Business Tax Compliance and Complexity

OECD Pillar Two (Global Minimum Tax)

Going Beyond the Headlines: Understanding Corporate Taxes

Every so often, you will see headlines highlighting large companies that pay little or no corporate income tax. While these stories may seem shocking, the reality is much more mundane.

Aligning Kentucky’s Tax Code for Growth

Norway’s New Budget Adds Unnecessary Complexity

Norway’s proposed reductions in income tax have the potential to increase disposable income for workers that can potentially raise consumption and contribute to economic growth. However, the increase of the wealth and indirect taxes is likely to step up the complexity of the tax system and create additional distortions.

Despite Slip in International Tax Competitiveness Index, Germany Retains Top G7 Rank

More often than not, by looking at Germany’s tax code as an example, G7 countries can improve the stability of their revenues and the lives of those they represent.

Pro-Growth Tax Reform for Oklahoma

Our new study identifies a number of deficiencies in Oklahoma’s tax code and outlines possible solutions for reform that would create a more neutral tax code and encourage long-term growth in the state.

Comparing Europe’s Tax Systems: Corporate Taxes

According to the corporate tax component of the 2021 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.

Tracking 2021 Election Results: State Tax Ballot Measures

Through 10 ballot measures across four states—Colorado, Louisiana, Texas, and Washington—voters will decide significant questions of state tax policy.

Supernormal Return

Lawmakers Consider Untested and Complex Policies to Fund Reconciliation Bill

Congress is debating new ways to raise revenue that would make the tax code more complex and more difficult to administer. The new proposals—imposing an alternative minimum tax on corporate book income, applying an excise tax on stock buybacks, and, at one point this week, a tax on unrealized capital gains for billionaires—are unreliable and highly complex ways to raise revenue.

Movers and Shakers in the International Tax Competitiveness Index

The Index provides lessons for policymakers when they are thinking of ways to remove distortions from their tax systems and remain competitive against their peers. The further up a country moves on the Index, the more likely it is to have broader tax bases, relatively lower rates, and policies that are less distortionary to individual or business decisions. Going the other way reveals a policy preference for narrow tax bases, special tax policy tools, and rules that make it difficult for compliance.

Mark-to-Market (MTM)

Proposal for Reporting Requirements for Financial Institutions Misses the Mark

Reducing the tax gap is a good idea, but the reporting requirements for financial institutions could be better-targeted at the problem at hand.

Tax Gap

Don’t Copy European Drug Pricing Policies that Reduced R&D and Innovation

Rather than pursuing policies that have demonstrably reduced R&D and innovation elsewhere, and that would disincentivize R&D in the U.S., lawmakers should continue to ensure an ecosystem that encourages risk-taking and R&D.

Patent Box Regimes in Europe, 2021

Patent box regimes (also referred to as intellectual property, or IP, regimes) provide lower effective tax rates on income derived from IP. Most commonly, eligible types of IP are patents and software copyrights. Currently, 14 of the 27 EU member states have a patent box regime.

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.

Don’t Add More Temporary Tax Policies in Budget Reconciliation

Temporary policy creates uncertainty for taxpayers and scheduling more expirations will add to the already-expiring provisions under the Tax Cuts and Jobs Act (TCJA) of 2017.

5 Things to Consider in the Tax Gap Discussion

Increasing tax compliance is a major part of the Biden administration proposal to raise revenue for physical and social infrastructure. Reducing the tax gap—the difference between taxes owed and taxes paid—is a good way to raise revenue, but it doesn’t come without trade-offs, and it’s important to go about it in the right way.

Considering Trade-offs to Improving Tax Collections

Recent Biden administration proposals rely heavily on revenue from better IRS tax collections to fund spending initiatives. The American Families Plan uses several avenues to reduce the tax gap (or the difference between taxes paid and taxes owed), from increasing the IRS’s tax enforcement budget to improving information technology and expanding reporting requirements.