As states in America continue to consider gross receipts taxes (GRTs) as a source of tax revenue, Europe is also evaluating proposals to use GRTs to tax digital firms. Europe’s historical experience, like the experience of its American counterparts, shows that GRTs are bad tax policy with no place in debates over digital taxation and
A recent paper by economists Alexander Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova, and John Van Reenen uses new data to examine how tax policy affects innovation. The authors show that while tax policy is not the only determining factor influencing innovative activity, taxes have a greater impact on effective tax rates as earnings rise.
The “tax extenders,” a set of tax provisions that have been temporarily continued for more than a decade, are back. These provisions have been expired for over a year now, but Senate Finance Chairman Chuck Grassley (R-IA) and House Ways and Means Chairman Richard Neal (D-MA) have said that extenders are once again under discussion.
Recent discussions of a proposed wealth tax for the United States have included little information about trends in wealth taxation among other developed nations. However, those trends and the current state of wealth taxes in OECD countries can provide context for this new proposal. The OECD maintains detailed tax revenue statistics going back to 1965
Tax filing season for 2018 opened yesterday, leaving many individuals to wonder: Did my taxes actually go down in 2018 as policymakers promised? Too many will be tempted to compare their 2017 tax refunds to their 2018 tax refunds and make a judgment that way. But that sort of analysis misses a key part of
My colleagues yesterday wrote about Senator Elizabeth Warren’s proposal for a wealth tax on high-net-worth individuals. Another issue is that a wealth tax may violate the U.S. Constitution, though legal opinions thus far are mixed. Our report did not analyze whether a wealth tax would be constitutional, and the short answer is that it’s unclear.
The OECD’s new database Corporate Tax Statistics provides insights into the recent history and current state of corporate income taxes (CIT) around the world. The database includes information on a variety of measures of corporate taxation including statutory tax rates, marginal and average effective tax rates, the cost of capital for different investments, and the
Last week, the Austrian cabinet met to plan the political agenda for 2019 and outline plans for changes to tax policy that will take place over the next few years. The current government has been in place since the end of 2017, and tax reform has been a main part of the agenda since. At
Key Findings The Tax Cuts and Jobs Act created the Opportunity Zones program to spur investment in economically distressed census tracts. Opportunity zones reduce capital gains taxes for individuals and businesses who invest in qualified opportunity zones. Opportunity zones were estimated to cost $1.6 billion in revenue from 2018-2027. New regulations stipulate that the program’s
Key Findings A tax expenditure is a departure from the normal tax code that lowers a taxpayer’s burden, such as an exemption, deduction, or credit. The list of tax expenditures in a tax system depends heavily on what one considers the normal tax code to be. Some tax expenditures are special preferences for particular kinds
This week is the first anniversary of the passage of the Tax Cuts and Jobs Act. The first meaningful reform to the federal tax code in a generation, the Tax Cuts and Jobs Act was historic, but it was not perfect. A year after its adoption, it’s important to take a step back to review
Launch Tracker: The Economic Impact of U.S. Tariffs and Retaliatory Actions President Trump is preparing to meet with Chinese President Xi Jinping this weekend to discuss trade policy and tariffs. The U.S. has pursued a policy of tariffs to address China’s unfair trading practices and China has retaliated, resulting in an escalation of trade barriers
On a yearly basis the IRS adjusts more than 40 tax provisions for inflation. This is done to prevent what is called “bracket creep,” when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in real income. The IRS used to
Key Findings In general, large industrialized nations tend to have higher statutory corporate income tax rates than developing countries. The worldwide average statutory corporate income tax rate, measured across 208 jurisdictions, is 23.03 percent. When weighted by GDP, the average statutory rate is 26.47 percent. The average top corporate rate among EU countries is 21.68
Tax competition at its best. Politico reports that the Canadian federal government will allow accelerated depreciation for some investments to compete with the U.S. expensing provision that was implemented as part of the U.S. Tax Cuts and Jobs Act (TCJA). The Canadian government has been concerned that the U.S. move has made the U.S. a more
Just three months after targeting Amazon with the Stop BEZOS Act, Sen. Bernie Sanders (I-VT) has turned his attention to another large employer. The “Stop Walmart Act” would penalize large corporations for buying back their stock unless all employees are paid $15 an hour and receive seven days of sick leave. It would also cap
Greece has faced some of the most difficult economic challenges in the developed world over the last decade. Instead of growing, the Greek economy has contracted in eight of the last 10 years, growing by small amounts in just 2014 and 2017. In 2011, the Greek economy shrank by 9.2 percent. The unemployment rate peaked
A recent report highlights the fact that among various measures of digitalization, Spain is falling behind not only its European peers but also many other countries in the world. At a time when tech firms and various digital innovations are paving the way for growth and development around the world, it is critical for Spain
As lawmakers return to Washington, D.C. after the midterm elections, one of their tasks will be addressing technical corrections to last year’s tax reform law. Issues often arise after legislation is enacted, and Congress can pass “technical corrections” to make laws accurately reflect congressional intent or to fix clerical errors. A letter sent to the
The Trump administration is reportedly circulating a draft report written by the Commerce Department that outlines results of an investigation into automobile imports and whether tariffs should be imposed. While the findings of the investigation are unknown, the Trump administration, since at least May of this year, has threatened to impose a 25 percent tariff