Top tax policy scholar visits campus as Sullivan Scholar in Residence
Thursday, November 7, 2024
By Ruth Paarmann and Amanda May

Last fall, tax policy expert Michelle Hanlon took time out of her busy schedule testifying before Congress and teaching at MIT to come to the University of Iowa campus as the 2023 Sullivan Scholar in Residence.

During her week-long residency with the accounting department, she met with accounting Ph.D. students and faculty and gave a public lecture at the Pappajohn Business Building, providing an overview of her research on the intricate geopolitical tensions between the Organisation for Economic Co-operation and Development (OECD) and individual nations over corporate tax and climate policies.

Michelle Hanlon in the Pappajohn Business Building courtyard.
Fun fact: Hanlon is originally from Iowa! Her family farm is in the Quad Cities area.

Her lecture delved into the proposal for a 15% minimum corporate tax across the globe by 2026. One of the questions she posed was: Who will have sovereignty, and where and how will these taxes be paid? 

If the proposal goes through, Hanlon says individual countries will stop having unilateral control over how much they tax companies. From a U.S. perspective: If we don’t tax our companies at least 15%, another country will. While 15% is well under the U.S.’ statutory 21%, there are many exceptions, and the water gets muddier the farther you go into policymaking. 

She noted that efforts to implement international taxes will have interesting and perhaps unexpected effects— particularly on financial accounting. The taxes will be a threat to capital markets as corporations juggle how to avoid them and countries try to manage implementation. It's also unclear who will dictate calculation, administration, and enforcement. 

According to Hanlon, these as-yet unanswered questions are at the core of an ever-shifting global shell game. 

“International tax policy has become very political and complicated, but it’s important and fun to study,” she said.  

THE TAKEAWAY: The coming changes in international tax policy will grab the attention of more than just researchers; they are likely to increase complexities for auditors everywhere.

 

The Sullivan Scholar in Residence program is supported by accounting alumnus Michael Sullivan (BBA87). Thanks to his generosity, the college is able to bring preeminent scholars to campus to enrich the education and scholarly connections of its students and faculty.

 

This article appeared in the 2024 issue of Iowa Ledger.