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Trends in FDI Before and After the Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (TCJA) of 2017 made several changes to the U.S. tax system to enhance competitiveness and discourage profit shifting to low-tax jurisdictions by U.S. multinationals. Among them were a new 10 percent minimum tax on companies with significant cross-border transactions (BEAT) and new tax rates on deemed intangible income (GILTI […]

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An International Tax Agenda for Congress on the Anniversary of the Global Tax Deal

Key Findings A year since the global tax deal was agreed to by more than 130 countries, progress on implementing legislation has hit a lull. Implementation of the minimum tax rules is not expected until the end of 2023 or in 2024. Since the 2017 U.S. tax reforms and other recent international rules changes, onshoring […]

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How FDI Adds Value to Supply Chains

The COVID-19 pandemic brought increased attention to U.S. global supply chains, as the pandemic impacted critical components within U.S. manufacturing. The attention has led to calls to structure U.S. tax policy to encourage firms to expand their manufacturing capacity in the U.S., under the belief domestic supply chains are inherently less risky than global ones. […]

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4 Things to Know About the Global Tax Debate

The taxation of large companies has been in the spotlight recently as governments around the world have sought to make significant changes to how corporate profits are taxed in a global economy. Last year more than 130 jurisdictions agreed to an outline of policies that would change where companies pay taxes and institute a global […]

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Why FDI Matters for U.S. Employment, Wages, and Productivity

The Biden administration has offered several proposals to reform the taxation of U.S. multinationals, addressing profit shifting as well as a broader view that offshoring is bad for the U.S. economy and firms should be encouraged to “reshore” as much activity to the United Sates as possible. Contrary to the Biden administration’s claims, raising taxes […]

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Comparing the Corporate Tax Systems in the United States and China

Key Findings Federal policymakers are debating a legislative package focused on boosting U.S. competitiveness vis-a-vis China; however, it currently contains little to no improvements to the U.S. tax code. The existing U.S. tax code is biased against capital investment and it is scheduled to worsen over the next decade. The tax bias against domestic investment […]

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Accounting for the Global Minimum Tax

Everyone loves accounting, right? You have debits and credits that change the balance of assets, liabilities, and equity on the balance sheet and report cash flows and accruals on the income statement. The rules are complex. To make matters worse, the accounting rules for tax are different than for financial accounting used to generate reports […]

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A Regulatory Tax Hike on U.S. Multinationals

Throughout the first year of the Biden administration, one tax policy theme was consistent. The President and Treasury Secretary Janet Yellen were focused on increasing the tax burden on U.S. companies—particularly multinational companies.  As Secretary Yellen put it last year, “It is about making sure that governments have stable tax systems that raise sufficient revenue […]

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The Global Minimum Tax Changes the Game for Build Back Better Revenue

The global minimum tax has upended many conversations about international tax policy, including in the United States. The goal of the policy is to set a worldwide 15 percent minimum effective tax rate on corporate profits and enforce it through a set of interconnected rules. If enough countries adopt those rules, then even those that […]

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Rushing Headlong into Formulary Apportionment

One of the greatest challenges of lawmaking is recognizing when a beautiful theory must succumb to an ugly fact. The purity of conceptual policymaking must take the real world into account and acknowledge that things that work well “in theory” sometimes fail spectacularly to meet expectations “in practice.” It would be wonderful if a policy […]