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Foreign Derived Intangible Income (FDII)

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Why Does the UTPR Matter?

As the UTPR is a new concept, it is worth explaining what it is and why Rep. Smith cares about it. In a sentence, the Undertaxed Profits Rule (UTPR) is a looming extraterritorial enforcement mechanism for a tax base the U.S. has not adopted.

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Biden and OECD Tax Proposals Would Hurt FDI

Academic research indicates foreign direct investment (FDI) is highly responsive to the corporate effective tax rate (ETRs); that is, the tax rate after accounting for all deduction and credits available to corporations.

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How Heavily Taxed Are U.S. Multinationals?

In general, the effective tax rates on the foreign profits of U.S. multinationals are not that low relative to the U.S. tax rate, contrary to popular rhetoric.

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Reviewing Wyden’s Reconciliation Tax Policy Proposals

Congressional lawmakers are putting together a reconciliation bill to enact much of President Biden’s Build Back Better agenda. Many lawmakers including Senate Finance Committee Chair Ron Wyden (D-OR), however, want to make their own mark on the legislation.

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

The proposed restructuring of the GILTI and FDII regimes makes several changes to the tax base that are largely offsetting, leaving virtually all the revenue potential to be determined by the tax rates on GILTI and FDII and the haircuts on foreign tax credits. Lawmakers should carefully weigh the trade-offs between higher tax revenues and competitiveness.

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International Tax Proposals and Profit Shifting

There are many ways the U.S.’s international tax rules could be changed, reformed, improved, or worsened. Reflexively jacking up taxes on U.S. multinationals does not necessarily accomplish the goal of reducing or eliminating profit shifting, and it would in fact worsen it.

Ways & means tax proposal seeks to combat extraterritorial taxes and discriminatory taxes Global minimum tax revenue OECD Pillar Two revenue OECD impact assessment OECD Pillar One tax Pillar one amount a Biden interest limitation Biden interest deduction rule Biden interest expense limitation Business interest expense limitation Democrat Senate international tax overhaul discussion draft legislation (Wyden Brown Warner international tax overhaul) or Sen Wyden international tax plan,

Four Revenue Scores on Options to Change U.S. International Tax Rules

Changes to international tax rules are likely on the way, and it is therefore important for lawmakers to understand how various reform options would impact U.S. tax burdens on multinational companies. Moreover, policymakers should also recognize the need for prudent policies that do not put U.S.-based multinationals at a competitive disadvantage or severely curtail investment and hiring.