A Better Way To Tax Foreign Profits Of US Companies
Robert PozenOctober 4, 2017, 1:56 PM EDT
Law360, New York (October 4, 2017, 1:56 PM EDT) -- The United States' system for taxing foreign profits of U.S. companies is broken. The main culprit is the combination of a high U.S. corporate tax rate and an outdated deferral rule. Under this combination, foreign profits of U.S. companies are subject to the 35 percent U.S. tax rate on corporate income, but that tax liability is deferred unless and until those profits are repatriated to the U.S.
As a result, over $2.5 trillion in past foreign profits of U.S. multinationals are now parked abroad, some in...