We took a few days off and will now segue from public transportation policy to tax policy remembering the post that Maryland Assembly passed tax policy that was REGRESSIVE when it decided to tax ONE-DAY or SHORT TERM CAR RENTAL at a higher rate than annual leasing car rental packages usually connected to global auto manufacturers.
REMEMBER----TAX UNIFORMITY LAWS BOTH STATE AND FEDERAL DO NOT ALLOW THESE KINDS OF SELECTIVE TAXATION
Who uses more and more the daily rental cars? Our professional middle-class, our seniors, our low-income not affording a car. This is one of hundreds examples of pushing the tax revenue burden from corporations and rich to WE THE PEOPLE.
Frequently Asked Questions About the Sales and Use Tax11 - Does the sales and use tax apply to rentals of tangible personal property?
Yes. Under the Maryland sales and use tax law, each rental or lease payment is treated as a sale and is subject to the 6 percent tax rate. An 11½ percent tax is imposed on short-term passenger car and recreational vehicle rentals, while certain short-term truck rentals are subject to an 8 percent tax.
Think of a small business owner trying to compete where state taxation deliberately targets industries and especially protects the global corporation having corporate accounts while taxing more heavily those in the same industry targeting individual renters. This is NOT FREE MARKET and has been getting more and more repressive these FEW DECADES OF CLINTON/BUSH/OBAMA.
Our public universities cannot lower tuition and open up to state citizens as they recruit wealthy students overseas while the university offers special tax packages to its employees. Public universities once never had enough funding to act as a corporation---all its revenue had to go to classroom and facilities.
Always check UMB's discount program against any special promotional rates that may be offered at your renting location. Discount numbers should be given at the time the reservation is made.
- Discount rates are available for most size vehicles. Rates may also vary depending upon regional pricing. Tax and surcharges may be added at certain locations.
- Depending upon the location, rental car companies may require the primary driver to be at least 25 years of age and hold a major credit card.
- Rates should include unlimited mileage, but ALWAYS VERIFY this at time of rental.
- Alamo, Avis and Budget rates should include a collision damage waiver, but ALWAYS VERIFY this at time of rental.
- When renting a vehicle, make sure to see the updated Fleet Manual PDF for insurance coverage purposes.
This is how global corporations these several decades in overseas Foreign Economic Zones got employees to think of their corporate welfare as trumping societal/community welfare------all benefits come from a corporation and not from our government. Now we fight one another to be on team global corporation because they give us the social benefits that used to come to everyone equally as citizens living in US---living in US cities. When US citizens become more and more dependent on place of employment for everything including whether one is TAXED AND FEED to death---we have lost our American equal rights of citizens.
What Are All Those Weird Fees on Your Rental Car Receipt?
Then One/WIRED 12/23/2014 Jordan Golson
The holidays are great and all, but for those of us living across the country or around the world from our friends and relatives, slogging over long distances quickly becomes a pain. Combine dealing with travelers who have seemingly never flown before, TSA security checks, and the pain that is renting a car, it's enough to make one stick to FaceTime video chats. Especially when you take your finances into account.
We know airlines are making gobs of cash by charging extra for things like checked baggage and extra legroom, but take a look at your latest car rental receipt, and you'll see you're paying for a lot of things that aren't related to, you know, getting a car. What, for example, is a concession recovery fee? Why does renting an Impala for three days come with a convention center surcharge? And why on Earth am I paying a daily facility charge when the whole point is that I'm taking the car out of the facility?
It turns out all those taxes and surcharges aren't hard to decipher ways for the rental companies to wring more cash out of you. They're hard to decipher ways for local governments and airports to wring more cash out of you. In addition to the standard sales taxes that states and municipalities apply to all purchases, special taxes are often levied on car rentals because politicians would rather tax visitors, who can't boot them out of office, than their own constituents, who can.
"Politicians are reluctant to choose a sales tax," says Sharon Faulkner, executive director of the American Car Rental Association, an industry lobbying group, because it immediately hits the wallet of all their constituents. Instead, "they try to hide it from the consumer and charge it on the car rentals." City and state leaders "are always looking for money from whatever source they can."
For a nearly two-week rental from Enterprise at Boston's Logan Airport last month, we paid six different taxes and surcharges. Here's what we forked over cash for, and where our money went:
Convention Center Surcharge ($10 per rental)
All vehicle rental transactions in the City of Boston are subject to this $10 "surcharge", meant to help pay for the construction and renovation of convention centers in five Massachusetts cities. Taxing car rentals to pay for civic projects like convention centers or stadiums is a frequent practice. "It has to do with tourism," says Faulkner, so politicians are happy to make tourists and business travelers pay.
Vehicle License Recovery Fee ($2 per day)
It's common practice to charge rental companies much higher fees to register and title their vehicles to increase revenue for motor vehicle departments. Some state legislatures allow car rental companies to pass on some of those costs directly to the customer in the form of license recovery fees.
Parking Surcharge ($0.60 per rental), Customer Facility Charge ($6 per day), & Concession Recovery Fee (11.11 percent)
These three are all related to the airport itself. Airports are expensive places to build and operate, particularly with huge unified car rental facilities and shuttle buses to move passengers around. To pay for those expensive services and billion-dollar buildings, airports charge car renters a wide variety of fees to cover their expenses.
Sales Tax (6.25 percent)
The standard sales tax on all purchases in the state.
The charges for civic projects like convention centers and stadiums, as well as the increased licensing fees for rental cars, are particularly galling to the American Car Rental Association. It views the taxes as "discriminatory", applied unfairly to one group of taxpayers—in this case, car rental customers. All these fees are likely to deter some folks from renting, meaning their overall profits decrease.
To fight this trend, the major car rental agencies have formed a trade group called Curb Automobile Rental Taxes, to direct consumers' anger toward local governments and away from the rental agencies themselves.
"Those are the ones that we don't have control over," says Faulkner. "We don't have a choice but to collect it and pay it to the appropriate county or state." Some of the fees are set up to pay for a particular project, and legislatures promise that the fee will be eliminated when the project is completed. However, that seems to rarely happen, and the money is instead directed to a different project. New York State, for example, has an additional 6 percent state-wide "special" sales tax on the rental cars, in place since 1990, with an additional 6 percent "special supplemental" tax added in 2009 on cars rented in New York City and several surrounding counties.
So why don't car rental agencies roll all these fees into the cost of the car rental itself? According to Faulkner, it's so governments can make sure they're getting all the money to which they are entitled. "It makes it easier for the municipality to audit," she says. "The airport has to know that you're paying your concession fees correctly, that the rental agency is not keeping any of these funds."
And for those entities, car rentals are an easy target, Faulkner says. It's, "Oh look! We can fund this, we can fund that, and they add another tax."
This is the biggest reason why renting a car off-site from the airport, from a neighborhood rental outlet for example, is so much cheaper than the rental desk at the airport—renters don't have to pay all the concession and facility fees that an airport requires. But good luck getting there without a car.
