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Jeremy Scott

Editor of Tax Notes


All Posts by Jeremy Scott

May 10, 2016 - 11:54 AM EDT
Trump's General Election Pivot Includes New Tax Ideas
Well, that didn't take long. After hinting for months that his positions are more fluid than they sometimes appear (and telling The New York Times that he was "flexible"), Donald Trump didn't waste any time beginning his pivot for a general election matchup with Hillary Clinton. During his first ap... [Read More]
May 2, 2016 - 12:06 PM EDT
The Least Important Part of Corporate Tax Reform Might Be the Rate
There is growing pressure around the world for major changes to corporate tax policy. The OECD's base erosion and profit-shifting project, and the pressures that drove the G-20 to push for action in the first place, is forcing governments to reexamine everything from transfer pricing to tax enforce... [Read More]
April 19, 2016 - 12:58 PM EDT
Warren Is Right About Tax Returns
Sen. Elizabeth Warren, D-Mass., might be a polarizing figure, but she is correct about at least one issue: pre-filled tax returns. Warren introduced legislation April 14 that would require the IRS to fill out tax returns for taxpayers with relatively simple tax situations. This would, of course, de... [Read More]
April 7, 2016 - 8:27 AM EDT
Treasury's New Inversion Regs Aren't Just About Inversions
In September 2014 Treasury took its first stab at stopping the wave of inversions that some argued was stripping the U.S. corporate base. It issued a finely turned notice targeting the ability of companies to use cash in foreign subsidiaries without paying U.S. tax. Inversions continued. In Novembe... [Read More]
March 21, 2016 - 3:19 PM EDT
Scotland Makes the Case That Taxes Pay for Things People Want
The weird power sharing situation between London and Edinburgh was on display last week when the United Kingdom's Conservative government announced that it would push forward with tax and spending cuts. Scotland's first minister, Nicola Sturgeon of the Scottish National Party, said she wouldn't acc... [Read More]
March 10, 2016 - 8:20 AM EST
Romney Cared About the 47 Percent Because He Cared About Deficits
Mitt Romney is in the news a lot for a man not running for president. The 2012 GOP nominee and former Massachusetts governor has attempted to make himself the face of the #NeverTrump movement. He made a blistering speech attacking Donald Trump and recorded robocalls for several candidates urging vo... [Read More]
February 22, 2016 - 4:15 PM EST
A 'Brexit' Would Mean More if Labour Were In Power
The prospect of the United Kingdom pulling out of the European Union is now much more than theoretical. Having cut his deal with the European Union, U.K. Prime Minister David Cameron announced that the long-promised referendum on leaving the EU would be held on June 23. A British exit from Europe w... [Read More]
February 17, 2016 - 12:14 PM EST
Obama's Oil Barrel Tax Would Be Extremely Regressive
There isn't much new in President Obama's final budget proposal. The budget features 115 tax provisions from last year's plan, and many of the 30 new provisions are simple tweaks to old proposals (mostly having to do with the extenders package passed by Congress). There is, however, one new tax tha... [Read More]
February 2, 2016 - 3:49 PM EST
Ted Cruz's Iowa Win Not a Victory for a VAT
Sen. Ted Cruz finally did what the GOP establishment couldn't: He stopped Donald Trump's momentum. After fending off criticism from party elites who can't stand his tactics in Washington, and vicious attacks from Trump about his place of birth and integrity, Cruz defeated the billionaire businessma... [Read More]
January 21, 2016 - 8:57 AM EST
Furor Over Extenders and Rising Deficits Disingenuous
The federal budget deficit will increase for the first time since President Obama's first year in office, and many in Washington are trying to cause a panic about it. The deficit will grow from $439 billion last year to $544 billion next year, according to a Congressional Budget Office report relea... [Read More]
December 10, 2015 - 5:55 AM EST
How Congress Keeps Saving the Tax System From Treasury and the IRS
The conventional wisdom is that Congress passes messy laws and Treasury and the IRS have to use their regulatory authority to provide clarity and administrability. The recent changes to partnership audits are only the latest example of practitioners and observers crying out that provisions in legis... [Read More]
December 1, 2015 - 11:52 AM EST
Congress Gives Up on Paying for Extenders . . . And That's Fine
Nothing is certain in Washington, of course, but it appears that congressional leaders are on the verge of a major deal that would at least partially relieve the annual burden of passing so-called tax extenders. A massive proposal that would permanently extend the research credit, the expanded EITC... [Read More]
November 12, 2015 - 12:31 PM EST
Netanyahu's Economic Reforms and the Laffer Curve
Israeli Prime Minister Benjamin Netanyahu might be best known for his hawkish foreign policy, his confrontational, even alienating demeanor, and his determination to resist Iran and radical Islamist forces at all costs. But what he'd really like to be known for are his economic reforms. At least th... [Read More]
November 5, 2015 - 8:06 AM EST
A Look Back at the Most Interesting Part of Bowles-Simpson
It might be the 10-year anniversary of President George W. Bush's President's Advisory Panel on Federal Tax Reform issuing its final report, but there is a more recent tax policy anniversary coming up. On November 10, 2010, President Obama's National Commission on Fiscal Responsibility and Reform (... [Read More]
October 28, 2015 - 12:12 PM EDT
Paul Ryan Punts on Tax Reform
At first glance, Paul Ryan had a lot in common with his predecessor as House Ways and Means chair. Like Dave Camp, Ryan said he was very serious about moving a tax reform package. Like Camp, Ryan promised to make the tough choices for a revenue-neutral package that would make the United States more... [Read More]
October 14, 2015 - 12:51 PM EDT
Democrats Offer Nothing Much on Tax Reform
