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Corporate Tax

Corporate Tax Research Papers

Paper: A moral view of tax planning

Starbucks photo by Hans Vivek.

A pair of Dutch lawyers have an interesting new article out called “Good Tax Governance: A Matter of Moral Responsibility and Transparency.”

In the article, Hans Gribnau and Ave-Geidi Jallai of Tilburg Law School discuss how aggressive tax planning may disadvantage multinational corporations by causing resentment among consumers.

The professors write that because the public views tax avoidance in moral rather than legal terms, the bad PR associated with aggressive tax planning strategies must be a key consideration for implementing a tax planning strategy. Continue reading “Paper: A moral view of tax planning” »

Corporate Tax Law

Caterpillar & The Border Adjustment Tax: Wednesday’s Tax Brief

Construction equipment photo by Ladislav Soukup.

The GOP’s proposal for a Border Adjustment Tax may help out companies such as construction manufacturer Caterpillar, Inc., which is currently facing a federal tax evasion investigation.

Prosecutors accuse Caterpillar of hiding its profits in Switzerland, however the company maintains that its tax arrangements are perfectly legal.

The company reportedly gave a Swiss subsidiary legal rights to its global replacement parts business, which means that the profits accrued in Switzerland instead of the U.S.

The GOP’s Border Adjustment Tax plan would make this type of tax arrangement unnecessary by not taxing the overseas sales of U.S. companies. (Currently, U.S. corporations are taxed on their worldwide income.) Continue reading “Caterpillar & The Border Adjustment Tax: Wednesday’s Tax Brief” »

Corporate Tax Law

Corporate Tax Rates, ACA quirks, John Koskine: Monday’s Tax Brief

Jenna Beekhuis, an office tower in San Francisco

Here are some tax stories on my radar today:

The Affordable Care Act: Leonard E. Burman examines an interesting quirk of the Affordable Care Act (ACA) over at Tax Vox — apparently the “additional Medicare contribution” tax on the investments of high-income households doesn’t go into the Medicare trust fund after all.

The reason? A provision that would have directed the Medicare contribution to support the trust fund wouldn’t have survived reconciliation. (Tax Vox)

See also: Republicans are flirting with class warfare in their healthcare bill,” Henry Aaron, The Hill. Continue reading “Corporate Tax Rates, ACA quirks, John Koskine: Monday’s Tax Brief” »

Corporate Tax Law

Investment income, corporate tax rates, law firm partner rankings: Thursday’s Tax Brief

Man in suit by Nigel / NX VISION, UK via Unsplash.

Here are the legal stories of my radar today.

A downgrade: The Washington Post reports that a key Obamacare surcharge on investments may not be as profitable as originally projected by Congress’ Joint Committee on Taxation.

The tax was a 3.8 percent fee on certain kinds of investment gains for taxpayers that have more than $200,000 in annual income (or couples over $250,000).

Two theories for the drop in revenue:

  1. Wealthy individuals are avoiding the surcharge on investments by housing investments in S corporations and then paying themselves as employees.
  2. The Joint Committee has simply taken a more pessimistic view of the profitability on the investments subject to the surcharge.

The new, lower estimate is that repealing this part of Obamacare will cost the government $158 billion in revenue over the next 10 years. (Washington Post) Continue reading “Investment income, corporate tax rates, law firm partner rankings: Thursday’s Tax Brief” »