Tax Foundation 2014 Annual Report

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ANNUAL REPORT 2014

PRINCIPLED

INSIGHTFUL

ENGAGED


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ii

We Are the Most Eecve Think Tank

Media Citations per $100,000 of Revenue in 2014

Blog Posts in 2014

596Facebook Likes in 2014

4,622

Twier Followers in 2014

15,022

Books Distributed in 2014

33,503

Sta in 2014

24

Research Reports in 2014

69

Tax

Foundation

300

Urban

Institute31

Mercatus

Center26

Center on Budget

& Policy Priorities25

Brookings

InstitutionAmerican

Legislative

Exchange Council

Tax PolicyCenter

686997

Citizens for

Tax Justice

& ITEP

129

Americans

for Tax Reform

135


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Our Vision:

A World Where the Tax CodeDoesnt Hinder Success


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A Leer from Our President2014 was a banner year for the Tax Foundation. As youll discover in the pages that

follow, we are winning the ght for pro-growth, simple tax policy. State by state,

legislator by legislator, and taxpayer by taxpayer, our hardworking team of twenty-

four is leading the conversation on tax policy, changing it from one about revenue to

one about the impact of taxes on people, jobs, wages, and economic growth. This is a

battle worth ghting because good tax policy can improve every life.

In February of 2014, Ways and Means Chairman Dave Camp proposed a bill that

did little but rearrange the existing tax code. Fortunately, this offered our team an

opportunity to suggest pro-growth solutions. This resulted in the replacement of

the bill with a discussion of better alternatives. Since then, weve assisted several

members of Congress, including Senators Mike Lee, Rand Paul, and Marco Rubio,

in developing comprehensive tax reforms to grow the economy.

We had just as much impact on the state level. Across the country, our four-person

state team worked alongside governors, legislators, and activists to identify and

implement structural changes to their tax codes that will allow people and businesses

to ourish. And we dont think this success should belong to any one party. In 2014

alone, we designed reforms with the support of Governor Andrew Cuomo (D-NY)

that, in the coming years, will give New York one of the best corporate tax codes in the

nation, and we worked with Governor Mike Pence (R-IN) to design tax reforms for

individuals and businesses in Indiana.


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We have hope for the future because in 2014, our team laid the foundation for what

lies ahead. With your help, 2016 will be a crucial year for the great tax debate, and

2017 will be the year of sweeping tax reform. By shaping the conversation, weve

focused the tax policy debate on the impact it will have on you, me, and our economy.

In the meantime, well keep working until we achieve a world where the tax code

doesnt hinder success.

We have big plans for 2015 and 2016, and Im excited. In 2015, were positioned to

become an even more effective organization. Our inuence in Washington, DC and

in state capitals across the country continues to grow. Were promoting principled,independent research and developing educational resources to guide policymakers

toward reforms that grow the economy, create jobs, and lift wages. We have the

talent and tools in place to make an even greater impact on tax reform next year and

in the years to come.

Were grateful to all of our supporters who have kept us ghting since 1937.

Cheers!

Scott Hodge


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Our Most Popular Topics

1. Business Taxes

2. Sales Taxes3. Excise Taxes

4. Tax Reform

5. Value of $100 by State

6. Transportation Taxes

7. Property Taxes

8. Income Taxes

9. International Taxes

10. Film Tax Credits

Were a Globally Ranked Think Tank

Best Instuonal

Collaboraon

65thBest U.S. Think

Tank to Watch

12thBest Advocacy

Campaign

34th

The University of Pennsylvanias 2014 Global Go To Think

Tank Index Reportrecognized the Tax Foundation as:

Table of Contents

1. Our Vision

2. A Letter from Our President4. Table of Contents

6. Our Center for Federal Tax Policy

10. Our Center for State Tax Policy

14. Our Center for Legal Reform

16. Were Making the News

18. Our 78th Annual Dinner22. Our New Home

24. Our Team

25. Board of Directors

26. Financials


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The Tax Foundation is helping in every

imaginable way to lay the foundation for

sweeping, permanent tax reform.John EnglerPresident of the Business Roundtableand former Governor of Michigan


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Advancing the Principles of Sound Tax Policy inWashington

Since 1937, our experts have fought for tax and scal policy that enables

the United States to grow and prosper. Year after year, weve strived for

this vision, knowing that if we follow the principles of sound tax policy,

our country will be more competitive in the world economy, have greater

economic growth, and, most importantly, have higher standards of living

for all Americans.