The US had a moderately successful period of TAX UNIFORMITY before consolidations to monopoly and then global monopoly. Corporations were earning profits but not enough to create winners and losers inside their own corporate structure and then extended to surrounding communities. As corporations started using BENEFIT PACKAGES to lure the best workers we first saw the distortion of TAX UNIFORMITY----then we saw the loopholes tied to denying those same corporate workers those benefits. Pensions were used as global Wall Street fodder---health plans were dismantled before aging employees really needed them ---and here we see what was a tax/fee benefit is now being called increased income. An employee is taking that rental car because they are traveling for work----but slowly they are seeing that cost take from their annual income.
Individual citizens renting cars have for these few decades footed the heavier tax burden now it is coming back to global corporate workers.
Below we see tax talk on health care benefits to employees and as with the car rental industry we see these tax enforcement hitting small health care businesses with global corporations not paying taxes. Since MOVING FORWARD includes global corporate campuses having their own health, education, car rental corporations enfolded into that global corporation ----they now do not need to shelter employees. Global corporations are the tax welfare queens now wanting more taxes collected from 99% of citizens.
When US citizens allow this WINNERS AND LOSERS tax policy expand of course we all become LOSERS----this is NOT left Democratic tax policy---it is right wing corporate tax policy and will become more and more regressive. if we keep thinking WE ARE WINNERS at this corporation allowing the breakdown of tax uniformity then that status will change FAST---as we see these few decades.
The term TAX AND SPEND DEMOCRATS has always been propaganda----left social progressive taxation simply builds tax equity INCLUDING CORPORATIONS---and makes sure that tax revenue comes back to communities so citizens benefit from taxes they pay.
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Talking Tax: Employee discounts can be taxable income
Talking Tax: Employee discounts can be taxable income
By: Peter G. Robbins, CPA September 13, 2012 on Talking Tax: Employee discounts can be taxable income
Q: I have a small dental practice in Twin Falls. One of my dentist friends was recently audited by the IRS, and she and her employees had to pay additional tax because the employees and their families paid less than the normal rates for dental services. Why would they have to pay more tax when she charged less? I do the same for my employees and am concerned I may have the same problem.
A: There are very specific rules on providing discounts to employees under the fringe benefit provisions of the Tax Code. While these rules certainly apply to your business as a dentist, they actually apply to any business that offers employee discounts on either goods or services.
Generally we are taxed on all income we receive from any source unless there is a specific exclusion in the law. And income is very broadly defined, so it includes money as well as other economic benefits we receive. Employees who are given a discount off the regular price of a service are actually receiving an economic benefit by way of not having to pay the full price for the service they are receiving. As an example, if the normal cost of a dental procedure is $100, but the employee is only charged $90, the employee has received an economic benefit of $10. Absent a specific exclusion in the Tax Code, this $10 benefit would be considered taxable income to the employee.
Fortunately, the law does provide for certain exclusions from this harsh treatment. The first of these rules pertains to the “no-additional-cost service.” This is a service that is normally offered to a company’s customers in the ordinary course of business, and where the company incurs no substantial additional costs in providing the service to the employee.
While this might seem to apply to a dental practice, there is a catch. This rule will only apply to “excess capacity services.” These are services such as a seat on an airplane, train or bus that would otherwise go empty if not given to an employee. But professional services such as medical, legal or accounting services are not eligible for this exemption.
Employee discounts on services not falling under the “no-additional-cost service” exemption can still be treated as non-taxable fringe benefits, but only to the extent that the discount is no more than 20 percent of the normal price of the service (the 20 percent discount rule also applies to the purchase of goods by an employee). So in my example above, the $10 discount would not be taxable since it is only a 10 percent discount off the regular price.
However, if the employee only paid $75 for a service that normally costs the general public $100, there would be taxable income triggered. Of the total discount of $25, the first 20 percent ($20) would be excluded, but the remaining $5 would be taxable income to the employee.
So your dentist friend was most likely providing services to employees at a more than 20 percent discount. As a result, the IRS examiner would want to include any discount more than 20 percent in the employees’ taxable wages and also assess additional payroll taxes (Social Security and Medicare tax).
But for health care businesses such as a dental practice, there is another aspect that the IRS apparently overlooked in the audit you described. Employer-provided health care benefits are a tax-free fringe benefit under other Tax Code provisions. Our firm encountered an IRS exam of a dentist who was providing gratis dental work to his employees. The IRS initially asserted that most of these services (other than the 20 percent portion) were a taxable benefit. But the issue evaporated when we reminded the examiner of the special tax-free fringe rules for health care benefits.
These fringe benefit rules can be complex, so be sure to check with your tax adviser to see what applies to your business and how to avoid problems in the future. And don’t forget to gently remind your employees of the nice tax-free benefit they are getting. Employees often forget that these fringe benefits really are part of their total compensation
While corporations were wiggling out of all taxation and worker benefit plans we see our GLOBAL WALL STREET NEO-LIBERAL University of Chicago telling us that eliminating corporate taxation is TRICKLE DOWN for the 99%. This is today----and this was the REAGANOMICs that moved the US to colonial extreme wealth extreme poverty status.
Why are WE THE PEOPLE shaking our fists at TRUMP when University of Chicago and its neo-liberal economics department are the source of very, very, very bad economic and tax policy? Who is leading the 99% in shaking our fists at Trump? These same Clinton/Obama neo-liberals pushing bad tax policy.
'Bob Lucas, the nobel-prize winning economist at the University of Chicago, once remarked that reducing or eliminating taxation on capital income was the closest thing he has ever seen to a free lunch, in terms of the concomitant increase in investment and economic growth that would create'.
The answer for a state and a US city in collecting more needed tax revenue is getting rid of businesses not wanting to pay taxes---that is the national and global corporate chains. Get rid of them and we get rid of all the ATTACKS ON TAX UNIFORMITY. Lots of small businesses replacing global corporate campuses will allow for lower small business taxation----this is where we were in tax policy before Reagan/Clinton-----this is to where we need to return. We need to remember this about that heavy tax rate on corporations by FDR New Deal era------that 90% rate lowered to 70% ----needed to come down over time. That extremely high tax rate was clawing back fraud-----having our corporate tax rate below 50% even at 40% was never a bad tax policy. Global 1% of course intend having ZERO TAXES on corporations which is what US FOREIGN ECONOMIC ZONE TAX FREE policies have done these few decades.
Today we have global Wall Street pols and players installing all these tax policies written for that corporate and wealth crowd-----CLINTON/BUSH/OBAMA----we also have had the same ROBBER BARON period that necessitated those FDR 90% corporate tax levels in clawing back corporate fraud. If you think you are a winner because your employer was a WINNER in these trillions of corporate fraud---you are setting the stage for our children and grandchildren to be GREAT BIG TAX LOSERS.
University of Chicago and CATO are the same FAR-RIGHT WING extreme wealth economics wanting no taxation on corporations.
May 22, 2017 @ 08:20 PM 1,110 2 FREE Issues of Forbes
How Would Corporate Tax Reform Benefit Workers?
