In the United States, tax reform continues to be as divisive politically after the fact as it was during the legislative progress. Indeed, a recent survey by the Pew Research Center suggests that those whose political sympathies lay closer to the Democrats than the Republicans still oppose the changes, even though a great many of them stand to benefit.
Complain as they might that the TCJA was skewed towards corporations and fiscally irresponsible, there’s very little that the Democrats can do at the moment to reverse things. Perhaps this year’s mid-term congressional elections may give them more influence over legislation and policy. But, would they really want to start picking off the bits of the TCJA they don’t like? Given that the tax cuts are encouraging some of America’s largest firms to relocate operations domestically, and that the IMF tacitly endorsed … Read More »
Importers of solar panel equipment in India are probably feeling very aggrieved at their Government at the moment, after it announced a proposal to slap a 70 percent tariff on such products sourced from China.
India may well be justified in pursuing this somewhat drastic measure. After all, it wouldn’t be the first time that China has been accused of selling its products around the world too cheaply to the detriment of local producers (local consumers, who of course benefit from low prices, never seem to count!). But trade disputes are rarely clear cut, and it seems that few parties ever come out of them completely undamaged. So it might not be India’s smartest move.
Furthermore, this story was notable because it adds to a growing trend for governments to tax the production and consumption of renewable energy, surely a policy completely at odds … Read More »
It seems the good times are about to roll for taxpayers after the enactment of the Tax Cuts and Jobs Act. And not only has the tax reform feel-good factor driven US stocks to their highest values, companies have announced pay rises and other tax perks for employees as a result, such as with the recent announcement from Walmart.
But even here, some companies are seeing short-term fallout. As a result of the cut to the corporate income tax rate to 21 percent, many large multinationals have adjusted the value of their deferred tax assets, resulting in a write down in their profits, typically by billions of dollars. And elements of the TCJA could also prove particularly problematic for banks, many of which have expressed concern about the “BEAT” interest deduction limitation provisions.
What’s more, while taxes might be getting lower for many … Read More »
Despite plunging corporate tax rates across the world, the jury’s still out on whether there’s truly a corporate tax rate to the bottom occurring. Many have predicted the death of corporate tax in the not-too-distant-future. As I surmised on this subject recently, such claims feel somewhat exaggerated and a tad hysterical. Surely, public opinion would be so hostile to such an eventuality that governments simply wouldn’t allow it? It’s a safe argument for me; an argument that can only be settled after the next decade or three.
Nevertheless, there can be little doubt that robust competition is taking place between jurisdictions on corporate tax at present, and the recently completed tax reform legislation in the United States, which slashed corporate tax to 21 percent, has probably intensified it. It can’t be a complete coincidence that China kicked off 2018 by announcing … Read More »
Brexit is becoming harder for businesses to come to terms with, both those in Britain and beyond. And, even though December saw UK and EU negotiators reaching a tentative agreement on the first phase of talks, in reality this ship has barely left port.
As far as businesses are concerned, the negotiators have only scratched the surface of the issues they are most worried about, like customs, potential trade taxes, VAT, regulatory divergences, product standards, etc., etc.
You would think that regimes in the UK and the EU have so much in common that there would be no need to wipe the slate clean and start again from scratch. But that would be too easy, wouldn’t it? After all, the EU doesn’t do things the easy way – I’m not sure if it even knows how. So bespoke Brexit it will be, at … Read More »