In 2014, we made incredible strides in this effort. We steered Congress

toward pro-growth solutions with our top-of-the-line tax model that

shows how new policies would affect American jobs, wages, and workers;

we were in constant contact with the media to educate them on the

weakness in our current tax code; and we published and promoted 33

research reports and hundreds of articles to provide the public with aholistic view of taxes in the United States.

Our Center forFederal Tax Policy

Unique Media OutletsCing Us in 2014

1,657

Blog Posts

in 2014

344

Media Citaonsin 2014

3,067


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Since 2013, Tax Foundation experts and professors from top universities have

teamed up to teach members of Congress and their staffs the foundations of

economics and tax policy. The program benets attendees in two ways: they

leave better versed in the economics of taxation, and they know to turn to us for

in-depth tax analysis. In 2014:

UNIVERSITY

Opening the World of Economics

EST. 2013

In just two years, weve educated more than 100 members ofcongressional sta on the fundamentals of sound tax policy. Weexpect to educate 100 more sta members in 2015.

More than 75 congressional staffmembers participated in theprogram.

Attendees from across thepolitical spectrum took part.

Dozens of tax counsels, legislativedirectors, and policy analystsgraduated.

Participants ranked the program at anaverage of 4.2 out of ve.

of attendees said they would recommendthis program to other congressional staff.97%


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Cutting Edge Economic AnalysisDelivered Directly to Congress

Our Taxes and Growth (TAG) economic modelprovides lawmakers with the tool they need

to know how their tax policies affect jobs,

wages, investment, and economic growth. It

also provides lawmakers with a more realistic

picture of the way policies affect the amount

of tax revenue the government collects.

We have even bigger plans for our TAGModel in 2015 and 2016. We plan to analyze

every major candidates tax reform plan, so

taxpayers know exactly how it will affect them

and the economy around them.

Increase of

$2.5 Trillion

$15

$17

$19

$21

$23

$25

$27

$29

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Real GDP aerTax Reform

Projected RealGDP (2014 to 2029)T

rillionsofDollars

Tax Reform Could Grow the Economy by $2.5 Trillion

The Economic Effects of a Corporate and Individual Income Tax Rate Cut to 25 Percent, a Capital Gains

and Dividends Income Rate Cut to 10 Percent, and Full Expensing for All Business Investments


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Our New Global Index Highlights the HarmCaused by the U.S. Tax Code

On September 15, 2014, the Wall Street Journalran an exclusive on our

first edition of the International Tax Competitiveness Index. The Index

compares the tax codes of the 34 countries in the Organisation forEconomic Co-operation and Development (OECD) to determine which

has both the best tax environment for individuals to invest and for

businesses to grow.

Media Citaons

208

41,577Website Views

28,724Social Media Shares

Countries Cing Us

26


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Year after year, through principled, meticulous analysis, our team gives state

legislators, business leaders, and citizens the information and resources they need

to improve tax codes for everyone.

Our Center for

State Tax PolicyImproving Policy, One State at a Time

Our teamtesed andpresented in 32states in 2014


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Creating Competition Among the States

Our Index Was Cited in the Top Newspapers

States Cited inFirst Week

50

The State Business Tax Climate Indexis one of our most inuential

publications. It ranks states on various components of tax policy,

fostering competitiveness between states, and pushing legislators

to make changes that will improve their tax codes.

