Corporate Income Taxes

How Do Taxes Affect Interstate Migration?

IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.

Tax Hike Proposals Live on Despite Being Dropped in the Inflation Reduction Act

President Biden proposed a 7-point hike in the corporate tax rate to 28 percent, a new minimum book tax on corporate profits, and higher taxes on international activity. We estimated these proposals would reduce the size of the economy (GDP) by 1.6 percent over the long run and eliminate 542,000 jobs.

What European Countries Are Doing about Windfall Profit Taxes

It’s unlikely these implemented and proposed windfall taxes will achieve their goals of addressing high gas and energy prices and raising additional revenues. They would more likely raise prices, penalize domestic production, and punitively target certain industries without a sound tax base.

Tax

Combined Federal and State Corporate Income Tax Rates in 2022

When examining tax burdens on businesses, it is important to consider both federal and state corporate taxes. Corporate taxes are one of the most economically damaging ways to raise revenue and are a promising area of reform for states to increase competitiveness and promote economic growth, benefiting both companies and workers.

After the UK Super-Deduction: Assessing Proposals for the Reform of Capital Allowances

For many years, the UK has adopted a strikingly ungenerous approach to capital cost recovery – the ability of firms to write off investment against tax. This has coincided with consistently low levels of business investment. The super-deduction, which has temporarily made the UK tax system much more supportive of capital investment in plant and machinery is set to expire.

Audit

Taxes and the UK’s new Prime Minister

In an already-challenging economic environment, new UK Prime Minister Liz Truss must get tax rates correct to avoid over-burdening a population and business sector facing immense uncertainty. Focusing only on rates while ignoring the base misses an opportunity for real, pro-growth reform.

New Mexico and the Question of Tax Competitiveness

Every change to a state’s tax system makes its business tax climate more or less competitive compared to other states and makes the state more or less attractive to business.

Accounting for the New Book Minimum Tax

The Inflation Reduction Act includes a book minimum tax, which is raising the eyebrows of accountants everywhere. Scott Dyreng, a professor of accounting at Duke University, and Daniel Bunn join Jesse to discuss how these minimum taxes work and how companies aim to comply with all these new complex rules and tax increases.

The Economic, Revenue, and Distributional Effects of Permanent 100 Percent Bonus Depreciation

The phaseout of 100 percent bonus depreciation, scheduled to take place after the end of 2022, will increase the after-tax cost of investment in the U.S. Permanently extending it would increase long-run economic output by 0.4 percent and increase employment by 73,000 FTE jobs.

Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020)

The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.

The Tax Compliance Costs of IRS Regulations

In a pattern that has become all too common in recent decades, the newly enacted Inflation Reduction Act (IRA) added yet another layer of complexity to an already complex and burdensome federal tax code.

Arkansas’s Rate Reduction Acceleration

Arkansas recently became the 13th state to authorize an individual income tax rate reduction this year. This round of tax cuts accelerated reforms enacted eight months ago.

Tax Foundation Response to OECD Consultation on Amount A of Pillar One

Pillar One Amount A is meant to reallocate taxable profits of large multinationals, mitigate double taxation of profits, and avoid a harmful tax and trade war.

House Votes on the Inflation Reduction Act

The House of Representatives is set to pass the Inflation Reduction Act, the latest iteration of President Biden’s tax and climate agenda. Garrett Watson joins Jesse to discuss what sacrifices were made by key lawmakers to bring this bill to the finish line. They also look at what the economic impact of this proposal would be as the country continues to face historic rates of inflation.

Who Gets Hit by the Inflation Reduction Act Book Minimum Tax?

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.

Minimum Book Tax: Flawed Revenue Source, Penalizes Pro-Growth Cost Recovery

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.

Reminder that Corporate Taxes Are the Most Economically Damaging Way to Raise Revenue

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.

It Would Be a Mistake to Resurrect Corporate Alternative Minimum Tax

The Inflation Reduction Act may be smaller than the proposed Build Back Better legislation from 2021, but both sets of legislation propose a reintroduced corporate alternative minimum tax (AMT). The 30-year experience with a corporate AMT shows it is not a good solution.