State tax revenue collections were down 5.5 percent in FY 2020, driven by a dismal final quarter (April through June) as states began to feel the impact of the COVID-19 pandemic. While these early losses are certainly not desirable, they are manageable and far better than many feared.
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Just as COVID-19 is putting pressure on other sources of revenue, the loss of VAT revenues resulting from the crisis will force governments to evaluate their VAT systems.
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Under an individual AMT, many taxpayers are required to calculate their income tax liability under two different systems and pay the higher amount.
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Over the last two decades, corporate income tax rates have declined around the world. Our new map shows the most recent changes in corporate tax rates in European OECD countries, comparing how combined statutory corporate income tax rates have changed between 2017 and 2020.
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A marriage penalty exists when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers.
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Tax treaties usually provide mechanisms to eliminate double taxation and can provide certainty and stability for taxpayers and encourage foreign investment and trade. A broad network of tax treaties contributes to the competitiveness of an economy.
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In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax.
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To discourage a certain form of international debt shifting, many countries have implemented so-called thin-capitalization rules (thin-cap rules), which limit the amount of interest a multinational business can deduct for tax purposes.
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New Jersey has the highest effective rate on owner-occupied property at 2.21 percent, followed closely by Illinois (2.05 percent) and New Hampshire (2.03 percent).
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To prevent businesses from minimizing their tax liability by taking advantage of cross-country differences in taxation, countries have implemented various anti-tax avoidance measures, one known as Controlled Foreign Corporation (CFC) rules.
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