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100 Percent Bonus Depreciation (Full Expensing)

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Tax Foundation jobs Build Back Better Act: Details & Analysis of the House Ways and Means Committee Tax Proposals Reconciliation Bill Tax, Biden taxes, Biden tax plan, Biden tax increases upcoming tax changes and upcoming federal tax changes ALIGN Act american innovation and jobs act Permanently Preserving America’s Investment in Manufacturing Act

Policymakers Offer Proposals to Fix Three Upcoming Tax Changes

Three upcoming tax law changes scheduled by the 2017 Tax Cuts and Jobs Act (TCJA) to help offset its revenue losses would be canceled by proposed legislation that would prevent the tax treatment of investment from worsening over the coming years.

4 min read
Since 2017 tax reform, US corporate tax expenditures are about average in the OECD. Reuters us corporate tax in line with foreign rivals

U.S. Corporate Tax Expenditures and Effective Tax Rates in Line with OECD Peers

Last week, an analysis by Reuters suggested that U.S. firms pay less income tax than foreign competitors, in part because “the U.S. tax code is unusually generous with tax breaks and deductions,” also known as corporate tax expenditures. However, the Reuters analysis is at odds with other data and studies indicating that U.S. corporate tax expenditures and effective tax rates are about on par with those in peer countries in the OECD.

3 min read
expensing infrastructure Who bears the burden of corporate taxes? Learn more about who bears the burden of the corporate income tax (who actually pays corporate taxes) and the corporate tax burden

Expensing Is Infrastructure, Too

The Biden administration has suggested several tax increases for his infrastructure plan. Public infrastructure can help increase economic growth, but by raising taxes on private investment, the net effect on growth may be negative. However, tax options like retaining expensing for private R&D investment or making 100 percent bonus depreciation for equipment permanent would be complementary to the goals of infrastructure spending.

5 min read
Biden GILTI Biden global minimum tax Biden US global minimum taxBiden international tax Us corporate tax, US tax, corporate income tax, new investment

Two Important Issues that Must Be Resolved in “Global Tax Reform”

If the U.S. is suggesting a 15 percent effective rate as the minimum acceptable rate for a global agreement, then the tax bases of the various minimum taxes adopted as part of the agreement should be aligned to minimize complexities and unintended consequences.

5 min read
Wyden 199a pass-through deduction proposal Democrats proposed to expand child tax credit as part of covid relief package. Analysis of the “SALT Act” state and local tax deduction cap, Restoring Tax Fairness to States and Localities Act, SALT cap repeal, eliminate SALT cap

Tax Policy Ideas in the Republican Study Committee Budget

While much of the tax policy now under debate aims to increase the tax burden on businesses, several policies in the newly released Republican Study Committee (RSC) budget for Fiscal Year 2022 focus on reducing the tax code’s barriers to investment and saving.

3 min read
Australia budget 2021 to 2022 Australia budget tax proposals and Australia tax proposals in new budget lessons from down under

Tax Policy Lessons from Down Under

This week the Australian government released its latest budget proposal and two policies that stand out in its fiscal response to the pandemic should be helpful as the economic engine of the country turns back on. The first is full expensing for some investments and the second is the introduction of a loss carryback provision. The new budget takes both these temporary policies and extends them into 2023.

2 min read
international tax avoidance To help countries face the pandemic-related financing needs while reducing inequality, the International Monetary Fund (IMF) has released a series of policy recommendations based on a temporary COVID-19 tax, levied on high incomes or wealth. IMF tax proposals: shrink inequality or harm pandemic economic recovery? OECD work plan, BEPs 2.0, base erosion, profit allocation, global minimum tax, base erosion and profit shifting oecd

IMF Tax Proposals: Shrink Inequality or Sink Post-Pandemic Recovery?

To help countries face the pandemic-related financing needs while reducing inequality, the International Monetary Fund (IMF) has released a series of policy recommendations based on a temporary COVID-19 tax, levied on high incomes or wealth.

4 min read
After the Super-Deduction Assessing Proposals for the Reform of Capital Allowances

Leveling Up: The UK’s Super-Deduction and its Regional Divide

As part of the 2021 Budget, the UK introduced a 130 percent super-deduction for plant and equipment for the next two years, meaning that businesses can take a deduction amounting to 130 percent of the costs in the year the investment is made.

4 min read
depreciation Capital allowances and capital cost recovery across OECD countries, 2021. Learn more about capital allowance and capital recovery.

Capital Cost Recovery across the OECD, 2021

The ongoing pandemic has once again highlighted the importance of investment. To address the economic fallout of the pandemic, several OECD countries have temporarily accelerated depreciation schedules for various assets.

31 min read
UK tax reform, 2021 budget UK 2021 budget, UK corporate tax reform, UK corporation tax rate

Marginal Effective Tax Rates and the 2021 UK Budget

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.

15 min read