Media Citaons inFirst Week

549

30,024

Website Views inFirst Week

4,527

Social Media Sharesin First Week

Wall Street Journal

USA Today

Washington Post

New York Post

The Business Journals

Pittsburgh Post-Gazette

Dallas Morning News

The Tampa Tribune

Star-Ledger

Atl. Journal Constitution

Newsday

Chicago Sun-Times

Orange County Register

Houston Chronicle

Philadelphia Inquirer

Tampa Bay Times

Salt Lake Tribune

St. Louis Post Dispatch

News & Observer

The Record

Des Moines Register

Indianapolis Star

Miami Herald

Charlotte Observer

The Oklahoman

San Diego Union-Tribune

The Plain Dealer

The Oregonian

The Hartford Courant

The Providence Journal


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Outstanding Achievement in State Tax Reform in 2014

Indiana: Senator Brandt Hershman

SBTCI Overall Rank: 10thin 2011 to8thin 2015

Michigan: Governor Rick Snyder


SBTCI Corporate Income Tax Rank:

49th

in 2012 to 10th

in 2015

DC: Chairman Phil Mendelson

Passed comprehensive tax reform,lowering individual and business taxrates.

Nebraska: Governor Dave Heineman


New York: Governor Andrew Cuomo

SBTCI Corporate Income Tax Rank:24thin 2014 to 20thin 2015

New policies passed in 2014 willlower the states corporate tax ratefrom 7.1% to 6.5%, bringing the statescorporate tax ranking to 4th.

Rhode Island: John Simmons, RIPEC

New policies passed in 2014 willlower the states corporate tax ratefrom 9% to 7%.

Every year, we award leaders of the ght for smarter, more principled tax policy. Their efforts better

peoples lives, as demonstrated by improvements in the State Business Tax Climate Index(SBTCI).


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2014s Best Reads in State Tax Policy

Iowa Illustratedand San Diego Illustrated depict overall economies

and tax systems from a broad perspective through a series of charts

and graphics. These were the rst chart books of what will be a

long-running series that teaches taxpayers and policymakers about

their cities and states.

Simplifying Nevadas Taxes: A

Framework for the Futureis a reformbook that guides policymakers

toward better tax policy, laying out

various options for improvements

in the states tax code. In 2015, the

Nevada legislature implemented

several changes based on our

recommendations.

Facts & Figures: How Does Your State

Compare? is a handy, pocket-sized booklet

that compares tax rates in all 50 states.

Facts & Figureswas rst published in 1942,and every year, we mail copies to each state

legislator in the nation.

Copies Distributed

10,566

In 2013, we released our rst

comprehensive tax reform book,featuring policy options for the state

of North Carolina that would grow its

economy. Legislators wholeheartedly

accepted our recommendations and

enacted them in 2014, improving the

states tax code for individuals and

businesses. In 2015, legislators are

already proposing implementation of

even more of our recommendations.

At the 2014 State Policy Network Conference,our chart books received an award forinnovaon and design in presenng policyideas and informaon in new ways.

CombinedWebsite Views

8,7943,128

Total CopiesDistributed

Total Numberof Charts

62


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The Tax Foundation state team has been a

critical partner in the pursuit of tax reform

I will continue to utilize their expertise to push

for additional pro-growth, conservative tax

policies in Wisconsin.

Representave Dale KooyengaVice Chair of Wisconsins Joint Commiee on Finance


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Our Center forLegal Reform

Some Taxes Are Just Bad Policy, Others Are Illegal

As the nations leading think tank on tax policy, its our responsibility

to ensure that constitutional taxpayer rights are protected. To

achieve this, we continually seek opportunities to aid taxpayers in the

fight for their rights.

In 2014, we led amicus briefs for several cases, including:

Alabama Department of Revenue v. CSX Transportation, Inc.

Direct Marketing Association v. Brohl

Comptroller of the Treasury of Maryland v. Wynne et ux.

Sabina Loving, et al., Appellees v. Internal Revenue Service, et al., Appellants

With our input, the Supreme Court ruled in favor of taxpayers

in the case of Comptroller of the Treasury of Maryland v.

