Corporate Income Taxes

Financial Transaction Tax (FTT)

State Tax Changes Taking Effect January 1, 2023

Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.

Bonus Depreciation and New Corporate Investment in 2018

If bonus depreciation is allowed to phase out, then the tax bias against capital investments will increase, discouraging firms from making otherwise profitable investments.

Corporate Tax Rates around the World, 2022

A new report shows that corporate tax rates around the world continue to level off. “We aren’t seeing a race to the bottom, we’re seeing a race toward the middle,” said Sean Bray, EU policy analyst at the Tax Foundation.

Chile’s Tax Reform Heads in the Wrong Direction

As Chile looks to the future, the accelerated deductions for capital investment costs should be extended and made permanent while unnecessary tax hikes on individuals and capital should be avoided. Policymakers should focus on growth-oriented tax policy that encourages investment, savings, and entrepreneurial activity, increasing Chile’s international tax competitiveness.

A Tale of Two Tax Plans in the United Kingdom

History is clear. Lowering budget deficits via spending restraint frees resources for additional private output and jobs. Lowering them by raising taxes on business investment and labor services makes it harder to dis-inflate without a recession.

Ranking State Tax Systems: Corporate Taxes

All corporate income taxes fall on capital investment, but the structure should not make matters worse, and policymakers should take care not to distort investment decisions through the use of targeted incentives for select firms or activities instead of a lower rate for all businesses.

Lesson Plan: Average vs. Marginal Tax Rates

In this lesson plan, students will know how average and marginal tax rates are calculated. Students will compare the two tax rates. Students will learn how marginal and average tax rates combine to impact the taxpayer and economy.

Spain’s Race to the Bottom in the International Tax Competitiveness Index

Since 2020, Spain has dropped from 26th to 34th on the International Tax Competitiveness due to multiple tax hikes, new taxes, and weak performances in all five index components.

Comparing Europe’s Tax Systems: Corporate Taxes

According to the corporate tax component of the 2022 International Tax Competitiveness Index, Latvia and Estonia have the best corporate tax systems in the OECD.

Details and Analysis of Canceling the Scheduled Business Tax Increases in Tax Cuts and Jobs Act

The business tax changes originally introduced in the TCJA are scheduled to increase tax burdens on businesses at a time when economic headwinds and broader uncertainty are higher than they have been in decades.

Permanent 100 Percent Bonus Depreciation Even More Important When Inflation Is Elevated

We find that the dynamic cost of permanent bonus depreciation rises by about 7 percent under 4 percent inflation, but the economic benefit, measured by the size of the economy, rises by about 25 percent.

Colombia Is in Urgent Need of Pro-Growth Comprehensive Tax Reform

Colombia should consider shifting its planned tax reforms from harmful corporate and individual taxes to less harmful consumption taxes.

2023 State Business Tax Climate Index

While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.

International Tax Competitiveness Index 2022

While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.

Inflation Is Surging, So Are Federal Tax Collections

Federal tax collections are approaching the highest levels in U.S. history set during World War II and again during the dot-com bubble in 2000. Meanwhile, federal spending in FY 2022 was over 25 percent of GDP—a level only exceeded during the height of the pandemic in 2020 and 2021, and during World War II.

What the EU Gets Wrong About “Tax Fairness” and How Principled Tax Policy Can Help

A more principled EU tax system will increase economic growth across the economy and provide the government with stable finances for spending priorities.

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.