The U.S. Trade Representative (USTR) expanded its digital service tax investigations, announcing Section 301 investigations into digital tax policies in nine countries and the European Union. The announcement follows an investigation of the French digital services tax that was completed in 2019, after which the USTR threatened significant #tariffs in retaliation against France.
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Taxes on digital services, digital advertising, and the sale or utilization of consumer data, which were already emerging before the #coronavirus crisis, look increasingly attractive to cash-strapped states and localities.
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What are the best tax policies to encourage a smooth transition and strong economic recovery? How should goals of economic recovery and growth be balanced with revenue needs?
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With California’s unemployment rate approaching 25 percent, it is somewhat surprising to find policymakers contemplating a literal tax on jobs.
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The digitalization of the economy has been a key focus of tax debates in recent years. Our new report reviews digital tax policies around the world with a focus on OECD countries, explores the various flaws and benefits associated with the wide set of proposals, and provides recommendations for lawmakers to consider.
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The European Commission announced new budget plans including loans, grants, and some revenue offsets. The proposals follow other support mechanisms for workers and businesses that were designed in response to the Covid-19 pandemic and economic shutdown.
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Alesina’s work suggests that raising taxes to reduce the federal deficit and national debt would be an economic mistake. The less economically damaging path is to cut spending, what some have called austerity policies.
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Rather than find ways to restrict net operating loss (NOL) carrybacks, lawmakers should focus on ways to improve liquidity by cashing out accrued NOLs, which would benefit startups and new small businesses without taxable income to offset in prior years.
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A digital services tax like the one implemented by France likely violates both the General Agreement on Trade in Services and a model U.S. free trade agreement. However, it is uncertain whether meaningful relief could be obtained under either regime.
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To prevent confusion and to ensure taxpayers receive the full benefit of the extended federal deadline, states should consider extending first- and second-quarter estimated tax payment due dates to July 15 or later.
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Most countries provide tax relief to families with children—typically through targeted tax breaks that lower income taxes. While all European OECD countries provide tax relief for families, its extent varies substantially across countries.
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While other states are starting to think about the recovery, California is contemplating tax policies that would stand in the way of economic expansion once the health crisis abates. California’s shortfall is all too real, but tax policies which impede recovery are a hindrance, not a help.
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Consumption taxes, like sales taxes, are more economically neutral than taxes on capital and income because they target only current consumption.
3 min readThe HEROES Act adds to the confusion and instability already inherent in the tax code with multiple expiring provisions and reduced filing guidelines.
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Lawmakers can help expedite their state’s economic recovery by protecting employers from facing higher unemployment insurance tax rates at a time when they can least afford to pay them.
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The HEROES Act would make notable expansions to all three dependent-related credits, increasing maximum credit amounts, refundability, and income eligibility phaseouts. Practically, this means that certain filers could expect to receive a larger refund for each additional hour of work, eligible dependent, and dependent care expenses if the bill became law.
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The SMART Act, sponsored by Senators Bob Menendez and Bill Cassidy and Rep. Mikie Sherrill, would provide $500 billion in flexible funding to state and local governments.
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