Wynne. Now, the state of Maryland can no longer double tax

residents income that was earned out of state.


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35Average Citaonsper Day in 2014

13,189Total Media

Citaons in 2014

Were Making News

All 100 of The Top 100 Newspapers Cited us in 2014, including:

Our Work was Cited in 63 Countries in 2014We gained 40% more mediaattention in 2014 than in 2013,

and the 10 largest media outlets

cited us 288 times alone.

Trafc to our blog grew 180%,

from 648,306 pageviews in

2012 to 1.85 million pageviews

in 2014.

3,346Unique Media

Outlets Cited Usin 2014


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Our Work Goes Viral

In August, we released a map on the relative value of $100, to show how far $100 will go in

each state. Of the dozens of maps we make each year, this became our most popular ever,

making its way through hundreds of news outlets, informing hundreds of thousands ofpeople, and being viewed over 200,000 times.

The map highlights how the cost of living differs enormously from state to state. A person

living in rural Mississippi and making $50,000 might have a higher standard of living than

someone earning the same salary in New York City. The IRS doesnt take this into account,

taxing people with the same income at the same rate regardless of where they live.

Media Citaons472

Note: Numbers represent the value of goods that $100 can buy in each statecompared to the naonal average. The BEA has developed a methodology usingPersonal Consumpon ExpendituresandAmerican Community Surveydata to esmateaverage price levels in each state for household consumpon, including rentalhousing costs. Data is as of April 24, 2014. Published August 18, 2014.Source: Bureau of Economic Analysis, Regional Price Paries.

The Relave Value of $100 in Each State

MoreValuable

LessValuable

Tax Freedom Day is when the nation as a whole

has earned enough money to pay its total tax bill

for the year. In 2014, Tax Freedom Day arrived on

April 21. Every year, Tax Freedom Day receives

remarkable media attention, and in 2014, it was

cited by the media 1,289 times.Website View

203,501

10,913Social Media Shares

State/Local Salesand Excise Taxes13 Days

State/Local IncomeTaxes 9 Days

Federal Income Tax33 Days

Social InsuranceTaxes 27 Days

Federal CorporateIncome Taxes 8 Days

Other FederalTaxes 4 Days

Other State/LocalTaxes 3 Days

State/Local CorporateIncome Taxes 1 Day

Property Taxes11 Days

State/Local SocialInsurance Taxes 3 hours

Federal ExciseTaxes 2 Days

January

February

March

April

Tax Freedom DayApril 21, 2014

1 2 3 4

8765 9 10 11

15141312 16 17 18

22212019 23 24 25

29282726 30 31 1

1

5432 6 7 8

1211109 13 14 15

19181716 20 21 22

26252423 27 28 1

30 31

1

5432 6 7 8

1211109 13 14 15

19181716 20 21 22

26252423 27 28 29

1 2 3 4 5

9876 10 11 12

16151413 17 18 19

22212120 23 24 25

29282726 30 31 1


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77th Annual DinnerSince 1937, weve gathered the best and brightest in tax policy at

our Annual Dinner (affectionately referred to as Tax Prom) to

celebrate and honor the hard work of the year. In 2014, we held the

largest dinner in Tax Foundation history, lling the room with more

than 500 guests. Annual awards were presented to recognize key

pro-growth tax policy players in the public and private sector.


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Representative Pat Tiberi

(OH), presented by former

Representative Phil English

from Pennsylvania.

John Engler, President of the Business

Roundtable and former Governor of

Michigan, presented by Tax Foundation

Board of Directors Chairman David Lewis.

Mark Prater, Chief Tax Counsel and

Deputy Staff Director to the U.S Senate

Committee on Finance, presented by U.S.

Senator Orrin Hatch (UT).

Award Winners

Representative Pat Tiberi, 2014

Thank you to you and [the Tax Foundaon], and to all of the people

who supported you for so many years because youre providing the

light on top of the hill that we all look to for guidance.


