CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. IMF Calls For Rethink On US Tax Reform Design

IMF Calls For Rethink On US Tax Reform Design

by Glen Shapiro, Tax-News.com, Washington

03 August 2017


The current plan for US tax reform would disproportionately benefit the wealthy, the International Monetary Fund has said, recommending more support for low-income taxpayers and higher indirect taxes.

On the need for tax reform, the IMF said in its Article IV consultation for the United States that "the US personal and business tax system needs to be simpler and less distortionary, with lower tax rates and fewer exemptions." It said: "The redesign of the tax system should aim to raise labor force participation, mitigate income polarization, and support low- and middle-income households."

It added that "tax reform ought to be designed to be revenue enhancing over the medium term," and that the tax burden be shifted rather than cut, relative to gross domestic product. It said that the US should pursue tax reform that leads to lower headline rates and fewer tax reliefs, but to fund income tax cuts, the US should look to expand indirect taxes, such as introducing a federal-level consumption tax, a broad-based carbon tax, and a higher federal gas tax, it said.

"Such a move from direct to indirect taxes is likely to be positive for long-run growth," the Fund stated.

It said that a tax on the repatriation of US multinationals' funds held overseas "merits consideration but ought to be combined with a minimum tax for profits earned in low-tax jurisdictions to limit the scope of profit-shifting."

Meanwhile the IMF welcomed proposals to offer tax relief for low- and middle-income groups but said that the country should also consider expanding eligibility and relief available under the earned income tax credit.

TAGS: tax | business | value added tax (VAT) | International Monetary Fund (IMF) | offshore | tax rates | carbon tax | United States | tax reform

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »