An interesting look ahead, flagged for us by our peers at TaxProf Blog: Mihir A. Desai (Harvard Business School) has posted a new paper on evolving tax policy for companies operating overseas. Check out Securing Jobs or the New Protectionism?: Taxing the Overseas Activities of Multinational Firms; the abstract reads:

Tax policy toward American multinational firms would appear to be approaching a crossroads. The presumed linkages between domestic employment conditions and the growth of foreign operations by American firms have led to calls for increased taxation on foreign operations - the so-called end to tax breaks for companies that ship our jobs overseas. At the same time, the current tax regime employed by the U.S. is being abandoned by the two remaining large capital exporters - the UK and Japan - that had maintained similar regimes. The conundrum facing policymakers is how to reconcile mounting pressures for increased tax burdens on foreign activity with the increasing exceptionalism of American policy. This paper address these questions by analyzing the available evidence on two related claims - i) that the current U.S. policy of deferring taxation of foreign profits represents a subsidy to American firms and ii) that activity abroad by multinational firms represents the displacement of activity that would have otherwise been undertaken at home. These two tempting claims are found to have limited, if any, systematic support. Instead, modern welfare norms that capture the nature of multinational firm activity recommend a move toward not taxing the foreign activities of American firms, rather than taxing them more heavily. Similarly, the weight of the empirical evidence is that foreign activity is a complement, rather than a substitute, for domestic activity. Much as the formulation of trade policy requires resisting the tempting logic of protectionism, the appropriate taxation of multinational firms requires a similar fortitude.

A reminder that May is fast approaching, and with it comes the deadline for companies to apply to be considered for the Massachusetts Life Sciences Tax Incentive Program. That date is May 15, and qualifying companies will benefit from the $1 billion investment Massachusetts is making in life sciences over 10 years.

Specific tax incentives include an Investment Tax Credit for 10% of the cost of qualifying property, of which 90% may be refundable, as well as new credits for certain R&D, changes to existing R&D credits (again, of which 90% may be refundable) and an extension of the Net Operating Loss carryforward from 5 to 15 years.

We outline these incentives and more in this Tax Alert, and of course feel free to comment or contact us with questions.

April is National Financial Literacy Month, bringing into focus the major concern we have in this country around understanding finance. With that in mind and the April 15^th tax deadline approaching, this is a good time of year to put together a plan around finances, both for the short and long term…as they say, “if you fail to plan, plan to fail.”

In fact, it has been estimated that two out of three American households will probably fail to realize one or more of their major life goals due to a failure to effectively establish (and implement) a comprehensive financial plan.  That is a statistic that simply shouldn’t be – it’s not about how much families have in the bank, but about what is done with the money they do have.

The American Institute of Certified Public Accountants (AICPA) has designed a website to assist individuals with their financial decision-making and it includes information that encompasses virtually every critical financial stage of your life – go to www.360financialliteracy.org and click on “Life Stages” for additional information, or of course leave a comment if you have any questions for us at MFA’s Business Insights.