scholarly journals THE IMPACT OF THE 2017 TAX ACT ON CERTAIN PERSONAL INJURY PLAINTIFFS

2020 ◽  
Vol 12 (1) ◽  
pp. 27-57
Author(s):  
Gregg Polsky
Keyword(s):  
Internal Revenue Service ◽  
Personal Injury ◽  
Corporate Tax ◽  
Tax Rate ◽  
Administrative Action ◽  
Tax Legislation ◽  
Contingent Fee ◽  
The Impact ◽  
Treasury Department ◽  
Significant Attention

The 2017 Tax Act was the most sweeping federal tax legislation in over a generation. While many of its reforms, from dramatically lowering the corporate tax rate to altering the international tax rules, have already received significant attention, comparatively little attention has been paid to the 2017 Tax Act’s effects on personal injury plaintiffs. This Article explores those impacts. The 2017 Tax Act added a new provision that indirectly affects plaintiffs who allege sexual harassment or abuse. The new provision disallows the defendants’ deductions if the parties enter into a nondisclosure agreement. While targeted at defendants, the provision likely unwittingly harms plaintiffs by reducing settlement offers. The provision also suffers from a host of ambiguities that the Treasury Department and Internal Revenue Service will need to resolve. The 2017 Tax Act also eliminated so-called miscellaneous itemized deductions. In certain types of personal injury claims, such as defamation or emotional distress, this development causes the plaintiff to be taxed on the full settlement amount even if, as is often the case, one-third or more of the settlement is paid as a contingent fee to the plaintiff’s attorney. Legislative or administrative action is required to remedy this patent unfairness.

scholarly journals Abuses and Penalties of a Corporate Tax Inversion

2019 ◽  
Vol 7 (1) ◽  
pp. 5
Author(s):  
James Yang ◽  
Leonard Lauricella ◽  
Frank Aquilino
Keyword(s):  
Multinational Corporations ◽  
International Taxation ◽  
Internal Revenue Service ◽  
Tax Law ◽  
Corporate Tax ◽  
Tax Base ◽  
Tax Rate ◽  
Tax Savings ◽  
Treasury Department ◽  
The U.S

There is a serious problem in international taxation today. Many United States (U.S.) multinational corporations have moved abroad to take advantage of a lower tax rate in a foreign country. As a consequence, the tax base in the U.S. has been seriously eroded. This practice is known as “corporate tax inversion”. This paper discusses the abuses and penalties of this phenomenon. It is rooted in some deficiencies in the U.S. tax law. This paper points out that the U.S. has the highest corporate tax rate in the world. It imposes tax on worldwide income. It permits deferral of tax on foreign-sourced income until dividends are repatriated back to the U.S. As a result, it creates tax loopholes. This paper reveals six actual cases of corporate tax inversion. This practice has triggered the Congress to enact §7874, the Internal Revenue Service (IRS) to issue Notices IR 2014-52 and IR 2015-79, and the U.S. Treasury Department to promulgate TD 9761. This paper investigates some details of these penalties. This paper further demonstrates an example in determining the amount of tax savings by engaging in a corporate tax inversion. It also offers many strategies.

scholarly journals Malaysian corporate tax rate and revenue: the application of Ibn Khaldun tax theory

2018 ◽  
Vol 10 (2) ◽  
pp. 251-262
Author(s):  
Hairul Azlan Annuar ◽  
Khadijah Isa ◽  
Salihu Aramide Ibrahim ◽  
Sakiru Adsebola Solarin
Keyword(s):  
Cash Flow ◽  
Positive Impact ◽  
Tax Revenue ◽  
Corporate Tax ◽  
Gradual Reduction ◽  
Content Type ◽  
Ibn Khaldun ◽  
Tax Rate ◽  
Optimal Tax ◽  
The Impact

Purpose The present study aims to investigate the impact of the reduction of the corporate tax rate on corporate tax revenue. The study adopts the theory of taxation by Ibn Khaldun, depicted as the Laffer curve. Design/methodology/approach The paper analyses time series data for the period 1996 to 2014 using the autoregressive distributed lag (ARDL) approach. Findings The paper finds that the corporate tax rate has a dual effect on corporate tax revenue over the study period. It shows an inverted U-shape relationship between the corporate tax rate and corporate tax revenue and reveals that the optimal tax rate is 25.5156 per cent. Inferentially, a positive relationship exists between the two variables prior to the optimal tax rate, and a negative relationship prevails afterwards. A further test of causality shows a long-run unidirectional causality between corporate tax rate and corporate tax revenue. Research limitations/implications First, it should be noted that the policy was not implemented in isolation. Several other tax incentives were given to corporate tax payers, and therefore, such incentives should be controlled for to have a more insightful evaluation of the policy. Second and most important, there is a need to investigate whether the increased cash flow available to firms as a result of the reduction in the corporate tax rate adds value to firms. It is also necessary to investigate whether firms’ stakeholders benefited from the increased cash flow or was there managerial diversion of firms’ resources. Practical implications The policy of gradual reduction of the corporate tax rate in Malaysia is suspected to have a positive impact on the productivity of Malaysian companies, which has contributed to an increase in corporate tax revenue. It also has a positive impact on the economic growth of the country. It means that the lower corporate tax rate has actually reduced the cost of doing business in the country. Originality/value The benefit of increased corporate tax revenue needs to be investigated empirically for insightful policy evaluation. In Malaysia, however, such investigation is close to non-existent to the best knowledge of the researchers. Thus, the present study aims at investigating the impact of the policy of gradual reduction of the corporate tax rate on corporate tax revenue over an 18-year period from 1996 to 2014.

