Presidential candidate Mike Bloomberg proposes a financial transactions tax. The billionaire released a plan yesterday to impose a tax of 0.1 percent on all financial transactions. According to Bloomberg’s campaign, the revenue would reduce wealth inequality and support other measures, like a speed limit on trading, to curb predatory behavior and reduce the risk of destabilizing ‘flash crashes.’”
Global digital tax reform unlikely if US insists on “safe harbor,” says EU tax commissioner. Paolo Gentlloni, the European Union’s tax commissioner, warned the US proposal for a “safe harbor” that would allow firms to choose how to be taxed on their digital revenues “will in fact make a global solution very improbable.” Reuters reports that Gentiloni remains confident that a preliminary deal is possible by July. Finance ministers from the G20, the world’s largest industrialized countries, will meet this week in Riyadh, Saudi Arabia to continue their efforts to reach agreement on digital taxes .
Meanwhile, Spain moves towards digital business and stock market transactions taxes. The Spanish government plan would follow similar actions taken by other European countries like the United Kingdom and France. The Spanish Parliament still must approve the tax measures, which would take effect starting next year. Spain hopes a global digital tax plan will be in place by then.
TaxNotes report finds that income inequality falls after accounting for tax noncompliance. Previous research found that higher income people may be more likely than others to evade taxes. But the authors of this new report, Jason DeBacker, Bradley Helm, And Tran, and Alexander Yuskavage, find that compliance rates at the top of the income distribution are significantly higher. They compare income inequality using reported and audit-adjusted measures of income and find less inequality after accounting for noncompliance.
Speaking of tax compliance. A tax preparer in Seattle files returns for clients who perform both legal and illegal sex work. Lori St. Kitts expects to prepare tax returns for about 150 sex workers. Many fear that reporting their illicit income could get them into trouble, but St. Kitts is adamant that “Regardless of what you do — if you’re in business for yourself, especially — you need to follow tax laws.” Havocscope, a company that estimates black market activities, says the US prostitution business generates $14.6 billion nationally.
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