Tax Talk in the District, the Midwest, and Abroad
Tune in today for a conversation on DC tax reform: The State and Local Finance Initiative and the Tax Policy Center host a live webcast with members of the DC Tax Revision Commission. Before you tune in, check out TPC’s Kim Rueben’s primer on the reform plan.
Meanwhile, some midwestern millionaires might not like Mike. Illinois’ Democratic Speaker of the House Michael Madigan would like to amend the state’s constitution and raise tax rates, reports Reuters, by an additional 3 percent on any income over $1 million. The hike would garner $1 billion in annual revenue that would go to schools. Illinois’ state income tax rate is a flat 5 percent until January, when it will fall to 3.75 percent barring legislative action.
Millionaires are having better luck in Maryland. The deep-blue legislature approved a measure to gradually increase the state’s $1 million estate tax exemption to match the federal government’s, which was $5.25 million in 2013. Democratic Governor Martin O’Malley promises to sign the bill.
Inch by inch, Illinois’ Caterpillar is under tax scrutiny. The construction and mining equipment maker is expected to come under review by the Senate’s Permanent Subcommittee on Investigations, Bloomberg reports. Caterpillar would join Microsoft, Hewlett Packard and Apple, also suspected of tax avoidance through off-shore accounts.
Maybe “off-shore” depends on what the meaning of the word “off” is. When it comes to multinational corporations and taxes, does it matter who owns the shares of a company headquartered in America? What if its shareholders are foreign? Chris Sanchirico of the University of Pennsylvania raises the questions.
No country for intellectual property? Well, there’s Ireland, if you’re talking about Apple, Inc.: “[P]atents and other intellectual property (IP) are owned by an Apple subsidiary in Ireland, which receives a significant share of Apple’s worldwide profits. Apple pays only a 12.5 percent corporate tax rate in Ireland…” That’s all legal, but it doesn’t quite pass the “smell test,” according to TPC’s Eric Toder.
The Tax Executives Institute will be holding its mid-year conference in Washington this week. The title: The Regulatory Pendulum: Coping with Uncertainty. International tax and accounting rules will be high on the agenda.
Also new from TPC: Did you miss TPC’s Howard Gleckman’s latest posts on internet sales tax policy? (Hint: One idea floating around Congress is a bad one.) Or about Congress’ choices about “tax extenders” and the “doc fix?” (Hint: Congress won’t make any hard ones.) Meanwhile, TPC’s Len Burman explores the challenges in using tax policy to address income inequality, and TPC’s Elaine Maag and Brian Moore consider what happens to states under the President’s plan to extend the Earned Income Tax Credit.
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