Taxes touch nearly every aspect of people’s lives, yet many struggle to understand how the tax system works.
This guide offers four steps analysts can take to engage broader audiences, acknowledge historical and political contexts, and demonstrate the relevance of tax policy decisions to people’s daily lives and their long-term well-being. The goal is to empower people and communities to understand, engage with, and help achieve a better tax system.
Policymakers increasingly rely on the tax code to encourage certain activities or decisions, such as buying a home, having children, or saving for retirement.
But it can be difficult for people to understand how policymakers’ choices affect outcomes they see in their daily lives; for example, people may be unaware of the tax benefits for which they are eligible.
This makes it harder to have active, informed debates about tax policies and their impact on important outcomes: economic growth, competitiveness, fiscal sustainability, and inequality.
We identified four steps analysts can take to better communicate their analyses to broader audiences:
Demonstrate the impacts of tax policies in simple and engaging ways.
Analysts can make it easier to interpret standard tax distribution tables by adding basic graphs (e.g., small bar charts) or highlights to parts of the table. Moreover, clear and effective titles, subtitles, and annotations are essential to calling attention to patterns over time, gaps between groups, and other features central to understanding how tax policies affect different taxpayers.
Researchers and practitioners noted that the most helpful tax policy analyses focus on outcomes that matter to families, such as how a policy could affect their ability to pay for daily expenses. Making numbers personal can help readers who may not be familiar with tax terms understand what a policy means for them, their children, and their community.
Conduct analyses that highlight and meaningfully interpret subgroup differences.
Recent advances in data availability and statistical techniques have expanded analysts’ ability to model tax policies not only by income, family status, and age, but also by race and ethnicity.
For example, to visually summarize how tax burdens and benefits vary across income group and race and ethnicity, analysts can use a “heatmap” visualization technique, which applies color shading to illustrate deeper or more intense effects. Moreover, carefully discussing the potential reasons behind subgroup differences can equip readers with an understanding of how taxes intersect with other social policies.
Explain how policy design choices contribute to outcomes.
Tax policy analyses involve choosing a baseline scenario and then estimating potential changes under a proposed policy. But distribution tables typically present only the change from the baseline, making it difficult for readers to understand tax outcomes before and after a given reform.
Analysts can use bar charts to compare scenarios to help readers see the size and direction of the change between groups. In addition, they can present slope charts, case studies, or descriptions of representative households to make the before-and-after impacts of policies more compelling.
Put taxes in a historical and structural context.
Researchers and practitioners noted that showing how past decisions shape present outcomes is important. Text in and around graphs can be effective in calling out structures and institutions that have benefited some groups, sometimes at the expense of others.
Analysts might consider presenting patterns of income and wealth differences between groups and weaving in historical literature. Combining multiple dimensions of data—such as income or wealth, race and ethnicity, family characteristics, and multiple years—can better highlight trends and explore why those trends may or may not persist.
Download our checklist for making tax analyses more inclusive and effective. (PDF)
We reviewed the current landscape of tax analyses and summarized lessons learned from a series of interviews with leading researchers, advocates, and strategic communicators involved in producing, translating, and applying tax analyses in the policy process.
To illustrate how our approach can be applied to major legislation, we produced new distributional analyses of the 2025 budget reconciliation bill (the One Big Beautiful Bill Act) broken down by both income level and race and ethnicity (see “Related Content” below).