The Democrats held their first debate last night, and despite some attempts by the challengers to make it interesting, it mostly was a chance for front-runner Hillary Clinton to reestablish her brand and fight off the narrative that she was a sinking ship. The media is already in love with Hillary... [Read More]
September 29, 2015 - 1:43 PM EDT
Trump's Tax Plan Is Pretty Much GOP Orthodoxy
In late August, Jeb Bush attacked Republican front-runner Donald Trump by calling the billionaire a Democrat. Although Bush's remarks were intended to blunt some of Trump's momentum and were part of a broader strategy for the establishment candidate to regain relevancy, they were prompted by Trump'... [Read More]
August 31, 2015 - 1:18 PM EDT
Trump's Lack of Specifics on Tax Is Hardly Unique
The longer Donald Trump's campaign for the White House continues, the harder it becomes for the billionaire developer to completely avoid mentioning substantive issues. Although Trump is quite skilled at talking a lot and offering only sound bites, even he is starting to have trouble filling all th... [Read More]
August 17, 2015 - 12:43 PM EDT
Lessig Is Probably Wrong About Extenders
Money plays a big role in politics. And politics, of course, plays a big role in the formulation of tax policy and what ends up in legislation. House, Senate, and particularly presidential candidates need an ever-growing amount of cash and donations to wage successful campaigns. And those resources... [Read More]
August 10, 2015 - 1:50 PM EDT
Jeb Bush's Troubling Reversal on Taxes
The Republican debate season is underway. On August 6 the top 10 GOP candidates for president squared off in Ohio. The first contest will primarily be remembered for Donald Trump's bizarre spat with Fox News's Megyn Kelly. In 2012 the first Fox News debate saw a much more consequential moment. When... [Read More]
July 29, 2015 - 11:27 AM EDT
The Republicans Might Be Right About Koskinen
On July 27, House Oversight and Government Reform Committee Chair Jason Chaffetz said President Obama should remove IRS Commissioner John Koskinen, and he made it clear that if the president doesn't act, Congress could consider contempt charges and even impeachment. On the one hand, Chaffetz's thre... [Read More]
July 21, 2015 - 1:05 PM EDT
Yahoo's Spinoff Has a Decidedly Nonbusiness Purpose
Yahoo wants to spin off its holding in Alibaba. It had already sold a lot of its stake in the Chinese giant, but it retains a 15 percent share. The goal of the spinoff is supposedly to allow Yahoo to focus on its core business, but the reality is that CEO Marissa Meyer needs to show some profits to... [Read More]
July 14, 2015 - 8:34 AM EDT
With Jeb's Tax Returns Out of the Way, Attention Turns to Hillary's
Showing that some Republicans have learned their lesson from Mitt Romney's failed 2012 presidential campaign, Jeb Bush released 33 years' worth of tax returns on June 30. As many will recall, Romney did his absolute best to avoid releasing any tax information, finally caving and showing reporters... [Read More]
June 22, 2015 - 12:03 PM EDT
Supreme Court Could Create $353 Billion Deficit Problem
The wait continues for the Supreme Court's decision in King v. Burwell -- the Court did not release the opinion on June 22. If the Court decides in favor of King -- basically making residents of 34 states ineligible for healthcare credits -- that will gut President Obama's healthcare reform effort,... [Read More]
June 15, 2015 - 1:20 PM EDT
Can the United States Kill BEPS?
The United States is through trying to needle the OECD's base erosion and profit-shifting project with pinpricks. Last week, Robert Stack, U.S. Treasury deputy assistant secretary (international tax affairs), abandoned the subtle digs Treasury had been using to attack BEPS and flat-out said the Uni... [Read More]
June 2, 2015 - 11:52 AM EDT
Republican Support for Brownback's Tax Plan Begins to Erode
Kansas was supposed to be a Republican success story. It elected a conservative governor who happened to be a former U.S. senator, and he, unlike many of his colleagues, followed through on his promises to radically overhaul his state's tax system, lowering rates and drastically reducing the burden... [Read More]
May 19, 2015 - 12:40 PM EDT
Hawkins Casts Powerful Shadow Over OPR
In March 2009 then-IRS Commissioner Douglas Shulman tapped Karen Hawkins to lead the agency's Office of Professional Responsibility. Hawkins had been slated to become the next chair of the American Bar Association Section of Taxation, but chose to take the commissioner up on his challenge to reinvi... [Read More]
May 12, 2015 - 12:00 PM EDT
Unexpected Tory Victory Has Major Ramifications for Europe
Defying polls, pollsters, and the specter of a hopelessly fractured Parliament, the Conservatives won a resounding victory in the U.K. election last week. The end of the coalition with the Liberal Democrats will free David Cameron to follow a purer Tory agenda and raises major questions about the U... [Read More]
May 4, 2015 - 1:43 PM EDT
What's at Stake in the U.K. Election
On May 7 U.K. voters will go to the polls to determine the fate of the country's first coalition government since World War II. The election will also be the United Kingdom's first referendum on the austerity policies of the Cameron government. Across the Atlantic, many U.S. commentators have opine... [Read More]
April 28, 2015 - 2:19 PM EDT
Rubio Would Be Another Obama on Tax Lawmaking
Marco Rubio is having a good couple of weeks. The freshman Republican senator from Florida has surged to the top of polls in the crowded GOP presidential field, outdistancing even former Florida Gov. Jeb Bush. His announcement of his presidential campaign received favorable reviews, both because of... [Read More]
March 31, 2015 - 12:24 PM EDT
The Rich Are Finally Paying More in Taxes
The centerpiece of President Obama's tax platform has always been that wealthy taxpayers should be paying more. He ran on it in 2008, and his budgets and tax reform plans have always featured new revenues from higher-income individuals (or multinationals). Although much of his agenda has foundered,... [Read More]
March 16, 2015 - 1:13 PM EDT
Does the U.N. Matter in the Tax World?
