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The Issue

The national government currently faces a national debt of $18 trillion. National entitlement programs are all on paths to bankruptcy, some as soon as this year. Many states and cities face their own impending financial cliffs as years of over-promising wages and benefits to public workers collide with chronic under-funding of public pension funds. Government debt is a “ticking time bomb” that threatens to destroy people’s savings, the economy, and America’s leadership in the world.

The regulatory state is similarly out of control. According to the Competitive Enterprise Institute’s annual survey of the cost and reach of regulations, federal regulation and intervention cost American consumers and businesses an estimated $1.88 trillion in 2014 in lost economic productivity and higher prices. Economy-wide regulatory costs amount to an average of $14,976 per household – around 29 percent of an average family budget of $51,100. Although not paid directly by individuals, this “cost” of regulation exceeds the amount an average family spends on health care, food, and transportation.

In order to stop tax hikes and compel elected officials to control spending, free-market advocates must first prove that lower taxes, privatization of public services, and tax and spending limitations yield stronger economic growth and prosperity. The Heartland Institute, along with many other excellent think tanks and advocacy groups, produces research and commentary making this point. Legislators armed with good information can win debates and get their legislation passed, persuade constituents, and mobilize interest groups that benefit from good policy choices.

Some of the major budget and tax issues we address include:

Constitutional reform: Taxes and spending by the national government have risen far above levels that are sustainable. Congress and the president have demonstrated their inability to constrain spending or to balance the budget. The only real solution is for the states to exercise their power under Article V of the constitution to propose constitutional amendments that will mandate a balanced budget and in other ways rein in the federal government.

Entitlement reform: Heartland Senior Fellow Peter Ferrara has written extensively on the best ways to reform Social Security and Medicare to ensure that the benefits promised to seniors are kept without economy-crushing tax increases.

Public pension crisis: States across the country face structural budget deficits as a result of too-generous pension promises made to their employees. Mandatory payments into pension funds divert money away from essential government services and create pressure for tax increases.

Welfare reform: Income inequality is an issue being widely debated today. Democrats think they have a solution in raising the minimum wage, but a better solution is bipartisan welfare reform that takes money from bureaucracies and programs that aren’t working and gives it to the poor through programs that reward work and lead to self-sufficiency.

Excise taxes: State governments collected approximately $32 billion in 2014 by taxing “sinful” products and activities, including gambling, smoking, and alcohol. But relying on sin taxes is poor tax policy: They are regressive, unreliable, and unrelated to the benefits of public services financed by their revenues.

Right-to-Work Laws: There are now 26 right-to-work states as a result of educational efforts by The Heartland Institute and others. Right-to-work is a reform that creates new jobs and improve states business climate and economic competitiveness by guaranteeing that no person applying for a job can be forced, as a condition of gaining employment, to join or pay dues to a labor union.

Featured Subtopics

Smokestack emissions
Carbon dioxide emissions in the United States are falling dramatically. Carbon taxes won’t make that happen any more quickly, but they will hurt consumers, the economy, and the environment.
Beer and cigarettes and piggy bank
Excise taxes, often called "sin taxes," should be avoided because they distort the market and encourage unsustainable increases in government spending while placing an unnecessary burden on lower-income taxpayers.
Gasoline pump and money
The U.S. vehicle fleet is become increasingly fuel-efficient, causing motor-fuel tax revenues to be on the decline. Taxing a declining industry is not sound fiscal policy and only increases the burden on individuals and families.

Additional Subtopics

  • Capital Gains Tax
  • Economic Growth
  • Estate Tax
  • Foreign
  • Gross Receipts Tax
  • Income Tax
  • Interstate Comparisons
  • IRS
  • Land Value
  • Other Taxes
  • Property Tax
  • Sales Tax
  • Tax Increment Finance
  • Tax Reform: Federal
  • Tax Reform: States
  • Telecom and Internet Taxes
  • Tourism Taxes
  • Value Added Tax

Videos

Title: Highlights: An Economic Assessment of the Fair Tax in Illinois
Description: Three famous economists - Arthur B. Laffer, Ph.D., Stephen Moore, and Erwin J. Antoni, Ph.D - present their new paper for The Heartland Institute titled "Will the Last Taxpayer in Illinois Please Turn Out the Lights: An Economic Assessment of the Illinois ‘Fair Tax’." The report: https://www.heartland.org/_template-assets/documents/10-28-20%20FairTaxReport.pdf This video is just 15 minutes of highlights of their remarks. See the full 52-minute presentation here: https://youtu.be/81tQdY0mAI8 The economists’ research says passage of the so-called "Fair Tax" ballot initiative, which voters will decide on November 3, would:  hit small businesses with annual profits as low as $250,000;  slow job growth by an estimated 566,000 over the next decade, effectively eliminating about one in 10 current jobs;  result in 1.4 million people leaving Illinois for better economic opportunities, setting outmigration from Illinois at about nine times faster than the current alarming rate;  reduce the state's GDP by $20.5 billion over the next decade;  reduce home value appreciation by about 10.4 percent over the next decade;  make Illinois one of the five highest tax jurisdictions in the world, with only New Jersey and some Third World nations having a higher tax on corporations.

Taxes Experts Team

The Heartland Institute's experts on tax policy are available for legislative testimony, speaking engagements, and media interviews.

Staff & Fellows Policy Experts