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Gift or Lump of Coal: U.S. Cross-border Tax Changes Won’t Be Home for Christmas

As 2021 comes to a close, countries are moving toward harmonizing tax rules for multinationals, but stalled talks on the Build Back Better Act (BBBA) in the United States means new uncertainties for a global agreement and for taxpayers. Despite the 2017 U.S. tax reform serving as inspiration for current discussions of a global minimum […]

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What Do Global Minimum Tax Rules Mean for Corporate Tax Policies?

Today, the Organisation for Economic Co-operation and Development (OECD) released model rules for the global minimum tax (also known as Pillar 2). These rules are designed to apply to multinational companies with more than €750 million in total global revenues and place a minimum effective tax rate of 15 percent on those company’s profits. In […]

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Book Minimum Tax versus Corporate Rate Increase: Pick Your Poison

As the Senate considers which components of the House Build Back Better Act (BBBA) to include, one key difference between the original Ways and Means draft and the later Rules Committee version is on corporate taxes. The original draft would have raised the corporate tax rate to 26.5 percent, while the Rules Committee version would […]

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How Would the Ways and Means Proposal Affect Profit Shifting?

Recent proposals to increase the effective tax rates (ETRs) faced by multinationals rely on the argument that these firms achieve artificially low tax rates by shifting profits to foreign tax havens and other low-tax countries. By raising the tax rates on the foreign income of U.S. multinationals, these proposals would supposedly reduce profit shifting. However, […]

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Testimony: Joint Economic Committee Hearing on the Revenue Provisions of the Build Back Better Act

Note: The following is the testimony of Dr. William McBride, Tax Foundation Vice President of Federal Tax and Economic Policy, prepared for a Joint Economic Committee hearing on October 6, 2021, titled, “Building Back Better: Raising Revenue to Invest in Shared Prosperity.” Chairman Beyer, Ranking Member Lee, and members of the Joint Economic Committee, thank you for […]

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Which Industries Would the Tax Hikes Target?

A recent Tax Foundation analysis considered how various proposals from the Biden administration, from Congress, and from the Organisation for Economic Co-operation and Development would affect the effective tax rates (ETRs) on the foreign profits of U.S. multinationals. That analysis focused on how each policy and proposal would affect the overall ETRs. But which industries […]

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How Heavily Taxed Are U.S. Multinationals?

Recent proposals from the Biden administration and congressional Democrats aim to hike taxes on the foreign profits of U.S. multinationals, resting on the claim that U.S. multinationals pay very low tax rates on these foreign profits. But how heavily taxed are they, and how would various proposals affect these tax rates? U.S. multinational enterprises (MNEs) […]

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Treasury Minimum Tax Argument Relies on Narrow Interpretation of Current/Proposed Rules

Tuesday, the U.S. Treasury Department released a blog authored by Treasury officials Itai Grinberg and Rebecca Kysar. Though the blog purports to make a case for President Biden’s proposal to increase the current minimum tax on foreign profits of U.S. companies, its arguments rely on a very narrow interpretation of current law and the president’s […]

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Tax Foundation Response to Ireland Department of Finance Consultation Document: Consultation on OECD International Tax Proposals

Introduction Tax Foundation welcomes the opportunity to respond to the public consultation on the OECD International Tax Proposals. Tax Foundation is a nonprofit think tank based in Washington, D.C., and our mission is to improve lives through tax policies that lead to greater economic growth and opportunity. We use the four principles of simplicity, neutrality, […]

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Tax Foundation Comments on the Wyden, Warner, Brown Discussion Draft

Introduction Tax Foundation welcomes the opportunity to offer comments on the Wyden, Warner, Brown discussion draft on international taxation. Tax Foundation is a nonprofit think tank based in Washington, D.C., and our mission is to improve lives through tax policies that lead to greater economic growth and opportunity. We use the four principles of simplicity, […]