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.
3 min read
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.
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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.
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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.
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While it is important that Peru find ways to offset its deficit spending, a temporary wealth tax may introduce more problems than it solves.
5 min read
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.
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.
4 min read
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.
3 min read
Digital services taxes effectively ring-fence the digital economy by limiting the tax to certain revenue streams of digital businesses, discriminating in favor of more traditional sectors of the economy.
18 min read