Taxation of Multinational Businesses

Tax Foundation Response to OECD Consultation on Amount A of Pillar One

Pillar One Amount A is meant to reallocate taxable profits of large multinationals, mitigate double taxation of profits, and avoid a harmful tax and trade war.

Who Gets Hit by the Inflation Reduction Act Book Minimum Tax?

In dollar terms, the industries that would account for the largest book minimum tax liabilities are manufacturing, at $73.2 billion, followed by finance, insurance, and management at $46.9 billion.

Digital Services Taxes in Europe, 2022

About half of all European OECD countries have either announced, proposed, or implemented a digital services tax.

How Does the Inflation Reduction Act Minimum Tax Compare to Global Minimum Tax?

Over the course of the last year, it has become clear that Democratic lawmakers want to change U.S. tax rules for large companies. However, as proposals have been debated in recent months, there are have been clear divides between U.S. proposals and the global minimum tax rules.

Push for Higher Taxes Is Misguided During a Time of Inflation and Looming Recession

Some 40 years ago, the U.S. dealt with high inflation and slow economic growth. Then as now, the solution is a long-term focus on stronger economic growth and sustainable federal budgets.

Three Questions on Pillar One

While the global minimum tax gets much attention in the media, there is another significant piece to the deal.

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.

Global Deal or No Deal

On July 1st, 2021, over 130 countries agreed to an unprecedented 15% global minimum tax. One year later, the deal appears stuck. Daniel Bunn joins Jesse to discuss what this delay means for countries and multinational corporations, and what the path ahead looks like for global tax policy and competition.

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

Overall, the data shows outbound FDI shifted from low-tax to other jurisdictions, while inbound FDI remained largely unchanged.

Undertaxed Profits Rule (UTPR)

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

Congress should prioritize evaluation of recent international tax trends and the model rules and adjust U.S. rules in a way that supports investment and innovation and moves towards simplicity.

How FDI Adds Value to Supply Chains

Although the dispersion of our supply chains throughout the world has been scrutinized in recent years, both inbound and outbound foreign direct investment are critical to sustaining supply chain resiliency and reducing economic risks for both firms and investors.

Windfall Profits Taxes?

Oil prices have skyrocketed, posing a new risk to the post-pandemic recovery. Feeling the pressure to respond, policymakers have proposed everything from gas tax holidays, tapping into strategic reserves, and even rebate cards. One idea that has crawled back from the dead: “Windfall Profits Taxes.” This idea is seemingly simple: legislation targeted at the “excess” profits of oil companies. However, as with anything in tax policy, the reality is much more complicated.

Profit Shifting

4 Things to Know About the Global Tax Debate

The Biden administration has been supportive of the negotiations, but the changes should be reviewed in the context of recent policy changes in the U.S. and elsewhere, the general landscape of business taxation in the U.S., and potential challenges and risks arising from the global tax deal.

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

Contrary to the Biden administration’s claims, raising taxes on cross-border investment would hurt U.S. economic growth and jobs. Research shows that FDI creates jobs in the U.S. and raises workers’ wages and productivity.

Foreign Direct Investment (FDI)

Comparing the Corporate Tax Systems in the United States and China

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.

Which Global Minimum Tax Will We Get?

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 been debated in recent months, there are clear divides between U.S. proposals and the global minimum tax rules.

Let’s Make a Global Tax Deal

Late last year, over 130 countries agreed to a global minimum tax, a purported end-all and be-all to the “race to the bottom.” But this policy is complex, and countries are already struggling to implement these new rules. We talk through how this policy came to be, identify where problems are beginning to arise, and dispel some common myths about this emerging new tax system.