Corporate Interests Push Congress to Exempt Offshore Profits Permanently (Territorial System) or Temporarily (Repatriation Holiday)
Republican House Ways and Means Committee Chairman Dave Camp called the Chief Financial Officers of four different corporations to testify in favor of a “territorial” tax system on Thursday. A territorial system exempts offshore profits of U.S. corporations from U.S. taxes... Some corporate leaders have argued that if Congress does not permanently exempt their offshore profits, then lawmakers should temporarily exempt them with the sort of tax holiday for repatriated corporate profits that Congress enacted in 2004...Read More
Three Republicans and Three Democrats Introduce Amnesty for Corporate Tax Dodgers
On Wednesday, Rep. Kevin Brady (R-TX) introduced a bill (H.R. 1834) to provide a tax holiday for corporations that repatriate offshore profits, similar to the widely panned repatriation holiday enacted in 2004. The holiday is essentially a temporary tax exemption for corporate offshore profits, which some corporate leaders see as a second best alternative to a permanent exemption... Brady’s bill has five co-sponsors, and the three Democrats among them are likely to receive the most attention. The three Democrats have a history of opposing fair and responsible taxes...Read More
Microsoft-Skype Deal Shows Need for a True Worldwide Corporate Tax
Microsoft’s purchase of Skype for $8.5 billion provides a perfect illustration of why adopting a true worldwide corporate income tax system is critical to our economic future. According to the Wall Street Journal, the cash for Microsoft’s purchase of Skype (a Luxembourg-based company) will come out of its $42 billion in liquid assets held in foreign subsidiaries...Read More
Hawaii Passes Budget Limiting Upside-Down Tax Giveaways
Last week the Hawaii legislature sent Governor Neil Abercrombie a package of tax changes designed to help close the state’s yawning budget gap. Among its most notable components are the partial repeal of the state’s nonsensical deduction for state income taxes paid, and a new limitation on itemized deductions taken by wealthy taxpayers. Both of these changes will help mitigate the upside-down, regressive nature of Hawaii’s itemized deductions — a move that ITEP has urged many states to consider...Read More
Massive Business Tax Cuts Coming to Michigan, but EITC is Saved at Last Minute
For months, Governor Rick Snyder has been trying desperately to enact massive business tax cuts paid for with new taxes on pension income and the elimination of the Earned Income Tax Credit (EITC). Unfortunately, a modified version of Snyder’s plan passed both houses of the state legislature yesterday and is now on its way to the Governor’s desk, where it will soon be signed into law. In a bit of good news, however, the excellent advocacy work done by the Michigan League for Human Services (MLHS) and others ultimately resulted in the EITC being spared from complete elimination — though it has been scaled back by some seventy percent...Read More
Colorado Repeals Tax Loophole that Made Tom Cruise a "Farmer"
The agricultural property tax loophole we first told you about in March was closed on Monday when Gov. John Hickenlooper signed HB1146. Tom Cruise was among the most famous beneficiaries of the loophole, saving thousands of dollars in taxes because of his decision to allow sheep to “graze around the mansions for brief periods each year.” At this point, it remains unclear whether this new law will cause farmer Cruise to put away his shears and focus on his acting career...Read More
New ITEP Report: States Should Look to Connecticut on Tax Policy
Earlier this week, the Institute on Taxation and Economic Policy released a new report highlighting the key tax components of Connecticut’s recently enacted budget, which raised more than $1.4 billion in new taxes to mitigate cuts to core services...Read More
Rhode Island Considers Progressive Approach
Rhode Island remains one of a handful of states seriously considering revenue increases to help address significant state budget shortfalls... Last week, an alternative revenue-raising plan emerged. Representative Larry Valencia filed a bill for a temporary personal income tax surcharge of 4.1 percent on the state’s wealthiest residents, which would raise around $130 million...Can Georgia's Tax Reformers Overcome Grover Norquist?
Just weeks after a six-month effort by Georgia lawmakers to enact ambitious tax reform legislation fell apart, Governor Nathan Deal is signaling that lawmakers may be asked to continue their deliberations on this issue when they return for a special legislative session on redistricting this August. But if Deal's views on the shape of "tax reform" are any indicator, a special session could run into the same difficulties encountered during this year's tumultuous regular legislative session...Read More
Nevada Considers Sales Tax Reform
Recognizing the dire fiscal straits faced by the state, Democratic lawmakers in Nevada are pushing for a $1.5 billion plan to reform the sales tax to raise revenue and avoid harsh cuts in public services. One of the smartest parts of the plan would raise roughly $600 million in new revenues by expanding the state’s sales tax base to include services...Read More
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