Has U.S. investment abroad become more sensitive to tax rates?

by Rosanne Altshuler

Publisher: National Bureau of Economic Research in Cambridge, MA

Written in English
Published: Pages: 36 Downloads: 822
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Subjects:

  • Investments, American -- Taxation -- Econometric models.,
  • Corporations -- United States -- Taxation -- Econometric models.,
  • Investments, American -- Econometric models.,
  • Corporations -- Taxation -- Econometric models.,
  • Taxation -- Rates and tables -- Econometric models.

Edition Notes

StatementRosanne Altshuler, Harry Grubert, T. Scott Newlon.
SeriesNBER working paper series -- working paper 6383, Working paper series (National Bureau of Economic Research) -- working paper no. 6383.
ContributionsGrubert, Harry., Newlon, Timothy Scott., National Bureau of Economic Research.
Classifications
LC ClassificationsHB1 .W654 no. 6383
The Physical Object
Pagination36 p. ;
Number of Pages36
ID Numbers
Open LibraryOL22403976M

  The tax rate on long-term (more than one year) gains is 0%, 15%, or 20%, depending on taxable income and filing status. Interest income from investments is usually treated like ordinary income for. After reviewing the incentives for tax planning by MNCs from the United States and how these may have changed as a result of the Tax Reform Act of , the chapter compares income-shifting behavior in and to see if the reported profitability of controlled foreign corporations (CFCs) has become more sensitive to local tax rates. And this same individual born and residing abroad who has never visited the U.S., is still required to file an annual U.S. tax return, and also comply with foreign asset transfers and other compliance forms such as the FBAR FinCEN Form and Form under FATCA. more freely across borders, and business location and investment decisions are more sensitive to tax and regulatory structures than in the past. Maintaining the competitiveness of the U.S. economy requires that we carefully consider how our business tax environment can be designed to ensure that the United States continues to.

Fiscal paradise: foreign tax havens and American business.” (). Gravity-Model Specification and the Effect of the Canada-US Border.” Federal Reserve Bank of St. Louis. Working Paper No. (). Has US investment abroad become more sensitive to tax rates?”.   Has U.S. investment abroad become more sensitive to tax rates? In Hines, James (Ed.), International taxation and multinational activity (pp. ). Chicago, IL: University of Chicago Press. Google Scholar | Crossref. manufacturing subsidiaries have become more sensitive to tax rate differences across foreign jurisdictions in recent years. For the financial services industry, the changes embedded in TRA’86 moved the U.S. tax system closer to one in which ‘capital export neutrality’ is preserved for investments in low-tax countries. Not only have companies tended to become more mobile, but also governments have to deal with this new dimension in the design of their national tax policy. The gradual 2 According to Wells (), the earliest reference was in , when wool weavers were offered tax incentives to locate in Biella, in the Piedmont region of Northern Italy. 2.

"Has U.S. Investment Abroad Become More Sensitive to Tax Rates?" (with Harry Grubert and T. Scott Newlon), in International Taxation and Multinational Activity, edited by James Hines, Jr., University of Chicago Press, , Reprinted in International Taxation/The International. more freely across borders, and business location and investment decisions are more sensitive to tax considerations than in the past. As barriers to cross-border movement of capital and goods have been reduced, differences in nations’ tax systems have become a greater factor in .   This "far forward" rate has hovered around historically low levels of between /4 percent and /2 percent in the past year, more than basis points (that is, two percent) below its average since Far-forward rates in other advanced economies have also declined over the past decade and are currently at or near historic lows.

Has U.S. investment abroad become more sensitive to tax rates? by Rosanne Altshuler Download PDF EPUB FB2

The increase of more than one in the estimated elasticities from to suggests that the allocation of real capital abroad may have become more sensitive to differences in host country taxes in recent years. These results are consistent with increasing international mobility of capital and globalization of by: Has U.S.

Investment Abroad Become More Sensitive to Tax Rates. January - Working Paper Author(s): Rosanne Altshuler, Harry Grubert & T.

Scott Newlon. The second question is whether the location of investment abroad by U.S. firms has become more sensitive to tax rate differences across countries. A finding that investment location decisions have become more sensitive to tax rates would be consistent with the view that technological advances and the loosening of trade restrictions and capital Author: Rosanne Altshuler.

Rosanne Altshuler & Harry Grubert & T. Scott Newlon, "Has U.S. Investment Abroad Become More Sensitive to Tax Rates?," NBER Chapters, in: International Taxation and Multinational Activity, pagesNational Bureau of Economic Research, Inc.

Request PDF | Has U.S. Investment Abroad Become More Sensitive to Tax Rates. | We use data from the U.S. Treasury corporate tax files for and to. In Has U.S. Investment Abroad Become More Sensitive to Tax Rates?, (NBER Working Paper No.

), co-authors Rosanne Altshuler, Harry Grubert, and T. Scott Newlon address two critical questions concerning the investment decisions of U.S.

multinational corporations. First, how sensitive are investment location decisions to differences in tax. "A 1 percent increase in aftertax returns led to an almost 3 percent increase in the real capital stock of overseas manufacturing affiliates in " In Has U.S.

Investment Abroad Become More Sensitive to Tax Rates?, (NBER Working Paper No. ), co-authors Rosanne Altshuler, Harry Grubert, and T. Downloadable. We use data from the U.S. Treasury corporate tax files for and to address two related questions concerning the investment decisions of U.S.

multinational corporations. How sensitive are investment location decisions to tax rate differences across countries, and have investment location choices become more sensitive to differences in host country tax rates. ment abroad by U.S. firms has become more sensitive to tax rate differ-ences across countries.