scholarly journals Tax Burden of Agricultural Enterprises in Ukraine

2021 ◽  
Vol 25 (1) ◽  
pp. 157-169
Author(s):  
Serhii Kostornoi ◽  
Olena Yatsukh ◽  
Volodymyr Tsap ◽  
Ivan Demchenko ◽  
Natalia Zakharova ◽  
...  
Keyword(s):  
Value Added ◽  
Political Stability ◽  
Optimal Level ◽  
Tax Burden ◽  
Tax Rate ◽  
Agricultural Enterprises ◽  
Is Implementation ◽  
Advantages And Disadvantages ◽  
Tax Legislation ◽  
The Impact

Abstract Agriculture is one of the leading sectors of the Ukrainian economy, and the state pays special attention to its development. One of directions of the state’s support for agriculture is implementation of tax preferences due to which agricultural enterprises have a lower tax burden. The optimal level of the tax burden is an important factor in ensuring the positive dynamics of business activity in agriculture, as well as socio-political stability. The objective of the article is to determine the impact of recent changes in the Ukrainian tax legislation on the tax burden of agricultural enterprises, as well as the possible impact of current draft laws. The article examines features of the tax legislation in Ukrainewith regard to agricultural producers and its changes in recent years - increasing a single tax rate, introduction of indexation of land regulatory, monetary valuation, abolition of the special regime of a value added tax. The advantages and disadvantages of using a simplified taxation system by agricultural enterprises are considered. the study’s outcome comprises recommendations for agricultural enterprises to choose a tax system with the lowest tax burden, as well as recommendations for improving the tax legislation of Ukraine using preferential VAT rates for agricultural enterprises and a tax on withdrawn capital.

scholarly journals Comparison of Income Tax Base in Visegrad Countries

2021 ◽  
Vol 16 (2) ◽  
pp. 101-110
Author(s):  
Jana Hinke ◽  
Tomáš Rain ◽  
Barbora Hrabovská
Keyword(s):  
Literature Review ◽  
Income Tax ◽  
Corporate Tax ◽  
Tax Base ◽  
Tax Rate ◽  
The Disabled ◽  
The Impact ◽  
Visegrád Countries ◽  
Calculation Procedures

Abstract The objective of the research was to compare the procedures for the calculation of income tax in the Visegrad Four (V4) countries. The statutory income tax calculation procedures are very similar in the V4 countries. Particular systems differ parametrically. Based on a literature review, synthesis of knowledge, comparison and simulation calculations, it can be stated that Hungary has the lowest corporate tax rate, and in the simulative calculations it also produced the lowest tax and highest profit after taxation for a fictitious entity in Hungary. Income tax in the V4 countries differs mainly in the possibility of applying the loss of previous years, in the impact of depreciation on the amount of the tax and in the income tax rebate linked to the employment of the disabled.

The impact of R&D tax incentive programs on the performance of innovative companies

foresight ◽  
2019 ◽  
Vol 21 (5) ◽  
pp. 545-562
Author(s):  
Elena Makeeva ◽  
Ilona Murashkina ◽  
Irina Mikhaleva
Keyword(s):  
Explanatory Variable ◽  
Corporate Taxation ◽  
Corporate Tax ◽  
Data Set ◽  
Content Type ◽  
Tax Rate ◽  
Incentive Programs ◽  
Incentive Program ◽  
Tax Incentive ◽  
The Impact

Purpose This study aims to explore the influence of corporate taxation on the performance of innovative companies under various research and development (R&D) tax incentive programs. Design/methodology/approach The empirical model is based on the data of 520 companies for period 2007-2016. This model includes return on assets as the main proxy for performance and effective tax rate as a main explanatory variable. Controlling for other known determinants, the authors divide the sample into the subsamples to control for the various R&D tax incentive programs. The fact that the model includes the lagged explanatory variable of performance the Blundell –Bond model was applied. Findings The authors found evidence that corporate taxation has a significant impact on performance, but the direction could be ambiguous. Impact of the corporate tax rate on performance in general sample is significantly negative, which is consistent with results obtained by authors for the non-innovative companies. However, for further examination, the authors use subsamples of companies with different R&D tax incentive programs. The effect of corporate tax becomes positive under the patent box program only. Moreover, under various R&D tax incentive program, the impact of main control variables has changed. Therefore, the authors conclude that not only corporate taxation but also R&D tax incentive programs significantly influence the performance of innovative companies. Research limitations/implications The data are limited due to fragmented information disclosure about the R&D tax incentive program used. Thus, a different data set might reveal new information and correlation between variable on the same topic. Moreover, the authors do not cover all R&D tax incentive programs, which are specified for companies and countries. However, the study fills the gap between corporate taxation, performance and innovative companies. As the significant result was found the further research is important. The study contributes not only in the field of research but also a practical one. The choice of R&D tax incentive program influences main indicators of companies’ performance so it may change the behavior of the investors and decision-making managers of the companies. Originality/value Given the increasing interest in the topic of innovative companies, this study fills the gap between corporate taxation in innovative companies and performance. In addition, the importance of R&D tax incentive programs as a feature of innovative companies was found.

