One way to stop corporate inversions and tax dodgers… TPC’s Steve Rosenthal explains in his essay for Fortune. A corporate exit tax, he concludes “would discourage both voluntary departures and hostile foreign takeovers. Even a credible threat of an exit charge would deter US companies from accumulating earnings offshore.”
The public pension system might be in worse shape than we thought. The Hoover Institution has a new paper that finds a $3.4 trillion deficit in public pension system. That’s three times more than official figures, in part because author Joshua Rauh uses a conservative discount rate on pension liabilities that results in an upper bound estimate. “This study shows that unfunded pension liabilities are devastatingly widespread and only getting worse,” said Rauh. State and local budgets would need to dedicate 17.5 percent of their budgets to keep pension liabilities from growing.
What has Tax Day taught you? For the 49 Americans surveyed by Brookings Institution’s Vanessa Williamson, tax season’s deadline is all about the “hunt for their own personal ‘loopholes.’” That’s a problem, Williamson argues, because it can distort a taxpayer’s perception of both the current code and proposed reforms. She concludes that every year, “Instead of making tax policy less visible, policymakers should consider how to use the taxpaying process to educate and engage the public on questions of public finance.”
The IRS needs you (or a colleague). The agency seeks qualified applicants for its Electronic Tax Administration Advisory Committee. The panel is a forum to discuss issues such as the prevention of identity theft and refund fraud and supports the IRS’s goal of making paperless filing the preferred way to file tax and information returns. The IRS will accept applications through May 11 for 8-10 people to serve three-year terms beginning in July. More information is available on IRS.gov.
The European Union wants more tax disclosure by the world’s largest companies. Britain’s EU Commissioner, Lord Hill, presented rules that apply to companies with more than €750 million in sales. Country-by-country reporting rules already apply to banks, mining and forestry companies. Now, that rule covers companies which account for 90 percent of corporate revenues in the EU.
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