Tax Foundation

From Ballotpedia
Jump to: navigation, search
Tax Foundation
Leadership: Scott A. Hodge
Political Party: Nonpartisan
Website: Tax Foundation
Email: {{{email}}}

The Tax Foundation is a nonpartisan tax research group based in Washington, D.C. that focuses on educating citizens about tax policy and tax regulations on United States citizens.


The Tax Foundation works to educate taxpayers about tax policy and the tax burden at each level of government. The Tax Foundation believes that spreading basic information about government finance is the foundation of sound policy.[1]


The Tax Foundation was founded in 1937, in the worst of the Great Depression, after the administrations of Herbert Hoover and Franklin Roosevelt brought a 170 percent climb in federal spending. In the five years before the organization's founding, internal revenue collections had risen 198 percent.

A small group of business executives met in New York City and discussed ways how they could monitor fiscal activities at all levels of government and show the information to the general public. Those in the meetings decided to launch an organization that could research and analyze tax policy and information and inform and educate Americans. Because the small business executives were concerned about the effect the government's historical expansion might have on growth in the private sector, they wanted to educate fellow citizens using objective, reliable data on government finance.

The Tax Foundation has worked to promote a sense of "tax consciousness" in the public. It prides itself on its reputation of unbiased and independent information gathering and publishing.[1]

Principles of sound tax policy

The following are principles of sound tax policy according to the Tax Foundation:

Simplicity: Complicated tax laws undermine voluntary compliance by creating incentives to shelter and disguise income.

Transparency: Taxpayers should understand how tax assessment, collection, and compliance works in addition to government entities holding open hearings and providing revenue estimate explanations.

Neutrality: Taxes exist to raise needed revenue not in order to micromanage the economy so the tax system should not favor certain industries, activities, or products.

Stability: Constantly changing tax laws make long-range financial planning difficult. Temporary tax laws, including tax holidays and amnesties, should be avoided.

No Retroactivity: To coincide with the principle of stability, taxpayers should be able to rely on the law as it exists when they sign business contracts and make transactions.

Broad Bases and Low Rate: To coincide with the principle of neutrality, "lawmakers should avoid enacting targeted deductions, credits and exclusions." With these preferences reduced, members of the economy can raise substantial revenue with low tax rates. "Broad-based taxes can also produce relatively stable tax revenues from year to year."[1]

External links


  1. 1.0 1.1 1.2 About Tax Foundation