PRINCIPLED

INSIGHTFUL
ENGAGED
ANNUAL REPORT 2014

We Are the Most Effective Think Tank

Staff in 2014

Media Citations per $100,000 of Revenue in 2014

24
Research Reports in 2014

69
Blog Posts in 2014

596

Tax
Foundation

Americans
for Tax Reform

135

300

Facebook Likes in 2014

4,622
Twitter Followers in 2014

15,022
Books Distributed in 2014

33,503
ii

Citizens for
Tax Justice
& ITEP

on Budget
25 &Center
Policy Priorities

26 Mercatus
Center

129
97

68
69

Brookings
American
Institution
Legislative
Exchange Council

Tax Policy
Center

Urban
31 Institute

Our Vision:
A World Where the Tax Code
Doesnt Hinder Success

A Letter from Our President

2014 was a banner year for the Tax Foundation. As youll discover in the pages that
follow, we are winning the fight for pro-growth, simple tax policy. State by state,
legislator by legislator, and taxpayer by taxpayer, our hardworking team of twentyfour 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 fighting 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 flourish. 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.

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 influence 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 fighting since 1937.
Cheers!

Scott Hodge
3

Our Most Popular Topics

Were a Globally Ranked Think Tank

1. Business Taxes
2. Sales Taxes
3. 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

The University of Pennsylvanias 2014 Global Go To Think

Tank Index Report recognized the Tax Foundation as:

12th

34th

65th

Best U.S. Think

Tank to Watch

Best Advocacy
Campaign

Best Institutional
Collaboration

Table of Contents
1. Our Vision
2. A Letter from Our President
4. Table of Contents
6. Our Center for Federal Tax Policy
10. Our Center for State Tax Policy
14. Our Center for Legal Reform

16.
18.
22.
24.
25.
26.

Were Making the News

Our 78th Annual Dinner
Our New Home
Our Team
Board of Directors
Financials

The Tax Foundation is helping in every

imaginable way to lay the foundation for
sweeping, permanent tax reform.
John Engler
President of the Business Roundtable
and former Governor of Michigan

Our Center for

Federal Tax Policy
Advancing the Principles of Sound Tax Policy in
Washington
Since 1937, our experts have fought for tax and fiscal 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 a
holistic view of taxes in the United States.
Blog Posts
in 2014

344
6

Unique Media Outlets

Citing Us in 2014

1,657

Media Citations
in 2014

3,067

UNIVERSITY

EST. 2013

Opening the World of Economics

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 benefits 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:

97%

of attendees said they would recommend

this program to other congressional staff.

More than 75 congressional staff

members participated in the
program.

Dozens of tax counsels, legislative

directors, and policy analysts
graduated.

Attendees from across the

political spectrum took part.

Participants ranked the program at an

average of 4.2 out of five.

In just two years, weve educated more than 100 members of

congressional staff on the fundamentals of sound tax policy. We
expect to educate 100 more staff members in 2015.
7

Tax Reform Could Grow the Economy by $2.5 Trillion

Cutting Edge Economic Analysis

Delivered Directly to Congress

We have even bigger plans for our TAG

Model 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.

$27
$25
Trillions of Dollars

Our Taxes and Growth (TAG) economic model

provides 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.

$29

$23
$21
$19

Real GDP after

Tax Reform

Increase of
$2.5 Trillion

Projected Real
GDP (2014 to 2029)

$17
$15
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

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

Our New Global Index Highlights the Harm

Caused by the U.S. Tax Code
On September 15, 2014, the Wall Street Journal ran 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 for
Economic Co-operation and Development (OECD) to determine which
has both the best tax environment for individuals to invest and for
businesses to grow.
Countries Citing Us

26

Media Citations

208

Social Media Shares

28,724
Website Views

41,577
9

Our Center for

State Tax Policy
Improving Policy, One State at a Time
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 team
testified and
presented in 32
states in 2014

10

Creating Competition Among the States

The State Business Tax Climate Index is one of our most influential
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.
States Cited in
First Week

Media Citations in
First Week

Social Media Shares

in First Week

Website Views in
First Week

549

50

4,527

30,024

Our Index Was Cited in the Top Newspapers

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

11

Outstanding Achievement in State Tax Reform in 2014

Every year, we award leaders of the fight for smarter, more principled tax policy. Their efforts better
peoples lives, as demonstrated by improvements in the State Business Tax Climate Index (SBTCI).
Indiana: Senator Brandt Hershman
SBTCI Overall Rank: 10th in 2011 to
8th in 2015

Michigan: Governor Rick Snyder

SBTCI Overall Rank: 35th in 2012 to

29th in 2015

New York: Governor Andrew Cuomo

SBTCI Overall Rank: 27th in 2012 to

13th in 2015

SBTCI Corporate Income Tax Rank:

24th in 2014 to 20th in 2015

SBTCI Corporate Income Tax Rank:

49th in 2012 to 10th in 2015

New policies passed in 2014 will

lower the states corporate tax rate
from 7.1% to 6.5%, bringing the states
corporate tax ranking to 4th.

