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Topic:   Corporate, Business Taxation

1-10 of 87     Back to Topics Next>>


Corporate Inversions (Article)
Kimberly A. Clausing

Recently, there has been a spate of corporate inversions, where U.S. multinational corporations have combined with foreign companies, arranging their corporate structure to locate the residence of the resulting corporation in a foreign country with an attractive corporate tax climate. This paper will discuss both the longstanding features of the U.S. tax system that provide incentives for corporate inversions and the reasons for the present surge in inversions. If unfettered, corporate inversions are likely to undermine the U.S. tax base, so swift policy action is likely warranted. Inversions can be effectively addressed in a targeted fashion.

Published: 08/20/14
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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 (Article)
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 (Article)
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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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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Changes in the Organization of Business Activity and Implications for Tax Reform (Research Report)
George A. PleskoEric Toder

This paper documents the increased role of pass-through entities and the associated decline in use of the taxable corporate form since the Tax Reform Act of 1986 (TRA86) and discusses implications for the design of tax policy. We show how significant reductions in the corporate tax rate, absent changes in the personal tax rate, would reverse the organizational form incentives that have existed since TRA86. If the loss in revenue from a rate reduction is offset by a broadening of the tax base, most business entities, comprising most business income, will face an overall increase in their tax burden.

Published: 02/06/14
Availability:   PDF


Corporate Income Tax Reform: Dreaming On (Article)
Eric Toder

Both political parties are calling for corporate tax reform without agreement on specifics. Proposals to broaden the corporate tax base to pay for lower rates or to eliminate taxes on corporate repatriations while trying to prevent income shifting do not address the main problems of taxing multinational corporations in a global economy. This article discusses the need for more fundamental structural reforms and offers up two ideas – securing international agreement on better rules to allocate profits of multinationals among taxing jurisdictions or, alternatively, replacing the U.S. corporate tax with full taxation of dividends and accrued capital gains of U.S. shareholders.

Published: 01/28/14
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Updated Tables for "Using a VAT to Reform the Income Tax" (Tables)
Jim NunnsJoseph Rosenberg

In "100 Million Unnecessary Returns," Michael Graetz, professor of law at Columbia University, proposed sweeping tax reform that would remove most current taxpayers from the income tax rolls, reform the corporate income tax, significantly reduce the top individual and corporate rates, and adopt a value-added tax (VAT) as the principal tax paid by most Americans. Under a contract with The Pew Charitable Trusts, TPC prepared a detailed analysis of the Graetz proposal. We have updated some of the tables from our previous analysis that reflect the revised proposal as well as updated economic assumptions and technical improvements.

Published: 11/20/13
Availability:   PDF


Private Equity Is a Business: Sun Capital and Beyond  (Commentary)
Steven Rosenthal

Private equity has grown exponentially: it now controls and operates a large number of the companies in our economy. But private equity is just that: private. Its operations are confidential and difficult to parse. This article attempts to demystify the business of private equity. It also describes the unanimous decision by the 1st Circuit that a private equity fund is a trade or business for purposes of ERISA. Finally, the article discusses the tax implications of "trade or business" status for private equity funds and recommends further guidance from Treasury.

Published: 09/24/13
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1-10 of 87     Back to Topics Next>>