Ongoing discussions of corporate tax reform in Washington continue to focus on shaving a few points off the income tax rate. Would that be enough to restore the nation’s global tax competitiveness? Peter Merrill doesn’t think so. Merrill, principal and director of national economics and statistics with PwC’s Washington National Tax Services practice, believes that any rate cut should go much deeper, and has also argued in favor of increased reliance on consumption taxes (such as a value-added tax, or VAT – an option that, to say the least, hasn’t had an enthusiastic reception from corporate leaders). I asked Merrill for his take on the current state of play. more

Remember back in the early days of Sarbanes-Oxley, when we kept seeing all those reports that the leading cause of companies running afoul of the new law was problems with their tax reporting?

That’s all under control now, right? more

As corporate tax reform takes center stage in Washington and Tim Geithner prepares for his meeting with leading CFOs on Friday, discussions of the United States’ tax competitiveness seem stuck around one number: the statutory corporate income tax rate of 35 percent. This rate is, as the business press has been reminding us ad nauseam, the second highest among the nations in the Organization for Economic Cooperation and Development (after Japan – which, however, plans to slash five percentage points off its corporate rate in April, leaving the U.S. with the embarrassment of the highest combined state/national rate in the OECD).

The problem with this focus is that it doesn’t give the full picture of the country’s tax competitiveness. What about tax credits and subsidies? Income tax is only part of the story; what about payroll and property taxes? What about (increasingly important) non-OECD competitors? Compliance costs? Factor in all these and you might be tempted to argue that the U.S. is actually a fairly friendly place to do business.

But you’d be wrong. more

This kind of thing really gets my goat.

President Obama has been on a drive to ensure that the federal government doesn’t give out contracts to companies that are delinquent on their taxes, as I noted here. But according to a report released today, one agency that regularly does exactly that is … the IRS. more

The weaknesses of spreadsheets as a tool for the tax provision is a topic I’ve covered before in this blog (here), so I was intrigued to come across a devastating critique of this not-so-best practice from global business advisory firm Alvarez & Marsal. Jose Lamela, managing director with the firm and author of the report, notes seven problems with the use of spreadsheets in this key tax process: more