How would formulary apportionment work? Q.How would formulary apportionment work? A.Under the current global system, multinational firms determine their profits separately in each tax jurisdiction in which they operate. An alternative system would allocate a firm’s worldwide income across countries using a formula based on some combination of its sales, assets, and payroll in each jurisdiction. Read more about How would formulary apportionment work?
What is a territorial tax and does the United States have one now? Q.What is a territorial tax and does the United States have one now? A.Under a territorial tax, the United States would not tax profits earned overseas by US-resident corporations. The Tax Cuts and Jobs Act effectively exempted some of these profits, but retained taxation on some categories of foreign profits and imposed a new minimum tax on another. Read more about What is a territorial tax and does the United States have one now?
How does the tax system affect US competitiveness? Q.How does the tax system affect US competitiveness? A.The international tax policies that best encourage firms to invest in the United States are not necessarily the policies that best help US multinational companies compete with foreign-based multinationals. Policymakers face a trade-off among goals. Read more about How does the tax system affect US competitiveness?