Quotation of the Day – The New York Times

“We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice.” VICTOR FLEISCHER, a law professor at the University of San Diego who studies the intersection of tax policy and inequality. Source: Quotation of the Day – The New York Times

Obama can increase the tax on carried interest unilaterally

My latest Dealbook column: President Obama could change the tax treatment of carried interest with a phone call to the Treasury Department. But the White House will need a precise understanding of the regulatory landscape to make a change that is fair, easy to administer, and will hold up in court. via How the President[…]

How Tax Laws Distort the Pfizer Deal

But the clearest distortion is not size, but location. For multinational corporations based in the United States, taxes create an incentive to expand overseas operations by opening foreign subsidiaries, expanding foreign operations and acquiring foreign companies. Unlike a pure tax shelter, which generates paper losses to avoid taxes, the effects of tax expatriations are real.[…]

Taxes Won’t Kill Bitcoin, but Tax Reporting Might – NYTimes.com

My take on the bitcoin guidance: Bitcoin is a digital representation of value, not a real currency, according to the latest pronouncement from the Internal Revenue Service.The I.R.S. on Tuesday released guidance indicating that Bitcoins and other so-called virtual currencies that do not have the status of legal tender in any jurisdiction would be treated[…]

Baucus Cost Recovery Proposal

A tax proposal released on Thursday by the chairman of the Senate Finance Committee, Max Baucus, addresses a topic that tends to make my students’ eyes glaze over: cost recovery.Cost recovery is a technical topic but one that may shape our economic future, because it affects the calculations of every business manager making a decision[…]

Baucus International Tax Proposal

Changes to the tax code always create winners and losers. An ambitious plan to revise the system for taxing multinational corporations, released on Tuesday by the Senate Finance Committee chairman, Max Baucus, would hit technology companies and large pharmaceutical companies especially hard. Companies like Pfizer, Apple, Hewlett-Packard and Microsoft have become masters at reducing their tax liability in the United States by shifting income overseas.

These companies often hoard cash in offshore subsidiaries, and in the past they have successfully lobbied for a tax holiday to repatriate cash at lower tax rates. The Baucus proposal would, among many changes, end this practice of tax deferral and impose a minimum tax of about 20 percent on overseas profits — whether those profits are repatriated to the United States or not.