Archive for the ‘Types of Taxes’ Category

A Repatriation Tax Holiday for US Multinationals? Four Contagious Illusions

U.S.-based multinationals hold $2.1 trillion in foreign cash and insist that the only way they can feasibly bring that money back home is if Congress grants them a tax holiday—an idea that even President Obama now appears to support. But the argument they (and the President) are making for a holiday is based on a […]

Why the More Generous Child and Earned Income Tax Credits Should Be Made Permanent

co-authored with William G. Gale While most of the tax drama these days is focused on the fate of 50+ mostly-business tax breaks that expired nearly a year ago, lawmakers are also debating two provisions that are enormously important to low- and moderate-income households-the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). Temporary […]

Bigger, Cleaner, and More Efficient: A Carbon-Corporate Tax Swap

The Cato Institute has organized an online forum to debate pro-growth economic policy reforms. Tax Policy Center scholars Bill Gale, Donald Marron, and Eric Toder have each contributed to the discussion. The United States could reduce its contribution to global climate change and increase domestic prosperity by taxing emissions of carbon dioxide and other greenhouse […]

Could The U.S. Fix Taxation of Multinational Corporations With A Sales-Based Formula?

Corporate inversions have been the topic of the summer for tax wonks (beats jellyfish and beach traffic, I suppose), but the issue is a classic bit of Washington misdirection. Instead of focusing on the real disease—an increasingly dysfunctional corporate income tax—we are obsessing over a symptom—firms such as Burger King engaging in self-help reform by […]

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 […]