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Using economic analyses effectively
Businesses must anticipate and respond to the challenges and opportunities that arise from government legislative and regulatory policy changes. Economic analysis is a vital tool for quantifying effects, formulating strategy, and communicating to policymakers and the public. Data-driven analysis provides credible answers to questions about the potential effects of policy proposals.
Our offerings
- Revenue estimation and policy analysis
- Quantifying your economic footprint
- Measuring Total Tax Contribution
- Financial modeling of policy changes
- Tax sampling
Revenue estimation and policy analysis
Government decisions to tax, spend, or regulate can have major consequences on a company’s bottom line. We work with you to create custom reports that analyze the economic and budgetary consequences of tax policies, as well as modeling a wide range of other policy changes to identify their effect on the economy, formulate strategic decisions, and effectively communicate with stakeholders.
We can help you with:
- Revenue estimates
- Budget estimates
- Economic impact studies of legislative and regulatory proposals
- Distributional analysis of proposals by income, class, and region
Quantifying your economic footprint
Telling the story of a company’s economic contributions is an essential part of communicating with stakeholders and policymakers. A company’s economic footprint extends well beyond its own operations – it also includes the activities of its supply chain and the activity created from the spending by its own and supply chain employees. Our team helps businesses and industries quantify their economic footprint by measuring their economic contributions up and down their supply chains -- globally and at the national, state, county, and Congressional district levels -- including employment, payroll, contribution to GDP, and taxes.
We can help you with:
- Quantifying the economic contributions of existing operations
- Determining the potential economic effect of adding new facilities
- Identifying and measuring your social contributions, such as philanthropy, diversity, and sustainability
Measuring Total Tax Contribution
The amount of tax paid by large companies has attracted considerable public attention in recent years, but the focus on corporate income tax payments overlooks the wide variety of other taxes paid by businesses, which typically have little visibility in financial reporting. PwC’s Total Tax Contribution (TTC) framework is designed to help companies identify and communicate their true tax contribution, either in a particular country or on a global basis. TTC evaluates all business taxes paid by a company, distinguishing between those paid and borne by the company and those collected on behalf of the government. The framework also measures the costs incurred by companies in complying with these tax payment obligations.
We can help you with:
- Gaining a clear understanding of your company's overall tax contribution
- Monitoring and managing your taxes
- Communicating your company’s total tax contribution to stakeholders
Financial modeling of policy changes
Our team develops models for use in tax, financial, and investment planning. Our models have been used to assist clients in analyzing tax proposals, employee benefit plans, leasing arrangements, international investment structures, hedging calculations, and financial products.
We can help you with:
- Modeling the cash and book impact of tax legislative proposals
- Tax impacts on alternative financial products
- Tax compliance and planning solutions
- Tax efficient employer compensation
Tax sampling
Statistical sampling is a cost-efficient alternative to a manual review of a large volume of records or activities. It is frequently used in IRS and state tax examinations. Our team uses advanced statistical sampling methodologies to design cost-effective samples that provide our clients with reliable results.
We can help you with:
- Sampling strategy
- Sample design
- Estimation based on sample results
- Evaluation of statistical samples designed by other parties
- Presentation of results
We provide supporting documentation for all phases of the sampling and estimation process and help you evaluate and negotiate tax auditor sampling plans and provide support throughout the exam. Following are examples of the types of projects that frequently benefit from statistical sampling:
- Tangible regulations analysis
- Cost segregation/fixed asset studies
- Meals and entertainment studies
- Per diem studies
- Property tax studies
- Qualified intermediary audits/voluntary compliance audits
- Research credit studies
- Section 199 manufacturing deduction
- State and local taxes
How PwC can help
NES provides assistance with data collection, surveys, quantitative analysis, and report-writing. By combining real-world experience with extensive knowledge of the government sector the NES team supplies comprehensive and authoritative analysis and advice to businesses. We work together with you to:
Provide objective analyses to support your legislative and regulatory initiatives.
Measure on a consistent basis the total taxes paid and taxes borne by your company or industry to reflect the full contribution made in support of the government.
Analyze the effects of legislative or regulatory proposals on your company or industry.
Measure the economic contribution of your company or industry, including direct, indirect, and induced employment and GDP.
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