The Tax Policy Blog

September 24, 2014

At the Clinton Global Initiative meeting this week, former President Bill Clinton called for corporate tax reform as a “practical economic” need.

In the interview on corporate taxes, he likened the corporate tax system to a leaky boat and offered general support for moves...

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September 24, 2014

Yesterday, we presented data showing that the United States’ tax code is among the most progressive in the OECD when we compare Federal-level taxes, and an average value for state taxes. However, state income tax structures within the United States have just as much variation, in terms of progressivity, as OECD nations' income tax structures. We find that, using the same measure for the states as was used...

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September 24, 2014

The Obama Administration announced this week that it would clamp down on corporate inversions by altering existing regulations dictating the treatment of foreign earnings and foreign controlled corporations.

These rule changes will seek to reduce the incentive for a company to invert by reducing its financial benefit.

These rule changes will undoubtedly reduce the incentive to invert. However,...

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September 24, 2014

The Nevada Supreme Court recently held that the 2004 Live Entertainment Tax (LET) does not constitute a violation of strip clubs’ rights to freedom of speech under the First Amendment. While the plaintiffs, comprising a group of Nevada strip clubs, claimed the excise tax was discriminatory in...

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September 24, 2014

In a recent Wall Street Journal op-ed, Senators Marco Rubio (R-FL) and Mike Lee (R-UT) presented more details on the tax reform plan they have been working on over...

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September 23, 2014

A defining characteristic of an individual income tax system is its degree of progressivity. The United States has a rather progressive income tax. This means that the average tax rate paid by an individual increases as their income increases. Contrast this with a flat income tax, which all taxpayers have the same average tax rate regardless of income or a regressive income tax, which taxpayers pay declining average tax rates as their income increases.

Most countries maintain...

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September 23, 2014

Research in the field of economic development has widely recognized that entrepreneurship and new firm formation play an important role in promoting job creation and economic growth. According to a report released by Kauffman Foundation in 2011, nearly all net job creation in the United States occurred in firms less than five years old during the period of 1980-2005....

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September 23, 2014

A new bill from Representative Scott Peters of California would exempt some small businesses from quarterly tax payments. Currently, most businesses must send quarterly returns based on estimated tax to the IRS. This is a prudent piece of legislation that will reduce administrative costs and promote some growth, with virtually no downside.

The bill makes no change to actual tax owed. Instead, it just exempts...

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September 22, 2014

The Tax Foundation’s International Tax Competitiveness Index ranks the United States tax code 32nd out of 34 OECD countries. An obvious question to ask, then, is why the U.S. remains so wealthy, and so successful at creating new businesses.

A report from Harvard Business School – a survey on U.S. competitiveness...

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September 22, 2014

Representative Chris Van Hollen (D-MD) has introduced a bill called the “CEO-Employee Pay Fairness Act.” This bill would prevent a corporation from deducting the cost of compensating CEOs if the corporation did not raise the wages of all employees that earned less than $115,000 by a specific formula based on inflation and productivity growth.

In his press release, he argues that the...

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September 19, 2014

A group of professors recently released a study that finds insufficient discussion of the total cost of taxes in public finance textbooks. They find that common textbooks fail to fully include the total cost of taxes into discussions of public goods and cost-benefit analyses. I quote the abstract of the paper in full:

“Taxation...

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September 19, 2014

Recently, Senator Chuck Schumer (D-NY) released a bill that would retroactively change interest deduction laws and ownership requirements for inverted companies going back to 1994. We’ve discussed how this is an attempt to fix a problem that only sound tax reform can solve, but the bill’s retroactivity is also bad policy.

...

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September 18, 2014

Today the U.S. House of Representatives debated H.R. 4, the Jobs for America Act. Among addressing multiple issues, the bill would make permanent Section 179 small business expensing, 50 percent expensing, and repeal the medical device tax. Each of these provisions would move the tax code in the right direction.

Section 179

For a business...

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September 18, 2014

Senator Bernie Sanders recently said this about U.S. corporate taxes:

"Want to better understand why we have a federal deficit? In 1952, the corporate income tax accounted for 33 percent of all federal tax revenue. Today, despite record-breaking profits, corporate taxes bring in less than 9 percent. It’s time for real tax reform."

...

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September 18, 2014

In our new International Tax Competitiveness Index, the United States ranks 32nd out of the 34 countries in the OECD. This puts the United States behind countries such as Spain and Italy and just in front of Portugal and France.

There are a few main drivers behind the U.S.’s low score in the ITCI. There are the obvious ones: the U.S. has the developed world’s highest corporate tax...

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Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

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