Daily Deduction

from the Tax Policy Center

Competition and Tax Reform: A Thorn in Everybody’s Side

By :: May 1st, 2014

Running abroad like they’re being chased? Officials are making it known that the Treasury would like to crack down on US companies that change their address in order to lower tax bills. Corporations might speed up these tax-motivated inversions  in advance of any changes to tax rules. Firms argue that such deals are a rational response to high US corporate tax rates.

Settling like it might be criminally charged? Credit Suisse could face another crackdown of sorts: The US may pursue criminal charges against the second-largest Swiss bank for helping Americans evade taxes. The bank has been under US scrutiny since 2011, and may settle its dispute with the United States and New York within a month.

For whom the states toll… The Obama administration’s $302 billion transportation bill would allow states to collect interstate tolls to fund their infrastructure development, reversing a long-standing prohibition. The change, shared this week, comes as the Federal Highway Trust Fund is expected to run dry by  August. The White House proposal would replenish the Fund, now supported by an 18.4-cent per gallon gasoline tax, through a series of corporate tax reforms. The one-time revenue streams would close the fund’s deficit and permit $150 billion in spending beyond gas tax revenues. It remains unclear how well such a proposal would be received, politically or pragmatically.

Check it out and tune in if you can. The Urban Institute officially launches its new interactive public pension grading tool this afternoon, and it’s available now. Today’s  event will be webcast live here at 12:30 Eastern time.

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  1. Tax Roundup, 5/1/14: Iowa remains on top! Oh, that’s bad. « Roth & Company, P.C  ::  10:02 am on May 1st, 2014:

    […] Zaretsky, Competition and Tax Reform: A Thorn in Everybody’s Side.  The TaxVox headline […]

  2. Michael Bindner  ::  2:10 am on May 7th, 2014:

    Congrats on the new tool. Of course, it is hard to quanify pressure from the financial sector to do defined compensation programs, which are more lucrative to, gasp, the financial sector. Toll roads and gas taxes are similar, but not identical. It depends on whether the need is to fund all roads or just highways. Since many never hit highways at all, perhaps a toll is better. Credit Suisse sounds like it will live to fight another day. Some of its depositors, however, may feel the heat shortly (and its about time too). I suspect that anything the govenment does will catch those who are currently in the process of leaving. Indeed, simply passing a law (in a new Congress) to declare that you live and must pay taxes where your operations are kills any attempt to flee. A nice VAT would work as well, taxing each phase of the process – much of which is here.

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