scholarly journals Opportunity Zones-The Symbiosis of Tax Incentives and Community Development

2020 ◽  
pp. 64-70
Author(s):  
Rachel Raskin, CPA ◽  
Sharon Brickman, CPA
Keyword(s):  
Community Development ◽  
Mutual Funds ◽  
American History ◽  
Tax Avoidance ◽  
Tax Incentives ◽  
Capital Gains ◽  
Economic Innovation ◽  
Jobs Act ◽  
American Cities ◽  
The U.S

U.S. lawmakers have created one of the greatest tax-avoidance opportunities in American history, while simultaneously serving underperforming American cities and neighbourhood’s (Bertoni 2018). Subchapter Z of The Investing in Opportunity Act (“The Act”), as part of the 2017 Tax Cuts and Jobs Act (TCJA), amended the Internal Revenue Code to provide major tax incentives for investments in designated “Opportunity Zones”. The tax incentives act as subsidies by allowing investors to defer the recognition of capital gains from the sale of appreciated assets if they are timely reinvested in opportunity zones (Bertoni 2018). According to the Economic Innovation Group (2018), there is approximately $6.1 trillion of unrealized capital gains in stocks and mutual funds in the U.S. economy. Under the direction of sophisticated investors, this capital can be channelled to revitalize depressed communities and create jobs, infrastructure, and other economic opportunities. In a press release, the Department of Treasury (2018) revealed that it anticipates $100 billion in private funds will be invested in opportunity zones over the next eight years. If the intention of the act comes to fruition, capital gains that investors realize from selling previous investments will be used to fuel growth in economically depressed areas.

Code Section 304: The Gift That Keeps on Giving

2019 ◽  
Vol 17 (1) ◽  
pp. 25-39
Author(s):  
Doron Narotzki ◽  
Melanie G. McCoskey
Keyword(s):  
Tax Avoidance ◽  
Tax Planning ◽  
Expected Loss ◽  
Legislative Change ◽  
Planning Tools ◽  
The Gift ◽  
Foreign Corporations ◽  
Jobs Act ◽  
The U.S ◽  
Jel Classifications

ABSTRACT The Tax Cuts and Jobs Act (TCJA) has created a unique opportunity to utilize Code Section 304 and Code Section 245A as powerful tax-planning tools. By utilizing the rules established for redemptions between related corporations under the anti-abuse provisions of Code Section 304 combined with the new 100 percent DRD of Code Section 245A, extracting earnings from affiliated foreign corporations tax-free has never been easier. This paper explains how these two code sections interact with each other and the resulting ability to extract certain foreign-sourced earnings tax-free. It also identifies incentives created by the TCJA to operate profitable businesses overseas and expected loss operations in the U.S. Finally, the paper offers a legislative change to close the tax avoidance loophole created by the TCJA. JEL Classifications: H2.

scholarly journals Beyond Borders: Governmental Fragmentation and the Political Market for Growth in American Cities

2019 ◽  
Vol 51 (3) ◽  
pp. 150-167
Author(s):  
Eric Stokan ◽  
Aaron Deslatte
Keyword(s):  
Community Development ◽  
Local Governments ◽  
Nationwide Survey ◽  
Tax Incentives ◽  
The Political ◽  
Political Fragmentation ◽  
Political Market ◽  
Market Framework ◽  
Regulatory Flexibility ◽  
American Cities

Political fragmentation has been conceptualized as a phenomenon which increases competition for mobile citizens and jobs between local governments within the same region. However, the empirical basis for this nexus between governmental fragmentation and increased competition for development is surprisingly lacking. Utilizing a newly constructed database that matches political fragmentation indices (horizontal, vertical, and bordered) to a nationwide survey of economic development officials in 2014, we begin to fill this gap by analyzing the influence fragmentation has on the use of tax incentives, regulatory flexibility, and community development tools in U.S. cities. Applying the political market framework and a Bayesian inferential approach, we find that the proliferation of local governments increases incentive use. However, more specialized governance increases the probability of using community development activities.

