The voices of Tax Policy Center's researchers and staff
On the Hill: Taxpayer protection sought, tax reform input needed. The Senate Finance Committee holds a hearing today on protecting taxpayers from scams during the current tax filing season. Yesterday, panel Chairman Orrin Hatch and Ranking Member Ron Wyden announced their effort to solicit ideas on how best to reform the tax code to be simpler, fairer, and more efficient. “By opening up our bipartisan working groups to public input, we hope to gain a greater understanding of how tax policy affects individuals, businesses, and civic groups across our nation.”
One business group has a new study related to corporate tax reform. The Business Roundtable, a group of chief executive officers of major US corporations, thinks foreign takeovers are a result of the high US corporate tax rate. According to its commissioned study conducted by Ernst and Young, the US lost a net $179 billion in business assets to foreign mergers and acquisitions over the last 10 years. The group wants to lower the US corporate tax rate from 35 percent to 25 percent, and would like foreign income shielded from US taxation. It thinks that, with lower taxes, US firms would have been net acquirers of foreign assets.
But are tax reform debates already headed down the wrong path? If the Rubio-Lee tax plan is any indication, TPC’s Bill Gale thinks it might be. The plan is not revenue-neutral according to conventional or “static” scoring. Instead, it relies on future economic growth to cover immediate revenue losses.. But “the Tax Foundations’ growth estimate is, to put it mildly, inconsistent with standard economic analysis… Discussion of tax reform is a good idea. But it’d be even nicer to discuss serious ways to pay for reform as well.”
The tax burden will fall slightly for most in Minnesota. According to the state revenue department’s biennial tax incidence study, the share of Minnesotans’ total income paid in state and local taxes is expected to tick down from 11.5 percent in 2012 to 11.4 percent in 2017. The outlook is different for the top ten percent who’ll earn at least $165,871 annually by 2017. Their taxes went up under Democratic Governor Mark Dayton’s 2013 budget and their tax burden is expected to rise from 10.5 percent to 10.7 percent.
And a big check awaits some who didn’t bother to file returns in 2011. The IRS reports that it owes $1 billion in refunds to a million taxpayers who had taxes withheld but did not file returns in 2011. If they want their money, they need to file their 2011 return by April 15. According to IRS Commissioner John Koskinen, “People could be missing out on a substantial refund, especially students or part-time workers. Some people may not have filed because they didn’t make much money, but they may still be entitled to a refund.” The IRS estimates half of the potential refunds are for more than $698.
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Posts and Comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.