Categories
Uncategorized

Comparing Europe’s Tax Systems: Cross-Border Tax Rules

Today’s map looks at how European OECD countries rank on cross-border tax rules and is the last in our series examining each of the five components of our International Tax Competitiveness Index (ITCI). Cross-border tax rules define how income earned abroad and by foreign entities are taxed domestically, making them an important element of each country’s […]

Categories
Uncategorized

Gift or Lump of Coal: U.S. Cross-border Tax Changes Won’t Be Home for Christmas

As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act (BBBA) in the United States means new uncertainties for a global agreement and for taxpayers. Despite the 2017 U.S. tax reform serving as inspiration for current discussions of a global minimum […]

Categories
Uncategorized

What Do Global Minimum Tax Rules Mean for Corporate Tax Policies?

Today, the Organisation for Economic Co-operation and Development (OECD) released model rules for the global minimum tax (also known as Pillar 2). These rules are designed to apply to multinational companies with more than €750 million in total global revenues and place a minimum effective tax rate of 15 percent on those company’s profits. In […]

Categories
Uncategorized

The Interest Limitation Pile-On

How should tax policy treat interest expenses? Historically, corporate income tax systems in the U.S. and around the world have allowed businesses to deduct their interest paid. As Congress contemplates adding a new worldwide interest limitation rule as part of the Build Back Better Act (BBBA), it is useful to consider the potential effects of […]

Categories
Uncategorized

Book Minimum Tax versus Corporate Rate Increase: Pick Your Poison

As the Senate considers which components of the House Build Back Better Act (BBBA) to include, one key difference between the original Ways and Means draft and the later Rules Committee version is on corporate taxes. The original draft would have raised the corporate tax rate to 26.5 percent, while the Rules Committee version would […]

Categories
Uncategorized

Who Really Pays the Tariffs? U.S. Firms and Consumers, Through Higher Prices

When the Trump administration imposed tariffs on various imports in 2018, the stated purpose was to boost U.S. industries and punish foreign exporters. But rather than hurting foreign exporters, the economic evidence shows it is American firms and consumers hardest hit by the Trump tariffs. The tariffs resulted in higher prices for a wide variety […]

Categories
Uncategorized

Despite Slip in International Tax Competitiveness Index, Germany Retains Top G7 Rank

On the heels of Halloween, leaders of the world’s 20 biggest economies endorsed a global minimum tax of 15 percent on large multinational corporations. The minimum tax, signed in Rome and announced by the Organisation for Economic Co-operation and Development (OECD), is intended to curb profit shifting and limit tax rate competition between governments. In […]

Categories
Uncategorized

What’s Next for Tax Competition?

The recent agreement on a global minimum tax and other changes to tax rules around the world have called into question the future of tax competition. It is difficult to anticipate how tax competition will ultimately be impacted by these changes, although I seriously doubt that the usefulness of Tax Foundation’s International Tax Competitiveness Index […]

Categories
Uncategorized

Movers and Shakers in the International Tax Competitiveness Index

The 2021 version of the International Tax Competitiveness Index is the eighth edition of that report. Over the years, many different researchers at the Tax Foundation have worked on the report, several new members of the Organisation for Economic Co-operation and Development (OECD) have been added, and various methodological changes have taken place. One thing […]

Categories
Uncategorized

How Would the Ways and Means Proposal Affect Profit Shifting?

Recent proposals to increase the effective tax rates (ETRs) faced by multinationals rely on the argument that these firms achieve artificially low tax rates by shifting profits to foreign tax havens and other low-tax countries. By raising the tax rates on the foreign income of U.S. multinationals, these proposals would supposedly reduce profit shifting. However, […]