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The Consequences of the Tax Cut and Jobs Act’s International Provisions: Lessons from Existing Research

Dhammika Dharmapala

Abstract:

This paper discusses the potential consequences of the international tax provisions of the recent Tax Cut and Jobs Act (TCJA), drawing on existing research. It uses the observed behavior of firms during the 2005 repatriation tax holiday to infer the relative burdens created by the repatriation tax and by the TCJA’s new "Global Intangible Low-Taxed Income" (GILTI) tax, and it concludes that the TCJA increases the tax burden on U.S. residence for many, and perhaps most, U.S. firms. It also argues that the GILTI and "Foreign-Derived Intangible Income" (FDII) provisions will create substantial distortions to the ownership of assets, both in the United States and around the world

Citation

Dhammika Dharmapala (2018), The Consequences of the Tax Cut and Jobs Act’s International Provisions: Lessons from Existing Research , National Tax Journal, 71:4, pp. 707-728

DOI: doi.org/10.17310/ntj.2018.4.06