Taxation of Multinational Businesses

Risks to the U.S. Tax Base from Pillar Two

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.

How Bermuda’s New Corporate Income Tax Could Negatively Impact Some OECD Member States

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.

Global Tax Tug of War: Comparing the UN and OECD Approaches

The United Nations (UN) is preparing to flex its muscles on international tax policy. Several developing countries say the OECD’s approach favors richer countries at their expense, and the UN hopes to fix this.

Another Digital Services Tax in Sight

Canada is planning to join the club of countries that, in the past 3 years, introduced a digital services tax (DST) despite U.S. opposition and concerns expressed by Canadian businesses.

Inflation Reduction Act One Year After Enactment

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.

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July 25, 2023May 20, 2024

What You Need to Know about the Global Tax Deal

The technical rules that were once solely the province of tax wonks in D.C. and Paris are being brought out into the public sphere.

Weeding the Garden of International Tax

Simplifying international tax rules will not solve all the challenges that stand in the way of healthy cross-border investment, but eliminating unnecessary provisions would be a positive pivot relative to the trajectory of recent years. It’s high time that policymakers stopped pursuing ever more complex rules and started the hard work of simplification.

A Tax Reform Plan for Growth and Opportunity: Details & Analysis

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.

JCT Analyzes Federal Revenue Effects of Pillar Two

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.

Enhancing the U.S. Tax Treaty Network: Prioritizing Brazil and Chile

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.

Why Does the UTPR Matter?

As the UTPR is a new concept, it is worth explaining what it is and why Rep. Smith cares about it. In a sentence, the Undertaxed Profits Rule (UTPR) is a looming extraterritorial enforcement mechanism for a tax base the U.S. has not adopted.

New Ways & Means Proposal Shows Continued Commitment to Combat Extraterritorial Taxes

The legislation follows from the bipartisan concern regarding tax policies adopted by other countries specifically targeting U.S. businesses or the U.S. tax base.

Tax Ideas for the EU Green Transition

The past few years have brought a renewed push from countries across the globe to combat climate change. In the European Union, policymakers have put a timeline on their climate agenda. By 2050, the EU wants to achieve a net-zero economy. Sean Bray, director of European policy, breaks down how much it would cost to achieve this goal.

Minnesota Looks to Raise Taxes despite Projected $17.6 Billion Budgetary Surplus

Does the Optimal Tax System Exist?

While research on optimal taxation often focuses on the pure economic implications, it rarely considers cultural and societal differences that can lead to very different outcomes when trying to implement an optimal tax system.

The Faulty Revenue Estimate Behind Minnesota’s Consideration of Worldwide Combined Reporting

As Minnesota lawmakers consider making theirs the first state to mandate worldwide combined reporting, they are relying on a revenue estimate that is—this may not be the technical term—completely bogus.

New Jersey Should Take Opportunity to Make Corporate Taxes More Competitive

By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.

Minnesota’s Omnibus Tax Bill Would Undermine the State Economy

As policymakers in St. Paul finalize this year’s tax bill, they should avoid policies that incentivize the diversion or relocation of capital. Importantly, states do not institute tax policy in a vacuum. The evidence from states’ experiences and the academic literature supports the conclusion that tax competitiveness matters not just to businesses but to human flourishing.

Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal

According to our analysis, President Biden’s budget would reduce long-run economic output by about 1.3 percent and eliminate 335,000 FTE jobs. See what tax policies the president is proposing.

Biden’s New Tax Proposals Are Complicated and Rife with Double Taxation

Tax reform should be about increasing fairness. And the way to get there is by reducing complexity and double taxation, not by doubling down on them.