Law Commons^™

The Gordian Knot: How The United States, The European Union, And Organization For Economic Cooperation And Development Took Action Against Corporate Tax Avoidance, Katlyn Twomey

Honors Projects in History and Social Sciences

In 2016, the United States had the highest corporate tax rate in the world. Perhaps, the high tax rate could be why American corporations are holding an estimated $2.5 trillion abroad (Cox 2016). According to a study by the Bureau of Economic Analysis, U.S. firms pay a measly 3% in tax to foreign governments on those profits, rather than the 35% U.S. corporate tax rate. How are these corporations able to legally avoid paying taxes on a large percentage of their profits? Many use various loopholes in the laws to shift profits into other countries or U.S. states referred to …