Archive for the ‘Corporate Taxes’ Category

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 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 […]

The Great Tax Inversion Death Spiral

Congress and corporate America are in a dangerous and mutually destructive race: The more lawmakers threaten to ban the practice of inversions—where U.S. based multinationals merge with foreign firms to lower their tax bill– the more firms race to complete the deals while they can. The more deals, the more pressure on Congress to ban them. […]

The Tax-Shopping Backstory of the Medtronic-Covidien Inversion

How can a company headquartered in Minneapolis merge with a competitor run out of Mansfield, Massachusetts in order to pay taxes in Ireland?  It’s just another day in corporate inversion-land, where an opportunity to cut taxes is once again driving key business decisions. This time, the buyer is Minnesota-based medical device maker Medtronic Inc. Its […]

The Strange Fruit of the House’s Bonus Depreciation Bill

When the Ways & Means Committee sent the House a measure to make permanent extra-generous tax subsidies for firms that purchase capital equipment, I noted in passing that the bill included a provision extending “bonus depreciation” rules to fruit and nut trees. If I had read the bill more carefully, I would have noticed that while […]

Did Multinationals Use a Foreign Earnings Tax Holiday To Burnish Their Financials Rather Than Reduce Taxes?

We’ve known for years that the 2004 repatriation tax holiday did little to boost domestic investment or create U.S. jobs, as promised by its backers. Now we are learning that many multinational corporations were not even interested in using the temporary holiday to cut their taxes. Instead, according to a new study, it may have been little more […]

Dave Camp’s Great Bonus Depreciation Flip-Flop

Sadly, the House Ways & Means Committee has turned on its head a proposal by its chairman, Dave Camp (R-MI) to repeal bonus depreciation for business capital investment. Instead of scrapping the measure, which Congress originally passed in 2008 as a temporary anti-recession tonic, the panel has voted to make the tax break permanent. And, […]

Turning Carbon Tax Theory Into Reality

A carbon tax has great appeal. It could reduce the risk of climate change by building emissions costs into market prices, thus discouraging the use of carbon-based fuels. And it would make a lot of revenue available for a broad range of purposes including reducing other taxes, new spending, or cutting the deficit. A nice […]

Tax Chauvinism: Who Cares Where a Firm is Incorporated?

Following the recent offer by U.S drugmaker Pfizer to acquire British pharmaceutical firm AstraZeneca, congressional Democrats are proposing new limits on the ability of U.S.-based firms to establish foreign residence as a way to cut their U.S. corporate tax bill. Even before this latest flap, the Obama Administration proposed curbs on this practice, known as an […]

Are Multinationals Getting Tired of Waiting for Corporate Tax Reform?

Is it possible that U.S.-based multinationals are getting tired of waiting for Congress to enact corporate tax reform? Seeking cash for domestic acquisitions, some of the nation’s best-known firms are starting to bring back their foreign earnings. Some are finding ways to avoid paying tax at all on that income. Others are so anxious to […]