The OECD's base erosion and profit-shifting project has dominated the international tax scene for over a year. Ever since the G-20 tasked the organization with finding solutions to the perceived problem of multinationals paying low effective tax rates, the international tax community has talked abo... [Read More]
March 10, 2015 - 8:24 AM EDT
Improving Deficit Numbers Don't Make Obama a Deficit Hawk
The Congressional Budget Office released its new 10-year baselines on March 9 showing that the deficit will be $486 billion in 2015, about the same as last year. The report was initially expected last week, but was delayed by winter weather in the Washington area. The CBO's new baselines will undou... [Read More]
March 3, 2015 - 9:19 AM EST
Jeb Bush, Grover Norquist, and the Decline of the Pledge
On March 1 the spokeswoman for former Florida governor and 2016 Republican presidential hopeful Jeb Bush said that Bush would not sign Grover Norquist's antitax pledge. Norquist subsequently tweeted that those who didn't sign the pledge almost always raised taxes when pushed by "spenders." Does Bu... [Read More]
February 24, 2015 - 8:44 AM EST
Does the United States Really Need a Tax Revolution?
"The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing." Jean-Baptiste Colbert, French minister of finances, 1665-1683. Louis XIV created the modern French state and laid the template for 17th- and 18th-century a... [Read More]
February 9, 2015 - 12:38 PM EST
Finance Committee Review of 1986 Act Smacks of Desperation
The Senate Finance Committee will try to use history as a guide to break the logjam on tax reform. The Republican-led body will hold a February 10 hearing featuring former Finance Chair Bob Packwood and former Sen. Bill Bradley, who will talk about the process that led to the historic legislation t... [Read More]
February 2, 2015 - 11:38 AM EST
Obama's Foreign Earnings Tax: 19 Percent Minimum DOA but Deemed Repatriations Key
President Obama's February 2 budget will propose a 19 percent minimum tax on foreign earnings. When news broke over the weekend about the plan, all of the headlines focused on this new levy, which is designed to minimize the benefits of shifting profits and income out of the United States and into... [Read More]
January 27, 2015 - 9:16 AM EST
3 Early Signs of What to Expect From Congress
The 114th Congress is off and running. Lawmakers have already elected their leaders, had a few spats behind closed doors, and decried how the other side isn't willing to work together on common issues. None of that is anything new -- it's pretty much how all legislatures open. But along with rout... [Read More]
January 13, 2015 - 8:56 AM EST
Nunes Plan Ignores Base Erosion Concerns
Another lawmaker has thrown his hat into the tax reform ring. Republican House taxwriter Devin Nunes released a business tax reform plan last week that would gradually lower tax rates to 25 percent and move to full expensing. Nunes's plan shifts U.S. international tax rules toward territoriality an... [Read More]
December 16, 2014 - 9:34 AM EST
Slashed Budget Shows IRS's Failure to Build Political Support
In June House Republicans proposed funding the IRS at $10.9 billion, a cut of over $300 million from last year's budget and $1.5 billion below the president's request. At the time, the proposal was seen as a gesture to show the GOP's displeasure with the agency, and no one thought it would ever mak... [Read More]
December 8, 2014 - 12:57 PM EST
The New GOP Congress and the Congressional Budget Office
Republicans will take over both chambers of Congress starting in January. Bill Cassidy's victory over Mary Landrieu in Louisiana pushed the GOP's Senate majority to 54 to 46, while several other runoffs in that state mean Republicans will have at least 247 seats in the House. This will give the par... [Read More]
November 24, 2014 - 1:41 PM EST
New GOP W&M Members Send a Mixed Signal
The House Ways and Means Committee is undergoing a major transition. Committee Chair Dave Camp is leaving Congress at the end of the year and will be replaced by Rep. Paul Ryan. That means the end of an era and a possible major reshuffling of committee priorities. But Ways and Means is also getting... [Read More]
November 11, 2014 - 9:01 AM EST
A Republican Königgrätz?
In the late 1860s, the Second French Empire seemed on the verge of collapse. An economic downturn, combined with disastrous foreign adventures (particularly involving an attempt to enforce a regime change overseas), so tarnished the imperial brand that only a small minority of the previously loyal... [Read More]
November 4, 2014 - 8:32 AM EST
Is the IRS Office of Professional Responsibility in Decline?
In March of 2009, incoming American Bar Association Section of Taxation Chair Karen Hawkins was tasked with taking over the IRS Office of Professional Responsibility. It had been a tough few years for OPR, which struggled with changing professional standards from congressional legislation and a hea... [Read More]
October 27, 2014 - 1:19 PM EDT
Will a Graduated Income Tax Sink Martha Coakley?
