Tax Proposals, Comparisons, and the Economy

Reliance on Consumption Taxes in Europe

Hungary relies the most on consumption tax revenue, at 45.3 percent of total tax revenue, followed by Latvia and Estonia at 45.1 percent and 42.4 percent, respectively.

Reliance on Social Insurance Tax Revenue in Europe

Social insurance taxes are the second largest tax revenue source in European OECD countries, at an average of 29.5 percent of total tax revenue.

Evaluating Proposals to Increase the Corporate Tax Rate and Levy a Minimum Tax on Corporate Book Income

President Biden and congressional policymakers have proposed several changes to the corporate income tax, including raising the rate from 21 percent to 28 percent and imposing a 15 percent minimum tax on the book income of large corporations, to raise revenue for new spending programs. Our new modeling analyzes the economic, revenue, and distributional impact of these proposals.

Changes to the Tax Base Matter When Evaluating the Impact of Tax Reforms

A new study illustrates how overlooking an important element of the tax system—the structure of the tax base—can lead to an incomplete understanding of how tax reform impacts the economy.

Reliance on Individual Income Tax Revenue in Europe

Denmark relies the most on revenue from individual income taxes, at 52.4 percent of total tax revenue, followed by Iceland and Ireland at 40.8 percent and 31.5 percent, respectively.

Reliance on Corporate Income Tax Revenue in Europe

Despite declining corporate income tax rates over the last 30 years in Europe (and other parts of the world), average revenue from corporate income taxes as a share of total tax revenue has not changed significantly compared to 1990.

Sources of Government Revenue in the OECD, 2021 Update

Developed countries have on average become more reliant on consumption taxes and less reliant on individual income taxes. These policy changes matter, considering that consumption-based taxes raise revenue with less distortionary effects than taxes on income.

Personnel Is Policy: Biden International Tax Team Edition

This week, the Treasury Department added several new appointees as staffing continues following President Biden’s inauguration. Among them were three scholars of international tax policy: economist Kimberly Clausing and law professors Rebecca Kysar and Itai Grinberg. These three will be influential in developing the administration’s approach to changing U.S. tax rules for multinational corporations and negotiating international tax policy changes at the Organisation for Economic Co-operation and Development (OECD).

The European Commission and the Taxation of the Digital Economy

The consultation on the EU’s digital levy provides an opportunity for policymakers and taxpayers to reflect on the underlying issues of digital taxation and potential consequences from a digital levy. Unless the EU digital levy is designed with an OECD agreement in mind, it is likely to cause more uncertainty in cross-border tax policy.

Financial Transaction Taxes in Europe

Belgium, Finland, France, Ireland, Italy, Poland, Spain, Switzerland, Turkey, and the United Kingdom currently levy a type of financial transaction tax

Actionable VAT Policy Gap in Europe

Value-added taxes (VAT) make up approximately one-fifth of total tax revenues in Europe. However, European countries differ significantly in how efficiently they raise VAT revenues. One way to measure a country’s VAT efficiency is the VAT Gap.

Tax Subsidies for R&D Expenditures in Europe, 2021

Many countries incentivize business investment in research and development (R&D), intending to foster innovation. A common approach is to provide direct government funding for R&D activity. However, a significant number of jurisdictions also offer R&D tax incentives.

Day 2 of OECD Consultation on International Tax Reform Blueprints

The OECD consultation is in the context of the Inclusive Framework on Base Erosion and Profit Shifting which is made up of delegates from more than 135 countries and is focused on policies that reduce opportunities for tax avoidance by multinational companies. The current proposals being considered would change both where and how much companies pay in corporate taxes.

Day 1 of OECD Consultation on International Tax Reform Blueprints

The first session was focused on Pillar 1 of the OECD proposal. The pieces in Pillar 1 would change tax rules so that companies would be paying more taxes in countries based on the location of customers. This approach would move more tax revenues into so-called “market countries.”

Wealth Taxes in Europe, 2020

Net wealth taxes are recurrent taxes on an individual’s wealth, net of debt. The concept of a net wealth tax is similar to a real property tax. But instead of only taxing real estate, it covers all wealth an individual owns. As today’s map shows, only three European countries covered levy a net wealth tax, namely Norway, Spain, and Switzerland. France and Italy levy wealth taxes on selected assets but not on an individual’s net wealth per se.

A Framework for the Future: Reforming the UK Tax System

Our new guide identifies key areas for improvement in UK tax policy and provides recommendations that would support long-term growth without putting a dent in government revenues.

Details and Analysis of President Joe Biden’s Campaign Tax Plan

What has President Joe Biden proposed in terms of tax policy changes? Our experts provide the details and analyze the potential economic, revenue, and distributional impacts.

Tracking the 2020 Presidential Tax Plans

Two Roads Diverge in the OECD’s Impact Assessment

The difference that the OECD presents between the potential impact in the context of agreement compared to a harmful tax and trade war should show policymakers the value of continuing multilateral discussions.

Pillars, Blueprints, an Impact Assessment, and Construction Delays

The OECD released blueprints for proposals on changing international tax rules alongside an impact assessment based on the overall design of the proposals. While the blueprints cover proposals both for changing where large multinationals owe corporate tax and designing a global minimum tax, there are still many unanswered questions. In the meantime, other digital tax proposals are moving forward and have the potential to result in a harmful tax and trade war.