scholarly journals Reregulating Indonesian Stock Buyback: A Lesson From United States

Yuridika ◽  
2021 ◽  
Vol 36 (3) ◽  
pp. 559
Author(s):  
Didik Farkhan Alisyahdi ◽  
Diffaryza Zaki Rahman
Keyword(s):  
Economic Development ◽  
Income Tax ◽  
Limited Liability ◽  
Corporate Income Tax ◽  
Share Repurchases ◽  
Share Repurchase ◽  
The Us ◽  
Stock Buyback ◽  
Jobs Act ◽  
Tax Cuts

This article compares the corporate income tax cuts enacted by the Indonesian COVID-19 Relief Law and the US Tax Cuts and Jobs Act. It investigates the correlation between the tax cuts in the Tax Cuts and Jobs Act, economic development, and share repurchases in the US. It seeks to identify appropriate limitations on share repurchases in Indonesia following the enactment of the COVID-19 Relief Law. This research was carried out using the juridical normative method by tracing the literature and laws concerning share repurchase arrangements in Indonesia and the US. The results show that there is a slight positive correlation between the reduction of corporate income tax and economic development in the US and that the US income tax cuts have caused significant growth in share repurchases. After the enactment of the Indonesian COVID-19 Relief Law, which also reduced corporate income taxes, Indonesia may be on the verge of extensive share repurchase activity, as occurred in the US. To tackle this problem, we recommend amending Law No. 40 of 2007 concerning limited liability companies to re-regulate the restriction on share repurchases.

scholarly journals Measuring the Effects of Corporate Tax Cuts

2018 ◽  
Vol 32 (4) ◽  
pp. 97-120 ◽  
Author(s):  
Alan J. Auerbach
Keyword(s):  
Multinational Corporations ◽  
Income Tax ◽  
Capital Investment ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Corporate Tax ◽  
The Law ◽  
Jobs Act ◽  
The Impact ◽  
Tax Cuts

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986. The law introduced many significant changes. However, perhaps none was as important as the changes in the treatment of traditional “C” corporations—those corporations subject to a separate corporate income tax. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The magnitude of these increases is extremely difficult to predict. Indeed, the public debate about the benefits of the new corporate tax provisions enacted (and the alternatives not adopted) has highlighted the limitations of standard approaches in distributional analysis to assigning corporate tax burdens.

scholarly journals The Russian Cohen doctrine: problems in calculating costs and deductions in the absence of proper documentation

2019 ◽  
pp. 48-54
Author(s):  
Zh. G. Popkova
Keyword(s):  
Income Tax ◽  
Income Taxes ◽  
Regulatory Framework ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Court Case ◽  
The Us ◽  
Judicial Doctrine ◽  
Approximate Amount

The article provides information about a foreign judicial doctrine (the Cohen Rule) that originated in the court case of 1930 with the participation of George Cohen, Broadway Theater manager and producer. The doctrine under consideration that is still valid in the US tax law does not exclude the application of the approximate amount of taxpayer’s expenses when calculating income taxes in the absence of documents verifying expenses. It is concluded that the domestic regulatory framework applies a similar approach that envisages a fixed deduction for individual entrepreneurs under Article 221 of the Tax Code. It is proposed to introduce a similar regulatory framework for corporate income tax.

scholarly journals Fiscal Measures to Boost the Economic Development of Russian Territories

2020 ◽  
Vol 12 (5) ◽  
pp. 99-113
Author(s):  
A.D. Andryakov ◽  
◽  
E.A. Dombrovskiy ◽  
◽  
Keyword(s):  
Economic Development ◽  
Income Tax ◽  
Federal Budget ◽  
Corporate Income Tax ◽  
Compensation Mechanism ◽  
Russian Regions ◽  
The Russian Federation ◽  
Reduced Rate ◽  
Equalization Grants ◽  
Additional Stimulation

