The voices of Tax Policy Center's researchers and staff
Will some private schools lose their tax-exempt status? If religious schools that ban same-sex relationships want to continue to do so, they might have to start paying taxes. If the US Supreme Court rules this month that same-sex marriage is a constitutional right, the IRS could conclude that banning those relationships violates “fundamental national public policy” and revoke the schools’ tax-exempt status. This last happened in 1983, when the High Court allowed the IRS to revoke the tax-exempt status of schools that banned interracial relationships.
Low tax rates abroad, or here, in a box? The hot new tax break getting attention from many Members of Congress: A “patent box,” or “innovation box.” The plan would cut tax rates on US income from patents and other intellectual property. Right now, corporations like Apple reduce their taxes by shifting their intellectual property to low-tax jurisdictions. Backers say the idea will help US-based firms compete globally. But as Bloomberg explains, if Congress lowers rates on patent income, there’ll be less revenue available to reduce rates on other, non-preferred income that is not so mobile, such as from retailers and some manufacturers.
The IRS did business with corporations that still owed taxes. That’s not allowed, but the IRS awarded $18.8 million in contracts to 17 such corporations in 2012 and 2013. The Treasury Inspector General for Tax Administration said that the IRS didn’t have the necessary controls in place to prevent this from happening. The IRS says it’s correcting the problem.
Offshore tax zones cost developing nations. They lose about $100 billion annually because profits from foreign direct investment end up in offshore tax avoidance zones. That’s according to the United Nations Conference on Trade and Development’s latest annual World Investment Report. The Netherlands and Luxembourg provide a low-tax home to much of these investments.
Lucky Number 13? Louisiana Governor Bobby Jindal formally announced his 2016 run for the presidency, joining 12 other declared contenders. Thanks to some tax credit acrobatics in the state’s just-passed budget, Jindal recently succeeded in keeping his “no tax pledge” with Grover Norquist and Americans for Tax Reform.
Today on the Hill: SNAP and Work, States and Highways. On the House side, there’ll be a joint hearing between subcommittees of the Agriculture and Ways & Means panels to examine how the SNAP (food stamp) program affects work. Panelists include Casey Mulligan of the University of Chicago, Chanel McCorkle and Marsha Netus of America Works, Erik Randolph of the Illinois Policy Institute, Olivia Golden of the Center for Law and Social Policy, and the Urban Institute’s Eugene Steuerle. The Senate Finance Committee will hold a hearing on state innovations in financing transportation infrastructure.
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