Ike Brannon , Contributor
I write about fiscal and regulatory policy in Washington D.C. Opinions expressed by Forbes Contributors are their own.
Reducing the tax on capital income by reducing the corporate tax rate would undoubtedly result in an increase in capital investment, most economists would agree. Bob Lucas, the nobel-prize winning economist at the University of Chicago, once remarked that reducing or eliminating taxation on capital income was the closest thing he has ever seen to a free lunch, in terms of the concomitant increase in investment and economic growth that would create.
However, in the debate over the current tax reform, few people have discussed the impact that a lower corporate tax rate would have on the labor market. In a research paper forthcoming in Tax Notes, Andrew Hanson of Marquette University and I look at the empirical literature that examines the impact that corporate taxation has on the labor market--an aspect of tax reform that is not as well understood.
Put broadly, there are two different channels through which a lower capital tax rate can impact labor market decisions. The first is via the substitution effect: a lower capital tax rate makes plant and equipment cheaper, so firms have an incentive to substitute capital for labor.
But there is also the scale effect: reducing the cost of capital lowers the effective cost of doing business, so firms increase their scale of operations. As a result, businesses invest in more capital and labor.
The essential question is which effect dominates. Andrew and I reviewed the economic studies pertinent to this question and the evidence suggests that a lower corporate tax rate boosts employment and wages.
Put briefly, there are two different strands in the literature pertinent to this question: One strand studies the question via different corporate tax rates at the state level while the other looks at corporate tax rate differences across countries.
We believe that the state corporate tax rate differences are most relevant for understanding how a corporate tax rate reduction at the federal level may impact labor markets, because the economic environment is--of course--the same as it would be for federal rate changes.
The research is by no means unanimous of course, but the most relevant studies by our account (most notably by William Harden and William Hart) find that a one percentage point increase in the corporate tax rate would increase unemployment by .2%-.5%. A 10-20% reduction in the rate--the range that the Trump Administration has proposed-- would translate to a 2%-10% boost in long-run employment.
Ike Brannon is a visiting fellow at the Cato Institute and president of Capital Policy Analytics, a consulting firm in Washington DC.
When we allow our national media and our public universities to create these kinds of data and statements----we know they are corporate universities ---we know these national media outlets are not journalists because they are not telling WE THE PEOPLE THE 99% that all this is bogus ----and we allow statements of boosted long-run employment at the same time we are openly told employment will see great declines these coming few decades.
'A 10-20% reduction in the rate--the range that the Trump Administration has proposed-- would translate to a 2%-10% boost in long-run employment'.
Where do we protest and create civil economic disruption to reverse these policies?
AT THE INSTITUTIONS WRITING AND PROMOTING THESE POLICIES.
We should have NO PUBLIC UNIVERSITIES promoting NEO-LIBERAL ECONOMICS. TRUMP being the same as CLINTON/BUSH/OBAMA is going to install whatever tax policy they would----global 1% want zero taxation on global corporations as designated in US Foreign Economic Zone policy with tax obligations growing on small and regional businesses.
Like the recent $15 an hour wage policy -----the global corporations will not be paying that as they go robotic---it will be our regional and small businesses paying that higher wage and this ANTI-FREE MARKET policy will indeed kill that very local economic structure we need to stop MOVING FORWARD. This is the same goal in these business taxation policies----global corporations will be paying no taxes while smaller businesses are paying the slightly lower 10-20 % reduction----
Googling this tax issue has a long list of searches with articles PRETENDING Trump's tax plan helps SMALL BUSINESS which is the right wing conservative voters wanting relief from taxation during Obama indeed intended to kill small business. Here we see Trump's tax policy does the same even while national media is allowing Trump to pose right wing conservative. Global Wall Street does not intend to lower taxes on small businesses. Here is the problem for REAL LEFT SOCIAL PROGRESSIVES wanting to see that $15 a hour LIVING WAGE----we cannot do this NOW as global corporations are escaping enforcement---we must rebuild our local economies with small businesses which cannot compete RIGHT NOW ---with a crony corrupt anti-free market global corporate rule ---please consider the steps needs to get back to US social progressive economic policy---we must get back to real free market policy FIRST before we address LIVING WAGE. GET RID OF GLOBAL CORPORATE CAMPUSES FIRST----then work on Living Wage. We need US citizens to HAVE JOBS in order to have Living Wage.
Trump’s “small business” tax plan helps only the rich
Earn more than $700,000 under Trump’s “pass-through” business plan? Congrats. Everyone else? Sorry.
Updated by Alvin Chang@email@example.com May 16, 2017, 8:10am EDT
One of the central parts of President Trump’s tax plan is to cut taxes on what are called “pass-through” businesses. Proponents pitch that as a big boost for middle-class owners of small businesses.
But a new analysis from the Tax Policy Center finds that aside from making Trump personally a lot richer, the pass-through provision would almost entirely benefit the wealthy.
TPC finds that the plan could cut almost $2 trillion in taxes over 10 years, but the rich would reap nearly all the benefits:
Yes, there’s a tiny little bar for the bottom 80 percent.
TPC ran its analysis assuming both a 15 percent rate for pass-throughs (Trump’s plan) and a 25 percent rate (House Speaker Paul Ryan’s plan). In addition, they looked at a “broad” definition of income, which includes all owners of pass-through businesses, as well as a “narrow” definition, which only includes owners who are actively involved in the business.
TPC’s Howard Gleckman puts it into real numbers (emphasis mine):
With the broad income definition, three-quarters of the benefit would go to highest-income one percent of households, who make $700,000 or more. They’d get an average tax cut of about $76,000, or 4.8 percent of their after-tax income
By contrast, fewer than five percent of middle-income households would get a tax cut, averaging $370.
This goes counter to the rhetoric that tax breaks for pass-through entities help small businesses.
Just a refresher: Pass-throughs don’t pay corporate taxes but instead disperse money to their owners, who only have to pay individual taxes. That’s because it would be tough for someone owning, say, a small dry cleaning business to pay corporate taxes and individual taxes, which is what traditional corporations have to do. (We have a cartoonsplainer of it here.)
THESE SHAREHOLDERS HAVE NOT BEEN PAYING THESE CORPORATE TAX OBLIGATIONS THESE FEW DECADES AND OF COURSE WILL NOT WITH PASS-THROUGHS AS WELL.
Javier Zarracina / Vox But over time, more large corporations started organizing themselves as pass-through businesses — including the Trump Organization. And now a handful of very rich people earn the lion’s share of pass-through income.
Everyone else splits a smaller share:
And the wealthiest 1 percent of Americans are the biggest beneficiaries, earning about 69 percent of all pass-through income:
Javier Zarracina / Vox Right now, pass-throughs pay an effective federal tax rate of about 19 percent, according to the Treasury Department, which is significantly less than the 32 percent that traditional corporations pay on average. But Trump wants to help these pass-through businesses even more and cap their federal taxes at 15 percent, which would essentially create a special low-cost tax lane for some wealthy business owners — including Trump.
