The tax treatment of intangible assets has come into the spotlight recently with the Biden administration proposing to undo a policy adopted in 2017 to encourage intellectual property (IP) to be located in the U.S.
Raising rates on those with the most flexibility to leave—or never to return—risks turning those fears into a self-fulfilling prophesy.
Tax cut legislation is not just a red state phenomenon, and tax reductions come in many forms other than rate reductions. The American Rescue Plan Act’s state tax cuts limitation is a problem for more states than you think.
Whether we use corporate tax collections as a portion of GDP, average effective tax rates, or marginal tax rates, each measure shows that the U.S. effective corporate tax burden is close to or above the average compared to its OECD peers. Raising corporate income taxes would put the U.S. at a competitive disadvantage, whether one looks at statutory tax rates or effective corporate tax rates.
While the focus has been on the federal rate, it is important to include state tax rates when thinking about the total tax burden on corporate income.
With so many federal changes occurring in such a short amount of time—including some federal provisions changing more than once and a major change to the treatment of UC income occurring in the middle of tax filing season—state legislators have faced the challenge of responding to these changes quickly in order to provide certainty to taxpayers.
An increase in the federal corporate tax rate to 28 percent would raise the U.S. federal-state combined tax rate to 32.34 percent, higher than every country in the OECD, the G7, and all our major trade partners and competitors including China.
The economics is clear: If Biden wants to maximize the economic benefits of his $3 trillion in new infrastructure spending, he should cut $3 trillion in other government spending to pay for it.
The government of Hartford County, Connecticut is in line to receive $173 million in local aid under the American Rescue Plan Act (ARPA). There’s only one problem: the government of Hartford County doesn’t exist, nor do any of Connecticut’s other counties have county-level government despite being allocated a collective $691 million under the bill.
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.
In an effort to rein in perceived excesses in executive compensation, Sen. Bernie Sanders (I-VT) and other co-sponsors have proposed to increase a company’s corporate income tax rate progressively based on the difference between median worker pay and CEO pay.
Some tax hikes are more damaging than others, according to Congressional Budget Office (CBO) and new Tax Foundation economic modeling.
Capital stock taxes are imposed on a business’s net worth (or accumulated wealth). As such, the tax tends to penalize investment and requires businesses to pay regardless of whether they make a profit in a given year, or ever.
Since 1987, unemployment compensation benefits have been subject to federal income tax and, in most states, to state income tax. According to the Congressional Research Service, such treatment—including unemployment compensation benefits in taxable income—is common across industrial nations.
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.
The EU recently launched a consultation to reform the business tax system, which will outline the priorities for corporate taxation over the coming years to meet the needs of a globalized economy that struggles to recover from the consequences of the COVID-19 crisis. It will also set EU actions regarding the ongoing international discussion on the taxation of the digital economy and a global minimum tax.
Limiting addiction to nicotine is a laudable goal, but lawmakers should exercise caution with the methods employed. Using gross receipts taxes on businesses to effectively levy an excise tax introduces complexity to an already flawed tax design. It is better to let the excise tax internalize externalities and the business tax raise general revenue.
The IRS recently announced the extension of tax filing and payment deadlines from April 15th to May 17th to help taxpayers navigating the many tax changes amid the pandemic and give the IRS opportunity to clear its backlog of tax returns and correspondence.
Many members of Congress have taken issue with the 2017 tax reform. However, the reasoning that has led some to believe that GILTI provides a path to offshoring investment and jobs is flawed.
New Yorkers faced the highest burden, with 14.1 percent of income in the state going to state and local taxes. Connecticut (12.8 percent) and Hawaii (12.7 percent) followed.