From President Biden calling the Tax Cuts and Jobs Act the “largest tax cut in American history,” to former President Trump claiming that Biden “wants to raise your taxes by four times,” the campaign rhetoric on taxes may be sparking some confusion.
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The aim of patent boxes is generally to encourage and attract local research and development (R&D) and to incentivize businesses to locate IP in the country. However, patent boxes can introduce another level of complexity to a tax system, and some recent research questions whether patent boxes are actually effective in driving innovation.
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The agreement represents a major change for tax competition, and many countries will be rethinking their tax policies for multinationals.
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Puerto Rico, a US territory with a limited ability to set its own tax policies, will be the first part of the US to be substantially affected by Pillar Two, the global tax agreement that seeks to establish a 15 percent minimum tax rate on corporate income.
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A new trade war could wipe out the benefits of pro-growth tax reform.
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Tax cuts vs. tax reform: what’s the real difference, and why does it matter?
As Hungary takes over the six-month rotating presidency of the Council of the European Union in the aftermath of the European elections, the relationship between tax policy and Europe’s competitiveness will be closely linked.
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While neither full expiration nor a deficit-financed full extension of the TCJA would be appropriate, lawmakers should consider the incentive effects of whichever tax reform they pursue. Because taxes affect the economy, they also affect the sustainability of debt reduction.
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The European Union’s experience with high inflation highlights the critical need for adaptive fiscal policies. Best practices drawn from the academic literature recommend implementing automatic adjustment mechanisms with a certain periodicity and based on price increases.
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Given the positive contribution of full expensing to economic growth and that the UK already incurred the peak-year costs due to the existing policy, it is imperative to maintain it permanently.
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The National Foreign Trade Council’s survey shows that the private sector recognizes the economic value of treaties as an instrument to increase tax certainty and decrease distortions.
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Adopting tax policy based on sound principles like neutrality rather than political expediency is essential for the European Union’s fiscal future.
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23 European countries have implemented carbon taxes, ranging from less than €1 per metric ton of carbon emissions in Ukraine to more than €100 in Sweden, Liechtenstein, and Switzerland.
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To make the taxation of labor more efficient, policymakers should understand the inputs into the tax wedge, and taxpayers should understand how their tax burden funds government services.
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Governments often justify higher tax burdens with more extensive public services. However, the cost of these services can be more than half of an average worker’s salary.
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The recent push to increase taxes on the wealthy has gained significant traction across Europe. This report highlights the obstacles and complex interplay between tax policy and economic behavior, suggesting that simply raising tax rates on the wealthy might not yield the intended social benefits.
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Short FormImproving the country’s fiscal situation won’t be comfortable, but economic growth can help cushion the blow.
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European Union Member States are in the process of implementing the global minimum tax in line with a directive unanimously agreed to at the end of 2022.
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Carryover provisions help businesses “smooth” their risk and income, making the tax code more neutral across investments and over time.
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Pro-growth tax reform that does not add to the deficit will require tough choices, but whether to raise the corporate tax rate is not one of them. If lawmakers want to craft fiscally responsible and pro-growth tax reform, a higher corporate tax rate simply does not fit into the puzzle.
3 min read