All discussion on internet over tax policy is coming from global Wall Street----either Bush global Wall Street neo-cons pretending to be real right wing conservatives---or Clinton global Wall Street neo-liberals pretending to be left social progressives in tax policy. IT IS ALL PROPAGANDA. If we know a media outlet is one of these two global Wall Street players then we know to look for how it skews policy goals.
ECONOMIC POLICY INSTITUTE is just that global Wall Street economic/tax policy think tank. The discussions on tax policy are real issues-----so looking at what issues need to be addressed ---this is a good site. Below we see the corporate tax policy written at the time US FOREIGN ECONOMIC ZONE policies were installed supposedly to address just these issues of what tax obligations US corporations that go global would have to US.
GLOBAL CORPORATIONS HAVE ALWAYS OWED TAXES ON INCOME GENERATED OVERSEAS. THEY SIMPLY USE THIS 'DEFERMENT' TAX POLICY TO KEEP FROM PAYING IT.
The solution for WE THE PEOPLE is no longer trying to figure out tax policies that will result in global corporations PAYING THOSE TAXES----THEY WILL NOT.
The solution is ending the status of global corporations operating inside US------they don't want to pay taxes then we don't want them. We know this Economic Policy Institute is a global Wall Street think tank because it goes on and one about how different policies are the solution---THEY KNOW DIFFERENT POLICIES ARE NOT THE SOLUTION.
'How U.S. multinational corporations are taxedSince the enactment of the Revenue Act of 1913, U.S. multinational corporations have been subject to a tax on their worldwide income. For U.S. corporations with foreign subsidiaries (known as controlled foreign corporations, or CFCs),3 the foreign-sourced active income of the subsidiary is not taxed until it is repatriated through dividend distributions to the U.S. parent company; this is known as deferral'.
Here we have a definite identification of EPI being a global Wall Street policy think tank and not looking for ways global corporations will pay taxes----the person writing this article is FAR-RIGHT WING GLOBAL WALL STREET tied to right wing and Bush neo-conservative institutions ----like global Johns Hopkins. He would not work there if he was trying to hold power accountable.
Please stop allowing these media and think tank discussions on tax policy make it seem they are interested in finding a corporate fairness model when we know the only solution is ENDING GLOBAL CORPORATE CAMPUS STATUS in US. GET RID OF GLOBAL WALL STREET PLAYERS WANTING TO CREATE NOTHING BUT US CITIES DEEMED FOREIGN ECONOMIC ZONES FILLED WITH GLOBAL CORPORATE CAMPUSES. This is the only way to return to TAX UNIFORMITY and ending tax subsidies killing our FREE MARKET ECONOMY.
'He has taught economics at Wayne State University, American University, and Johns Hopkins University. He has a Ph.D. in economics from the University of Michigan'.
The Simple Fix to the Problem of How to Tax Multinational Corporations — Ending Deferral
Report • By Thomas L. Hungerford • March 31, 2014
Issue Brief #378Download PDF
“Tax reform is dead—long live tax reform” appears to be the message coming out of Washington these days. On Tuesday, February 25, Sen. Mitch McConnell appeared to close the book on tax reform in this Congress when he told reporters, “I think we will not be able to finish the job.” The next day, Rep. Dave Camp, the chairman of the House Ways and Means Committee, unveiled his long-awaited comprehensive tax reform proposal. Later in the day, House Speaker John Boehner was asked about the Camp tax reform plan and replied with “blah, blah, blah, blah.”
However, while comprehensive tax reform may be on hold for a few years, reform of business taxes—the corporate income tax—is still being considered by the Obama administration and many in Congress. The contentious aspects of reforming the corporate income tax include even such basic issues as how to tax the profits of multinational corporations (MNCs). Some argue that the United States should adopt a territorial approach to taxing U.S. multinational corporations—that is, not taxing the profits they earn from overseas operation (or, in the jargon, their active foreign-source income). Others argue that the U.S. should move to a pure worldwide system in which active foreign-source income is taxed at U.S. rates as it is earned. The current U.S. system is between these two approaches: Active income of foreign subsidiaries of U.S. parent multinational corporations is taxed only when it is repatriated or paid to the U.S. parent corporation as a dividend. Not imposing taxes on income held abroad is known as deferral in that taxes are deferred until the income is repatriated.
This issue brief examines this contentious issue. The principal findings are:
- Rules to protect the U.S. corporate income tax base (that is, to ensure that corporate earnings are indeed subject to taxation), known as subpart F, have been weakened over the past several years by legislative and rule changes, shrinking the corporate income tax base and reducing revenue raised from corporate taxes.
- About 60 percent of multinational corporations’ foreign-source earnings and profits come from countries in which the firms have little business activity, evidence that these MNCs are using tax havens to avoid paying the U.S. corporate income tax.
- Fixing the problem of corporate income taxation does not require deeply complex reform that touches on every part of the tax code; instead it largely can be achieved simply by ending deferral. Ending deferral would move the U.S. closer to a pure worldwide system and could significantly increase corporate tax revenue, reduce profit shifting, increase investment in the U.S. by American multinational companies, and simplify the corporate income tax system.
- Ending deferral could increase corporate tax revenue by over $50 billion per year, or $500 billion over 10 years. The additional revenue could be used for education funding, infrastructure improvements, and other investments in America’s future.
Approaches to taxing multinational corporations
A multinational corporation (MNC) is a business that is incorporated and operates in one country (the home country) but also maintains operations in other countries. There are two basic approaches to how the home country taxes the income of a multinational corporation: the worldwide approach and the territorial approach.
Under the worldwide approach, the home country would tax the worldwide income of the MNC, regardless of where the income is earned.1 That is, both domestically earned and foreign-source income is taxed by the home country. Under this approach, the home country generally allows a credit or deduction for foreign taxes paid on foreign-source income to avoid double taxation. The worldwide approach results in capital export neutrality—that is, income from capital owned by home-country citizens faces the same tax burden regardless of where the capital is invested. Consequently, home-country multinational corporations would allocate their capital around the world based on economic considerations and not tax considerations. If all nations adopted a worldwide system, it would promote international efficiency in the allocation of capital.
Under the territorial approach, the home country only taxes the income earned within its borders; an MNC’s foreign-source income is not taxed by the home country. Of course, the foreign-source earnings may be subject to taxation by foreign countries. The territorial approach results in capital import neutrality—income from investments by all firms (domestic and foreign) in the same country is taxed at the same rate.
It is often argued that U.S. firms are at a competitive disadvantage when operating in lower-tax foreign countries because the U.S. worldwide approach in theory subjects foreign earnings of U.S. MNCs to the higher U.S. tax. The argument of competitive disadvantage, however, is, at best, debatable (Shoup 1974), and, more likely, highly questionable (Gravelle 2012a and 2012b).2 Furthermore, Gravelle (1994) notes that capital import neutrality is not really neutral in that the location of investment could be affected if different countries have different tax rates on capital income—in other words, investment decisions will continue to be based, at least in part, on tax considerations.
Different countries take different approaches to taxing MNCs. But none of the major developed countries has adopted a pure worldwide or a pure territorial system. Most countries have a hybrid tax system that falls somewhere between the two approaches.
