State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.
32 min read
On this episode of The Deduction, we speak with Pam Olson, Tax Foundation Board Member and Consultant on Tax Policy Services at PwC, about the tax on Global Intangible Low Tax Income, or “GILTI.” In 2017, GILTI was implemented as a minimum tax designed to disincentivize U.S. companies from shifting profits overseas, but it doesn’t work how drafters intended, and now President Biden has proposed doubling it.
With the Biden administration proposing a variety of new taxes, it is worth revisiting the literature on how taxes, particularly on corporate and individual income, can impact economic growth.
9 min read
If Biden wants to reduce tax evasion, raising the corporate rate, increasing the incentives to engage in tax evasion, and creating a larger tax advantage to becoming a pass-through business is counterproductive.
3 min read
New Joint Committee on Taxation (JCT) data indicates that the federal tax system is progressive, consistent with similar analysis by the Congressional Budget Office (CBO), and the OECD.
2 min read
The Biden administration’s American Jobs Plan proposal to fund infrastructure spending relies on a bet that the benefits outweigh the costs of a higher corporate tax burden. Using the Tax Foundation model, we find that this trade-off is a bad one for the U.S. economy, resulting in reduced GDP, less capital investment, fewer jobs, and lower wages.
3 min read
Policymakers should recognize that corporate tax hikes will not only impact large firms, but many smaller and younger firms as well. Considering that many of these smaller firms are significant contributors to net job growth, raising corporate taxes at this time would not be conducive for a speedy economic recovery.
2 min read
The taxation of capital—at both the individual and the corporate level—is much debated and affects economic growth by lowering the incentives to save and invest.
6 min read
Location Matters is an account of tax complexity and the ways that tax structure affect competitiveness. For policymakers, it represents an opportunity to explore the seemingly more arcane tax provisions that can have a significant impact on business tax burdens, and to discover how their tax code—often completely by accident—picks winners and losers.
4 min read
A landmark comparison of corporate tax costs in all 50 states, Location Matters provides a comprehensive calculation of real-world tax burdens, going beyond headline rates to demonstrate how tax codes impact businesses and offering policymakers a road map to improvement.
8 min read
Some lawmakers have expressed concerns about President Biden’s proposal to raise the federal corporate income tax rate from 21 percent to 28 percent, and instead suggest raising the rate to 25 percent.
3 min read
Under President Biden’s tax plan, the United States would tax corporate income at the highest top rate in the industrialized world, averaging 65.1 percent.
3 min read
There’s a useful contrast between two revenue options related to President Biden’s infrastructure push. The president’s American Jobs Plan includes a proposal to raise the corporate tax rate to 28 percent. Meanwhile, historically, the gas tax is the main revenue source for transportation funding.
8 min read
In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.
4 min read
Kansas has the revenue cushion it needs to provide tax relief to individuals and businesses and improve the structure of its tax code in the process. These pro-growth reforms would not only help taxpayers amid the pandemic but would also promote economic recovery and growth in a state that is lagging behind its competitors.
7 min read
Taxes on goods and services were on average the greatest source of tax revenue for Latin American and Caribbean countries
5 min read
While many of the tax proposals work in tandem, some conflicts continue to exist. If lawmakers were able to repeal federal deductibility, reduce income tax rates, finish the job on inventory taxation, and phase out the capital stock tax, this would represent a marked improvement in the state’s tax climate, eliminating several of the most uncompetitive features of the current code.
6 min read
The international corporate tax changes in President Biden’s tax plan would increase tax rates on domestic income more than on foreign income, resulting in a net increase in profit shifting out of the US, according to our Multinational Tax Model.
33 min read
As policymakers consider tax options to boost the U.S. economy’s long-run economic growth, they should consider reforms that would increase growth the most while minimizing forgone tax revenue.
4 min read
Economic research and Tax Foundation modeling indicate there is a negative trade-off between progressive taxes on capital income—such as the wealth tax, minimum book tax on corporate income, and a higher corporate tax rate—and economic growth.
21 min read