Direct Taxation

Americans owe taxes on a portion of their Social Security benefits if they earn more than $25,000 as individuals, or $32,000 as couples. (When computing taxes on Social Security, the Internal Revenue Service counts half of a taxpayer’s benefits as part of their income.) These thresholds have never been adjusted for inflation since the tax was introduced in 1984 as a way to shore up the program’s finances. So as the cost-of-living adjustment, or COLA, raises monthly checks for retired workers, more taxpayers become subject…

Researchers at the University of North Carolina Tax Center analyzed securities filings to determine what companies would have paid if the tax had been in place last year. They found fewer than 80 publicly traded U.S. companies would have paid any corporate minimum tax in 2021, and just six—including Amazon and Warren Buffett’s conglomerate—would have paid half of the estimated $32 billion in revenue the levy would have generated. The tax, which takes effect in January, is the largest…

WASHINGTON—President Biden is set to sign into law sweeping legislation to lower prescription drug prices, boost the renewable energy sector and impose new taxes on large corporations.The Democrat-backed package is one of Mr. Biden’s most consequential accomplishments since taking office, the latest in a string of legislative victories that the president’s aides hope will improve his standing heading into November’s midterm election. Republicans have criticized the legislation, casting it as government overreach and…

With two bills advanced through Congress in recent weeks, the Biden administration has grown the federal government’s imprint on major sectors of the U.S. economy—including semiconductors, energy and health—and further buried the idea once widely held in Washington that private markets should be left alone, without government involvement.The shift grew out of two decades of economic crises, rising national populism, a deepening economic rivalry with China, and concerns about the long-run effects of climate change.…

WASHINGTON—The U.S. Treasury Department is softening its limits on foreign tax credits, responding to corporations that have been warning about double taxation. The department issued corrections Tuesday to rules released in December that have drawn furious complaints from multinational companies. The change makes clear that foreign income taxes don’t have to precisely mirror U.S. income-tax rules for when certain costs can be deducted in order to qualify for foreign tax credits.…

Companies are racking up hundreds of millions of dollars in income taxes on pay for top executives, a growing bill that in some cases makes up a sizable chunk of their annual tax expense. Tesla Inc. booked $447 million in taxes on executive pay over three years. Pay for officers generated nearly 20% of all tax costs booked by defense contractor Howmet Aerospace Inc. in the same period. At cosmetics retailer Ulta Beauty Inc.,…

From his new office in Miami Beach, real-estate investor Barry Sternlicht is only steps from the ocean. His waterfront mansion is just a short drive away. Cold winters and state income taxes are a thing of the past now that he has relocated here from Connecticut.Mr. Sternlicht, known for launching the trendsetting W Hotel brand, moved his Starwood Capital Group to the city in 2018. He’s part of a booming migration of financial firms, technology companies and venture capitalists that has…

U.S. and European officials are trying to inject fresh momentum into a global drive for a minimum corporate tax rate, but they are finding it difficult to navigate around a series of roadblocks, namely Democrats’ narrow margins in Congress and consequential objections from Hungary.Nearly 140 countries agreed last year to impose a 15% minimum tax on large companies, paving the way for the most significant overhaul of international tax rules in a century. Getting to that point took years of negotiations that often seemed…

WASHINGTON—An unprecedented gush of income tax revenue is flowing into the federal government, driven in part by investors and business owners, and the size and speed of the increase has surprised even the nation’s fiscal-policy experts.Individual income tax collections are poised to reach $2.6 trillion, or 10.6% of the economy in the fiscal year that ends Sept. 30, according to the Congressional Budget Office. That is up from 9.1% in 2021 and would mark a record in the 109-year history of the tax, topping the war-tax…

WASHINGTON—Business owners are likely saving more than $10 billion annually in federal taxes through state laws that circumvent the $10,000 cap on state and local tax deductions, according to a Wall Street Journal analysis of state data.The state laws blunt the cap’s effect on owners of closely held businesses such as law firms, hedge funds, manufacturers and car dealerships, while workers earning wages generally can’t take advantage. The strategy, now available in 27 states, converts business owners’ personal income…