How U.S. multinational corporations are taxed
Since the enactment of the Revenue Act of 1913, U.S. multinational corporations have been subject to a tax on their worldwide income. For U.S. corporations with foreign subsidiaries (known as controlled foreign corporations, or CFCs),3 the foreign-sourced active income of the subsidiary is not taxed until it is repatriated through dividend distributions to the U.S. parent company; this is known as deferral.4 Taxpayers, however, have been allowed a credit (since 1918 and a deduction before that) for foreign taxes paid on their foreign-sourced income to avoid double taxation—the foreign tax credit. Deferral and the foreign tax credit complicate the tax system and affect the amount of tax actually collected.
Firms benefit from deferral to the extent that the foreign tax rate is lower than the U.S. corporate tax rate. In response to the growing number of incorporations in tax havens (countries with low or no corporate tax) to obtain a tax advantage, the Kennedy administration proposed to eliminate deferral except for income earned in less developed countries that are not tax havens.5 Congress ultimately adopted the administration’s recommendation to end tax haven abuses with the addition of subpart F to the Internal Revenue Code, but did not end deferral in general.
Subpart F prohibits MNCs from deferring taxes on certain income known as “subpart F income.”
Subpart F income is generally income from passive investments rather than income earned from active business operations. Subpart F income is highly mobile income that easily can be shifted to low-tax jurisdictions; it is taxed as it is earned regardless of whether it is repatriated or not. The general trend, however, has been the weakening of subpart F with “check the box” and the enactment of the “look-through rule” (see the text box for more information).6 Sicular (2007, 349) notes that the look-through rule “effectively repealed antideferral rules for much of what subpart F of the Internal Revenue Code was originally intended to prevent.” The look-through rule expired at the end of 2013, but is part of the “tax extenders” package that Congress is considering.7 While it is likely to be extended, even if it isn’t, most of its adverse tax effects can be achieved through check-the-box regulations.
Check-the-box regulations and the look-through rule
Rather than shift investments to tax havens to take advantage of low taxes, firms find that the tax advantages can be achieved at lower cost by simply shifting profits to the tax havens. Indeed, over the past 20 years, rules from both the executive and legislative branches reducing the effectiveness of the antideferral rules of subpart F have increased offshore profit-shifting. The Treasury Department issued the check-the-box regulations in 1997, and Congress enacted the look-through rule as a temporary measure in 2006.
Income from many transactions between two foreign subsidiaries (CFCs) of the same U.S. parent is considered subpart F income and taxed by the United States. The check-the-box regulations were intended to simplify tax rules related to the classification of subsidiaries for tax purposes. The regulations essentially allow MNCs to transform a foreign subsidiary into a hybrid entity—a CFC that is recognized as a corporation in one tax jurisdiction (and taxed accordingly) but not in another tax jurisdiction. For example, suppose a U.S. parent corporation has one subsidiary in a low-tax country (CFC-low) and one in a high-tax country (CFC-high). If CFC-low extends a loan to CFC-high, then the interest paid by CFC-high to CFC-low would be considered passive or subpart F income of the U.S. parent and taxed by the U.S. (The interest payment would be a deductible expense by CFC-high in determining its tax liability in the high-tax country.) Under the check-the-box regulations, the U.S. parent can elect to have CFC-high considered as a disregarded entity (DRE) by literally checking a series of boxes on IRS form 8832. In other words, CFC-high is now considered a branch of CFC-low for U.S. tax purposes—the two CFCs are considered a single entity and, thus, there is no interest payment subject to tax from the perspective of the IRS.
The look-through rule, enacted in 2006 as part of the Tax Increase Prevention and Reconciliation Act, provides “look-through” treatment for certain payments between related CFCs; in essence removing certain passive income from subpart F and permitting much of what the check-the-box regulations allow.
Deferral provides an incentive to multinational corporations to keep foreign-sourced active income offshore because corporate taxes are not due until the income is repatriated. Furthermore, deferral also provides an incentive to shift income to low-tax jurisdictions and to keep it there. This is referred to as the “lock-out effect.” One method often used to shift profits from relatively high-tax countries (such as the United States) to low- or no-tax countries (tax havens) is transfer pricing—the pricing of intellectual property rights and other intangible assets when transferred from the U.S. parent company to an offshore affiliate. The problem with this is that a multinational’s “profits may be artificially inflated in low-tax countries and depressed in high-taxed countries through aggressive transfer pricing that does not reflect an arms-length result from a related-party transaction” (JCT 2010, 5).
The deferral of tax on active foreign-source income results in lower corporate income tax revenue. As a matter of fact, it is listed as the largest corporate tax expenditure by the Joint Committee on Taxation (JCT 2013).8 JCT estimates that deferral will reduce corporate income tax revenue by $265.7 billion between 2013 and 2017—over $50 billion per year on average.
Although the United States does tax the worldwide income (domestic and foreign-source) of U.S. nationals (individuals and corporations), it takes into consideration the fact that the country where the income is earned may also tax that income. To prevent double taxation of income, the U.S. allows a credit for foreign taxes paid. But to protect the tax base, the U.S. limits the amount of the foreign tax credit to what the taxpayer’s tax liability on the foreign-source income would be under the U.S. tax code.
Since 2004, businesses have calculated their foreign tax credit separately for two different “baskets” of income—passive income and general income (mostly active income).9 Within each basket, excess credits generated in high-tax countries (that is, potential credits that could not be used because the foreign tax liability is higher than what would be owed under the U.S. tax code) can be used to offset U.S. taxes due on income earned in low-tax countries. Excess credits can effectively offset much or even all of the U.S. tax liability on income repatriated from tax havens. This is known as cross-crediting and has become more extensive over time as the foreign tax credit rules have changed in favor of multinational corporations. Before 1976, cross-crediting was limited because the foreign tax credit was calculated separately for each country—known as the per-country limit. After 1976, the per-country country limit was abandoned and separate limits for different categories of income were adopted. There were nine categories or baskets of income until 2007 and only two baskets after 2007, thus making cross-crediting easier.
U.S. multinational corporations and their controlled foreign corporations
In 2008, U.S. corporations reported having 83,642 controlled foreign corporations.10 These CFCs had $14.5 trillion in assets at the end of the tax year and $662.0 billion in before-tax earnings and profits. Information for CFCs of U.S. corporations in selected countries is reported in Table 1. The table includes 16 countries that appear on one or more lists of tax havens and 12 developed nations that are not tax havens.11
CFCs in the selected tax haven countries account for about 19 percent of the total number of CFCs (see column 1), but account for 60 percent of all CFC before-tax earnings and profits (see column 2). Compare this to 12 large countries with significant U.S. MNC presence—this group accounts for one-third of all CFCs but less than a quarter of total earnings and profits. It is important to keep in mind that the tax haven countries are not large economic powerhouses; the combined GDP of the 16 tax haven countries listed in the table is less than Italy’s GDP.
The last column of the table reports, for each country, the CFCs’ earnings and profits as a percentage of the country’s GDP. For tax havens, profits from CFCs are often very large compared with the country’s GDP. In four cases it is many times larger than GDP—from two times to nearly 20 times as high. It is difficult to imagine that these profits are due to economic activities actually undertaken in these specific countries. In the large developed countries we examine, CFC earnings and profits tend to be very small compared with the country’s GDP.
Costa and Gravelle (2010) find that U.S. business income in low-tax countries is high relative to actual business activity (e.g., employment and physical assets) in these countries. Grubert (2012) shows that a large gap between the U.S. tax rate and foreign tax rate leads to an increase in the share of income in that country but not an increase in sales in that country.
This research combined with the information in Table 1 provides ample evidence of rather aggressive profit shifting by multinational corporations.
Earnings and profits of U.S. multinational corporations’ foreign subsidiaries (CFCs), 2008
Number of CFCs
Earnings and profits before taxes (millions $)Earnings and profits as a percent of GDPAll geographic regions
Selected tax havens
British Virgin Islands4197,876937.90%
Panama (including Canal Zone)2821,8328.00%
Percent of total–all regions18.60%59.90%
Selected developed countries (excluding tax havens)
Percent of total–all regions33.20%21.30%
Source: Internal Revenue Service's Statistics of Income, and GDP data from CIA and IMF
How much money is “trapped” overseas?It has been widely reported that U.S. multinationals claim an estimated $2 trillion “permanently” reinvested offshore income—in essence, income locked out of the United States and hence unlikely to ever be subject to the U.S. corporate income tax. Yet many CEOs have argued that these funds could well return if another repatriation “holiday” allows these funds to return to the U.S. and face a more “reasonable” tax rate of, say, 5.25 percent or even lower (compared with the normal 35 percent tax rate).12 This is not a vain hope on the part of these CEOs; there was indeed such a repatriation holiday in 2004. To boost the case for offering a repatriation holiday, many CEOs (and some policymakers) argue that the repatriated funds will lead to increased investment and create jobs in the United States as well as increase corporate tax revenue.
There is, however, some disagreement over how much is actually permanently reinvested overseas. Zion, Varshney, and Burnap (2011) estimated that S&P 500 companies had almost $1.3 trillion in undistributed foreign earnings in 2010—double the amount in 2006. A May 2012 study by J.P Morgan analysts found that multinational corporations have over $1.7 trillion in undistributed foreign earnings (Chasan 2012). A more recent study reportedly estimates that $1.95 trillion is indefinitely invested overseas (Murphy 2013). Although it is indefinitely invested overseas, a large chunk is reportedly sitting in U.S. bank accounts or in U.S. Treasury securities (Linebaugh 2013). In other words, much of these permanently reinvested overseas earnings are actually invested in U.S. liquid assets rather than in foreign physical assets. Furthermore, many observers argue that U.S. multinationals are able to tap their overseas earnings without paying U.S. tax (Drucker 2010).
The term “permanently reinvested earnings,” however, is an accounting term rather than a description of actual investment in overseas tangible assets. Multinational corporations have two options regarding the financial reporting of foreign-source earnings that are not immediately repatriated. First, the MNC can recognize an expense for expected taxes due when the earnings are eventually repatriated. This reporting helps the MNC’s investors understand the potential liabilities of the firm. Second, the MNC can use an accounting rule known as the “Indefinite Reversal Exception” to defer recognizing the tax expense until the earnings are actually repatriated. In essence, the MNC declares that the earnings are permanently reinvested, which increases reported after-tax profits. Krull (2004, 765) finds evidence that MNCs designate earnings as permanently reinvested “to manage earnings in order to meet analyst forecasts.”
Evidence prior to 2000 suggests that the repatriation rate (repatriated earnings as a proportion of foreign earnings) was about 40 percent (Hines 1999; Desai, Foley, and Hines 2007). After 2000, the repatriation rate appears to be substantially lower, closer to 20 percent (Gravelle 2012a).13 This could possibly be due to the anticipation and aftermath of the 2004 repatriation holiday (the repatriation rate for 2005 is not included in this estimate). Brennan (2010) presents evidence that firms increased the share of foreign earnings that were “permanently reinvested” overseas after the repatriation holiday. He suggests that one of the consequences of the holiday was to lead firms to expect future repatriation holidays and to hoard foreign earnings overseas.14
Summary of the problem of taxing multinational corporations
The principal problem with the current corporate tax system is the erosion of the corporate income tax base. Multinational corporations have used aggressive tax planning techniques to shift profits from the U.S. (and other high-tax countries) to tax havens, which has led to a dramatic build-up of earnings in tax havens over the past 10 to 15 years. Consequently, many large corporations pay low or even no federal income taxes.15 And, despite rising corporate profits, corporate tax receipts have been falling as a proportion of total federal revenue.16
But base erosion is not the only problem. A second problem is the complexity of the current tax code regarding multinational corporations. The rules for both the foreign tax credit and subpart F are complicated for firms to comply with and for the IRS to administer.17 Multinational corporations’ tax lawyers and accountants spend a great deal of time and effort to exploit the rules to minimize U.S. tax liability. The IRS must expend resources to administer and enforce the rules as well as to detect and prosecute fraudulent claims, which is increasingly difficult as the IRS budget has steadily fallen since 2010.18
The Camp policy option
Some policy analysts and policymakers, such as House Ways and Means chairman Dave Camp, have advocated that the U.S. adopt a mostly territorial tax system. The Camp plan would allow multinational corporations to deduct 95 percent of repatriated foreign-source CFC active income from taxable income.19 With a 25 percent statutory corporate tax rate, this foreign-source income would be taxed by the U.S. at a 1.25 percent tax rate (with no foreign tax credit). Subpart F income would continue to be taxed at the statutory tax rate as it is earned.
The $2 trillion in accumulated offshore income would be taxed under a transition rule. The income would be included in taxable income, but up to 90 percent of noncash earnings and 75 percent of cash earnings would be deductible--in other words, this income would be taxed at a 3.5 percent or 8.75 percent tax rate whether or not it is repatriated. Foreign tax credits would be partially available. Additionally, firms would be allowed to pay the taxes over eight years.20
A territorial system, however, does not address the problems of the current international business tax system. As a matter of fact, this system would probably exacerbate the problems. Not taxing foreign-source active business income strengthens the incentive for U.S. multinationals to shift profits overseas and claim that this income is permanently reinvested overseas.
Furthermore, passive (and hence readily mobile) income will continue to be taxed as it is earned under the Camp plan. To protect the tax base, the Camp proposal attempts to strengthen subpart F. The foreign tax credit is also retained to prevent the double taxation of subpart F income. Consequently, two major rules contributing to the complexity of the tax system would remain in the tax code, which all but guarantees continued full employment for tax lawyers. And if the IRS’s budget continues to be reduced, then the tax base will be further eroded as tax lawyers find more and more tax loopholes with no IRS push back.