If you asked voters to identify the state most associated with the values of the Democratic Party, most probably wouldn't name a state at all. They would say Massachusetts, which is technically a commonwealth. But for all its dependability in presidential elections (it hasn't supported a Republican... [Read More]
October 7, 2014 - 9:31 AM EDT
Will the EU Commission Crack Down on Irish Tax Deals?
The European Commission is on the offensive about possible illegal state aid. In June it announced that it was investigating deals between Ireland and Apple and between Fiat and Luxembourg. On September 30 the commission released two letters outlining portions of its case against both countries. Wh... [Read More]
August 25, 2014 - 12:54 PM EDT
Fracking Taxes Help States Now, but What About the Future?
As bad as the federal budget picture looked during the Great Recession, the fiscal climate in the states was worse. The federal government used stimulus spending to prevent many states from having to make sharp cuts in services because of steep declines in sales, income, and corporate tax revenues.... [Read More]
August 11, 2014 - 2:25 PM EDT
Kansas and Missouri Show the Dangers of Tax Competition
Tax competition isn't just an international issue. While recent headlines have focused on how the high U.S. corporate rate is causing multinationals to relocate to jurisdictions that have cut their taxes or restructured their tax regimes to be more favorable to business (like Ireland and the Unite... [Read More]
August 5, 2014 - 9:22 AM EDT
It’s Not Clear How to Effectively Deal With Inversions
There is almost no one left in official Washington who doesn't think something should be done about inversions. But there is a lot of variety in the solutions being proposed, which makes consensus almost impossible. Most Republicans and some Democrats think inversions can be dealt with only throug... [Read More]
July 29, 2014 - 8:01 AM EDT
Hedge Fund 'Basket' Options and the Second Hundred Years’ War
“The investigation of the income tax returns for each successive year reveals the increasingly stubborn fight of wealthy individuals and corporations against the payment of their fair share of the expense of their Government.” Treasury Secretary Henry Morgenthau, 1937 “More and more enterprises... [Read More]
July 14, 2014 - 3:11 PM EDT
Time Criticizes IRS for EO ‘Rubber-Stamping’
Over the weekend, posted an article with the headline “IRS to Rubber-Stamp Tax-Exempt Status for Most Charities After Scandal.” The story reported that the IRS had decided to stop screening 80 percent of exempt organization charitable applications each year and included an interview with... [Read More]
July 8, 2014 - 1:10 PM EDT
Could EU Probe Signal the End of Sweetheart Tax Deals?
Multinationals are constantly pushing the envelope to achieve lower effective tax rates. Although U.S. corporations are not the only companies that do this, they are among the most aggressive and benefit from some of the leakiest transfer pricing rules in the developed world. U.S. tax rules are cle... [Read More]
July 1, 2014 - 8:17 AM EDT
IRS Strategic Plan Highlights Effects of Budget Cuts
Make no mistake -- the IRS deserves all the heightened scrutiny and even scorn from congressional Republicans. Its conduct during the exempt organization scandal and the ongoing aftermath has been appalling. Those looking for a conspiracy and White House involvement are missing the point. The IRS'... [Read More]
June 23, 2014 - 12:04 PM EDT
Lost Lerner E-mails Latest Example of IRS Death Wish
Lois Lerner can't escape from her role as a villain in Washington. She is at the heart of the exempt organization scandal that simply won't die. The latest round of the increasingly partisan and bizarre saga is the announcement that Lerner's e-mails from two critical years during the targeting o... [Read More]
June 9, 2014 - 1:47 PM EDT
Whistleblower Highlights Undue Influence at the IRS
The IRS continues to try to rebuild itself following its mishandling of conservative groups' exempt organization applications. The scandal dominated last year, leading to the resignation of the acting commissioner and the quick appointment of a restructuring expert, John Koskinen, as the permanent... [Read More]
June 3, 2014 - 8:46 AM EDT
Camp Waves the White Flag
After years of work and months of anticipation, House Ways and Means Committee Chair Dave Camp, R-Mich., released his comprehensive tax reform draft in February. Even though several detailed proposals on aspects of tax reform had already been released, the complete plan contained a number of surpri... [Read More]
May 19, 2014 - 12:57 PM EDT
The Medical Device Excise Tax Derails Extenders
From a policy perspective, the extenders may not be all that important. Many of the expiring or expired tax provisions are poorly tailored to accomplish their purported goals. House Ways and Means Committee Chair Dave Camp and then-Senate Finance Committee Chair Max Baucus wanted to strip most of t... [Read More]
April 28, 2014 - 12:12 PM EDT
The Most Expensive Extenders
Congress returns this week, and the major tax policy objective for the remainder of the year is to deal with the so-called extenders. These temporary, expired tax provisions have traditionally sailed through Congress (albeit on a delayed and dilatory schedule) for years, with little or no debate ab... [Read More]
April 21, 2014 - 12:51 PM EDT
The Misleading Debate About the Corporate Income Tax
The federal government relies less and less on the corporate income tax with each passing year. As corporate tax receipts fall, some policymakers (including the president) have looked to plug holes in international tax rules, arguing that multinationals are taking advantage of leaky transfer pricin... [Read More]
April 14, 2014 - 1:38 PM EDT
Why the Free File Alliance Is Bad for Taxpayers
It's almost tax day, and many taxpayers are probably struggling to finish their returns or contemplating filing for an extension. The classic picture of a harried citizen crouched over a paper return frantically erasing numbers is out of date thanks to the advent of e-filing, but the use of online... [Read More]
April 7, 2014 - 1:13 PM EDT
Audit Electability
In an ideal world, tax laws do not drive business decisions. Instead, the tax system should accurately reflect how businesses operate and then capture the proper amount of revenue for the government. That was one of the main selling points for the check-the-box regulations. However, a taxpayer's c... [Read More]
March 31, 2014 - 12:12 PM EDT
‘Fair Shot for Everyone’ Contains Details for No One
Setting a new low for lack of detail and specificity, Senate Democrats unveiled their “Fair Shot for Everyone” agenda last week. Only loosely a set of real proposals, the agenda is merely a series of talking points designed to distract voters from President Obama's lagging approval numbers and t... [Read More]
March 24, 2014 - 12:08 PM EDT
Portman’s Disappointing Tax Reform Plan
On February 26 House Ways and Means Chair Dave Camp released a comprehensive discussion draft for tax reform that included legislative language and made several tough choices to deliver on the chair's promise to lower corporate and individual rates to 25 percent and stay revenue neutral. It was th... [Read More]
March 17, 2014 - 12:25 PM EDT
Would a Republican Senate Improve the Chances for Tax Reform?