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The Foundations distinguished record ofaccomplishment should be a source of pride to

its members, who deserve the thanks of all of

our citizens for their dedication to a task whichcontributes so much to the effective functioning

of the American democratic system.

President John F. Kennedy, 1962


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We began fighting for pro-growth tax policy in 1937 in our very first office at 30 Rockefeller Plaza in New York City.

Seventy-seven years, several offices, and hundreds of tax battles later, our team made the move to 1325 G Street NW

in Washington, DC. The new office provides us with the space we need to grow our staff, work collaboratively, and host

guests who will aid us in our efforts to better the lives of taxpayers.

Our New Home


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Since 1950 I have known your research and educaonal eorts on thescal aairs of government, and I am convinced that programs such as

yours are needed more today than ever before.

Former President Dwight D. Eisenhower, 1962


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Our TeamExecutive TeamScott Hodge, PresidentJoseph Henchman, Vice President, Operations

Michael Vogler, Vice President, DevelopmentAndrew Lundeen, Director of Federal Projects

Chris Krukewitt, HR & Accountant

Federal Policy TeamStephen Entin, Senior FellowMichael Schuyler, Senior FellowKyle Pomerleau, EconomistAlan Cole, EconomistHuaqun Li, Economist

Gavin Ekins, Research Economist

State Policy TeamScott Drenkard, Economist & Manager of State ProjectsLiz Malm, Economist

Jared Walczak, Policy Analyst

Development TeamWhitney Everley, Director of Major Gifts

Lexxie Monahan, Manager of Donor Communications

Marketing TeamRichard Borean, Communications Manager

Melodie Bowler, EditorTom VanAntwerp, Director of ITDan Carvajal, Production Designer

Colby Pastre, Communications Associate

Operations TeamSteven Luhr, Operations Assistant


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We offer a unique internship program designed to introduce

undergraduate and graduate students to tax policy principles and

how to apply them in assessing and advancing public policy. Working

directly with our staff in various areas of tax policy, interns gain valuable

professional experience and learn about all aspects of our operation.

2014 Highlights

Every internship at the Tax Foundation includes substantive work and opportunities foradvancement. Highlights from our 2014 internship class include:

The Next Generation of Good Tax Policy

Liz Emanuel authored 13 blog posts andcoauthored a major report on state and

local taxes. Tyler Dennis authored 10 blog posts

on topics ranging from carbon taxesin Australia to marijuana taxes inColorado.

Using experience from our internshipin spring of 2014, Johannes Schmidt

earned a position as Grants andAwards Program Associate at the

Atlas Network. Other interns contributed to

major federal studies including theInternational Tax CompetitivenessIndex and our signiture federalchartbook, Business in AmericaIllustrated.


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Dr. DouglasHoltz-EakinPresident, American ActionForum

6thDirector, CongressionalBudget Office

Board of DirectorsDavid P. LewisChairman

Vice President Global Taxes,Chief Tax Executive & Assistant

Treasurer, Eli Lilly andCompany

The HonorablePhilip EnglishCo-Chair, Government RelationsGroup, Arent Fox LLP

Member of the U.S. House ofRepresentatives (1995-2009)

Sarah McGillSenior Vice President of Tax,

PepsiCo, Inc.

James W. LintottTreasurer

Chairman, Sterling FoundationManagement LLC

Pamela OlsonPrincipal, Deputy Tax Leader,PricewaterhouseCoopers LLP

Former Assistant Secretary

for Tax Policy, U.S.Department of the Treasury

The HonorableBill ArcherSenior Policy Analyst,PricewaterhouseCoopers LLP

Chairman, House Ways andMeans Committee (1995-2001)

Member of the U.S. House ofRepresentatives (1971-2001)

Stephen KranzPartner, McDermott Will &Emery LLP

Scott A. HodgePresident, Tax Foundation

Tom RoesserSenior Director of Tax Affairs,Microsoft Corporation


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Financials, Revenue & Expenses

Were growing because of you.