The Baucus discussion draft
Sen. Max Baucus, chairman of the Senate Finance Committee before he was chosen to be the ambassador to China, released a staff discussion draft for international business tax reform.21 The discussion draft contains two options for taxing the foreign-source income of multinational corporations—they are dubbed “Option Y” and “Option Z.” Both options are hybrid systems (that is, between a territorial system and worldwide system). The options would expand subpart F to include more income as subpart F income to prevent profit shifting. Additionally, the options would repeal check-the-box and look-through rules.
Option Y moves toward a partial territorial system. The foreign-source income of CFCs is divided into two categories. One is foreign income earned from selling products and services to U.S. customers; this income would be taxed as it is earned at the full U.S. corporate tax rate.22 The other category is foreign income earned from selling products and services in foreign markets. If this income is subject to an effective foreign tax rate that is at least 80 percent of the U.S. corporate tax rate, then the income is exempt from U.S. taxes when repatriated. If the effective foreign tax rate is less than 80 percent of the U.S. rate, then the income is considered subpart F income and taxed currently with a deduction for 20 percent of the deemed dividend and a foreign tax credit. Essentially, all foreign income is subject to a tax rate that is at least 80 percent of the U.S. tax rate (though not necessarily taxed by the U.S.).
Option Z, as with Option Y, would have the same two categories of foreign-source income, each taxed differently. Income earned from selling products and services to U.S. customers would be considered subpart F income and taxed accordingly (i.e., as it is earned at the full U.S. tax rate). Other foreign income would be taxed with a 40 percent deduction (essentially at a tax rate that is 60 percent of the U.S. rate) if it is active foreign market income and with no deduction if it is not active income (taxed at the full U.S. corporate tax rate). The foreign tax credit is retained for the foreign income that is included in taxable income.
Both options add to the complexity of the corporate income tax by taxing different categories of income at essentially different tax rates. The plans retain the two provisions contributing to the complexity of the corporate tax: the foreign tax credit and subpart F. Since foreign-source income is taxed more lightly than domestic income, the tax incentives to shift profits and investments overseas is not eliminated.
A better policy option
Wholesale tax reform is unlikely this year or in the next Congress. But many of the problems with taxing multinational corporations could be addressed without sweeping tax reform. The tax system could be shifted closer to a pure worldwide system simply by eliminating the largest corporate tax expenditure: deferral. The incentive to shift profits and invest overseas is eliminated. Firms would no longer base investment decisions on the tax implications of those decisions. And corporate income tax revenue could increase by over $50 billion per year, or $500 billion over 10 years.
Furthermore, with all foreign-source income taxed as it is earned, subpart F and all of its associated headaches could be eliminated, thus somewhat simplifying the tax code.23 Of course, the foreign tax credit (and associated headaches) would remain to avoid double taxation of foreign-source income, but it too could be simplified and strengthened to reduce cross-crediting issues.
Such a policy was proposed when Senators Ron Wyden and Dan Coats introduced the Bipartisan Tax Fairness and Simplification Act of 2011 (S. 727) in the 112th Congress.24 This was a comprehensive tax reform plan that would have changed both the individual income tax and corporate tax systems. The proposal would have broadened the tax base by eliminating several corporate tax expenditures and reduced the corporate tax rate to 24 percent (from the current 35 percent). The international business tax reform would have moved the corporate tax system much closer to a pure worldwide approach by eliminating deferral; all CFC income would have been taxed as it was earned. The foreign tax credit would have been modified to reduce the problem associated with cross-crediting by adopting a per-country limit on the credit.25
Some have argued that foreign-source income should not be taxed by the U.S. because it is not earned here and does not benefit from government actions and protections. However, the Supreme Court got it right in 1924—U.S. citizens and their property benefit from the U.S. government. Many goods produced and sold by U.S. subsidiaries were developed in the U.S. with the help of various tax breaks for R&D (think of the many Apple Inc. products, such as iPhones and iPads). Many of the “foreign” assets (tangible and intangible) are protected by U.S. patent, copyright, and trademark laws.
It is often argued that our tax system is broken beyond repair, especially with regard to multinational corporations. Some claim that our worldwide approach to taxing the income of multinational corporations leads to the offshoring of profits and jobs, and that we must exchange the worldwide approach for the territorial approach. This claim, however, ignores one key fact: The problem is not the worldwide approach, the problem is deferral. Deferral allows multinational firms to postpone paying U.S. tax on foreign-source income until it is brought back or repatriated to the U.S. If this income remains offshore indefinitely, then the firms indefinitely escape paying U.S. taxes. Deferral provides multinational corporations a large incentive to move profits, investment, and jobs offshore.
Although a variety of very different reforms have been proposed to change how the United States taxes U.S. multinational corporations, none of the major proposals in the 113th Congress gets to the heart of the problem: deferral. Simply eliminating deferral and taking a pure worldwide approach could remove the incentives to shift profits, investment, and jobs overseas. In addition, eliminating deferral would broaden the tax base and raise much needed tax revenue—revenue that could be used for education funding, infrastructure improvements, and other investments in America’s future.
About the author
Thomas L. Hungerford joined the Economic Policy Institute in 2013 as a senior economist and is also director of tax and budget policy. Prior to joining EPI, Hungerford worked at the General Accounting Office, the Office of Management and Budget, the Social Security Administration, and the Congressional Research Service. He has published research articles in journals such as the Review of Economics and Statistics, Journal of International Economics, Journal of Human Resources, Journal of Urban Economics, Review of Income and Wealth, Journal of Policy Analysis and Management, Challenge, and Tax Notes. He has taught economics at Wayne State University, American University, and Johns Hopkins University. He has a Ph.D. in economics from the University of Michigan.
'The tax system could be shifted closer to a pure worldwide system simply by eliminating the largest corporate tax expenditure: deferral'.
When citizens say TAX TECHNOLOGY CORPORATIONS as the policy towards stopping the attack on employment with replacement by artificial intelligence and robotics---we KNOW this will not happen. Once we go global online we have lost any way towards oversight and accountability to know what taxes are owed.
Here we see MOVING FORWARD TAX POLICY---from global Wall Street Bush neo-con Texas and this is the standard for CLINTON/OBAMA NEO-LIBERALS as well--remember CLINTON/BUSH/OBAMA NOW TRUMP all the same MOVING FORWARD.
The far-right wing global Wall Street neo-liberal education policies always say this helps the poor so we need to cut taxes even as higher education technology corporations are the current CORPORATE WELFARE QUEENS and filling our local economies with fraud and corruption.
JUST AS BUSH FAMILY HAVE DONE FOR SEVERAL DECADES-----ONCE FOR THEIR ENERGY CORPORATIONS---THEN THEIR GLOBAL BIG AG AND BIG MEAT----NOW THEIR GLOBAL EDUCATION CORPORATIONS.
From where does global online higher education corporations come? From far-right global Wall Street CA----WA-----MA-----NY-NJ-----all CLINTON/OBAMA NEO-LIBERAL states. This is how we know it is a tag-team CLINTON/BUSH/OBAMA----same tax policies.
