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Author: Toder, Eric

1-10 of 105     Back to Authors Next>>


Lessons the United States Can Learn From Other Countries' Territorial Systems for Taxing Income of Multinational Corporations (Research Report)
Rosanne AltshulerStephen ShayEric Toder

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.

Published: 01/21/15
Availability:   PDF | Order this title online at Hopkins Fulfillment Services


Corporate Tax is Broken and Needs Major Surgery (Commentary)
Eric ToderAlan Viard

In a contribution to the Wall Street Journal’s MarketWatch Inc., Eric Toder and Alan Viard argue that recent highly publicized tax avoidance transactions by U.S. corporations reflect basic flaws in how we tax the income of multinational corporations, and that proposed reforms that maintain current definitions of corporate residence and source won’t fix the underlying problems. They propose two fundamental structural reforms – seeking international agreement on rules for allocating the income of multinational corporations among countries, or scrapping the U.S. corporate income tax entirely and replacing it with taxation at ordinary income rates of dividends and accrued gains of U.S. resident shareholders.

Published: 08/06/14
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How To Stop Corporations From Fleeing U.S. Tax Laws (Commentary)
Eric Toder

In a contribution to The Wall Street Journal's MarketWatch, Eric Toder explains why corporations expatriate from the United States and argues that they will continue to do so until Congress addresses the fundamental flaws in the corporate income tax. He then provides some possible solutions to end the erosion of the U.S. corporate tax base.

Published: 07/28/14
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Analysis of Specific Tax Provisions in President Obama's FY2015 Budget (Research Report)
Elaine MaagJim NunnsEric ToderRoberton Williams

This document reviews several notable tax proposals in President Obama’s fiscal year 2015 Budget. These include expanding the earned income tax credit (EITC) for workers without qualifying children, expanding the child and dependent care tax credit for families with young children, conforming rules for self-employment contributions act (SECA) taxes for professional service businesses, and changing business taxes to create a reserve to fund long-run revenue-neutral business tax reform.

Published: 06/30/14
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Review of Conference on What the United States Can Learn From the Experience of Countries with Territorial Tax Systems (Research Report)
Eric Toder

On February 28, 2014, the Urban Institute hosted an invitational conference on what policymakers in the United States can learn from the experience of other countries with territorial systems for taxing the income of their multinational corporations. Participants included academic experts, government officials, and private sector tax practitioners from the United States and overseas. The discussion focused on the experience of four countries – two (Australia and Germany) with long-standing territorial systems and two (Japan and the United Kingdom) that moved to a territorial system recently. This document summarizes the discussion at the conference.

Published: 06/17/14
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Tax Policy Issues in Designing a Carbon Tax (Article)
Donald MarronEric Toder

A carbon tax is a promising tool for discouraging the greenhouse gas emissions that cause climate change. In principle, a well-designed tax could reduce the risk of climate change, minimize the cost of emissions reductions, encourage innovation in low-carbon technologies, and raise new public revenue. But designing a real-world carbon tax poses significant challenges. We analyze those challenges from a public finance perspective, emphasizing three tax policy design issues: setting the tax rate, collecting the tax, and using the resulting revenue. The benefits of a carbon tax will depend on how policymakers address those issues. Copyright American Economic Association; reproduced with permission of the American Economic Review.

Published: 05/27/14
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Adding Employer Contributions to Health Insurance to Social Security's Earnings and Tax Base (Research Report)
Karen E. SmithEric Toder

Including employer-sponsored health insurance (ESI) in taxable compensation would increase income and payroll tax receipts, but would also increase Old Age, Survivors, and Disability Insurance (OASDI) benefits by adding ESI to the OASDI earnings base. The increased present value of OASDI benefits from including ESI in the wage base in 2014 would offset about 22 percent of increased income and payroll taxes, 57 percent of increased payroll taxes, and 72 percent of increased OASDI taxes. Both taxes and benefits as a share of income would increase between the bottom and middle quintiles and then decline for higher income taxpayers.

Published: 05/01/14
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Major Surgery Needed: A Call for Structural Reform of the US Corporate Income Tax (Research Report)
Eric ToderAlan Viard

A corporate income tax can play a useful role by preventing shareholders from deferring tax on retained corporate profits. The current U.S. corporate income tax is deeply flawed, however, because it relies on definitions of corporate residence and income sourcing that corporations can easily manipulate, causing economic distortions and erosion of the corporate tax base. Two structural reform options to address these problems are securing international agreement on better ways to allocate the corporate tax base among countries and replacing the corporate income tax with full taxation of American shareholders' dividends and accrued capital gains on stock in publicly traded companies.

Published: 04/04/14
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Congress Should Phase Out the Mortgage Interest Deduction (Article)
Eric Toder

The mortgage interest deduction is one of the most expensive federal tax preferences. Supporters claim it stimulates homeownership, which creates broad benefits to society beyond the benefits received by owners. But the case for these external benefits is unproven and the deduction is an ineffective way to promote homeownership. Instead, it provides an incentive for middle-income and upper income people to acquire larger and more expensive homes than they otherwise would. A uniform credit for interest or first home purchases would be a more effective subsidy for homeownership. The deduction, however, should be phased out gradually to minimize market disruption.

Published: 03/28/14
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Evaluating Broad-Based Approaches for Limiting Tax Expenditures (Research Report)
Eric ToderJoseph RosenbergAmanda Eng

This paper evaluates six options to achieve across-the-board reductions to a group of major exclusions and deductions in the income tax: (1) limiting their tax benefit to a maximum percentage of income; (2) imposing a fixed dollar cap; (3) reducing them by a fixed-percentage amount; (4) limiting their tax saving to a maximum percentage of their dollar value; (5) replacing preferences with fixed rate refundable credits; and (6) including them in the base of the existing Alternative Minimum Tax (AMT). We discuss issues of design, implementation, and administration, and simulate the revenue, distributional, and incentive effects of the various options.

Published: 02/06/14
Availability:   PDF

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