It's the season for tax reform. Besides House Ways and Means Chair Dave Camp, both Senate Finance Committee member Rob Portman of Ohio and President Obama have unveiled their own plans to overhaul the tax code. Portman's is very light on details, and Obama's is still another budget proposal that... [Read More]
March 10, 2014 - 2:47 PM EDT
Camp Hits Popular Deductions Hard
The largest tax expenditure in the code is the exclusion for employer-provided healthcare insurance. It cost the government $130 billion in lost revenue in 2013. It's also the only major individual tax expenditure that isn't on the chopping block under House Ways and Means Committee Chair Dave Ca... [Read More]
March 3, 2014 - 2:30 PM EST
Comparing the Camp and Obama Bank Taxes
By now, almost everyone interested in tax policy knows about Dave Camp's tax reform discussion draft. Camp's plan is the most detailed tax reform proposal in some time (arguably since 1986, depending on how seriously you take the efforts of President George W. Bush's blue ribbon commission). The... [Read More]
February 24, 2014 - 4:41 PM EST
How to Pay for Camp’s Tax Reform Plan
This is the week tax reform observers have been waiting for. House Ways and Means Chair Dave Camp, after years of preparing small drafts and laying the groundwork, will release a comprehensive discussion draft on reform. Camp's plan might be out as soon as February 26. In an e-mail to his committe... [Read More]
February 10, 2014 - 2:45 PM EST
Check the Box for Tax Avoidance
Before 1996, entity classification was extremely complicated and made up a large part of corporate and partnership practice. Corporate and income tax professors in law school lectured us about how lucky we were that we no longer had to worry about the Kintner tests or the six characteristics of a c... [Read More]
February 3, 2014 - 4:15 PM EST
Making Tax Reform a Partisan Issue
Everyone wants tax reform. Both the right and the left have complaints about the tax code, some the same and some different. The tax system is unfair, complicated, burdensome, and out of step with the rest of the world, according to the common refrain. The problem is that tax reform means different... [Read More]
January 28, 2014 - 9:01 AM EST
BEPS Project Should Include Digital Economy Permanent Establishment
The OECD's base erosion and profit-shifting project dominated news in the international tax world last year. The OECD's surprising and sudden shift to start protecting the tax base, instead of focusing only on preventing double taxation, took some multinationals by surprise and led to a lot of ha... [Read More]
January 13, 2014 - 3:26 PM EST
Financial Product Reform Might Not Be Imminent
Comprehensive tax reform might be far in the future, but that doesn't mean that no changes to the tax system will be made over the next few years. The medical device excise tax is unpopular and might be repealed soon. Extenders are bound to be dealt with eventually, and it's likely a few won't b... [Read More]
January 6, 2014 - 3:00 PM EST
A To-Do List for Wyden
While it isn't quite official yet, the Senate will almost certainly have a new Finance Committee chair early in 2014. Current Chair Max Baucus has been nominated by President Obama to become ambassador to China. While it might have seemed that Baucus was doing a lot in 2013, the reality is that he... [Read More]
December 16, 2013 - 12:33 PM EST
IRS Moves Closer to Having a Commissioner
After a scandal-filled year in which the IRS's credibility dropped to levels unseen since 1998, the federal tax collector needs an image overhaul. The United States relies on voluntary tax compliance, and that suffers if taxpayers no longer trust that the agency charged with administering the nati... [Read More]
December 9, 2013 - 3:21 PM EST
Will FATCA Ever Go Into Effect?
The Foreign Account Tax Compliance Act seems to be revolutionizing the way governments share tax information. Other nations are using intergovernmental agreements to piggyback on FATCA information-gathering efforts. Virtually every practitioner and financial industry representative will readily adm... [Read More]
December 2, 2013 - 12:39 PM EST
NFL Encourages Localities in Race to the Bottom
The NFL's tax-exempt status has come under attack recently because of a book by Gregg Easterbrook targeting what he calls the league's “fleecing” of taxpayers. But the controversy over whether the league office should be tax exempt is largely academic -- there isn't much there to tax (unlike i... [Read More]
November 25, 2013 - 2:25 PM EST
The NFL Is Tax-Exempt? Yes, But . . . .
The NFL and Thanksgiving are an annual tradition. Every year the professional football league stages several matchups on the holiday, dominating televisions in living rooms across the country for pretty much the entire day. Lately, however, a new tradition seems to be evolving: criticism of the NFL... [Read More]
November 18, 2013 - 1:06 PM EST
Is the House ACA Vote a Sign of Bipartisanship?
