2011. 
  54. ^ "Stocks, Flows, and Fuzzy Math". Krugman.blogs.nytimes.com. October 11, 2011. Retrieved October 17, 2011. 
  55. ^ McBride, William (July 26, 2012). "Grasping at Straws: A Response to Paul Krugman". The Tax Foundation. Retrieved 15 September 2016. 
  56. ^ Hodge, Scott (October 11, 2011). "Response to Paul Krugman on "Millionaire" Taxes". The Tax Foundation. Retrieved 15 September 2016. 

External links[edit]