Welcome to the IMA Tax Policy Blog. The blog format reflects our efforts to provide IMA members with timely, relevant and thought provoking information in a form that is accessible for easy reference. IMA’s Tax Policy Blog will be updated on a regular basis. Weekly news update emails will be sent out to notify subscribers of new information posted on the blog. IMA members are welcome to submit material for the blog, or request specific information. Simply email Editor Stefany Henson at shenson@ima-net.org with your information or request. Editorial submissions are subject to review. 

Wednesday
Jun252014

U.S. Workers Face a Tax Burden of 31.3 Percent

Average Worker Pays over $16,000 in Income and Payroll Taxes

U.S. wage earners face a 31.3 percent tax burden on pre-tax income according to the latest analysis from the nonpartisan Tax Foundation. Although this burden is high, the average across the 34 OECD countries is slightly higher, at 35.8 percent.

Using the latest data from the OECD, the report hones in on U.S. tax policy and explains the breakdown of the average U.S. worker’s tax burden, how it compares to other developed countries, and why workers, instead of employers, bear the weight of the tax burden.

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Wednesday
Jun252014

House Backs Two Permanent U.S. Tax Extenders

by Mike Godfrey, Tax-News.com, Washington Tuesday, June 17, 2014

On June 12, the Republican-led United States House of Representatives passed two bills to make permanent certain tax breaks for small businesses and S corporations, which were part of the pending “tax extenders” provisions that expired at the end of 2013.

The first bill, the America’s Small Business Tax Relief Act, introduced by the Chairman of the Ways and Means Subcommittee on Select Revenue Measures, Pat Tiberi (R – Ohio), and Ron Kind (D – Wisconsin), a member of the Ways and Means Subcommittee on Trade and Health, would permanently reinstate tax provisions that allow small businesses to immediately deduct the cost of investments in property and qualifying equipment

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Wednesday
Jun182014

Recent changes to IRS regulations may allow you to more easily amend tax returns to claim missing research credits!

From IMA member Plante Moran

On June 2, 2014, the Internal Revenue Service (IRS) amended Treasury Regulation §1.41-9(b)(2) removing the limitation of the making the election of the alternative simplified credit (ASC) computation on an amended return under §41(c)(5) of the Internal Revenue Code (Code). The final and temporary regulations, are counter to the IRS’s earlier stance in final rules (T.D. 9528) issued back in 2011, which did not allow for the ASC election on an amended return. The recent changes from the IRS to the regulations may allow taxpayers to amend returns and claim credits that were previously unclaimed due to the inability to document earlier base period information from the 1980’s or 1990’s.

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Wednesday
Jun182014

Japan Attracting Business with Corporate Tax Reforms

By William McBride, The Tax Foundation

The Wall Street Journal reports that Japan will likely reduce its corporate tax rate starting next year, possibly in stages down to around 25 or 30 percent. This would make Japan more competitive with its nearest neighbors, particularly China which has a 25 percent corporate tax rate. Currently, Japan has the second highest corporate tax rate in the developed world at about 35 percent, while the U.S. has the highest corporate tax rate at 39.1 percent (including national and subnational taxes). If Japan cuts their corporate tax rate the next highest corporate tax rates in the developed world would be in France and Belgium, both at 34 percent.

Japan appears likely to raise its consumption tax next year from 8 percent to 10 percent, partly to offset any lost corporate tax revenue. The Journal has an interesting graphic indicating that Japan’s consumption tax already raises more revenue than its corporate tax, and with a rate that is less than one-quarter the corporate tax rate.

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Wednesday
Jun112014

Illinois changes application of sales tax to vehicle leases

Overall lease tax cost likely to be reduced — Source: McGLADREY’S TAX ALERT | May 19, 2014

On April 21, 2014, Illinois enacted Public Act 098-0628, changing the manner in which sales tax applies to long-term leases of passenger cars, light trucks, recreational vehicles and passenger vans. These changes may make it cost effective for lessees to delay entering into long-term leases until after the law becomes effective on Jan. 1, 2015.

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