Global Intangible Low Tax Income (GILTI)

OECD Pillar One

OECD Pillar Two (Global Minimum Tax)

GILTI: Foreign Tax, Local Impact

Since only U.S. businesses pay the GILTI tax, not foreign businesses, it makes U.S.-based brands less competitive abroad. Whatever its intentions, GILTI is a flawed policy, and doubling down on it will hurt us abroad, and at home.

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 in the United States means new uncertainties for a global agreement and for taxpayers.

The Interest Limitation Pile-On

As Congress contemplates adding a new worldwide interest limitation rule as part of the House Build Back Better Act, it is useful to consider the potential effects of this proposal as well as whether it is necessary to add this on top of the U.S.’s existing restrictions on the value of interest deductions.

Which Industries Would the Tax Hikes Target?

Using Tax Foundation’s Multinational Tax Model, we estimate the effective tax rates on controlled foreign corporation (CFC) profits under current law and under each of the proposed plans for business tax hikes.

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.

Choose Your Own Adventure: Global Minimum Tax Edition

Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. international tax rules. However, as proposals have surfaced in recent weeks, there are clear divides among various proposals.

Qualified Business Asset Investment (QBAI) Exemption

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

As Congress prepares to rewrite some portion of the current international tax rules, it’s hoped that they are able to achieve a more principled approach and one that is not so subject to obfuscation and misinterpretation.

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.

Top Ten Congressional Districts Impacted by Biden Corporate Tax Proposals

The Biden corporate tax plan would disproportionately harm these congressional districts and make the U.S. less internationally competitive. These tax hikes, along with individual tax increases, would also raise taxes on net for 96 percent of congressional districts by 2031 after these temporary credits expire in 2025.

GILTI of Neglecting Losses

As lawmakers are reviewing international tax rules and determining what to change and update, they should pay attention to the way GILTI interacts with profitable and loss-making companies.

Expense Allocation: A Hidden Tax on Domestic Activities and Foreign Profits

While arcane, expense allocation rules are relevant to current debates because they result in a heavier tax burden for U.S. companies under current law than the recently negotiated global minimum tax proposal.

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.

Adoption of Global Minimum Tax Could Raise U.S. Revenue…or Not

This interaction between the U.S. proposals and those that may be put into law in foreign jurisdictions should give lawmakers caution when evaluating the revenue potential of changes to GILTI.

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.

Options for Reforming the Taxation of U.S. Multinationals

The Biden administration’s international tax proposals would impose a 7.7 percent surtax on the foreign profits of U.S. multinationals, resulting in a net increase in profit shifting out of the U.S.

Intellectual Property Came Back to U.S. after Tax Reform, but Proposals Could Change That

Intellectual property is a key driver in the current economy. Among other things, intellectual property includes patents for life-saving drugs and vaccines and software that runs applications on phones and computers.

How Biden’s Business Tax Proposals Would Impact Taxpayers Across States

The Biden administration has targeted U.S. businesses, including corporations and passthrough entities, to raise revenue to fund new spending. However, individual taxpayers across America will end up footing the bill.