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All Or Nothing? The Obama Budget Proposals And Beps, Reuven S. Avi-Yonah

Articles

There is a wide bipartisan consensus that the U.S. international tax regime is broken. We have the highest corporate tax in the OECD, which at 35 percent imposes a real burden on corporations earning mostly U.S.-source income. At the same time, U.S.-based multinationals pay very low effective tax rates on foreign-source income earned through their subsidiaries, leading to a strong incentive to shift profits out of the United States. Finally, the United States is among the few countries to fully tax dividends paid by foreign subsidiaries to their domestic parents, leading to the “trapped income” phenomenon in which $2 trillion …