Revenue 2014* 2013* 2012*

Philanthropic Foundations 1,552,000 1,223,977 756,095

Business Contributions 1,481,004 1,129,900 802,814

Donations from Individuals 379,348 348,009 355,899

Event Revenue, Net 290,425 230,389 237,643

Investment Income 18,695 8,771 7,820

Publication Sales & Other 12,864 12,014 12,944

Total Revenue 3,764,529 2,953,060 2,173,216

Expenses

Programs 2,143,968 1,821,069 1,254,609

Fundraising & Donor Outreach 467,830 436,719 417,619

General & Administrative 289,458 211,880 228,520

Total Expenses 2,901,256 2,469,668 1,900,821

20142013

0

1,000,000

2,000,000

3,000,000

$4,000,000

2012

Revenue

Expenses

*as of December 31


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Change in Net Assets 2014* 2013* 2012*

Surplus/(Decit) on Activities 833,080 483,392 272,395

plusReleased Restricted Funds from Prior Years 309,544 99,224 76,624

less Funds Restricted for Future Years (212,832) (309,544) (22,787)

lessLease & Sublease Adjustment (124,726) n/a n/a

plusUnrealized Net Gain/(Loss) on Investments 30,192 71,333 39,160

Change in Net Assets 835,259 344,405 365,392

Assets

Cash & Cash Equivalents 575,954 555,374 351,640

Accounts Receivable 557,227 299,126 77,820

Prepaid Expenses & Other Assets 220,913 51,888 65,220

Investments 1,502,093 681,766 602,260

Furniture & Equipment, Net 798,552 36,081 39,987

Total Assets 3,654,739 1,677,192 1,155,776

Liabilies & Net Assets

Accounts Payable & Accrued Expenses 556,362 55,696 83,187

Tenant Improvement Allowance 625,489 0 0

Deferred Rent & Sublease Liability 151,241 12,983 4,646

Other Long-Term Liabilities 9,302 0 0

Total Liabilities 1,342,393 98,393 131,702

Unrestricted Net Assets 2,067,444 1,269,255 924,850

Temporarily Restricted Net Assets 244,901 309,544 99,224

Total, Net Assets 2,312,345 1,578,799 1,024,074

Total Liabilies & Net Assets 3,654,739 1,677,192 1,155,776

Balance Sheet

*as of December 31


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Our Mission:

The Principles of Sound Tax Policy:Simplicity

Administrative costs are a loss to society, and complicated

taxation undermines voluntary compliance by creatingincentives to shelter and disguise income.

Transparency

Tax legislation should be based on sound legislativeprocedures and careful analysis. A good tax systemrequires that taxpayers be informed and understand howtax assessment, collection, and compliance works. Thereshould be open hearings, and revenue estimates should be

fully explained and replicable.

Neutrality

Taxes should not encourage or discourage certain economicdecisions. The purpose of taxes is to raise needed revenue, not

to favor or punish specic industries, activities, and products.

Stability

When tax laws are in constant ux, long-range nancial

planning is difcult. Lawmakers should avoid enactingtemporary tax laws, including tax holidays and amnesties.

No Retroacvity

As a corollary to the principle of stability, taxpayers shouldbe able to rely with condence on the law as it exists when

contracts are signed and transactions are completed.

Broad Bases and Low Rates

As a corollary to the principle of neutrality, lawmakersshould avoid enacting targeted deductions, credits, andexclusions. If tax preferences are kept to a minimum,substantial revenue can be raised with low tax rates. Broad-based taxes also produce relatively stable tax revenuesfrom year to year.

We improve lives through tax policy research and education

that leads to greater economic growth and opportunity.


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Suite 950

Washington, DC 20005

Phone: 202.464.6200

Content & Editing: Lexxie Monahan & Melodie Bowler

Design & Layout: Dan Carvajal & Colby Pastre

taxfoundation.org

facebook.com/taxfoundation

@TaxFoundation

PRINCIPLED

INSIGHTFUL

ENGAGED

Tax Foundation 2014 Annual Report

Documents

Transcript of Tax Foundation 2014 Annual Report