Corporate Tax Inversions
The White House recently released new regulations designed to make tax inversions by US companies “significantly less profitable.” The rules will discourage—not stop—companies from moving their headquarters overseas, acting as a temporary means of capturing US corporate tax revenue while Congress works to develop more permanent and extensive measures.
RFF Fellow Marc Hafstead suggests that taxing emissions can be a viable long-term solution to corporate tax inversion. He writes: “Carbon taxes have the potential to raise billions of dollars each year that could finance the type of tax reform that would make US corporations more competitive and reduce their incentive for inversion. . . . A bill that establishes a carbon tax while reducing corporate tax rates could satisfy members on both sides of the aisle.”
Confronting Climate Change
In President Obama’s remarks at the United Nations Climate Summit, he emphasized the importance of a coordinated international effort to combat climate change and warned that “no nation can meet this global threat alone.” The president also reiterated the US pledge to meet its 2020 carbon emissions goals, highlighting the importance of securing similar commitments from other major polluters.
This year’s summit is considered by many to be a litmus test for the viability of a global climate agreement ahead of the 2015 UN conference in Paris. As RFF University Fellow Robert Stavins of Harvard notes, representatives should focus on gaining commitments from all members, eliminating the unsuccessful two-tier participation system of the past and “breaking the logjam that has prevented progress” since the Kyoto Protocol.