A finding that investment location decisions have become more sensitive to tax rates would be consistent with the view that technological advances and the loosening of trade restrictions and capital controls have in recent years increased the ease. The second question is whether the location of invest-ment abroad by U.S.

firms has become more sensitive to tax rate differ-ences across countries. A finding that investment location decisions have become more sensitive to tax rates would be consistent with the view that technological advances and the loosening of trade restrictions and. Scott Newlon's 6 research works with citations and reads, including: Has U.S.

Investment Abroad Become More Sensitive to Tax Rates. Another recent study asked, 'Has [U.S.] investment abroad become more sensitive to tax rates?' It analysed corporate tax-return data for (the latest then available), and found that by the end of this period the typical American multinational had become twice as likely to locate.

Downloadable. Previous work on the effect of taxes on foreign direct investment (FDI) focused primarily on capital income taxes. We investigate the proposition that other forms of taxation may also deter FDI. We use tax ratios, i.e., average effective tax rates, on consumption, labor and capital income for a panel of 25 OECD countries from 1.

Has U.S. Government Investment Abroad Become More Sensitive to Tax Rates. Rosanne Altshuler, Harry Grubert, and T. Scott Newlon Comment: Jack M. Mintz 2. Tax Sparing and Direct Investment in Developing Countries Comment: Timothy J. Goodspeed 3. Does Corruption Relieve Foreign Investors of the Burden of Taxation.

Shang-Jin Wei Comment. Newlon, Has U.S. investment abroad become more sensitive to tax rates?, (). Tax policy and foreign direct investment in the United States. Downloadable. This paper examines the effects of the Tax Reform Act of on the international location decisions of U.S.

financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jurisdictions. These same rule changes were not applied to other forms of income; in.

1 Has U.S. Investment Abroad Become More Sensitive to Tax Rates. 2 Tax Sparing and Direct Investment in Developing Countries; 3 Does Corruption Relieve Foreign Investors of the Burden of Taxes and Capital Controls.

4 Transaction Type and the Effect of Taxes on the Distribution of Foreign Direct Investment in the United States. Has U.S.

investment abroad become more sensitive to tax rates. In International taxation and multinational activity, ed. James Hines, 9 – 38 Chicago: University of Chicago Press. Balasubramanyam, V. N., Mohammed Salisu, and David Sapsford. This paper reviews the empirical literature on the impact of company taxes on the allocation of foreign direct investment.

We compare the outcomes of 25 empirical studies by computing the tax rate elasticity under a uniform definition. The median value of the tax rate elasticity in the literature is around − (i.e.

a 1%-point reduction in the host-country tax rate raises foreign direct. Has U.S. Investment Abroad Become More Sensitive to Tax Rates.

NBER Working Paper No. w Number of pages: 39 Posted: 16 Aug Last Revised: 07 Apr Has U.S. Investment Abroad Become More Sensitive to Tax Rates. by Rosanne Altshuler & Harry Grubert & T. Scott Newlon The Effect of the Tax Reform Act of on the Location of Assets in Financial Services Firms.

Tax rates facing American multinational firms exhibit positive cross-sectional correlation, indicating that countries with high corporate income tax rates are also likely to have high indirect tax rates.

The correlation is ininand in   That is, even if country i has a low tax rate but country j’ s rate is even lower, T. NewlonHas U.S. investment abroad become more sensitive to tax rates. Hines (Ed.), International tax and multinational activity, University of Chicago Press, Chicago, IL () Google Scholar.

Not only are U.S. firms sensitive to the different tax rates abroad, but studies also have found that foreign investors are sensitive to U.S. taxes – especially state corporate income tax rates. These studies find that state tax rates have a significant effect on the location of new plants.

Altshuler R, Grubert H, Newlon TS () Has U.S. investment abroad become more sensitive to tax rates. In: Hines JR (ed) International taxation and multinational activity.

The University of Chicago Press, Chicago, pp 9– Google Scholar. Altshuler, Rosanne, Harry Grubert and T. Scott Newlon.

Has U.S. investment abroad become more sensitive to tax rates. In International taxation and multinational activity, ed. James R. Hines Jr. Chicago: University of Chicago Press, Clausing, Kimberly A.

Tax-motivated transfer pricing and US intrafirm trade prices. Altshuler R, Grubert H, Newlon TS () Has U.S. investment abroad become more sensitive to tax rates. International taxation and multinational activity. University of Chicago Press, Illinois, pp 9– Google Scholar.

The UK corporate tax rate has been reduced from 26 to 24 per cent inand is expected to be further reduced to 23 per cent in and to 22 per cent in & Newlon, T.

(), 'Has U.S. Investment Abroad Become More Sensitive to Tax Rates?', International Taxation and Multinational Activity, National Bureau of Economic Research.

Has U.S. Investment Abroad Become More Sensitive to Tax Rates. Organization for Economic Cooperation and Development. Foreign Direct Investment, Exchange Rate Variability and Demand Uncertainty.

International Economic Review, (). Globalization and the Future of Social Protection. Has the U.S. Investment Abroad Become More Sensitive to Tax Rates. (). empirical work suggests that U.S. manufacturers may have become more sensitive to differences in local tax rates across countries in recent years.

first to suggest that the sensitivity of U.S. investment abroad to after-tax rates of return abroad had increased in the s (Grubert and Mutti and ). Altshuler, Grubert, and Newlon.Has US investment abroad become more sensitive to tax rates? In: Hines, J.R.

Jr., ed. International taxation and multinational activity, University of Chicago Press, Chicago, pp. 9– Google Scholar."Has U.S. Investment Abroad Become More Sensitive to Tax Rates?" with Harry Grubert and T.

Scott Newlon, January "Recent Developments in the Debate on Deferral," February, "On the Progressivity of the Child Care Tax Credit: Snapshot versus Time-Exposure Incidence," with Amy Ellen Schwartz, March