Transocean and the History of Tax Inversions

2018 ◽  
Vol 34 (1) ◽  
pp. 1-12
Author(s):  
Susan M. Albring ◽  
Randal J. Elder ◽  
Mitchell A. Franklin
Keyword(s):  
Multinational Corporations ◽  
Economic Impacts ◽  
Income Taxes ◽  
Tax Rates ◽  
Corporate Tax ◽  
Corporate Income Taxes ◽  
History Of ◽  
Jobs Act ◽  
The U.S ◽  
Over Time

ABSTRACT The first tax inversion in 1983 was followed by small waves of subsequent inversion activity, including two inversions completed by Transocean. Significant media and political attention focused on transactions made by U.S. multinational corporations that were primarily designed to reduce U.S. corporate income taxes. As a result, the U.S. government took several actions to limit inversion activity. The Tax Cuts and Jobs Act of 2017 (TCJA) significantly lowered U.S. corporate tax rates and one expected impact of TCJA is a reduction of inversion activity. Students use the Transocean inversions to understand the reasons why companies complete a tax inversion and how the U.S. tax code affects inversion activity. Students also learn about the structure of inversion transactions and how they have changed over time as the U.S. government attempted to limit them. Students also assess the tax and economic impacts of inversion transactions to evaluate tax policy.

Brewing Up Controversy: A Case Exploring the Ethics of Corporate Tax Planning

2015 ◽  
Vol 30 (4) ◽  
pp. 311-327 ◽  
Author(s):  
Megan F. Hess ◽  
Raquel Meyer Alexander
Keyword(s):  
Real World ◽  
Ethical Issues ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Learning Assessment ◽  
Class Discussion ◽  
Corporate Tax ◽  
Tax Havens ◽  
Multinational Organizations ◽  
The U.S

ABSTRACT This instructional case explores the ethical issues surrounding the corporate tax-planning and tax-avoidance strategies of multinational organizations. Drawing on the real-world experiences of SABMiller, one of the world's largest beverage companies, this case provides a launching point for students to consider the ethics of corporate tax planning. The ethics of multinational tax practices, especially the use of tax havens, has recently become the focus of media and legislative debate in both the U.S. and the U.K., and many well-respected companies, such as General Electric, Apple Inc., and Starbucks are now feeling the pressure to reform. In a post-case learning assessment, students demonstrated significant improvement in their understanding and indicated that they enjoyed discussing this controversial issue. The “Implementation Guidance” section and Teaching Notes offer guidance for in-class discussion of the ethical and tax issues in this case.

Introduction

2019 ◽  
pp. 1-32
Author(s):  
Traci C. West
Keyword(s):  
South Africa ◽  
Sexual Violence ◽  
Violence Against Women ◽  
American History ◽  
Gender Violence ◽  
Narrative Approach ◽  
History Of ◽  
Interdisciplinary Framework ◽  
Theoretical Foundations ◽  
The U.S

This chapter presents the interdisciplinary framework of the book and its core argument linking issues of racism and religion--particularly heteropatriarchal Christianity--in the cultural support for gender violence. It argues that the conjoined presence of religion, anti-black racism, and sexual violence against women in American history of slavery and colonialism compels a similarly transnational exploration of inspiration from Africana activists and scholars to address U.S. gender violence. A methodological overview describes the book’s theoretical foundations in feminist and womanist studies, and how tools of ethnography, anthropology, and Christian theo-ethics inform the its unconventional narrative approach. The U.S.-based analysis features snapshots of the author’s encounters with leaders and their contexts, not a broad survey or comparison of gender violence in Ghana, South Africa, and Brazil.

The Compromise That Made the Republic and the Nation’s First Statistical Race

2013 ◽  
Author(s):  
Kenneth Prewitt
Keyword(s):  
United States ◽  
Public Policy ◽  
Affirmative Action ◽  
Social Science ◽  
American History ◽  
Starting Point ◽  
The Creation ◽  
The Republic ◽  
The Moment ◽  
The U.S

This chapter demonstrates how assumptions of racial superiority and inferiority tightly bound together statistical races, social science, and public policy. The starting point of this is constitutional language. The U.S. Constitution required a census of the white, the black, and the red races. Without this statistical compromise there would not have been a United States as it is today. In the early censuses slaves were counted as three-fifths of a person, a ratio demanded by slaveholder interests as the price of joining the Union. A deep policy disagreement at the moment of founding the nation was resolved in the creation of a statistical race. Later in American history the reverse frequently occurred. Specific policies—affirmative action, for example—took the shape they did because the statistical races were already at hand.

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