Wyden’s Financial Services Tax Proposals Would Put “Mark-to-Market” to the Test
Mark-to-market is not simple to implement, as it involves new administrative and compliance challenges for taxpayers. Mark-to-market levies tax on phantom income, requiring some taxpayers to engage in some degree of liquidation, ultimately suppressing incentives to save and invest. The limited tax revenues that could result from these proposals are not worth the risk.
5 min read
Temporary Policies Complicate the Child Tax Credit’s Future
Over the next ten years, the structure of the Child Tax Credit (CTC) is scheduled to change, complicating efforts to extend enhanced CTC benefits or reform the CTC for the long-term. Rather than take an all-or-nothing approach or kick the can down the road by relying on temporary expansions, lawmakers could consider alternative options that better target low-income households, retain work incentives, reduce the impact on federal revenue, and provide taxpayers with a stable, consistent tax code.
8 min read
GILTI of Neglecting Losses
As lawmakers are reviewing international tax rules and determining what to change and update, they should pay attention to the way GILTI interacts with profitable and loss-making companies.
5 min read
Lawmakers’ Tax Rate to Help Pay for Reconciliation is 1,900 Percent
While the excise tax penalty in H.R. 3 is referred to as a 95 percent tax rate, it actually amounts to a 1,900 percent tax rate because of how the proposal defines the tax base. In other words, under the H.R. 3 tax penalty, a drug that sells for $100 would incur a $1,900 tax.
3 min read
The DASH Act Isn’t the Best Way to Solve the Housing Crisis
To tackle problems of homelessness and housing costs, Senator Ron Wyden (D-OR) has released a major tax proposal, the Decent Affordable Safe Housing (DASH) For All Act. Several of Wyden’s proposals are also components of the Biden administration’s infrastructure agenda, with a large focus on tax credits designed to either incentivize new housing or directly reduce rent burdens.
5 min read
Don’t Add More Temporary Tax Policies in Budget Reconciliation
Temporary policy creates uncertainty for taxpayers and scheduling more expirations will add to the already-expiring provisions under the Tax Cuts and Jobs Act (TCJA) of 2017.
3 min read
5 Things to Consider in the Tax Gap Discussion
Increasing tax compliance is a major part of the Biden administration proposal to raise revenue for physical and social infrastructure. Reducing the tax gap—the difference between taxes owed and taxes paid—is a good way to raise revenue, but it doesn’t come without trade-offs, and it’s important to go about it in the right way.
3 min read
Expense Allocation: A Hidden Tax on Domestic Activities and Foreign Profits
While arcane, expense allocation rules are relevant to current debates because they result in a heavier tax burden for U.S. companies under current law than the recently negotiated global minimum tax proposal.
10 min read
Paying for Reconciliation Bill with “Health Care Savings” Threatens Medical Innovation
One of the ways lawmakers intend to pay for $3.5 trillion of new spending in the budget reconciliation package is by creating “health care savings.” The leading proposal to achieve this is H.R. 3, the Elijah Cummings Lower Drug Costs Now Act, which would change the way that prescription drug prices are negotiated under Medicare Part D.
5 min read
International Tax Proposals and Profit Shifting
There are many ways the U.S.’s international tax rules could be changed, reformed, improved, or worsened. Reflexively jacking up taxes on U.S. multinationals does not necessarily accomplish the goal of reducing or eliminating profit shifting, and it would in fact worsen it.
6 min read