Anyone hoping that tax reform isn't quite dead should be looking at Washington for any sign of bipartisanship. Glimmers of hope can appear almost anywhere, and sometimes you have to look hard to find them. Bipartisanship can arise for a number of reasons: growing trust between the parties, a conse... [Read More]
November 4, 2013 - 2:03 PM EST
What the Daugerdas Verdict Means for Tax Shelter Promotion
Engaging in tax shelters has become risky business. The government is now quite adept at shutting down formerly popular transactions like LILOs, SILOs, son-of-BOSS, and a host of others. Taxpayers frequently find themselves paying back taxes and interest, along with steep penalties. But the governm... [Read More]
October 28, 2013 - 2:57 PM EDT
Revenue Divide Will Likely Derail Conference Committee
The government shutdown might be over, but it's up to 29 members of Congress to make sure it doesn't happen again anytime soon. The handpicked members of the much-anticipated conference committee will meet for the first time this week, and they face a pretty tall order. They must deliver a report... [Read More]
October 7, 2013 - 2:26 PM EDT
It Isn’t Time to Bury the Income Tax Just Yet
On October 3 the income tax marked its 100-year anniversary. If you're confused by the commemorative articles that appeared earlier in the year, it's because 2013 also marks 100 years of the 16th Amendment, which allowed Congress to impose an income tax as part of tariff reform in 1913. There is... [Read More]
September 30, 2013 - 12:21 PM EDT
Shutdown Will Stop IRS Audits, but Not ACA Implementation
The House and Senate are on pace for a government shutdown. After the Senate rejected language in the House-passed bill that would have defunded Obamacare, the lower chamber met over the weekend. The result was a continuing resolution that would scrap the medical device excise tax and delay Obamaca... [Read More]
September 23, 2013 - 2:07 PM EDT
Sun Capital Might Be Bigger Than You Think
Practitioners, commentators, and taxpayers have spent weeks trying to figure out the importance of the First Circuit's decision in Sun Capital. When the court held that a private equity fund was in a trade or business for the purposes of ERISA, it caused many to wonder whether tax law would be aff... [Read More]
September 16, 2013 - 1:16 PM EDT
The Faltering Financial Transaction Tax and the Future of Wall Street
The financial meltdown in 2008 was supposed to change how banks and Wall Street were regulated and taxed. The idea that trading was too volatile and that banks were engaged in numerous risky transactions caught hold. There was a growing belief that financial institutions and investment firms should... [Read More]
September 9, 2013 - 1:21 PM EDT
Who Are the 43 Percent?
Mitt Romney's presidential campaign never really recovered from his remarks about the 47 percent. At a private fundraiser, the Massachusetts Republican seemed to marginalize the supposed 47 percent of Americans who pay no income taxes, referring to them as those “who believe that the government h... [Read More]
August 26, 2013 - 1:00 PM EDT
Cruz’s Push to Defund Obamacare Could Derail Tax Reform
Republican Sen. Ted Cruz of Texas is pushing to defund Obamacare. That isn't terribly surprising. Cruz is part of a group of conservative lawmakers that has tried to force the Republican Party into deeper opposition to President Obama's policies. He doesn't seem to believe in compromise, and he... [Read More]
August 19, 2013 - 12:45 PM EDT
Camp’s Senate Decision Helps, but Won’t Save, Tax Reform
After spending the last three years declaring that his sole focus was on tax reform, House Ways and Means Chair Dave Camp wavered in the last few weeks. On July 31 he announced he was considering running for the Senate seat being vacated by Democrat Carl Levin. Running as a Republican in Michigan w... [Read More]
August 12, 2013 - 12:15 PM EDT
First Circuit Deals Equity Funds a Blow in Sun Capital
The furor over the First Circuit's decision in Sun Capital Partners v. New England Teamsters hasn't abated. The court's holding that a private equity fund was engaged in an active trade or business and therefore was liable for pension liabilities under ERISA could have a profound impact on treat... [Read More]
August 5, 2013 - 12:20 PM EDT
Is the Exclusion for Employer-Provided Healthcare Outdated?
The largest tax expenditure is not the mortgage interest deduction, accelerated depreciation, or even the capital gains preference. It is the exclusion of employer-provided health insurance from income. Treasury estimates that the exclusion costs the federal government $163 billion a year, almost a... [Read More]
July 29, 2013 - 12:21 PM EDT
The Power to Delay
“The power to tax involves the power to destroy.” Chief Justice John Marshall's famous phrase from McCulloch v. Maryland made it clear that if state governments had the power to tax the federal government, they could effectively impede or burden the implementation of federal legislation or the... [Read More]
July 22, 2013 - 4:21 PM EDT
Shedding Light on Advance Pricing Agreements
U.S. multinationals, or at least some of them, aren't paying that much tax. Their marginal tax rates are falling, and lawmakers and the public are starting to notice. In May, Apple's CEO was dragged before the Senate Homeland Security and Governmental Affairs Permanent Subcommittee for Investigat... [Read More]
July 15, 2013 - 2:39 PM EDT
Noem, Schweitzer Decisions Give Shape to Key Senate Races
Democrats have been dealt a double blow over the last month. South Dakota Republican Rep. Kristi Noem announced June 11 that she would not challenge former Gov. Mike Rounds for the Republican nomination in the race to succeed retiring Democratic Sen. Tim Johnson. And over the weekend, popular forme... [Read More]
July 8, 2013 - 2:16 PM EDT
Summers Pushes for Tax Break on Foreign Profits
Lawrence Summers has had a long career in government. He was Treasury secretary under President Clinton and an economic adviser to President Obama until 2010. Summers has a spotty record (just look at how his recommendations on derivatives and other financial products have worked out), but he remai... [Read More]
July 1, 2013 - 12:20 PM EDT
Obama’s Climate Change Proposals Lack Major Tax Component
On June 25, 2009, President Obama made a major push for Congress to adopt climate change legislation that included a cap-and-trade proposal. In a speech in the Rose Garden, the president defended his plan and reiterated his campaign pledge to cut U.S. emissions. Cap and trade was never seriously co... [Read More]
June 24, 2013 - 1:41 PM EDT
Can the OECD Be Trusted on Base Erosion?
