Archive for the ‘International Tax’ Category

Tax Reform’s Quiet Protectionism

House Ways and Means Chairman Dave Camp has offered a detailed and thoughtful set of proposals on international tax reform, as did former Senate Finance Chairman Max Baucus in November, 2013. The proposals, however, contain a new form of subtle protectionism. They quietly aim to discourage U.S.-based multinationals from making products overseas and selling them […]

Fiscal Magic: Paying for New Highways by Cutting Corporate Taxes

Does it make sense to fund much-needed roads, bridges, and mass transit with a big tax cut for multi-national corporations? A growing number of Democrats and Republicans seem to think so. But I have my doubts. At first glance, what could be more appealing? At a time when the Highway Trust Fund is grossly underfunded–thanks […]

The Year in Taxes: From the Fiscal Cliff to Tax Reform Talks

The year in taxes started with the nation toppling, briefly, over the fiscal cliff. And it ended with some interesting policy proposals on tax reform though little political progress. Remember the fiscal cliff? While that crisis was resolved on New Year’s Day, it really began in 2001, when President George W. Bush signed the Economic […]

Baucus Proposes International Tax Reform But Future Action Remains Uncertain

In an effort to jumpstart moribund tax reform efforts, Senate Finance Committee Chairman Max Baucus (D-MT) is suggesting major changes in the way U.S.-based multinational corporations are taxed on their overseas income. The plan is quite specific (even including legislative language and a 90-page technical summary) but it is not a formal proposal and leaves many […]

“Stateless Income” Versus “Statefully Taxless Income”

Ireland is playing the world like a Celtic harp, and perhaps the world deserves it. The US and other European nations have been complaining for some time about Ireland’s impish behavior in international tax. Ireland, it is said, has specifically designed its tax system to help facilitate tax avoidance by massive multinational enterprises (MNEs) such […]

The OECD’s International Tax Plan: The First Step on a Long Road

Last week, the OECD proposed a major new initiative aimed at cracking down on tax avoidance by multinational corporations. The 40-page report follows widespread international criticism of aggressive tax planning by high-profile U.S.-based firms such as Starbucks, Apple, and Google. The OECD report, called the Action Plan on Base Erosion and Profit Shifting, makes 15 recommendations […]

Large U.S. Firms Paid a 16.6 Percent Federal Tax Rate

A new analysis by the Government Accountability Office finds that in 2010 large U.S. corporations paid an average effective tax rate on their worldwide income of 22.7 percent and U.S. federal tax of only about 16.6 percent.  The federal rate was less than half of the 35 percent statutory rate. Large firms that made a […]

The Real Story About Apple’s Taxes

The remarkable thing about the Senate Permanent Investigations Subcommittee’s report on Apple Inc.’s corporate tax avoidance is how unremarkable it is. Because Apple is so profitable, the dollars involved will certainly attract attention (this is a Senate committee after all, so that is the point). The report alleges Apple reduced its U.S. corporate income tax […]

A New Way to Address the International Tax Mess

There may be no more vexing challenge in the Revenue Code than the taxation of foreign transactions of multinational companies. Most everyone agrees that the current system is a mess. And corporate tax reform is impossible without addressing international issues. Yet, this corner of the tax law is not only immensely complex but most proposed […]

The Economics of Corporate Rate Cuts are More Complicated than Politicians Think

It is an article of faith at the White House and among some congressional Republicans that while individual tax reform may be off the table this year, corporate reform remains a reachable goal. Rewriting the corporate income tax, goes the theory, is easier because there is a consensus within the business community to lower rates […]