This state assembly tax policy was introduced in 2015 during Obama and was held at bay only for a short period----folks better know these state assemblies will MOVE FORWARD these tax policies making it impossible for WE THE PEOPLE THE 99% TO REBUILD OUR LOCAL ECONOMIES and protect against growing REGRESSIVE TAX POLICY.
Texas Tax Exemption for Higher Education
Technology Corporations Amendment (2015)
Not on Ballot
This measure was not put
on an election ballot
The Texas Tax Exemption for Higher Education Technology Corporations Amendment was not on the November 3, 2015 ballot in Texas as a legislatively referred constitutional amendment. The measure, upon voter approval, would have exempted research technology corporations created by public or private higher education institutions from personal property taxation.The measure would have defined a "university research technology corporation" as a "special-purpose corporation created to develop and commercialize technologies that are owned wholly or partly by a public or private institution of higher education in Texas or by a nonprofit medical center development corporation with members that are institutions of higher education in Texas."
The measure was introduced into the Texas Legislature by Rep. Gary Elkins (R-135) as House Joint Resolution 64.
Text of measure
Ballot titleThe proposed ballot title was:
“The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of certain property owned by or leased to or by a university research technology corporation.”Constitutional changesSee also: Article 8, Texas Constitution
The proposed amendment would have added a Section1-p to Article 8 of the Texas Constitution.
The following text would have been added by the proposed measure's approval:
Sec. 1-p.(a) In this section, "university research technology corporation" means a special-purpose corporation created to develop and commercialize technologies that are owned wholly or partly by a public or private institution of higher education in this state or by a nonprofit medical center development corporation with members that are institutions of higher education in this state.
(b) The legislature by general law may exempt from ad valorem taxation:
(1) the ownership interest of a university research technology corporation in real and tangible personal property;
(2) the ownership interest of a nonprofit medical center development corporation in real and tangible personal property leased to or used or occupied primarily by a university research technology corporation; or
(3) the leasehold interest of a university research technology corporation in real and tangible personal property leased from a nonprofit medical center development corporation.(c) The legislature may impose eligibility requirements for an exemption authorized by this section.
OfficialsPath to the ballot
See also: Amending the Texas ConstitutionThe proposed constitutional amendment was filed by Rep. Gary Elkins (R-135) as House Joint Resolution 64 on January 5, 2015.
A two-thirds vote in both chambers of the Texas State Legislature was required to refer this amendment to the ballot. Texas is one of 16 states that require a two-thirds supermajority vote in both chambers. The Texas House of Representatives approved the amendment on April 27, 2015, with 131 representatives voting "yea" and nine voting "nay." The measure was not approved by both chambers of the legislature.
We shared Maryland's regressive tax policy on car rentals---well, Maryland is a state of super-sized FEES AS TAXATION because it has maxed on tax rates. We no longer look at income tax or sales tax rates as indicators of a REAL left social progressive tax state as now services and public works is to where tons of regressive taxation are happening.
The list below places our GLOBAL WALL STREET CLINTON/OBAMA states top in taxation along with Bushes' Texas right in there ------this is how we know WE THE PEOPLE are getting soaked in taxes and fees as US cities deemed Foreign Economic Zones kill any taxation on global corporations.
LOOK AT THE LOCAL TAX RATES AND FEES AS THEY GROW HIGHER THAN STATE WHICH IS HIGHER THAN FEDERAL.
Maryland citizens have to listen every day as our media outlets and global Wall Street 5% pols and players spin these tax policies to sound like something is happening for the 99% of WE THE PEOPLE-----Look at CA, WA-------GLOBAL GREEN TECHNOLOGY CORPORATION central.
Coverage and Speed
How Wireless Works
Taxes and Fees
State Tax Rankings
Fair Funding for 911
State Tax Rankings
Where Does Your State Stand?
Taxes and Fees on Monthly Wireless Service, July 2016
Rank State State-Local Wireless Rate Federal Rate (USF) Combined Federal/ State/ Local Rate
1 Washington 18.78% 6.64% 25.42%
2 Nebraska 18.67% 6.64% 25.31%
3 New York 18.04% 6.64% 24.68%
4 Illinois 17.84% 6.64% 24.48%
5 Pennsylvania 15.70% 6.64% 22.34%
6 Rhode Island 14.82% 6.64% 21.46%
7 Missouri 14.79% 6.64% 21.43%
8 Florida 14.70% 6.64% 21.34%
9 Arkansas 14.67% 6.64% 21.31%
10 Kansas 13.78% 6.64% 20.42%
11 South Dakota 13.72% 6.64% 20.36%
12 California 13.55% 6.64% 20.19%
13 Alaska 13.54% 6.64% 20.18%
14 Puerto Rico 13.49% 6.64% 20.13%
15 Maryland 12.83% 6.64% 19.47%
16 Utah 12.73% 6.64% 19.37%
17 North Dakota 12.39% 6.64% 19.03%
18 Arizona 12.25% 6.64% 18.89%
19 Tennessee 12.10% 6.64% 18.74%
20 District of Columbia 11.70% 6.64% 18.34%
21 Texas 11.58% 6.64% 18.22%
22 New Mexico 11.33% 6.64% 17.97%
23 Indiana 11.22% 6.64% 17.86%
24 Oklahoma 10.92% 6.64% 17.56%
25 Colorado 10.84% 6.64% 17.48%
26 Kentucky 10.77% 6.64% 17.41%
27 South Carolina 10.64% 6.64% 17.28%
28 Minnesota 9.98% 6.64% 16.62%
29 Alabama 9.92% 6.64% 16.56%
30 Mississippi 9.24% 6.64% 15.88%
31 Georgia 9.63% 6.64% 16.27%
32 New Jersey 9.02% 6.64% 15.66%
33 Iowa 8.81% 6.64% 15.45%
34 Maine 8.71% 6.64% 15.53%
35 New Hampshire 8.68% 6.64% 15.32%
36 Wisconsin 8.61% 6.64% 15.25%
37 North Carolina 8.57% 6.64% 15.21%
38 Vermont 8.50% 6.64% 15.14%
39 Massachusetts 8.49% 6.64% 15.13%
40 Louisiana 8.79% 6.64% 15.43%
41 Ohio 8.44% 6.64% 15.08%
42 Wyoming 8.18% 6.64% 14.82%
43 Michigan 7.98% 6.64% 14.62%
44 Hawaii 7.68% 6.64% 14.32%
45 Connecticut 7.49% 6.64% 14.13%
46 West Virginia 6.72% 6.64% 13.36%
47 Virginia 6.68% 6.64% 13.32%
48 Delaware 6.34% 6.64% 12.98%
49 Montana 6.21% 6.64% 12.85%
50 Idaho 2.26% 6.64% 8.90%
51 Nevada 2.09% 6.64% 8.73%
52 Oregon 1.84% 6.64% 8.84%
Weighted Avg. 11.93% 6.64% 18.57%
Simple Avg. 10.70% 6.64% 17.34%
Source: Tax Foundation Fiscal Fact, Wireless Tax Burdens Rise for the Second Straight Year in 2016. Publication no. 527. Scott Mackey & Joseph Henchman, Sept. 2016.