The voices of Tax Policy Center's researchers and staff
Have it your way… unless you’re Burger King. Five Senate Democrats—Illinois’ Dick Durbin, Michigan’s Carl Levin, Rhode Island’s Jack Reed, Vermont’s Bernie Sanders and Ohio’s Sherrod Brown—asked Burger King to not move its legal headquarters to lower-tax Canada. They accused it of trying to avoid paying its fair share for roads and other public services it receives in the United States.
If not Burger King’s way, what way? Berkshire-Hathaway’s Warren Buffett recently asked top Senate Finance Committee Republican Orrin Hatch whether Congress planned to curb corporate inversions. Buffett’s group would help finance Burger King’s deal with Canada’s Tim Hortons. Hatch has already said the various retroactive limits from senators Chuck Schumer and Dick Durbin, Carl Levin, and the Obama administration would raise taxes, won’t advance tax reform, and do not move toward a territorial system of international taxation. While Finance Chairman Ron Wyden holds out hope for action in a lame duck session, inversion action seems deadlocked for this year: That’s quite a familiar “way.”
What about those hedge-fund insurers? Bloomberg reports that Treasury is considering how it might close one loophole that allows hedge-fund managers to avoid taxes. Hedge funds can route their investments through an insurance company in low-tax countries like Bermuda. Earlier this summer, Ron Wyden asked Treasury to explain why hedge-fund insurers continue to crop up when IRS promised a crackdown in 2003.
And the Ex-Im Bank? The Export-Import Bank charter expires September 30, and Congress is pressed to do something about it. The program directs taxpayer dollars to subsidize the export of American products to keep US companies competitive in world markets, but some of the biggest beneficiaries are huge multinational corporations such as Boeing and General Electric—firms with the resources to finance their own endeavors. Is it worth it? TPC’s Donald Marron considers the question.
Charitable giving would drop under Camp’s tax reform plan. The Urban Institute’s Center on Nonprofits and Philanthropy and the TPC have a new analysis of House Ways & Means Chair Dave Camp’s tax reform plan. Looking at four groups of provisions related to charitable giving by individuals, the researchers estimate individual giving would decrease by 7 to 14 percent, though other provisions might offset some of those effects.
“Highs” can be expensive in Colorado. Legal recreational marijuana sales in Colorado reached $29.7 million between January and July 2014, beating medical marijuana sales by $800,000. Rather remarkable, since recreational marijuana is more expensive than medical marijuana. Consider the taxes: Medical marijuana sold in Denver carries a sales tax of 7.72 percent. Recreational marijuana carries that sales tax, plus a 10 percent state sales tax, and a 3.5 percent sales tax from the City and County of Denver applied at the point of sale. On top of that: Wholesalers pay a 15 percent excise tax on bulk sales of cannabis.
On the Hill Next Week: On Tuesday, September 16, the Senate Finance Committee will examine the state of retirement savings and possible improvements through the tax code. The committee will hear testimony on the outdated energy tax code on Wednesday, September 17.
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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.