Many Americans find the U.S. tax system confusing, overly complex and even unfair, because it favors some individuals and economic activities over others. Additionally, the U.S. tax code does not currently generate adequate revenue to keep up with the spending promises lawmakers have made.
For these reasons, most lawmakers and voters agree the tax code needs reform – and there are many policy options available to make our system simpler, more transparent, and more supportive of economic growth and fiscal sustainability.
Before we can begin to assess the value of specific proposals, it helps to look at the big picture of how the system works – and to address some common misconceptions. Check out the infographic below for an overview of the system and then test how much you have learned with our tax quiz.
Further Reading
How Does the Capital Gains Tax Work, and What Are Some Proposed Reforms?
While the capital gains tax affects anyone selling a capital asset, higher-income individuals are typically subject to the tax more so than average Americans.
What Is the SALT Cap?
The deduction of state and local tax payments from federal income taxes has been a subject of debate among economists and policymakers over the past few years — with significant implications for our budget and fiscal outlook.
What Is the Premium Tax Credit?
The premium tax credit reduces the cost of health insurance for millions of Americans. It is also one of the largest federal tax expenditures.