DC: Chairman Phil Mendelson

Passed comprehensive tax reform,
lowering individual and business tax
rates.

12

Nebraska: Governor Dave Heineman

Rhode Island: John Simmons, RIPEC

New policies passed in 2014 will
lower the states corporate tax rate
from 9% to 7%.

2014s Best Reads in State Tax Policy

Iowa Illustrated and San Diego Illustrated depict overall economies
and tax systems from a broad perspective through a series of charts
and graphics. These were the first chart books of what will be a
long-running series that teaches taxpayers and policymakers about
their cities and states.
Total Number
of Charts

62

Total Copies
Distributed

3,128

Facts & Figures: How Does Your State

Compare? is a handy, pocket-sized booklet
that compares tax rates in all 50 states.
Facts & Figures was first published in 1942,
and every year, we mail copies to each state
legislator in the nation.

Copies Distributed

10,566

Combined
Website Views

8,794
Simplifying Nevadas Taxes: A
Framework for the Future is a reform
book 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.

At the 2014 State Policy Network Conference,

our chart books received an award for
innovation and design in presenting policy
ideas and information in new ways.

In 2013, we released our first

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.

13

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.
Representative Dale Kooyenga

Vice Chair of Wisconsins Joint Committee on Finance

14

Our Center for

Legal 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 filed 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.
15

Were Making News

Our Work was Cited in 63 Countries in 2014

We gained 40% more media

attention in 2014 than in 2013,
and the 10 largest media outlets
cited us 288 times alone.
Traffic to our blog grew 180%,
from 648,306 pageviews in
2012 to 1.85 million pageviews
in 2014.

35

Average Citations
per Day in 2014

3,346 13,189

Unique Media
Outlets Cited Us
in 2014

Total Media
Citations in 2014

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

16

Our Work Goes Viral

January
1

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 of
people, and being viewed over 200,000 times.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

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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,
Bacon ipsum dolor amet sirloin tongue salami jerky turkey drumstick.
taxing people with the same income at the same rate regardless of where they live.

10

11

12

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14

15

16

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18

19

20

21

22

23

24

25

26

27

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February

March

Bacon ipsum dolor amet sirloin tongue salami jerky turkey drumstick. Meatball pork ra.

472

Media Citations

10,913

Federal Income Tax

33 Days

Social Insurance
Taxes 27 Days

Federal Excise
Taxes 2 Days

Federal Corporate
Income Taxes 8 Days

10

11

12

13

14

15

Other Federal
Taxes 4 Days

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

State/Local Income
Taxes 9 Days
State/Local Social
Insurance Taxes 3 hours
State/Local Sales
and Excise Taxes
13 Days

April
1

10

11

12

Property Taxes
11 Days

13

14

15

16

17

18

19

20

21

21

22

23

24

25

State/Local Corporate
Income Taxes 1 Day
Other State/Local
Taxes 3 Days

26

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28

29

30

31

Tax Freedom Day

Social Media Shares

April 21, 2014

Tax Freedom Day is when the nation as a whole

has earned enough money to pay its total tax bill
The Relative Value of $100 in Each State

203,501
Website View

Note: Numbers represent the value of goods that $100 can buy in each state
compared to the national average. The BEA has developed a methodology using
Personal Consumption Expenditures and American Community Survey data to estimate
average price levels in each state for household consumption, including rental
housing costs. Data is as of April 24, 2014. Published August 18, 2014.
Source: Bureau of Economic Analysis, Regional Price Parities.

TAX FOUNDATION

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

Less
Valuable

More
Valuable
@TaxFoundation

cited by the media 1,289 times.

17

77th Annual Dinner

Since 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, filling 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.

18

19

Award Winners

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).

Thank you to you and [the Tax Foundation], 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.
Representative Pat Tiberi, 2014

20

The Foundations distinguished record of

accomplishment should be a source of pride to
its members, who deserve the thanks of all of
our citizens for their dedication to a task which
contributes so much to the effective functioning
of the American democratic system.
President John F. Kennedy, 1962

21

Our New Home

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.
22

Since 1950 I have known your research and educational efforts on the
fiscal affairs of government, and I am convinced that programs such as
yours are needed more today than ever before.
Former President Dwight D. Eisenhower, 1962
23

Our Team
Executive Team
Scott Hodge, President
Joseph Henchman, Vice President, Operations
Michael Vogler, Vice President, Development
Andrew Lundeen, Director of Federal Projects
Chris Krukewitt, HR & Accountant

Federal Policy Team

Stephen Entin, Senior Fellow
Michael Schuyler, Senior Fellow
Kyle Pomerleau, Economist
Alan Cole, Economist
Huaqun Li, Economist
Gavin Ekins, Research Economist

State Policy Team

Scott Drenkard, Economist & Manager of State Projects
Liz Malm, Economist
Jared Walczak, Policy Analyst

Development Team
Whitney Everley, Director of Major Gifts
Lexxie Monahan, Manager of Donor Communications