Two possible directions of fiscal measures aimed at improving Russian territories’ economic development are discussed in the paper: one at the level of largest agglomerations and another one at the regional level. It is widely accepted that agglomerations are “engines” of economic growth. The Strategy of Spatial Development of the Russian Federation until 2025 pays special attention to the development of agglomerations. However, the latter process has not only natural limitations, but also institutional ones arising from low fiscal independence of municipalities which form agglomerations. To overcome the institutional limitations, the paper proposes a set of fiscal measures, including a redistribution of tax revenues and expenditure obligations between the center of a given agglomeration and the region that contains it. The current fiscal mechanisms of stimulating economic development of Russian regions are analyzed. A mechanism of additional stimulation for regions to develop their own revenue base is proposed; it includes the transfer of receipts of VAT levied with a reduced rate of 10 % to regions in exchange for centralization of some part of corporate income tax in the federal budget. Different scenarios of this exchange are analyzed. It is shown that centralization of the corporate income tax amount corresponding to the 1 % rate in the federal budget in exchange for the transfer of VAT levied with a rate of 10 % to regions with a compensation mechanism within the transferred amounts is neutral to the federal budget and to budgets of the regions which receive equalization grants.

scholarly journals The Impact of the Tax Cuts and Jobs Act of 2017 on the US Government Debt

2019 ◽  
Vol 7 (4) ◽  
pp. 01-09
Author(s):  
Min Xu ◽  
Suk Kim ◽  
Jeanne David
Keyword(s):  
Government Debt ◽  
Us History ◽  
The Great Recession ◽  
Tax Relief ◽  
The Us ◽  
Us Government ◽  
Federal Debt ◽  
Jobs Act ◽  
The Impact ◽  
Tax Cuts

There have been three major tax cuts in the modern US history: 1) the Tax Cuts and Jobs Act of 2017; 2) the Economic Growth and Tax Relief Reconciliation Act of 2001; and 3) the Economic Recovery Act of 1981. Each of the first two major tax cuts had increased the federal debt. Just about everybody agrees that US federal debt is on an unsustainable path. Can we afford another major tax cut without trigging a major economic disaster such as the Great Recession of 2007-2009? This article discusses an overview of this new law, the impact of the first two major tax cuts on the federal debt, the impact of the Tax Cuts and Job Acts on the US government debt, and its consequences.

scholarly journals Notching R&D Investment with Corporate Income Tax Cuts in China

2018 ◽  
Author(s):  
Zhao Chen ◽  
Zhikuo Liu ◽  
Juan Carlos Suárez Serrato ◽  
Daniel Yi Xu
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
D Investment ◽  
Tax Cuts

scholarly journals Can Corporate Income Tax Cuts Stimulate Innovation?

2019 ◽  
Vol 55 (5) ◽  
pp. 1415-1465 ◽  
Author(s):  
Julian Atanassov ◽  
Xiaoding Liu
Keyword(s):  
Income Tax ◽  
Financial Constraints ◽  
Opposite Effect ◽  
Tax Avoidance ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Corporate Income Taxes ◽  
Corporate Innovation ◽  
Tangible Assets ◽  
Tax Cuts

We hypothesize that corporate income taxes distort firms’ incentives to innovate by reducing their pledgeable income. Using a differences-in-differences methodology, we document that large corporate income tax cuts boost corporate innovation. We find a similar but opposite effect for tax increases. Most of the change in innovation occurs 2 or more years after the tax change, and there’s no effect before the tax change. Exploring the mechanisms, we show that tax cuts have a stronger impact on innovation for firms with weaker governance, greater financial constraints, fewer tangible assets, smaller patent stock, and a greater degree of tax avoidance.

The Tax Cuts and Jobs Act of 2017 and the Gig Economy: Why the Employee vs. Contractor Debate Matters More than Ever

2021 ◽  
pp. 088636872110602
Author(s):  
Stanley Veliotis ◽  
Balsam Steve
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Point Of View ◽  
Tax Law ◽  
Court Cases ◽  
Independent Contractors ◽  
Gig Economy ◽  
Jobs Act ◽  
The U.S ◽  
Tax Cuts

The issue of whether workers are independent contractors or employees has become even more relevant with recently enacted and proposed legislation and court cases in many jurisdictions seeking to impose employee status on many Gig economy workforce participants, such as ride-share drivers. This article emphasizes that the U.S. income tax rules, especially after tax reform effective in 2018, makes employee status extremely tax-inefficient for these workers. This article explains the relevant tax law changes and provides various examples of typical settings to confirm that workers with even small relative work expenses are often better off as contractors from a tax point of view.

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