Are Social Security finances about to get worse? A House bill with broad bipartisan support would increase benefits for about 5 million state and local government workers. Specifically, it would increase benefits for retirees who didn’t pay Social Security taxes for part of their working lives—mostly former government workers who participated in state and local pension plans. TPC’s Gene Steuerle argues that the plan would add to the fiscal imbalance of the Social Security trust funds.
Study: Inflation Reduction Act’s minimum corporate tax would hit Amazon, Berkshire Hathaway hardest. The University of North Carolina Tax Center used 2021 financial records to estimate the impact of the new 15 percent corporate minimum tax. It finds that the minimum tax would have affected about 78 companies, resulting in $31.8 billion in tax revenue. Two companies would have paid the most: Berkshire Hathaway would have paid $8.33 billion and Amazon would have paid $2.77 billion. The estimates are subject to change, since companies’ operations may change in 2023, when the minimum tax goes into effect.
British pound falls upon UK announcement of tax cut plan. The British pound fell to an all-time low against the US dollar yesterday. This partly reflects a negative view of the Truss administration’s plan to cut tax rates and increase borrowing as inflation remains high. The British pound also fell against other currencies, indicating some concerns about the country’s economy.
Did the world’s biggest meat companies avoid millions in UK tax? An investigation by the Guardian and Lighthouse Reports finds that Anglo Beef Processors UK and the Pilgrim’s Pride Corporation (owned by Brazilian firm JBS) appear to have taken advantage of different tax systems when structuring loans. The companies have multiple branches in the United Kingdom, the Netherlands and Luxembourg. The respective UK branches reportedly lent to their branches in the other two countries at 0 percent interest. Different UK branches would borrow the money back at 5 percent interest. Since the interest is tax-deductible, the companies reportedly reduced their tax bills by an estimated £160 million.
China announces extension of tax breaks for electric vehicle purchases. New electric car purchases will be exempt from China’s sales tax until Dec. 31, 2023. The exemption applies to fully electric and plug-in hybrid cars. China first introduced the exemption in 2014 and has occasionally extended the tax break to boost demand. There are an estimated 300 Chinese companies manufacturing electric vehicles, and China has nearly 4 million charging units across the country.
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