How Heavily Taxed Are U.S. Multinationals?
In general, the effective tax rates on the foreign profits of U.S. multinationals are not that low relative to the U.S. tax rate, contrary to popular rhetoric.
7 min read
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History of Attempted Changes to Step-Up in Basis Shows Perilous Road Ahead
As Congress considers President Biden’s proposal to tax unrealized capital gains at death, the history of previous efforts suggests it faces a perilous road ahead. Lawmakers must resolve tricky design and implementation details that derailed past attempts to change how capital gains are treated when assets are passed from one generation to the next.
4 min read
U.S. Corporate Income Faces Third-Highest Integrated Tax Rate in OECD Under Ways and Means Plan
Under the House Ways and Means tax plan, the United States would tax corporate income at the third-highest integrated tax rate among rich nations, averaging 56.6 percent.
3 min read
Choose Your Own Adventure: Global Minimum Tax Edition
Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have surfaced in recent weeks, there are clear divides among various proposals.
5 min read
Latest White House Report Tells Incomplete Story on Average Tax Rates for Wealthy
The White House Council of Economic Advisors (CEA)’s recent report estimates the average federal individual income tax rate for the top 400 wealthiest households in the U.S to be 8.2 percent, lower than typically estimated for top earners.
4 min read
Taxing Decisions, 2021: Minisode 1
We discuss where the reconciliation package on Capitol Hill stands and talk through recent Tax Foundation modeling, which found that the plan may not have the economic boost its proponents have claimed.
The Good, the Bad, and the Ugly of the Ways and Means Plan
The latest version of the Biden Build Back Better agenda, released last week by the House Ways and Means committee, is dense, with too many provisions to flesh out completely. Here’s a rundown of the good, the bad, and the ugly of it.
7 min read
Federal Tobacco Tax Proposal Could Result in 50% Increase in State Taxes
The potential federal tax increase of over 1,600 percent on dipping tobacco as a result of the House Democrats’ proposal could result in state taxes and retail prices increasing by more than 50 percent in certain states.
4 min read
Yes, the US Tax Code Is Progressive
As Congress considers several tax proposals designed to raise taxes on high-income earners, it’s worth considering the distribution of the existing tax code.
3 min read
Top Tax Rate on Pass-through Business Income Would Exceed 50 Percent in Most States Under House Dems’ Plan
Under the House Democrats’ reconciliation plan, the top tax rate on pass-through business income would exceed 50 percent in most states. Pass-through businesses, such as sole proprietorships, S corporations, and partnerships, make up a majority of businesses and majority of private sector employment in the United States.
3 min read
U.S. Would Have Third-Highest Corporate Tax Rate in OECD Under Ways and Means Plan
Under the Ways and Means text, the U.S. would have an average corporate tax rate of 30.9 percent, which would be the third-highest corporate tax rate in the OECD, behind only Colombia and Portugal.
1 min read
Corporations in Most States Would Face Income Tax Rate Exceeding 30 Percent Under Ways and Means Proposal
Under the House Democrats’ tax plan, companies in 21 states and D.C. would face a higher corporate tax rate than in any country in the OECD.
1 min read
Wake Me Up when Reconciliation Ends
Reconciliation. One word that drives D.C. crazy, yet has been the way some of Congress’s most monumental bills have become law. We discuss why this complex budget process is back in the mix as Congress gears up to advance President Biden’s multi-trillion-dollar tax agenda.
House Tobacco Proposals Defy Biden’s Tax Pledge and Undermine Harm Reduction Efforts
House Democrats’ newly released $3.5 trillion tax legislation includes a tax increase on tobacco, nicotine, and vapor products levied on tobacco manufacturers. But ultimately it would fall heavily on tobacco consumers—many of the group that earns less than $400,000 that President Biden pledged would not see a tax increase.
6 min read
Tax Reform and Infrastructure Investment: The Two Theories
The Biden administration does have a point about how some components of the infrastructure bill could put downward pressure on inflation in the long term. However, the taxes chosen to pay for those investments would counteract those effects, by reducing investment and productivity growth.
4 min read
Treasury Minimum Tax Argument Relies on Narrow Interpretation of Current/Proposed Rules
As Congress prepares to rewrite some portion of the current international tax rules, it’s hoped that they are able to achieve a more principled approach and one that is not so subject to obfuscation and misinterpretation.
7 min read
Reviewing Wyden’s Reconciliation Tax Policy Proposals
Congressional lawmakers are putting together a reconciliation bill to enact much of President Biden’s Build Back Better agenda. Many lawmakers including Senate Finance Committee Chair Ron Wyden (D-OR), however, want to make their own mark on the legislation.
5 min read
Top Ten Congressional Districts Impacted by Biden Corporate Tax Proposals
The Biden corporate tax plan would disproportionately harm these congressional districts and make the U.S. less internationally competitive. These tax hikes, along with individual tax increases, would also raise taxes on net for 96 percent of congressional districts by 2031 after these temporary credits expire in 2025.
2 min read
Wyden’s Financial Services Tax Proposals Would Put “Mark-to-Market” to the Test
Mark-to-market is not simple to implement, as it involves new administrative and compliance challenges for taxpayers. Mark-to-market levies tax on phantom income, requiring some taxpayers to engage in some degree of liquidation, ultimately suppressing incentives to save and invest. The limited tax revenues that could result from these proposals are not worth the risk.
5 min read
Historical U.S. Federal Corporate Income Tax Rates & Brackets, 1909-2020
How do current federal corporate tax rates and brackets compare historically?
8 min read