A Global Minimum Tax and Cross-Border Investment: Risks & Solutions
Leaders around the world are quickly moving to finalize an agreement on a global minimum tax in 2021, based on the so-called “Pillar Two” proposal from the OECD.
25 min read
Expert
Daniel Bunn
President and CEO
Daniel Bunn is President and CEO of the Tax Foundation. Daniel has been with the organization since 2018 and, prior to becoming President, successfully built its Center for Global Tax Policy, expanding the Tax Foundation’s reach and impact around the world.
Prior to joining the Tax Foundation, Daniel worked in the United States Senate at the Joint Economic Committee as part of Senator Mike Lee’s (R-UT) Social Capital Project and on the policy staff for both Senator Lee and Senator Tim Scott (R-SC). In his time in the Senate, Daniel developed legislative initiatives on tax, trade, regulatory, and budget policy.
He has a master’s degree in Economic Policy from Central European University in Budapest, Hungary, and a bachelor’s degree in Business Administration from North Greenville University in South Carolina.
Daniel lives in Halethorpe, Maryland, with his wife and their three children.
Latest Work
New Research Shows Major Changes for U.S. Companies Earning Profits from Ireland
New data show that the recent policy changes that have been implemented by the U.S., Ireland, and dozens of other countries are having an impact. The question for policymakers is whether they will take the time to understand these impacts before jumping to the next project to change international tax rules yet again.
3 min read
Carve-ins and Carve-outs: Open Questions for Global Tax Reform
There has been some confusion about how some parts of the recent G7 agreement on new tax rules for multinational companies might work. The new policies would target the largest and most profitable multinationals and bring in a global minimum tax.
5 min readSavings and Investment: The Tax Treatment of Stock and Retirement Accounts in the OECD
To encourage private retirement savings, OECD countries commonly provide tax-preferred retirement accounts. However, in many countries, including the United States, the system of tax-preferred retirement accounts is complex, which may deter savers from using such accounts—and potentially lower overall savings.
21 min read
Two Important Issues that Must Be Resolved in “Global Tax Reform”
If the U.S. is suggesting a 15 percent effective rate as the minimum acceptable rate for a global agreement, then the tax bases of the various minimum taxes adopted as part of the agreement should be aligned to minimize complexities and unintended consequences.
5 min read
GILTI by Country Is Not as Simple as it Seems
If policymakers want a recipe to dramatically expand the complexity of U.S. international tax rules and the burden on U.S. multinational businesses, then a tax on foreign earnings calculated at the country level would be the way to do it. Alternatively, policymakers could focus on mitigating the unintended consequences of GILTI and other recent international tax rules.
5 min read
Tax Policy Lessons from Down Under
This week the Australian government released its latest budget proposal and two policies that stand out in its fiscal response to the pandemic should be helpful as the economic engine of the country turns back on. The first is full expensing for some investments and the second is the introduction of a loss carryback provision. The new budget takes both these temporary policies and extends them into 2023.
2 min read
Recent Analysis Explores Pillar 1 Risks and the Potential for Disputes
As countries move closer to agreement on how the OECD Pillar 1 Amount A will work and which companies will be impacted by it, it is incredibly important for policymakers to continue to evaluate not just the intended effects but also the potential unintended consequences.
6 min read
Treasury’s Latest Pillar 1 Proposal: A Strategy to Split the Riches or Give Away the Store?
New international tax rules on super-profits would disproportionately impact U.S. companies however they are designed. The question that Treasury should answer is why limit the policy in such a way that magnifies that disproportionate application and the risk to the U.S. tax base.
6 min read
Biden’s Tax Plan Would Restore U.S. Exceptionalism—But Not in a Good Way
No other country has tried to enforce some of the policies that the Biden administration is proposing. Embarking on such uncharted course would set the U.S. apart from global tax policy norms and best practices and could harm American competitiveness.
4 min read
The Balancing Act of GILTI and FDII
The tax treatment of intangible assets has come into the spotlight recently with the Biden administration proposing to undo a policy adopted in 2017 to encourage intellectual property (IP) to be located in the U.S.
6 min read
U.S. Effective Corporate Tax Rate Is Right in Line With Its OECD Peers
Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers. Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.
4 min read
President Biden’s Infrastructure Plan Raises Taxes on U.S. Production
An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China.
6 min read
Marginal Effective Tax Rates and the 2021 UK Budget
The 2021 UK budget introduces a two-year super-deduction of 130 percent for plant and equipment and a delayed corporate tax rate increase from 19 percent to 25 percent in 2023. These policies have differential impacts on marginal effective tax rates for different assets, implying investment incentives will not be uniform.
15 min read
TCJA Is Not GILTI of Offshoring
Many members of Congress have taken issue with the 2017 tax reform. However, the reasoning that has led some to believe that GILTI provides a path to offshoring investment and jobs is flawed.
6 min read
Tax Subsidies for R&D Spending and Patent Boxes in OECD Countries
Despite the coronavirus pandemic’s immense health and economic challenges, the crisis has also revealed the incredible value of innovation.
32 min read
How GILTI Are U.S. Industries?
Both the Biden campaign and some Democratic members of Congress have recommended changes to GILTI, but before doing that, policymakers should consider how GILTI’s design can have ramifications for many U.S. companies and their tax burdens.
6 min read
An Investment Boost in the UK’s 2021 Budget
The UK’s Chancellor of the Exchequer Rishi Sunak released the 2021 budget, and most important for near-term growth is the significant boost to capital allowances.
5 min read
U.S. Cross-border Tax Reform and the Cautionary Tale of GILTI
The Biden campaign and Senate Democrats identified changes to GILTI that would increase the taxes U.S. companies pay on their foreign earnings. Rather than tacking on changes to a system that is currently neither fully territorial nor worldwide, policymakers should evaluate the structure of the current system with a goal of it becoming more, not less, coherent.
51 min read
An “Interest”ing Tax Hike in the COVID-19 Relief Proposal
As the House Ways and Means Committee continues working on the latest round of fiscal relief amid the pandemic, one curious provision in the legislation is a tax hike on multinational companies. One section of the legislation would repeal a provision in current law that allows U.S. multinationals to choose to allocate their interest costs on a worldwide basis (more on that in a moment).
4 min read