Tax Analysts Blog

Monday, April 23, 2012
It has been the stated policy of the United Kingdom's Conservative-led coalition government "to create the most competitive corporate tax regime in the G20." Chancellor of the Exchequer George Osborne reiterated this policy -- expanded to include all noncorporate business -- in his 2012 budget spee...
Monday, April 16, 2012
There are good reasons for the government to keep its hand out of the pockets of the wealthy. For example -- and this will be a shocker to most liberals out there -- it is a basic tenet of tax economics that an efficient system should eliminate all taxes on capital income. That translates into big...
Tuesday, April 10, 2012
This week President Obama wants to put the spotlight on his proposal to impose a 30 percent minimum tax on incomes in excess of $1 million--the so-called Buffett Rule. Because of the 15 percent preferential rate on capital gains and most dividends--and because a lot of income of rich people comes f...
Monday, April 9, 2012
In 1965 there was not a big difference between the level of taxes in the United States and in Western Europe. Then the Europeans put their VATs into high gear. Virtually nonexistent in 1965, Western European VATs had an average rate of 11 percent by 1976 and 20 percent by 2007 (Table 1). As VATs be...
Monday, April 2, 2012
For lawyers and political junkies, it is the Super Bowl: three days of Supreme Court arguments over one of the biggest domestic policy changes in decades. But we economists can only scratch our heads. Why are we in court? What's the big deal? It's called an "individual mandate." Sounds ominous. But...
Tuesday, March 27, 2012
In the days before the Tax Reform Act of 1986, when the top individual rate was above the corporate rate, wealthy owners of closely held businesses kept as much money as possible in subchapter C corporations. That was basic tax planning, but it was a hassle. Practitioners made small fortunes helpin...
Monday, March 19, 2012
When it comes to taxes, corporate America is divided into two parts. First, there are companies that pay full freight. Their effective tax rates are close to the statutory 35 percent rate. They tend to be low-tech and labor-intensive, and -- most of all -- they have most of their profits in the Uni...
Wednesday, March 14, 2012
Most members of Congress say they want tax reform that (1) lowers the base and (2) broadens the base. But mostly they just talk about lowering the rate--the easy part--and ignore the tough choices required to broaden the base. Worse still, they are continuously urged to move in the exact opposite d...
Tuesday, February 28, 2012
During the thrift crisis of the 1980s the government poured tens of billions into failing thrift institutions. This was followed by a huge debate about whether tax benefits given to those firms should be revoked. Now we have another crisis and the same issue arises. After the TARP funds saved the b...
Monday, February 27, 2012
Nothing is more fun for liberals than to catch a big multinational abusing U.S. tax laws. Google, Cisco, General Electric, and Apple -- to name a few -- now have public relations problems because the press has put a spotlight on their use of offshore tax havens. The tax dodging is disgraceful. The...
Wednesday, February 22, 2012
This table is made possible by the IRS Statistics of Income division which has just published 2008 data for 29,000 codes on its website. This information, which in prior years used to cost $500, is now available for free. (Click on table to enlarge.)...
Tuesday, February 21, 2012
Until he talked about tax reform, Treasury Secretary Timothy Geithner's spirited defense of administration policy was making a lot of sense. The scene was the venerable Senate Finance Committee hearing room the day after the release of President Obama's fiscal 2013 budget. Tough old Republican sena...
Monday, February 13, 2012
By taking advantage of lax U.S. transfer pricing rules, Apple Inc., the world's most valuable company, cut its federal tax bill by billions of dollars in 2011. Moreover, by taking advantage of flexible accounting rules, the company masked its tax avoidance by reporting a relatively high effective t...
Tuesday, February 7, 2012
There has been no shortage of encouraging words about tax reform from the White House. Just last week the press office apprised us: Over the nearly three decades since the last comprehensive reform effort, the tax system has been loaded up with special deductions, credits, and other tax expenditure...
Tuesday, February 7, 2012
In his 2012 State of the Union Address, the President re-iterated his pledge to reform the corporate tax by lowering the rate and broadening the base. One of his proposals to help pay for the rate reduction is a minimum tax on foreign profits: The President is proposing to eliminate tax incentives...
Sunday, February 5, 2012
Thank God for Mark Zuckerberg and America's other high-tech entrepreneurs who grow our economy in leaps and bounds. But please don't feel sorry for the 28-year old billionaire who will be facing what is likely to be a record setting $1.65 billion federal tax bill. That's 35 percent on the estimated...
Sunday, February 5, 2012
In this morning's New York Times Christina Romer, Chair of President Obama's Council of Economic Advisors until leaving in September 2010, argues that the value of subsidies for manufacturing are not justified by economics. Her article is essential for readers who want to get beyond all the recent...
Monday, January 30, 2012
Is it just a coincidence? Or is there growing interest in limiting interest deductions on corporate debt? My prior post made the case. And over the last few days there has been a lot of supportive talk from a variety of sources for limiting interest deductions . First, the latest issue of The Econo...
Monday, January 23, 2012
Was it creative destruction or vulture capitalism? Whatever you call what Mitt Romney did at Bain Capital, it is now a multi-pronged challenge to his presidential aspirations. Just the mention of investment shops like Bain can stir up resentment with the voters still looking for jobs and seething o...
Tuesday, January 17, 2012
If you listen to the politicians, you might think all would be right with the world if we just had more small businesses. There would be more innovation. More jobs. More entrepreneurship. More growth. If you sign on to this worldview -- as most of the public is inclined to do -- it naturally follow...