The Tax Policy Blog

December 19, 2014

Japan looks likely to cut its corporate tax rate by 2 to 3 points in 2015, according to Bloomberg:

Japan’s corporate income tax may be cut by more than 2 percentage points next year and reduced to less than 30 percent within five, Economy Minister Akira Amari said.

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December 18, 2014

The Washington Post has denounced the inclusion of bonus depreciation in the just-passed tax extenders bill for 2014. The correct term is “partial expensing.” There is nothing “bonus” about it. The partial...

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December 18, 2014

Technically speaking, Vermont’s gubernatorial election isn’t finished yet, but universal health care is. A long-awaited blueprint for the state’s planned transition to single-payer, just released, has been termed “detrimental to Vermonters”—not by the opposition, but by the Governor who made single-payer health care his signature issue.

Because no candidate received a majority of votes cast in November’s election, the selection of Vermont’s next Governor is up to the legislature,...

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December 17, 2014

There has been considerable discussion about the corporate tax system in the U.S. and the IRS’s global reach in the media over the past year. The rash of corporate inversions was the catalyst for the public discussion of the outdated worldwide corporate tax system, which only six other countries have.

The IRS’s global reach also extends to personal income as well. Citizens and green card holders who work abroad must file a tax return for all income...

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December 17, 2014

While the media has been feasting on Lux Leaks and other stories of “multinational tax dodging”, academic accountants have determined that U.S. multinational corporations (MNCs) have no particular tax advantage over U.S. domestic firms. In fact, a...

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December 16, 2014

The U.S. Senate has approved a one-year extension of the tax extenders bill, a grab bag of around 50 tax provisions for businesses and individuals. The bill will cost $42 billion over ten years and applies retroactively to the 2014 tax year. The House of Representatives passed their version of the bill last week.

The one-year extension passed by the House and Senate leaves the package...

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December 16, 2014

The Russian ruble fell sharply in value last night, losing about a fifth of its value against the dollar. This came despite a substantial rate hike by the Russian Central Bank in an emergency effort to preserve the value of the troubled currency.

The main source of Russia’s economic trouble is the recent fall in worldwide oil prices. The U.S. is better than ever at producing oil, and at the same time, it is also becoming more...

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December 16, 2014

The Internet Tax Freedom Act (ITFA), the moratorium on taxing internet access, was given a year-long extension when the Senate passed the omnibus spending bill this past Saturday. This is the fourth extension of the bill, first passed in 1998.

This means a continued, yet not...

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December 16, 2014

Andre Young, the producer, performer, and businessman known by the stage name Dr. Dre, took a commanding lead in the Forbes list of the world’s highest-paid musicians of 2014. With earnings of $620 million, he had a more than five-fold lead on the second-place musician, Beyoncé Knowles. In fact, by the Forbes data, he earned more than the next seven members...

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December 15, 2014

Today, State Tax Notes named the Council on State Taxation (COST), who represent the voice of the business community on key state tax issues, as its 2014 Organization of the Year (subscription required). We at the Tax Foundation had won that recognition for three years running and while we had an impressive year, there’s certainly no one we’d rather relinquish the title to more...

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December 12, 2014

The problem with free stuff, simply put, is that too many people want it. If you see a promotion for something like 7-Eleven’s Free Slurpee Day, you always end up having to temper your excitement when you realize that you’ll inevitably be waiting in line with the many others who want to enjoy the same treat. This is an unfortunate fact of life, the sort of thing we all reluctantly come to grips with by the time we turn twelve or so.

What puzzles me, then, is why we so often forget...

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December 12, 2014

An article in today’s Wall Street Journal presents conflicting evidence on the benefits of bonus depreciation, a provision in the tax extenders package currently being debated in Congress. Bonus depreciation allows companies to immediately write-off (expense) 50 percent of the cost of equipment and software. Normally, companies are required to depreciate...

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December 11, 2014

A piece from Christopher Flavelle at Bloomberg yesterday discussed dynamic scoring, and the thoughts of former Republican directors of the Congressional Budget Office on the subject. He sees the remarks of the former directors as a case against dynamic scoring, but it’s somewhat hard to see why. If anything, their remarks seem to refute the most common arguments against dynamic...

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December 11, 2014

Tax and fiscal policy are a key priority for the economy going forward, according to over one hundred leading CEOs who attended this year’s Wall Street Journal CEO Council.

In the annual meeting earlier this week, CEOs cited fiscal policy changes—in addition to issues regarding primarily structural reform of education and infrastructure—as key reforms to boost US competitiveness....

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December 11, 2014

Many Americans are familiar with the federal alternative minimum tax (AMT) as a calculation that they have to do at the end of their individual tax form if they take “too many” deductions. Not everyone is aware that the federal government also subjects corporate entities to the AMT, and a few handfuls of states do too. This week’s map shows which states levy a corporate AMT as of July 1, 2014, the snapshot date of our...

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