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Matthew Gardner
Senior FellowFor a corporation with deeply American roots, Microsoft seems remarkably unable to turn a profit here. Against all odds, the Redmond, Washington-based company continues to claim that virtually all its earnings are in foreign countries. Microsoft’s latest annual report, released earlier this week, shows that over the past two years, the company enjoyed worldwide income of almost $43 billion. It claims to have earned just 0.3 percent of that—$128 million—in the United States. -
Richard Phillips
Senior Policy AnalystDuring the presidential campaign, Donald Trump called out companies engaging in corporate inversions saying that one proposed inversion was “disgusting” and that “politicians should be ashamed” for allowing it to happen. Despite this rhetoric, the Trump Administration is considering rolling back critical anti-inversion rules as part of its broad regulatory review of recently issued Treasury Department regulations. -
Budget deliberations continue in earnest this week in Alaska, Connecticut, Pennsylvania, and Rhode Island. In South Dakota and Utah, the focus is on gearing up for ballot initiative efforts to raise needed revenue, though be sure to read about legislators nullifying voter-approved initiatives in Maine and elsewhere in our "what we're reading" section. -
Alan Essig
Executive DirectorUntil GOP leaders put forth a detailed tax proposal, we will not know for certain whether the plan will focus on the middle-class and create jobs. But what we do know is that unless the plan is a radical departure from the principles outlined by President Trump earlier this year or laid out by Paul Ryan last year in his “Better Way,” plan, GOP-led tax “reform” efforts will be a tax break bonanza for the wealthiest Americans while delivering a pittance to working people. -
Art Laffer and Stephen Moore recently penned an op-ed in the Wall Street Journal in which they called on state and local policymakers to support the Trump tax cuts. They claimed that the Trump plan would provide a significant boost to state and local tax revenues, thereby allowing states with large budget deficits to “regain fiscal health.” State and local lawmakers should not be fooled by these claims. The reality is that Trump’s tax cuts are more likely to worsen state and local fiscal health than improve it. -
While only a few states still remain mired in overtime budget debates, there is plenty of budget and tax news from around the country this week. Efforts are underway to repeal gas tax increases in California and challenge a local income tax in Seattle, Washington. And New Jersey legislators' law to modernize its tax code to tax Airbnb rentals has been vetoed for now.
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Alan Essig
Executive DirectorToday Republican leaders in Congress and officials from the White House released a joint statement on tax reform, claiming that “the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families, small business, and American job creators competing at home and around the globe.” Unfortunately, the proposals they have put forward so far do not address any such goals. -
Matthew Gardner
Senior FellowIn the latest example of how the tax code has been abused and distorted, the Cheesecake Factory is claiming the manufacturing tax deduction, apparently for manufacturing cheesecakes, burgers, and other treats. -
Steve Wamhoff
Federal Policy DirectorUnless the administration takes a radically different direction on tax reform from what it has already proposed, its tax plan would be a monumental giveaway to the top 1 percent. The wealthiest one percent of households would receive 61 percent of all the Trump tax breaks, and would receive an average of $145,400 in 2018 alone. -
July 24, 2017
Sound Tax Policy Made a Comeback in 2017
2017 marked a sea change in state tax policy and a stark departure from the current federal tax debate as dubious supply-side economic theories began to lose their grip on statehouses. Compared to the predominant trend in recent years of emphasizing top-heavy income tax cuts and shifting to more regressive consumption taxes in the hopes […] -
Matthew Gardner
Senior FellowThe Nike Corporation’s annual financial disclosure of income tax payments is always notable for two recurring trends: the Oregon-based company’s steady shifting of profits into offshore tax havens, and Nike’s apparent effort to conceal how it’s achieving this tax avoidance. This year’s report, released earlier this week, is no exception. -
Dylan Grundman O'Neill
Senior Policy AnalystState lawmakers face a dilemma when it comes to sales tax holidays, an attractive and popular policy that nonetheless proves to be a poor choice compared to developing thoughtful, targeted tax policies or investing in well-executed public services. Luckily, word seems to be getting out that the costs associated with these holidays far outweigh their purported benefits. -
Tax and budget debates drag on in several states this week, as lawmakers continue to work in Alaska, Connecticut, Rhode Island, Pennsylvania, Texas, and Wisconsin. And a showdown is brewing in Kentucky between a regressive tax shift effort and a progressive tax reform plan. Be sure to also check out our "What We're Reading" section for a historical perspective on federal tax reform, a podcast on lessons learned from Kansas and California, and more!
