President Biden and G-7: Yes to a global minimum corporate tax of 15 percent. Biden and leaders of the Group of 7 nations publicly endorsed on Friday a 15 percent minimum global corporate tax rate. They also agreed to replace individual country digital services taxes with a destination tax based on where multinational corporations conduct business, rather than where they’re headquartered or produce goods and services. Finance ministers backed the ideas last week.
Pozen: Pair the 15 percent minimum tax with a 25 percent corporate rate. In an essay for The Hill, Bob Pozen, who chairs TPC’s leadership council and is a senior lecturer at MIT’s Sloan School of Management, says such a country-by-country minimum tax would fit well with a 25 percent US corporate tax rate. Pozen also would scrap the current deduction for returns from plant and equipment based in foreign countries.
Collins: No gas tax hike in bipartisan infrastructure deal. Sen. Susan Collins, one of 10 members of a bipartisan group of senators trying to draft an agreement, says a gas tax increase is off the table. She told CBS’ Face the Nation yesterday that new spending could be paid for with an infrastructure financing bank, unused COVID-19 aid to state and local governments, and “a provision for electric vehicles to pay their fair share of using our roads and bridges right now.” Collins said, “Those are three of the provisions that we’ve taken a look at.”
Tax refund delayed? Might be because of identity screening. The IRS flagged 5.2 million tax refunds as potentially fraudulent for the 2020 tax year, with 1.9 million specifically to confirm the filer’s identity. In 2019, 63 percent of tax refunds delayed for identity screening ended up being legitimate. The screenings, while preventing billions of dollars in losses, also delay legitimate tax refunds—sometimes for months.
Treasury Secretary Janet Yellen to testify on Biden’s budget. Yellen will appear before the Senate Finance Committee on Wednesday and before the House Ways & Means Committee on Thursday. She likely will face questions about the international tax talks, Biden’s tax proposals, and the disclosure of 25 billionaires’ tax returns to ProPublica.
Also on the Hill this week. The Senate Finance Committee will hold a hearing on mental health care. The House Ways & Means Social Security Subcommittee will hold a hearing tomorrow on equity in Social Security.
Did you miss Kim Clausing on The Prescription? The deputy Treasury secretary for tax analysis talked last Thursday on the TPC webcast about Biden’s tax plans as well as the progress towards an international agreement on corporate taxation. You can watch here.
Next Thursday: 11th Annual IRS/TPC Joint Research Conference on Tax Administration. On June 24, the IRS and TPC host the only annual conference focused exclusively on tax administration research. Researchers from the IRS, other government agencies, academia, and private organizations will discuss some of the latest analyses seeking to make tax administration as effective as possible. Learn more and register here.
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