Sixty-two nations are cracking down on corporate tax evasion

The Organization for Economic Cooperation and Development released a plan to cut down on corporate tax evasion. This news brief will keep you up to date on this and other tax news!

Kiichiro Sato/AP/File
Customers line up as they wait for the release and sale start of the new Apple iPhone 6S at an Apple store on Chicago's Magnificent Mile, Friday, Sept. 25, 2015, in Chicago.

A global crackdown on corporate tax evasion nears finalization. The Organization for Economic Cooperation and Development released its plan to curb tax shelters and make companies pay taxes where they earn profits. US-based multinationals such as Google, Facebook, Starbucks, and Amazon have shifted profits to low-tax jurisdictions, much to some nations’ dismay. Sixty-two governments, companies, and nongovernmental organizations negotiated the plan, and 20 finance ministers from the world’s leading economies will discuss the plan on Thursday. 

How might New Hampshire measure the impact of new tax cuts? The state will cut business tax rates starting in the new year, as a result of a budget compromise reached last month. Business taxes make up nearly 25 percent of the state’s revenue, and most corporate tax revenue comes from only one percent of state businesses. Will a lower business tax rate bring more business investment? Says one tax attorney: “You can't really conclude five years from now that a particular change like a tax change is the reason why we added 220 or 2,500 jobs. It doesn't usually work that way…. It’s going to be hard, honestly, to evaluate this.”

Pennsylvania Governor Tom Wolf calls for broad based tax increase to avoid a deficit.Pennsylvania faces a $2 billion budget deficit and enters its 97th day of a budget impasse. Democrat Tom Wolf vetoed the legislature’s stop-gap spending bill last week. Wolf had proposed increasing the state personal income tax, broadening the base of the 6-percent sales tax, and levying a natural gas extraction tax. GOP lawmakers say they’ll decide tomorrow how to move forward.

If you want something done right, do it yourself? A small town in Massachusetts can’t wait any longer for the state to figure out its transportation funding. The town of Lee wants to levy a 3-cent-per-gallon tax increase on gasoline sold in its jurisdiction along Interstate 90. A state senator has introduced legislation to let all 351 Massachusetts municipalities follow suit.

The post Evasion, Cuts, Hikes, and Drops appeared first on TaxVox.

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