Marketing Team
Richard Borean, Communications Manager
Melodie Bowler, Editor
Tom VanAntwerp, Director of IT
Dan Carvajal, Production Designer
Colby Pastre, Communications Associate

Operations Team
Steven Luhr, Operations Assistant

24

The Next Generation of Good Tax Policy

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 for
advancement. Highlights from our 2014 internship class include:
Liz Emanuel authored 13 blog posts and
coauthored a major report on state and
local taxes.
Tyler Dennis authored 10 blog posts
on topics ranging from carbon taxes
in Australia to marijuana taxes in
Colorado.
Using experience from our internship
in spring of 2014, Johannes Schmidt

earned a position as Grants and

Awards Program Associate at the
Atlas Network.
Other interns contributed to
major federal studies including the
International Tax Competitiveness
Index and our signiture federal
chartbook, Business in America
Illustrated.

25

Board of Directors
David P. Lewis
Chairman

The Honorable
Philip English

Vice President Global Taxes,

Chief Tax Executive & Assistant

Co-Chair, Government Relations

Group, Arent Fox LLP

Treasurer, Eli Lilly and

Company

Member of the U.S. House of

Representatives (1995-2009)

James W. Lintott
Treasurer

Dr. Douglas
Holtz-Eakin

Chairman, Sterling Foundation

Management LLC

President, American Action

Forum

6th Director, Congressional

Budget Office

Former Assistant Secretary

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

The Honorable
Bill Archer

Stephen Kranz

Tom Roesser

Partner, McDermott Will &

Emery LLP

Senior Director of Tax Affairs,

Microsoft Corporation

Senior Policy Analyst,

PricewaterhouseCoopers LLP
Chairman, House Ways and
Means Committee (1995-2001)
Member of the U.S. House of
Representatives (1971-2001)

Scott A. Hodge
President, Tax Foundation

26

Sarah McGill
Senior Vice President of Tax,
PepsiCo, Inc.

Pamela Olson
Principal, Deputy Tax Leader,
PricewaterhouseCoopers LLP

Financials, Revenue & Expenses

Were growing because of you.
Revenue

$4,000,000

3,000,000

Revenue
Expenses
2,000,000

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

3,764,529

2,953,060

2,173,216

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

2,901,256

2,469,668

1,900,821

Total Revenue
Expenses
Programs

1,000,000

Total Expenses
0
2012

2013

2014

*as of December 31

27

Balance Sheet
Change in Net Assets

2014*

2013*

2012*

Surplus/(Deficit) on Activities

833,080

483,392

272,395

plus Released Restricted Funds from Prior Years

309,544

99,224

76,624

less Funds Restricted for Future Years

(212,832)

(309,544)

(22,787)

less Lease & Sublease Adjustment

(124,726)

n/a

n/a

30,192

71,333

39,160

835,259

344,405

365,392

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

1,502,093

681,766

602,260

798,552

36,081

39,987

3,654,739

1,677,192

1,155,776

Accounts Payable & Accrued Expenses

556,362

55,696

83,187

Tenant Improvement Allowance

625,489

Deferred Rent & Sublease Liability

151,241

12,983

4,646

9,302

Total Liabilities

1,342,393

98,393

131,702

Unrestricted Net Assets

2,067,444

1,269,255

924,850

244,901

309,544

99,224

Total, Net Assets

2,312,345

1,578,799

1,024,074

Total Liabilities & Net Assets

3,654,739

1,677,192

1,155,776

plus Unrealized Net Gain/(Loss) on Investments

Change in Net Assets
Assets

Investments
Furniture & Equipment, Net
Total Assets
Liabilities & Net Assets

Other Long-Term Liabilities

Temporarily Restricted Net Assets

*as of December 31

28

Our Mission:
We improve lives through tax policy research and education
that leads to greater economic growth and opportunity.

The Principles of Sound Tax Policy:

Simplicity

Stability

Administrative costs are a loss to society, and complicated

taxation undermines voluntary compliance by creating
incentives to shelter and disguise income.

When tax laws are in constant flux, long-range financial

planning is difficult. Lawmakers should avoid enacting
temporary tax laws, including tax holidays and amnesties.

Transparency

No Retroactivity

Tax legislation should be based on sound legislative

procedures and careful analysis. A good tax system
requires that taxpayers be informed and understand how
tax assessment, collection, and compliance works. There
should be open hearings, and revenue estimates should be
fully explained and replicable.

As a corollary to the principle of stability, taxpayers should

be able to rely with confidence on the law as it exists when
contracts are signed and transactions are completed.

Neutrality
Taxes should not encourage or discourage certain economic
decisions. The purpose of taxes is to raise needed revenue, not
to favor or punish specific industries, activities, and products.

Broad Bases and Low Rates

As a corollary to the principle of neutrality, lawmakers
should avoid enacting targeted deductions, credits, and
exclusions. If tax preferences are kept to a minimum,
substantial revenue can be raised with low tax rates. Broadbased taxes also produce relatively stable tax revenues
from year to year.
1

PRINCIPLED
INSIGHTFUL
ENGAGED
1325 G Street, NW,
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