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Matthew Gardner
Senior FellowThe latest annual financial report released by shipping giant FedEx is yet another reminder that where you stand often depends on where you sit. The report shows that last year FedEx paid a 7.5 percent federal income tax rate on nearly $3.6 billion of U.S. pretax income and this low rate is due in part to accelerated depreciation, a provision in the tax code that allows the company to write off capital investments faster than they wear out. It’s not surprising, then, that FedEx’s leadership is currently promoting a tax plan that would drop the company’s statutory tax rate even more, and allow it to write off capital investments even faster. -
Illinois and New Jersey made national news earlier this month after resolving their contentious budget stalemates. But they weren’t the only states working through (and in some cases after) the holiday weekend to resolve budget issues.
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Richard Phillips
Senior Policy AnalystWhat do terrorists, opioid and human traffickers, corrupt government officials and tax evaders have in common? They all depend on the secrecy provided by anonymous shell corporations to allow them to finance and profit from their crimes. Momentum is building in the House and Senate to pass legislation that would strike against illicit finance in the United States and around the world by bringing an end to the anonymity provided by U.S. incorporation. -
Carl Davis
Research DirectorJune 29, 2017
CBO Just Shot Down Trump’s Economic Forecast
Last month, the Trump Administration released a budget proposal that relies on unrealistic projections of economic growth to create the illusion that it will balance the budget by 2027. By making the federal budget outlook appear more favorable than it actually is, the administration is seeking to bolster its case for enacting a multi-trillion-dollar tax cut. Fortunately, Congress has its own independent forecaster that just chimed in with a more rational assessment of the economy. -
This week, several states attempt to wrap up their budget debates before new fiscal years (and holiday vacations) begin in July. Lawmakers reached at least short-term agreement on budgets in Alaska, New Hampshire, Rhode Island, and Vermont, but such resolution remains elusive in Connecticut, Delaware, Illinois, Maine, Pennsylvania, Washington, and Wisconsin.
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Carl Davis
Research DirectorSummer gas prices are at their lowest level in twelve years, which makes right now a sensible time to ask drivers to pay a little more toward improving the transportation infrastructure they use every day. Seven states will be doing this on Saturday, July 1 when they raise their gasoline tax rates. At the same time, two states will be implementing small gas tax rate cuts. -
Alan Essig
Executive DirectorThe Congressional Budget Office today released its score of the Senate Health Care proposal and the news is not good. It’s no wonder a narrow group of 13 lawmakers cobbled together the bill behind closed doors. Now that the measure has seen the light of day, we know that it epitomizes Robin Hood in reverse policies by snatching health coverage from 22 million people by 2026 (15 million in 2018) while showering tax cuts on the already wealthy. -
Richard Phillips
Senior Policy AnalystJune 23, 2017
Inverter Mylan Finds Yet Another Way to Avoid Taxes
Rather than being known for its pioneering pharmaceuticals, Mylan is increasingly becoming infamous for its pioneering tax avoidance strategies. In 2015, Mylan used an inversion to claim that it is now based in the Netherlands for tax purposes. It is a Dutch company only on paper because ownership of the company was mostly unchanged and it continues to operate largely out of the United States. This maneuver has allowed the company to avoid millions in taxes on its earnings in the U.S. and abroad. But that’s not the end of Mylan’s innovation when it comes to tax planning. A new report by Reuters found that Mylan is using a surprising new technique for dodging taxes: investing in coal refineries. -
Carl Davis
Research DirectorSupporters of creating a local personal income tax in Seattle are rightly concerned about the lopsided nature of their state’s tax code. In a 50-state study titled Who Pays?, produced using our microsimulation tax model, we found that Washington State’s tax system is the most regressive in the nation. -
Aidan Davis
State Policy DirectorWest Virginia’s roller coaster ride of a session is nearing its tumultuous end. In a press conference this morning, Gov. Jim Justice announced that he will let the legislature’s most recent budget bill become law without his signature. -
Meg Wiehe
Deputy Executive DirectorThis week several states rush to finalize their budget and tax debates before the start of most state fiscal years on July 1. West Virginia lawmakers considered tax increases as part of a balanced approach to closing the state’s budget gap but took a funding-cuts-only approach in the end. Delaware legislators face a similar choice, […] -
Alan Essig
Executive DirectorThe bill passed by the House of Representatives last month to repeal the Affordable Care Act (ACA) is the most unpopular legislation in decades. Lawmakers should reverse course and take the necessary time to put together legislation that would preserve or, better yet, improve access to health care. But this isn’t likely to happen because at its core, the American Health Care Act isn’t truly health care reform. It is tax cuts that disproportionately benefit the rich shrouded in legislative provisions that would weaken the existing health care law.
Blog Categories
- Corporate Taxes
- Earned Income Tax Credit
- Education Tax Breaks
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- Tax Credits for Workers and Families
- Tax Reform Options and Challenges
- Taxing Wealth and Income from Wealth
- Trump Tax Policies
- Who Pays?