scholarly journals Corporate taxes and high-quality entrepreneurship

2020 ◽  
Author(s):  
Ana Venâncio ◽  
Victor Barros ◽  
Clara Raposo
Keyword(s):  
Tax Reform ◽  
Corporate Taxation ◽  
High Quality ◽  
Difference In Differences ◽  
Tax Rate ◽  
Tax Legislation ◽  
New Firm ◽  
Start Ups ◽  
The Impact ◽  
Specific Tax

Abstract We examine the impact of corporate taxation on entrepreneurship, using a quasi-natural experiment, which substantially reduced the corporate tax rate for start-ups located in inland municipalities in Portugal. Using a difference-in-differences approach and IV regression, we find that the tax reform increased firm entry and new firm job creation. The entrepreneurs who took advantage of this tax reform are relatively older, and are better-educated individuals. Their start-ups are relatively larger, more productive, and are more likely to survive the first 3 years. These findings suggest that corporate taxation is an imperative constraint for entrepreneurship, particularly for high-quality entrepreneurs. These better-educated individuals find it easier to overcome the hurdles of tax legislation and to make use of the opportunities created by a specific tax reform.

The Effect of Taxation on Corporate Financing and Investment

2021 ◽  
Author(s):  
Hong Chen ◽  
Murray Z Frank
Keyword(s):  
Corporate Tax ◽  
Firm Level ◽  
Corporate Financing ◽  
Tax Rate ◽  
Household Level ◽  
Laffer Curve ◽  
Personal Taxes ◽  
Corporate Decisions ◽  
Financing And Investment ◽  
The Impact

Abstract Extensive empirical research concerning the impact of taxes on corporate decisions has had trouble identifying seemingly obvious effects. Perhaps the problem is that the seemingly obvious tax predictions are not quite right. We provide an equilibrium model with both corporate and personal taxes. In the steady-state equilibrium, the corporate tax rate affects the level of production despite interest deductibility at the firm level, but not household-level taxes on interest earnings or dividends. We prove several other tax irrelevance results and document a Laffer curve in the corporate tax rate.

scholarly journals THE ROLE OF TAX ADMINISTRATION AND TAX RATE ON FOREIGN DIRECT INVESTMENT

2020 ◽  
Vol 13 (1) ◽  
pp. 64-82
Author(s):  
Rusman Affandi Nasution
Keyword(s):  
Institutional Performance ◽  
Essential Factor ◽  
Corporate Tax ◽  
Tax System ◽  
Middle Income ◽  
Fdi Inflows ◽  
Tax Rate ◽  
Middle Income Countries ◽  
The Impact

This thesis examines the impact of the tax system in determining FDI inflows in countries around the world from 2010 to 2017. We group the countries into two groups, based on income levels. Our findings suggest that the tax system, which reflects the easiness of tax payment, and the commitment to all tax regulations, plays a significant role in determining FDI inflows in low & middle-income countries. In high-income countries, it is the corporate tax cut that plays the role. The result implies that improved institutional performance in low & middle-income countries is an essential factor to induce FDI inflows.

scholarly journals Does Corporate Tax Rate Affect FDI? Case Study of Core European Countries

2015 ◽  
Vol 11 (2) ◽  
pp. 143-151 ◽  
Author(s):  
Nahid Kalbasi Anaraki
Keyword(s):  
Fixed Effect Model ◽  
European Countries ◽  
Corporate Tax ◽  
Tax Rate ◽  
Effect Model ◽  
Tax Regimes ◽  
Macroeconomic Fundamentals ◽  
The Impact

Though there is a huge amount of literature on the determinants of FDI, only a few studies have examined the impact of corporate tax rate on FDI inflow to core European countries. Indeed, European countries have experienced a huge difference in their ability to attract FDI and we suspect this is due to different tax regimes. Though traditional view has focused on the role of macroeconomic fundamentals on capital flow, more recent studies have emphasized on the impact of corporate tax rate. The question of the sensitivity of FDI to corporate tax rate is so far an uncertain empirical issue as some find evidence in the importance of tax rate others argue that countries with higher tax rate have attracted more FDI. This paper investigates whether corporate tax rate dominates the role of other macroeconomic fundamentals in shaping FDI to selected core European countries. Using panel data and fixed effect model for the period of 1990-2015 this study concludes that corporate tax rate plays a more important role than economic fundamentals in affecting FDI flow to  core European countries; and that is why France’s economy has stayed back of other core European countries in attracting FDI inflow.

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