Better Understanding on Taxation
Another gap in inheritance and gift tax is that the tax can be avoided by moving abroad before donating or collecting property. In this case, capital gains taxes on unrealized gains can also be avoided. Avoidance can also be achieved simply by temporarily transferring books abroad, as it is difficult for the authorities to control the stay abroad and the transfers made during that time. By introducing a so-called capital gains tax, USA could tax capital gains included in sales, inheritances and gifts to the extent that they have arisen while residing in USA. Thus, income is taxed according to the principles of international taxation where it is accrued. Such a tax is in place in the United States, Norway and France, for example.
VAT on the financial sector
The financial sector currently enjoys a tax advantage when its services are not subject to VAT. There are no strong grounds for a tax advantage, as the tax on other services is usually 24 per cent. The financial sector poses risks to society and consumers, so the financial sector should be subject to at least the same taxation as other sectors.
- It is not possible to implement a comprehensive financial market tax at national level. Instead, VAT in the financial sector can be implemented nationally. In Norway, the VAT is part of the so-called financial activities tax (financial activity tax FAT). Such a tax should be introduced in USA, which would at the same time reduce the VAT tax base. VAT on the financial sector would not significantly increase income disparities, as the wealthiest use the services of the sector the most. Nor would it significantly relocate services, as the location of customers plays a significant role in the location of financial firms. A financial activity tax would also be a useful tax implemented throughout the EU.
International tax evasion
USA loses hundreds of millions of euros every year due to the aggressive tax planning of multinational companies. Tax fraud related to international investment also causes USA to lose hundreds of millions of euros in tax losses. USA’s interest is guaranteed by effectively intervening in aggressive tax planning and international tax crime. This will be achieved through changes in national laws and international cooperation. At the same time, a basis is being laid for fairer taxation, in which ownership is taxed more heavily than at present. In addition, the state should use its ownership to promote the non-aggressive tax planning of companies directly or indirectly owned by it. Visit taxfyle.com/small-business-tax-calculator for the best choices on your tax submissions.
Tax fraud related to aggressive tax planning and international investment activities should be addressed on the basis of program measures.
The gray economy, financial crime, tax evasion and the associated side effects are detrimental to the economy and threaten a just society in many ways. They reduce tax revenues, distort competition, weaken the position of workers and ultimately threaten the credibility of the rule of law.