Academic studies show that higher corporate tax rates depress worker wages and lead to fewer jobs. An Organisation for Co-operation and Development (OECD) study has found that the corporate tax is the least efficient and most harmful way for governments to raise revenue.
Pillar Two implementation is underway in many jurisdictions, and many governments are aiming to get their proposals approved before the end of 2023. However, estimating Pillar Two’s impact on government revenue is proving difficult. As a result, only a few countries have publicly presented their findings.
7 min read
Simplicity in the tax code means taxes should be easy for taxpayers to pay and easy for governments to administer and collect.
In recent years, European countries have undertaken a series of tax reforms designed to maintain tax revenue levels while protecting households and businesses from high inflation.
8 min read
As increased political attention focuses on the state of the American worker, expect to see a resurgence of the argument that the labor share of income is in decline.
5 min read
On 12 September, the European Commission released a proposal called “Business in Europe: Framework for Income Taxation” (BEFIT) and two associated proposals on transfer pricing and a Head of Office tax system.
6 min read
Given enough time, everything old is new again—including tax ideas best consigned to history. But worldwide combined reporting, which a few states flirted with in the 1980s, is rearing its head again.
6 min read
Congress should recognize that Pillar Two has significant U.S.-specific downsides, but also that it cannot unilaterally stop Pillar Two from taking effect. Instead, it should carefully consider a policy response for the next Congress, when a variety of forces are likely to compel it to act.
7 min read
A major case pending before the U.S. Supreme Court (Moore v. United States) is calling into question provisions on large portions of the U.S. tax base which could quickly become legally uncertain, putting significant revenue at stake.
7 min read
A growing international tax agreement known as Pillar Two presents two new threats to the U.S. tax base: potential lost revenue and limitations on Congress’s ability to set its own tax policy.
39 min read
Bermuda, long celebrated for its pristine beaches and offshore financial services, is embarking on a journey to recalibrate its tax mix. Spurred by the OECD’s Pillar Two initiative, the island will introduce its first-ever corporate income tax in 2025.
4 min read
As more and more states move away from throwback or throwout rules, those states that still impose these rules are becoming less attractive for businesses, which are incentivized to relocate their sales activities to non-throwback states.
6 min read
Congress should reconsider key elements of the IRA, including the book minimum tax and the green energy credits, with an eye towards simplification and fiscal responsibility.
46 min read
Discover why there are better and worse ways for governments to raise a dollar of revenue. That’s because no two taxes impact the economy the same.
Capital allowances play an important role in a country’s corporate tax base and can impact investment decisions—with far-reaching economic consequences.
4 min read
This tax reform plan would boost long-run GDP by 2.5%, grow wages by 1.4%, and add 1.3M jobs, all while collecting a similar amount of tax revenue as the current code and reducing the long-run debt burden.
39 min read
At least 32 notable tax policy changes recently took effect across 18 states, including alterations to income taxes, payroll taxes, sales and use taxes, property taxes, and excise taxes. See if your state tax code changed.
16 min read
The JCT analysis raises some useful questions for the U.S. domestic debate over Pillar Two. The Treasury Department should examine its support for an agreement that will reduce its own revenue intake. But it is also worth noting that the principal mechanism for the revenue reduction—the foreign tax credit—is a policy already baked into U.S. law, including the Republican-enacted global minimum tax from 2017. The OECD deal merely takes advantage of this longstanding feature.
6 min read
It’s unlikely these implemented and proposed windfall taxes will achieve their goals of raising additional revenues without distorting the market. Instead, they would penalize domestic production and punitively target certain industries without a sound tax base.
13 min read
In most European OECD countries, corporate income is taxed twice, once at the entity level and once at the shareholder level.
4 min read