After years of creating rules that allow multinational corporations to shift profits and income to whatever jurisdiction they like, the OECD is now very concerned about base erosion. In fact, it is drafting a major report on base erosion and profit shifting (commonly called BEPS). Pascal Saint-Aman... [Read More]
June 17, 2013 - 1:36 PM EDT
Paz’s Admissions Fuel GOP Ire, but Don’t Implicate Administration
The inappropriate scrutiny of conservative groups' applications for exempt status was the result of a rogue “conservative Republican” in Cincinnati who, for convenience, decided to focus on the names of organizations. That's the narrative that Democratic Rep. Elijah Cummings would like the medi... [Read More]
June 10, 2013 - 12:42 PM EDT
How Likely Is Carried Interest Reform?
During the height of the financial meltdown in 2009, Congress became obsessed with changing the tax treatment of carried interest. The idea that wealthy hedge fund managers could receive preferential capital gains treatment on their carried interest income shocked Democrats, and the media ran sever... [Read More]
June 3, 2013 - 12:19 PM EDT
IRS Missteps Will Hurt Tax Administration
The IRS is underfunded. The Service has seen its budget cut more than $1 billion since 2010, and those cuts are starting to take their toll, both on enforcement and filing season efficiency. The IRS Oversight Board wrote last week that “the current budgetary path is no longer sustainable.” Former... [Read More]
May 20, 2013 - 4:31 PM EDT
Rand Paul’s Claim of "Written Policy" Seems Like GOP Overreach
The beat keeps going in the IRS's exempt organizations scandal. Outgoing acting Commissioner Steven Miller did little to satisfy Republican critics in his testimony before the House Ways and Means Committee on Friday (in fact, he probably made the scandal worse). Another round of hearings will sta... [Read More]
May 13, 2013 - 12:06 PM EDT
Lerner’s Admission and Apology Ring Hollow
It wasn't a very good week for the Obama administration. Republicans have been accusing President Obama of allowing political concerns to trump policy for years, but the public simply hasn't bitten on issues like the infamous Benghazi talking points memo. But last week the GOP was handed new ammu... [Read More]
May 6, 2013 - 12:12 PM EDT
Plan to Tie Tax Reform to Debt Ceiling Will Likely Fail
House Republicans don't like the idea of raising the debt ceiling. Many would like to see steep spending cuts that would balance the government's finances and prevent the need for further debt ceiling increases. Others view the debt ceiling as conservatives' only leverage over President Obama an... [Read More]
April 29, 2013 - 12:42 PM EDT
Baucus, the Marketplace Fairness Act, and Tax Reform
By now the retirement of Max Baucus is old news. Most commentators have shifted from talking about the Montana senator's career to discussing how his seat might flip to Republicans in the next election. The mainstream press is also reporting Baucus's statements about his house in Montana, his den... [Read More]
April 22, 2013 - 1:05 PM EDT
How Important Is Deferral to Multinationals?
The U.S. tax system allows multinationals to effectively indefinitely defer taxes on profits earned by active foreign affiliates until that money is repatriated to the United States. Deferral as a cornerstone of tax policy dates from a compromise during the Kennedy administration and has long been... [Read More]
April 15, 2013 - 12:34 PM EDT
U.S. Taxpayers Buy a Lot of Weapons
Happy tax day! It's April 15, and undoubtedly many Americans are rushing to the post office to mail their returns to the IRS. The rise of e-filing and the increasing use of return preparers and TurboTax has significantly reduced last-minute traffic, but the United States always has its share of pr... [Read More]
April 8, 2013 - 12:56 PM EDT
What Should Be in the Obama Budget
President Obama will finally release a budget this week. Obama consistently ignores the statutory timeline for releasing his budget, and this year is the latest he has ever put forward a fiscal proposal. On all things administrative, the president is frequently dilatory. But those waiting with bate... [Read More]
April 1, 2013 - 12:28 PM EDT
Tim Johnson, Kristi Noem, and the Importance of Moderates to Tax Reform
Another Senate Democrat is retiring. South Dakota Sen. Tim Johnson will not seek a fourth term in 2014, leaving an open seat that Republicans will be heavily favored to pick up. Johnson's retirement brings the total number of Democrats leaving the Senate to five. The possibility that Johnson will... [Read More]
March 25, 2013 - 12:14 PM EDT
Senate Democrats Abandon the Estate Tax
The most progressive tax in the United States is also one of the most unpopular. Thanks to Republican-led efforts to characterize it as a death tax, the estate tax is almost universally reviled in Congress and by voters. To emphasize the point, last week the Democrat-controlled Senate voted 80 to 1... [Read More]
March 19, 2013 - 2:36 PM EDT
Paul Ryan Borrows a Page From Obama’s Playbook
Paul Ryan may have been on the ticket opposing President Obama in the last election, but that hasn't stopped the House Budget Committee chair from copying the president in at least one important respect. Much like Obama, Ryan keeps releasing the same budget every year, knowing full well that it ha... [Read More]
March 11, 2013 - 2:33 PM EDT
Carl Levin Changed the Face of Tax Enforcement
Not long ago, I pointed out that Sen. Carl Levin was determined to continue his quest to end offshore tax abuse by U.S. individuals and corporations. The Michigan senator had reintroduced the Cut Unjustified Tax Loopholes Act, a follow-up to his stalled Stop Tax Haven Abuse Act. Unless something ha... [Read More]
March 4, 2013 - 1:03 PM EST
Is the U.S. Tax Gap as Big as Italy’s?
