Archive for the ‘Types of Taxes’ Category

How Much Would An Individual Tax Rate Cut Add to the Deficit, and Who Would Benefit?

Reducing tax rates is a guiding principal of most tax reform plans. Even Democrats who see reform partly as a tool to boost revenues agree that some money generated by eliminating tax preferences ought to go to rate reduction. But how much does Treasury lose when Congress reduces individual tax rates, and which taxpayers benefit the […]

One Downside Of Inversions: Higher Tax Bills For Stockholders

Corporate inversions are all the rage these days as U.S. businesses merge with foreign firms and then restructure the combined businesses as foreign-based corporations. That yields tax benefits and may boost their after-tax profits, but it can also leave their stockholders with unwanted capital gains and big tax bills. As Howard Gleckman explained in TaxVox […]

Is Treasury About to Curb Tax Inversions on Its Own?

The Treasury Department put out the word that Secretary Jack Lew is considering regulatory curbs on corporate tax inversions, a step that may be intended to increase pressure on Congress to act once it returns from its summer recess in September. The matter of how much authority Treasury has to limit inversions has generated its […]

Can Obama slow corporate inversions? Yes he can.

Politicians can debate whether corporate tax inversions are “unpatriotic” or simply a legitimate technique to reduce taxes–and commentators can argue over whether anything should be done to stop them. Experts also disagree about whether President Obama and his Treasury Secretary have the legal authority to write new rules to discourage inversions. In my view, on this last […]

How REIT Spinoffs Will Further Erode the Corporate Tax Base

While Congress has been obsessing about tax inversions, it turns out another—potentially more important–tax avoidance technique is getting increased attention from the business community: Spinning off tangible assets into Real Estate Investment Trusts (REITs). If these deals become widespread, they’d be another nail in the coffin of the corporate income tax. Multinational firms already slash […]

Are Tax Inversions Really Unpatriotic?

President Obama and many congressional Democrats argue that U.S.-based multinational firms are being unpatriotic by moving their corporate addresses overseas in order to reduce their taxes. Obama even implied they are “corporate deserters.” These are powerful, emotionally-charged allegations. But are they fair? Is it unpatriotic to maximize tax savings? After all, companies and individuals do […]

The “Helping Working Families Afford Child Care Act” Would Help, but Doesn’t Solve the Timing Mismatch

The Child and Dependent Care Tax Credit (CDCTC) does not work for low-income families. It fails on three counts – the credit is nonrefundable, covers only a portion of expenses, and comes long after expenses have been incurred. Senators Jeanne Shaheen (D-NH), Barbara Boxer (D-CA), Patty Murray (D-WA), and Kristin Gillibrand (D-NY) have proposed the […]

The Bring Jobs Home Act Won’t

The Bring Jobs Home Act is a classic message bill. Its Democratic sponsors have no interest in making it law, they merely see it as a way to boost the party’s Senate candidates in part by forcing Republicans to vote against something that sounds like a good idea. After all, who could be against bringing […]

Have We Created a Two-Tiered Tax System—One for the Powerful and One for the Rest of Us?

Unlike the rest of us, many high-income, influential people and organizations have close to a free hand when it comes to their taxes. Already underfunded and understaffed, the IRS seems incapable of stopping many aggressive or even abusive interpretations of the tax laws, often by hedge funds or politically-motivated tax-exempt organizations. Over the past few […]

Abuse of financial products by hedge funds

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee: Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, long-term meant holding assets for […]