Tax Policy Blog

New York and New Jersey Consider Financial Transaction Taxes

Seeking new sources of funding, New York and New Jersey—two states at the heart of global financial markets—are considering financial transaction taxes.

Austria Is Mulling an Allowance for Corporate Equity

While not a short-term measure to alleviate the economic losses resulting from the current crisis, experience from other countries has shown that a tax allowance for corporate equity can be a sensible long-term policy that can strengthen Austria’s investment environment and improve financial stability.

The History of Excess Profits Taxes Not as Effective or Harmless as Today’s Advocates Portray

Today’s advocates would do well to study the history of excess profits taxes before overselling these taxes as a solution to the COVID-19 crisis.

The New EU Budget is Light on Details of Tax Proposals

The European Council recently agreed on a new multiannual budget and a recovery program, which sets EU budget levels for 2021-2027 totals €1 trillion (US $1.2 trillion). The lack of details on the various tax proposals and the eventual need for revenue sources to finance new EU debt mean there is a lot of work left for policymakers in Brussels to do.

Debunking 3 Myths About the Mortgage Interest Deduction

(Webinar) Figuring Out Phase Four: Next Steps on Federal and State Coronavirus Response

As U.S. businesses struggle to recover from the economic downturn, Congress and the White House continue to debate a phase four relief package, which could include anything from incentives for domestic travel and a payroll tax cut to more fundamental reforms like enacting permanent full cost recovery.

Tax Options to Promote Short-Term Recovery and Long-Term Economic Growth in Wisconsin

From a revenue standpoint, Wisconsin was better off than many states going into this crisis, but the policy decisions—including tax policy decisions—state policymakers make in the months ahead will have far-reaching implications for how quickly jobs and wages are restored in Wisconsin.

Financial Transaction Tax Could Hit Average Spanish

Spain is planning to implement two major taxes during the next few months, a digital services tax and a financial transaction tax, which have the potential to negatively impact capital formation, growth, and economic recovery and start a harmful trade war.

Hungarian COVID-19 Response: Surtax for Banks and Retail

Hungary is the only EU state to have actually implemented COVID-19 tax hikes.

Attracting Manufacturing to the U.S. Should Start with Neutral Tax Treatment, Not Subsidies

Before considering industry-specific laws and subsidies for onshoring, policymakers should make sure the U.S. tax code is not biased against domestic investment in the first place.

Future of Wisconsin Vapor Tax Uncertain after Decision by State Supreme Court

Biden’s Plan to Boost Research and Development Should Include Cancellation of Upcoming R&D Amortization

As concern over American competitiveness and onshoring of innovative activity increases, presidential candidates and policymakers should keep in mind the tax increases scheduled to take effect in the coming years, including the amortization of R&D and phaseout of the broader expensing provisions.

Digital Taxes, Meet Handbag Tariffs

The USTR announced new tariffs in response to the French digital services tax of 25% on $1.3 billion worth of goods. The tariffs would apply to several make-up products, handbags, and assorted soaps.

Non-Profit Files Lawsuit over Withholding Requirements in Ohio

As work increasingly takes place in home offices, states will have to grapple with the revenue implications, and may find it necessary to adopt policies to better compete with outlying areas. Taxing people in places in which they no longer work, however, will not be the solution.

Improved Cost Recovery Is A Wide-Ranging Policy Solution

Rather than limit improvements to certain sectors, lawmakers could pursue a broader policy of full expensing for all capital investment and neutral cost recovery for structures and clear the tax policy hurdles that currently stand in the way of private investment.

Peruvian “Solidarity Tax” Unlikely to Offset Deficit Spending

While it is important that Peru find ways to offset its deficit spending, a temporary wealth tax may introduce more problems than it solves.

FAQ on Neutral Cost Recovery and Expensing

Cost recovery is the way the tax code permits firms to recover (or deduct) the cost of making investments. Cost recovery plays an important role in defining a business’ taxable income and can impact investment decisions.

Phase 4 Is not the Time to Experiment with Temporary Credits

As lawmakers consider returning to the tax code as a tool to revive a struggling economy with high unemployment and an unpredictable virus, they should avoid temporary changes that can be distortive in the short term and inefficient in the long term.

National Taxpayer Advocate’s Report Is a Road Map to Simpler Pandemic Relief Provisions

The size and scope of the tax changes within the CARES Act created significant administrative challenges for the IRS. Lawmakers should prioritize simplicity in the next round of relief.

Decades in Corporate Taxation

Corporate taxation has evolved significantly, with rates coming down significantly over the last several decades. Countries have redesigned their tax bases by changing the treatment of losses, interest, and capital costs. A recent OECD report highlights the general stabilization of corporate tax revenues and statutory rates alongside major changes to address profit-shifting opportunities.