On the line for Alphabet, Inc: $3.5 billion. Intel and the IRS are in court over some of the firm’s international tax practices, but the biggest winner in the dispute could be Google’s parent company. The Wall Street Journal reports (paywall) that at least 20 firms are watching the case, which would affect cost-sharing arrangements between US corporations and their low-taxed foreign subsidiaries.
New from TPC: Economic development briefs from the State and Local Finance Initiative. How do state governments help small businesses borrow money or otherwise subsidize local investment? Often states use loan guarantees or even direct lending to reduce risks for banks and investors. Similarly, they use their tax systems to subsidize economic development. TPC’s Norton Francis examines both strategies.
Watch out for email and e-filing. Scammers posing as company CEOs have been emailing heads of Human Resource departments, requesting all W-2 forms of employees. Unsuspecting HR staff could inadvertently aid in the theft of employees identities. Meanwhile for e-filers, the Online Trust Alliance released an audit with disturbing findings: Six out of 13 tax software websites in the IRS Free File program failed cybersecurity protocols. Free File allows taxpayers who earned less than $62,000 in 2015 to e-file their taxes for free. Seventy percent of American taxpayers are eligible.
On the Hill today. The Senate Finance Committee holds a hearing on multi-employer pension plan systems.
Will Washington State levy the nation’s first carbon tax? The state legislature this week considers a ballot measure, Initiative 732, that would levy a tax of $25 per metric ton of fossil fuel emissions burned in Washington, reduce state’s sales tax by one percentage point, increase a low-income exemption, and reduce certain manufacturing taxes. If lawmakers can’t agree on an alternative by March 10, Initiative 732 will be on the November ballot.
In Russia, a big gas tax hike. The government needs cash to address its growing deficit, and President Vladimir Putin just approved plans to raise tax rates on gas and diesel by nearly 25 percent. The levy could raise 89.3 billion rubles ($1.1 billion) this year. Won’t help his struggling economy much, however.
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