Tax Analysts Blog

Friday, June 24, 2016

Evolutionary changes typically occur at a glacial place. In the tax world, however, we are witnessing a paradigm shift that’s occurring far more rapidly. I’m referring to the rise of automatic information exchange between national revenue bodies. This was unthinkable just a few short years ago.

Wednesday, June 8, 2016

Certain tenets  of tax policy are so thoroughly ingrained in our thinking that to question them seems almost sacrilegious. Among these is the doctrine that corporate income should be taxed once and only once. Typically that singular occurrence of corporate tax is imposed by the country with the strongest jurisdictional claim over the relevant corporate entity (residence-based taxation) or the economic activity that gave rise to the income (source-based taxation). It naturally follows that double taxation is an abomination that must be eliminated at all costs. This reflexive aversion to double taxation heavily influences our nation’s tax laws. It also features prominently in the international norms set by multilateral bodies such as the OECD.

Wednesday, June 1, 2016

In case you missed it, U.S.-based Terex Corp. has substantially altered its proposed merger with Finland’s Konecranes PLC. The original all-stock deal would have resulted in current Terex shareholders acquiring roughly 60 percent of the newly formed firm, which would have been based overseas. Instead, the two companies are now eyeing a much smaller cash and stock transaction that would be limited to an acquisition of two of Konecranes’ business units. Terex’s explanation for the change of plans is straightforward: The anticipated tax benefits are no longer available.

Thursday, May 12, 2016

Conventional wisdom tells us the OECD’s base erosion and profit-shifting initiative is the most significant development in tax policy in decades. Not so, says Reuven Avi-Yonah, a law professor at the University of Michigan and one of the leading critical thinkers in global taxation.

Thursday, March 17, 2016

Bodacious fantasy was in ample supply on Capitol Hill earlier this month, at a House Ways and Means Committee hearing on corporate tax reform. As important as tax reform is, we really don’t need further congressional hearings on it. Talk therapy won’t help. Everyone in Washington already knows what grown-up tax reform will look like. It looks like the Dave Camp bill.

Wednesday, February 24, 2016

What if someone waved a magic wand and suddenly increased your take-home pay? No, you wouldn’t need to put in longer hours. You’d simply be allowed to retain a larger slice of the paycheck you already earn. Who wouldn’t enjoy that?

Thursday, February 18, 2016

A wise person once observed that it’s difficult to fix something if you can’t measure the extent of the problem. I was reminded of this when I read Kimberly Clausing’s excellent Tax Notes article, “The Effect of Profit Shifting on the Corporate Tax Base,” in which she quantifies the revenue losses attributable to corporate profit shifting.

Thursday, January 14, 2016

One of our favorite discussion topics is the VAT -- more specifically, whether the United States will ever adopt a federal consumption tax. In that regard, much can be learned from looking at the experiences of other countries. What’s happening in India – the world’s largest democracy -- is noteworthy because it underscores some of the difficulties in harmonizing a federal VAT with preexisting taxes at the state and local levels.

Thursday, January 14, 2016
One of our favorite discussion topics is the VAT -- more specifically, whether the United States will ever adopt a federal consumption tax. In that regard, much can be learned from looking at the experiences of other countries. What's happening in India – the world's largest democracy -- is note...
Tuesday, September 15, 2015
It's not every day that a U.S. senator, let alone a presidential candidate, sues the government to suspend the enforcement of a federal tax law. Yet that is exactly what Sen. Rand Paul of Kentucky is doing. He is one of seven plaintiffs challenging the constitutionality of the Foreign Account Tax...
Friday, June 5, 2015
On June 2 a group called ICRICT, (the Independent Commission for the Reform of International Corporate Taxation) gathered in Trento, Italy, to release a declaration urging major changes in how governments around the world tax multinational corporations. You can find its declaration here. In reading...
Friday, April 24, 2015
Vermont Sen. Bernie Sanders introduced a corporate tax bill earlier this month. Unsurprisingly, it cuts in a different direction than most tax proposals floating around Washington these days. The bill (S.922) is titled the Corporate Tax Dodging Prevention Act of 2015. A companion bill was introduce...
Thursday, April 2, 2015
A colleague of mine, Tax Analysts' Mindy Herzfeld, has written a spirited critique of the stateless income doctrine. Her observations help explain why the United States is getting cold feet about the OECD's base erosion and profit-shifting project. You can read her full article here. The term “...
Friday, March 20, 2015
Earlier this month the Democratic staff of the Senate Finance Committee released a report that caught my eye. It's entitled “How Tax Pros Make the Code Less Fair and Efficient: Several New Strategies and Solutions.” The committee's ranking minority member, Oregon Sen. Ron Wyden, timed the repor...
Thursday, March 12, 2015
Senator Orrin Hatch has twice confessed his fondness for a federal consumption tax. Inquiring minds want to know where it comes from. The first time was in December 2014, when the Senate Finance Committee, which Hatch chairs, released a 330 page magnum opus, "Comprehensive Tax Reform for 2015 and...
Thursday, February 5, 2015
Congress's appetite for comprehensive tax reform, tepid as it may be, is being subsumed by interest in business-only tax reform. Enacting major legislation in the current political climate will prove a big task, but it should be feasible since the most contentious tax issues of the day relate to i...
Friday, January 23, 2015
Recent discussion here has focused on the proper jurisdictional reach of income taxation -- namely the fact that the United States taxes individuals on the basis of citizenship. This cuts against the international norm. Almost all other nations (apart from the tiny African state of Eritrea) tax on...
Thursday, January 22, 2015
Discussions here and in The New York Times have examined the Chinese government's recent efforts to squeeze more revenue out of its income tax system, especially from overseas activities. For businesses, cross-border investment structures are being more closely monitored to determine whether they c...
Monday, January 12, 2015
Jurisdictionally speaking, the Internal Revenue Code attempts to cast a broad net. The United States taxes its citizens' income on a worldwide basis, regardless of residency. As every American expat knows all too well, this means overseas earnings must be reported to the IRS as taxable income. It m...
Tuesday, December 23, 2014
For centuries the inner workings of the Vatican Bank have been cloaked in secrecy. That was before Pope Francis, who has pledged to restore public confidence in the administration of the Roman Catholic Church. This week we learned the United States and the Holy See have brokered a FATCA agreement f...