While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
Permanent full expensing is an efficient and neutral tax policy that will allow markets to allocate private investment effectively while moving the economy towards the climate goals of the EU.
Europe is facing difficult times. Governments are balancing the need for more resources with the need to maintain peace and prosperity domestically. To properly strike this balance, EU policymakers must incorporate “Fiscal Fairness” into the debate.
Since VAT revenues are such a significant and stable contributor to overall government revenues, EU policymakers should pay particular attention to how efficiently those revenues are raised.
Research has shown that spikes in tax rates can act as barriers to upward mobility. High marginal tax rates might directly influence the decisions workers make about accepting a raise, working additional hours, or whether they might remain on government benefits.
The EU’s recent VAT reform is an example of a win for governments, consumers, and companies. Charting a new path toward a more successful tax system.
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A well-structured tax code (that’s both competitive and neutral) is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
From a policy perspective it is appropriate to combat base erosion and profit shifting, but policymakers need to keep in mind the need for simplicity to avoid increasing the compliance burden on taxpayers and administrative burdens on tax authorities.
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.
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.
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.
Despite the coronavirus pandemic’s immense health and economic challenges, the crisis has also revealed the incredible value of innovation.