The United States has a tax gap problem. The IRS has estimated that the tax gap may be as much as $450 billion a year. That's approximately 18 percent of total federal revenues. As Senate Finance Committee Chair Max Baucus pointed out during the healthcare debate, closing the tax gap could have pa... [Read More]
February 25, 2013 - 12:57 PM EST
Taxing the Rich, Thenardier-Style
“Charge 'em for the lice, extra for the mice. Two percent for looking in the mirror twice. Here a little slice, there a little cut Three percent for sleeping with the window shut. When it comes to fixing prices There are a lot of tricks I knows. How it all increases, all them bits and pieces. Jesu... [Read More]
February 19, 2013 - 1:13 PM EST
Simpson-Bowles Try Again
Alan Simpson and Erskine Bowles have become synonymous with deficit reduction. Their names are thrown about by lawmakers and the White House whenever one side or the other wants to act serious about a grand bargain on taxes and spending. But the details of the Simpson-Bowles plan, originally releas... [Read More]
February 11, 2013 - 12:00 PM EST
Will Obama’s Call for Tax Reform Ring Hollow?
President Obama is going to call for tax reform in his State of the Union address this week. According to sources, the president will use tax reform as a way to lower the deficit, promote job creation, and address the growing income disparity. The latter will be couched in terms of how to increase... [Read More]
February 4, 2013 - 2:48 PM EST
Carl Levin Continues to Play the Role of Don Quixote
If Sen. Carl Levin ever feels like Sisyphus, constantly pushing a boulder up a hill only to have it roll back to the bottom, he certainly doesn't let anyone know it. For years, Levin has been on a quest to close international taxation loopholes. And for just as long, he has largely failed to persu... [Read More]
January 28, 2013 - 4:17 PM EST
Huffington Post Draws Tenuous Link Between Camp Plan, Fix the Debt Group
The derivatives market in the United States is estimated to be $600 trillion, which is 10 times the size of the global economy. Excessive trading in derivatives probably contributed heavily to the meltdown in the financial sector that threw the United States -- and the world -- into recession in 20... [Read More]
January 22, 2013 - 1:33 PM EST
Phil Mickelson Overreacts to Uptick in Taxes
President Obama and Democrats may think that taxes should go up more on upper-income earners, but count Phil Mickelson among those who disagree. The golfer recently told reporters that he planned to make “drastic changes” because of California's new tax laws. He hinted that retirement might be a... [Read More]
January 14, 2013 - 1:39 PM EST
TPC Study Shows Fiscal Cliff Deal Cut Taxes for Most
The fiscal cliff might be behind the United States, but the effects of the deal to avoid it will be felt for a long time. Unlike many other hasty tax compromises drafted on Capitol Hill, the provisions of the American Taxpayer Relief Act (ATRA) are mostly permanent. The income tax rates, the estate... [Read More]
January 7, 2013 - 5:50 PM EST
Both Parties Should Have Pushed Payroll Tax Cut
The fiscal cliff may have been averted, but anyone who just received their first paycheck of the new year probably noticed that it was a bit smaller. That may have come as a shock to many middle-income taxpayers. Didn't President Obama just spend a whole week touting the fact that he had saved 98... [Read More]
December 17, 2012 - 1:58 PM EST
Democrats Should View Japan as a Warning
Raising taxes in the middle of a weak economy is usually political suicide. Herbert Hoover did it in 1932 and condemned the Republican Party to decades of rebuilding. Bill Clinton did it in 1993 and watched as the GOP took control of Congress in 1994 for the first time in decades. And now President... [Read More]
December 10, 2012 - 2:06 PM EST
Business Tax Incentives Create Race to the Bottom
Tax competition is a positive force in the global economy, according to Daniel Mitchell of the Cato Institute. He believes that governments competing against each other to attract business makes tax codes more efficient and helps economic growth. It certainly helps businesses, but it isn’t clear j... [Read More]
December 3, 2012 - 2:44 PM EST
Why the Tea Party Is Bad for Conservative Tax Policy
The GOP has a Senate problem. Everyone knows it because it has been front and center in the last two election cycles. Despite a favorable political climate in 2010 and a map tilted their way in 2012, Republicans have failed to make much headway toward retaking the Senate (the party is only up five... [Read More]
November 26, 2012 - 2:20 PM EST
Why the Finance Committee Needs Angus King
It took John Kerry 14 years to get a seat on the Senate Finance Committee. That’s supposedly what Senate Majority Leader Harry Reid told Angus King when the Senate’s newest independent requested a seat on the prestigious taxwriting committee. King was hoping to replace Olympia Snowe, the retiring... [Read More]