Evaluating U.S. Tax Reform Options & Trade-Offs

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.