Tax Foundation
Encyclopedia
The Tax Foundation is a Washington, D.C.-based think tank
founded in 1937 that collects data and publishes research studies on tax policies at the federal and state levels. The organization is broken into three primary areas of research which are the Center for Federal Fiscal Policy, The Center for State Fiscal Policy and the Center for Legal Reform. The group is known for its annual reports such as "Facts & Figures:How Does Your State Compare" which was first produced in 1941 and Tax Freedom Day
for the United States, which it has produced since the early 1970s.
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". The Tax Foundation is organized as 501(c)3 non-profit educational and research organization. Its website states that journalists should describe it as: "a nonpartisan
tax research group," though it has been described as having a "pro-business leaning" and it has ties to various conservative groups.
Tax Foundation research is generally critical of tax increases, high business taxes, so-called "sin" taxes, tax preferences for the housing industry, and use of the tax code for "picking winners and losers". However, they are against reducing $47 billion in tax credits for the oil industry, and against taxes on growing fossil-fuel carbon emissions. They have spoken favorably of efforts to balance the federal budget with tax reform and significant spending cuts, such as the Bowles-Simpson plan, the Ryan Plan, and the Wyden-Coats plan.
The Tax Foundation has received funding from ExxonMobil
and from conservative political groups such as the Koch Family Foundations
, the Earhart Foundation
, and Citizens for a Sound Economy
.
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. The stated goal of the organization was "to monitor the tax and spending policies of government agencies". 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. By 1943, the Tax Foundation had helped set up taxpayers associations and expenditure councils in 35 states.
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. 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.
Since 1990 or earlier, the Tax Foundation has "operate[d] as a separate unit" of Citizens for a Sound Economy
.
Since 2009, The Tax Foundation’s offices have been located in the National Press Building in Washington, D.C.
s in the United States has been criticized by other think tanks, such as the Center on Budget and Policy Priorities
(CBPP) and Citizens for Tax Justice
(CTJ), citing repeated "methodological errors" and "reliance on early projections without hard data." CBPP has also criticized other reports by the Tax Foundation, and in turn the Tax Foundation has responded or criticized CBPP reports. The two groups have some areas of agreement, such as opposition to most tax expenditures and sales tax holidays.
In 2008, Paul Krugman
wrote in his New York Times blog that the Tax Foundation was "not a reliable source" in response to a report by the Tax Foundation comparing corporate tax rates in the United States
to those in other countries. In 2011, Krugman accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act
.
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
founded in 1937 that collects data and publishes research studies on tax policies at the federal and state levels. The organization is broken into three primary areas of research which are the Center for Federal Fiscal Policy, The Center for State Fiscal Policy and the Center for Legal Reform. The group is known for its annual reports such as "Facts & Figures:How Does Your State Compare" which was first produced in 1941 and Tax Freedom Day
Tax Freedom Day
Tax Freedom Day is the first day of the year in which a nation as a whole has theoretically earned enough income to fund its annual tax burden. It is annually calculated in the United States by the Tax Foundation—a Washington, D.C.-based tax research organization...
for the United States, which it has produced since the early 1970s.
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". The Tax Foundation is organized as 501(c)3 non-profit educational and research organization. Its website states that journalists should describe it as: "a nonpartisan
Nonpartisan
In political science, nonpartisan denotes an election, event, organization or person in which there is no formally declared association with a political party affiliation....
tax research group," though it has been described as having a "pro-business leaning" and it has ties to various conservative groups.
Goals and principles
Tax Foundation states that their research is guided by the principles of simplicity, transparency, neutrality, stability, no retroactivity, broad bases and low rates, which they describe as sound tax policy.Tax Foundation research is generally critical of tax increases, high business taxes, so-called "sin" taxes, tax preferences for the housing industry, and use of the tax code for "picking winners and losers". However, they are against reducing $47 billion in tax credits for the oil industry, and against taxes on growing fossil-fuel carbon emissions. They have spoken favorably of efforts to balance the federal budget with tax reform and significant spending cuts, such as the Bowles-Simpson plan, the Ryan Plan, and the Wyden-Coats plan.
The Tax Foundation has received funding from ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
and from conservative political groups such as the Koch Family Foundations
Koch Family Foundations
Koch Family Foundations is the informal name for a group of charities in the United States of America associated with the family of Fred C. Koch. The most prominent of these are the Charles G. Koch Charitable Foundation and the David H. Koch Charitable Foundation, created by two of Fred C...
, the Earhart Foundation
Earhart Foundation
The Earhart Foundation is a private charitable foundation that funds research and scholarship. It was founded in 1929 by oil executive Harry Boyd Earhart.- History :...
