States rely heavily on gas taxes to pay for transportation construction and maintenance costs. In 2021, state motor fuel taxes generated about $50 billion in revenue. State and local motor fuel tax revenue accounted for 26 percent of all highway and road spending.
With the establishment of the Department of Government Efficiency, Treasury and the IRS should take this opportunity to brag: Their research and development (R&D) have led to improvements in taxpayer service and administrative efficiency.
Table shows the change in the distribution of federal taxes, by expanded cash income level in 2025, of a proposal to increase the $10,000 limit on deductible state and local taxes (SALT deduction) to $200,000 for married couples filing jointly. The limit would increase from $5,000 to $100,000 for married individuals filing a separate return.
For a discussion of the distribution metrics presented in this table, see Measuring the Distribution of Tax Changes.
Table shows the change in the distribution of federal taxes, by expanded cash income level in 2025, of a proposal to increase the $10,000 limit on deductible state and local taxes (SALT deduction) to $200,000 for married couples filing jointly. The limit would increase from $5,000 to $100,000 for married individuals filing a separate return.
For a discussion of the distribution metrics presented in this table, see Measuring the Distribution of Tax Changes.
Table shows the impact on federal tax revenue for fiscal years 2025-34 of options to modify the $10,000 limit on deductible state and local taxes (SALT deduction).
New research suggests the TCJA’s estate tax provisions warrant special attention and reveal a unique opportunity for policymakers.
As policymakers look for ways to address large and persistent federal deficits, shoring up the estate tax should be under consideration. It could generate more federal revenue, boost taxpayer equity, and improve economic mobility.
If DOGE applied the same scrutiny to so-called “tax expenditures” that it plans for regulations and spending, it could shrink the government and reduce the deficit. And it might find some easier pickings, politically, than cutting into core government spending programs.
Expansions to the Child Tax Credit (CTC) are among many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) scheduled to expire at the end of 2025. If Congress does nothing, the credit will be cut in half, among other changes. As the TCJA deadline looms, the CTC could become a top priority to policymakers interested in decreasing child poverty.
Below are some issues and options to consider.
