The Inflation Reduction Act increases the IRS’s budget by roughly $80 billion over 10 years. The money is broken into four main categories—enforcement, operations support, business system modernization, and taxpayer services—as well as a few other small items such as an exploratory study on the potential of a free-file system.
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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. In other words, married couples who file jointly under this scenario have a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.
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In dollar terms, the industries that would account for the largest book minimum tax liabilities are manufacturing, at $73.2 billion, followed by finance, insurance, and management at $46.9 billion.
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While exempting accelerated depreciation from the book minimum tax would reduce some of the economic harm of the tax, there remain many unresolved problems within the design and structure of the tax that make it a poorly chosen revenue option.
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In the rush to pass the Inflation Reduction Act, which features an ill-conceived tax on the book income of U.S. corporations, it is worth reminding policymakers of a well-established finding in the economic literature.
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Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules.
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Some 40 years ago, the U.S. dealt with high inflation and slow economic growth. Then as now, the solution is a long-term focus on stronger economic growth and sustainable federal budgets.
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The Senate has begun debate on the so-called Chips bill, which would provide $52 billion in grants and $24 billion in tax credits to supposedly strengthen the production of semiconductors in the U.S.
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From policy to filing, from accounting to compliance: technology is truly shaping the future of taxes. We chat with Ben Alarie, CEO of Blue J, about how companies are utilizing technology to comply with the tax code and how policymakers can use technology to advance tax laws that support an ever-evolving economy.
While the global minimum tax gets much attention in the media, there is another significant piece to the deal.
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Academic research indicates foreign direct investment (FDI) is highly responsive to the corporate effective tax rate (ETRs); that is, the tax rate after accounting for all deduction and credits available to corporations.
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Policymakers from both parties in Harrisburg have proposed reducing Pennsylvania’s 9.99 percent corporate net income tax (CNIT) rate but could not agree on an approach—until now. With the enactment of HB 1342 lawmakers finally succeeded in cutting what had been the second highest state corporate tax rate in the nation.
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Idaho Ballot initiative would impose an incredibly high top marginal rate that would fall on many small businesses, not just high-income earners.
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Given the state’s strong budget surplus and projected continued revenue growth, Wisconsin is in a prime position to enact pro-growth reforms to improve the state’s competitive standing for decades to come.
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While the bulk of the proposed tax increases and spending programs remain under debate, Democratic lawmakers have reportedly agreed on prescription drug pricing provisions as a starting point for a revived Build Back Better package.
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As the Czech EU presidency considers a plan to manage various tax-related files, it would be wise to consider principled tax policy that broadens the tax base and reduces the tax wedge on strategic investment.
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On July 1st, 2021, over 130 countries agreed to an unprecedented 15% global minimum tax. One year later, the deal appears stuck. Daniel Bunn joins Jesse to discuss what this delay means for countries and multinational corporations, and what the path ahead looks like for global tax policy and competition.
Overall, the data shows outbound FDI shifted from low-tax to other jurisdictions, while inbound FDI remained largely unchanged.
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Congress should prioritize evaluation of recent international tax trends and the model rules and adjust U.S. rules in a way that supports investment and innovation and moves towards simplicity.
25 min read
Although the dispersion of our supply chains throughout the world has been scrutinized in recent years, both inbound and outbound foreign direct investment are critical to sustaining supply chain resiliency and reducing economic risks for both firms and investors.
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