, and Citizens for a Sound Economy
Citizens for a Sound Economy
Citizens for a Sound Economy was a conservative political group operating in the United States, whose self-described mission was "to fight for less government, lower taxes, and less regulation." In 2004, Citizens for a Sound Economy split into two new organizations, with Citizens for a Sound...
.
History
The Tax Foundation was organized on December 5, 1937 in New York City by Alfred P. Sloan, Jr., Chairman of the General MotorsGeneral Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
Corporation; Donaldson Brown
Donaldson Brown
Frank Donaldson Brown was a financial executive and corporate director with both DuPont and General Motors Corporation. He graduated from Virginia Tech in 1902 with a Bachelor of Science degree in Electrical Engineering...
, GM Financial Vice President; William S. Farish
William S. Farish
William Stamps Farish III is an American businessman and a former U.S. Ambassador to the United Kingdom .-Family and Early Life:...
, President of Standard Oil Company of New Jersey (Exxon); and Lewis H. Brown
Lewis H. Brown
Lewis Herold Brown was an industrialist.-Early life and career:Born in Creston, Iowa on February 13, 1894, he attended the University of Iowa in 1915. Brown served in France as an infantry captain during World War I. After the war, Brown was employed by Montgomery Ward and was promoted to...
, President of Johns-Manville
Johns-Manville
Johns Manville is an American corporation based in Denver, Colorado that manufactures insulation, roofing materials, and engineered products. The stock was included in the Dow Jones Industrial Average from January 29, 1930 to August 27, 1982 when it was replaced by American Express. Berkshire...
Corporation, who later became the first Chairman of the Board of The Tax Foundation. The stated goal of the organization was "to monitor the tax and spending policies of government agencies". Its offices were located at 50 Rockefeller Plaza
Rockefeller Center
Rockefeller Center is a complex of 19 commercial buildings covering between 48th and 51st streets in New York City, United States. Built by the Rockefeller family, it is located in the center of Midtown Manhattan, spanning the area between Fifth Avenue and Sixth Avenue. It was declared a National...
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. By 1943, the Tax Foundation had helped set up taxpayers associations and expenditure councils in 35 states.
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. 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.
Since 1990 or earlier, the Tax Foundation has "operate[d] as a separate unit" of Citizens for a Sound Economy
Citizens for a Sound Economy
Citizens for a Sound Economy was a conservative political group operating in the United States, whose self-described mission was "to fight for less government, lower taxes, and less regulation." In 2004, Citizens for a Sound Economy split into two new organizations, with Citizens for a Sound...
.
Since 2009, The Tax Foundation’s offices have been located in the National Press Building in Washington, D.C.
Board of directors
| Name | Term | Other Affiliations |
| Ongoing Directors: | ||
| David P. Lewis, Chairman | 2009–current | Eli Lilly Eli Lilly Eli Lilly was the founder of Eli Lilly and Company.Eli Lilly may also refer to:* Eli Lilly and Company, a global pharmaceutical company... & Co, Vice President Taxes, Tax Council Policy Institute, Treasurer |
| James Lintott | pre-1999–current | Sterling Foundation Management |
| Bill Archer William Reynolds Archer, Jr. William Reynolds “Bill” Archer, Jr. is a former American lawyer and politician. Archer served two terms, from 1967 to 1971, in the Texas House of Representatives — changing from the Democratic to the Republican party in 1969 — and later represented Texas in the United States House as a Republican... |
2003–current | former Texas Congressman |
| Former Directors (post-1990): | ||
| Wayne E. Gable | pre-1999-2008 | Koch Industries Koch Industries Koch Industries, Inc. , is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company... Dir. of Federal Affairs, Citizens for a Sound Economy Citizens for a Sound Economy Citizens for a Sound Economy was a conservative political group operating in the United States, whose self-described mission was "to fight for less government, lower taxes, and less regulation." In 2004, Citizens for a Sound Economy split into two new organizations, with Citizens for a Sound... , Americans for Prosperity Americans for Prosperity Americans for Prosperity is a Washington, D.C.–based political advocacy group. According to their literature, they promote economic policy that supports business, and restrains regulation by government... |
| James C. Miller III James C. Miller III James C. Miller III is a former U.S. government official and economist who served as chairman of the Federal Trade Commission between 1981 and 1985 and as Budget Director for President Ronald Reagan between 1985 and 1988... |
1989–2005 | Citizens for a Sound Economy; Director of OMB under Pres. Regan |
| Joseph O. Luby, Jr. | 2000–2006 | Exxon Mobil, VP Tax |
| James Q. Riordan | pre-1989–1999 | Mobil Mobil Mobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On... , VP Tax |
| R. Glenn Hubbard | 2003–2008 | Chairman of President Bush's Council of Economic Advisers |
| Michael P. Boyle | 2002–2006 | Microsoft Microsoft Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions... , VP Finance |
| Other Current Directors: | ||
| Douglas Holtz-Eakin Douglas Holtz-Eakin Douglas J. "Doug" Holtz-Eakin is an American economist, former professor, former Director of the Congressional Budget Office and former chief economic policy adviser to U.S... |
2009 | American Action Forum; chief economic adviser to Presidential candidate John McCain in 2008 |
| 2009 | Pepsico PepsiCo PepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company... , VP Tax Planning |
|
| Pamela F. Olson | 2009 | Skadden, Arps; senior economic adviser to the Bush George W. Bush George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000.... -Cheney Dick Cheney Richard Bruce "Dick" Cheney served as the 46th Vice President of the United States , under George W. Bush.... campaign and formerly Assistant Secretary of Treasury for Tax Policy under Pres. Bush |
Criticisms
The Tax Foundation's annual study that calculate Tax Freedom DayTax Freedom Day
Tax Freedom Day is the first day of the year in which a nation as a whole has theoretically earned enough income to fund its annual tax burden. It is annually calculated in the United States by the Tax Foundation—a Washington, D.C.-based tax research organization...
