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ARPA tax mandate American Rescue Plan Act state tax cuts

ARPA’s Tax Mandate Ruled Unconstitutional by Appellate Court

The Fifth Circuit has affirmed states’ authority over their respective tax policies and has asserted that the offset clause—often called the “Tax Mandate”—of the American Rescue Plan Act (ARPA) has enough fiscal impact on a state’s budget so as to be coercive, as opposed to incentivizing.

5 min read
Puerto Rico Tax Competitiveness and Pillar Two Global Tax Deal

Puerto Rican Competitiveness and Pillar Two

Puerto Rico, a US territory with a limited ability to set its own tax policies, will be the first part of the US to be substantially affected by Pillar Two, the global tax agreement that seeks to establish a 15 percent minimum tax rate on corporate income.

17 min read
Pillar One US Treasury Consultation on OECD proposal for public review input and comments

Five Takeaways from the New Pillar One Documents

The OECD recently released a trove of new documents on a draft multilateral tax treaty. The U.S. Treasury has opened a 60-day consultation period for the proposal and is requesting public review and input.

7 min read
Tax Foundation experts analyze ways to rein in the national debt, including US debt and deficits and federal budget and US spending and taxes

How to Rein in the National Debt

Now is the time for lawmakers to focus on long-term fiscal sustainability, as further delay will only make an eventual fiscal reckoning that much harder and more painful. Congressional leaders should follow through on convening a fiscal commission to deal with the long-term budgetary challenges facing the country.

35 min read
US Pillar Two responses should include a policy response from Congress on the OECD global tax deal's global minimum tax

How the U.S. Can Piece Together a Solution for Pillar Two

Congress should recognize that Pillar Two has significant U.S.-specific downsides, but also that it cannot unilaterally stop Pillar Two from taking effect. Instead, it should carefully consider a policy response for the next Congress, when a variety of forces are likely to compel it to act.

7 min read
Carbon Border Adjustment Mechanism EU CBAM carbon price carbon tariffs US global minimum tax US tax incentives Build Back Better tax rate on gilti Global Intangible Low Tax Income (GILTI) Global intangible low-taxed income US cross-border tax reform and GILTI Global Intangible Low Tax Income. Foreign tax credits

JCT Analyzes Federal Revenue Effects of Pillar Two

The JCT analysis raises some useful questions for the U.S. domestic debate over Pillar Two. The Treasury Department should examine its support for an agreement that will reduce its own revenue intake. But it is also worth noting that the principal mechanism for the revenue reduction—the foreign tax credit—is a policy already baked into U.S. law, including the Republican-enacted global minimum tax from 2017. The OECD deal merely takes advantage of this longstanding feature.

6 min read
Von der Leyen Biden EU IRA & Competitiveness | Tax FoundationPresident von der Leyen President Biden Can’t Fix European Competitiveness clean tech and Inflation reduction act subsidies

Dear President von der Leyen: President Biden Can’t Fix European Competitiveness

Focusing on the “threat” to European industry caused by the Inflation Reduction Act rather than internal tax system flaws puts the EU at risk of slower economic growth and possibly losing some of its important industrial base. It is also contrary to the EU’s geopolitical goals.

4 min read
global tax agreement global tax deal OECD global minimum tax rules corporate minimum tax rules Secretariat Proposal, OECD Public Consultation Document, Unified Approach under pillar one profit shifting definition tax planning and avoidance foreign direct investment FDI global tax deal impact of global tax agreement OECD international tax proposal

Time for an Updated Impact Assessment of the Global Tax Deal

Treasury Secretary Janet Yellen offered estimates from the EU Tax Observatory as evidence that the Polish government would benefit from supporting the global tax deal. Unfortunately, evidence was, at best, out of date.

2 min read
Tax haven, tax havens, tax haven countries, offshore tax havens, tax shelter US cross-border tax reform and GILTI Global Intangible Low Tax Income. Foreign tax credits

A Regulatory Tax Hike on U.S. Multinationals

While much of the policy focus has been on proposals embedded in the Build Back Better agenda, a meaningful tax hike for multinational companies has already been adopted.

1 min read
American Rescue Plan Act of 2021, Covid relief federal economic relief package, Biden stimulus $1,400 payments or stimulus checks COVID-19 tax resource center. coronavirus tax policy and the coronavirus (covid-19)

Federal Judge Rules Against ARPA’s Tax Mandate

Kentucky and Tennessee won an important legal victory Friday when a federal court ruled that the American Rescue Plan Act (ARPA)’s restrictions on state fiscal autonomy were unconstitutional and enjoined (blocked) the enforcement of those provisions against both states.

7 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