Study: After the TCJA, the ultra-wealthy’s effective tax rate fell. A new National Bureau of Economic Research study from economists Akcan Balkir, Emmanuel Saez, Danny Yagan, and Gabriel Zucman estimates that the effective tax rate for the top 0.0002 percent (roughly the Forbes 400) fell from about 30 percent to about 24 percent after the 2017 Tax Cuts and Jobs Act (TCJA). The study also attributes roughly 9 percentage points of the top 400’s total burden to corporate taxes. The authors further note that the wealth of that group has grown from about 2 percent of GDP in 1982 to about 20 percent today.
IRS guidance gives EV buyers a little more time before credit ends. The IRS has clarified that buyers who have a written binding contract and make a payment by Monday, September 30, 2025, can still claim the federal electric vehicle (EV) tax credit when they take delivery after that date.
In California: Roll back a cannabis tax hike, or protect child-care dollars? California’s cannabis excise tax rose from 15 percent to 19 percent on July 1 as part of a 2022 deal. Now, an Assembly-passed bill (AB 564) would restore the 15 percent rate for six years, reducing dedicated revenues by about $180 million annually, including roughly $81 million slated for about 8,000 additional subsidized child-care slots. Governor Gavin Newsom (D-CA) has signaled support for backfilling funds if the bill becomes law; the measure faces a September 12 legislative deadline. The Los Angeles Times explains the stakes for child-care advocates, legal dispensaries, and state finances.
Denmark moves to scrap taxes on coffee, chocolate, and sweets. Citing high food prices, Denmark’s government proposed eliminating longstanding levies on coffee and cocoa-containing products (and some other sweets), a cut officials estimate would lower everyday grocery costs and reduce prices from recent levels. The New York Times offers a rundown of the plan and its consumer impact.
How might federal immigration actions affect state and local budgets? TPC’s Gabriella Garriga and Aravind Boddupalli outline three channels—discouraged tax filing, reduced federal support, and the loss of local economic contributors—through which recent federal immigration actions could strain state and local finances. They note that about 5.4 million undocumented immigrants file taxes with Individual Taxpayer Identification Numbers, and that policy changes tied to the “One Big Beautiful Bill Act” (PL 119-21), along with a new IRS–DHS information-sharing agreement, could reduce filing and dampen revenues.
What could bring tax policy closer to public preferences? TPC’s Brookings Institution colleagues Sona Wyse, Ian Berlin, and Bill Gale examine why the “One Big Beautiful Bill Act” moved forward even though many voters viewed it unfavorably. They argue that differences between the preferences of wealthier Americans and the general public, as well as low public awareness of complex fiscal trade-offs, help explain the gap. They highlight options such as public financing of campaigns and clearer framing of tax-and-spending links to better align policy with voters’ priorities.
The Daily Deduction will resume its regular schedule Tuesday, September 2, after Labor Day.
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