s in the United States has been criticized by other think tanks, such as the Center on Budget and Policy Priorities
Center on Budget and Policy Priorities
The Center on Budget and Policy Priorities is a non-profit think tank that describes itself as a "policy organization ... working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals."The Center examines the short- and...
(CBPP) and Citizens for Tax Justice
Citizens for Tax Justice
Citizens for Tax Justice is a non-profit research and advocacy think tank based in Washington, DC. CTJ’s work focuses primarily on federal tax policy...
(CTJ), citing repeated "methodological errors" and "reliance on early projections without hard data." CBPP has also criticized other reports by the Tax Foundation, and in turn the Tax Foundation has responded or criticized CBPP reports. The two groups have some areas of agreement, such as opposition to most tax expenditures and sales tax holidays.
In 2008, Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
wrote in his New York Times blog that the Tax Foundation was "not a reliable source" in response to a report by the Tax Foundation comparing corporate tax rates in the United States
Corporate tax in the United States
Corporate tax is imposed in the United States at the Federal, most state, and some local levels on the income of entities treated for tax purposes as corporations. Federal tax rates on corporate taxable income vary from 15% to 35%. State and local taxes and rules vary by jurisdiction, though many...
to those in other countries. In 2011, Krugman accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act
American Jobs Act
The American Jobs Act and are bills proposed by US President Barack Obama in a nationally televised address to a joint session of Congress on September 8, 2011...
.
See also
- Americans For Fair TaxationAmericans For Fair TaxationAmericans For Fair Taxation , also known as FairTax.org, states it is the United States' largest, single-issue grassroots organization and taxpayers union dedicated to fundamental tax code replacement...
- Americans for Tax ReformAmericans for Tax ReformAmericans for Tax Reform is an advocacy group and taxpayer group whose stated goal is "a system in which taxes are simpler, flatter, more visible, and lower than they are today. The government's power to control one's life derives from its power to tax...
- Brookings InstitutionBrookings InstitutionThe Brookings Institution is a nonprofit public policy organization based in Washington, D.C., in the United States. One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and...
- Cato InstituteCato InstituteThe Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
- Center for Budget and Policy Priorities
- Citizens for Tax JusticeCitizens for Tax JusticeCitizens for Tax Justice is a non-profit research and advocacy think tank based in Washington, DC. CTJ’s work focuses primarily on federal tax policy...
- Koch Family FoundationsKoch Family FoundationsKoch Family Foundations is the informal name for a group of charities in the United States of America associated with the family of Fred C. Koch. The most prominent of these are the Charles G. Koch Charitable Foundation and the David H. Koch Charitable Foundation, created by two of Fred C...
- Heritage FoundationHeritage FoundationThe Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
- National Taxpayers UnionNational Taxpayers UnionNational Taxpayers Union is a taxpayers advocacy organization and taxpayers union in the United States, founded in 1969 by James Dale Davidson. NTU advertises that it is the largest and oldest grassroots taxpayer organization in the nation, with 362,000 members nationwide. It is closely...
- Tax Policy CenterTax Policy CenterThe Tax Policy Center is a non-partisan joint venture of the Urban Institute and the Brookings Institution. Based in Washington D.C., it aims to provide independent analyses of current and longer-term tax issues and to communicate its analyses to the public and to policymakers in a timely and...
- Urban InstituteUrban InstituteThe Urban Institute is a Washington, D.C.-based think tank that carries out nonpartisan economic and social policy research, collects data, evaluates social programs, educates the public on key domestic issues, and provides advice and technical assistance to developing governments abroad...