Incremental International Tax Reform: A Review of Selected Proposals

Business people, tax practitioners, and legal academics generally agree that the US' international tax regime is broken. Criticisms abound that the system is overly complicated, disadvantageous to American businesses competing in a global economy, and frequently subject to manipulation and abus...

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Bibliographic Details
Published in:Northwestern journal of international law & business 2010-07, Vol.30 (3), p.565
Main Authors: Cameron, David L, Postlewaite, Philip F
Format: Article
Language:English
Subjects:
Foreign subsidiaries
Foreign tax credits
Proposals
Tax exemptions
Tax reform
Tax regulations
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Summary:Business people, tax practitioners, and legal academics generally agree that the US' international tax regime is broken. Criticisms abound that the system is overly complicated, disadvantageous to American businesses competing in a global economy, and frequently subject to manipulation and abuse. In the recent past, individuals and groups across the political spectrum have proposed numerous reforms to address these problems, some of which seek simply to modify current requirements while others jettison the current system in favor of dramatic alternatives. Two of the more ambitious proposals regarding international tax reform have centered on implementing changes that would significantly modify the current international tax regime. The first proposal would move the current regime closer to an exemption or territorial system and provide that foreign income, whether earned directly or through a foreign subsidiary, would not be subject to US taxation. The importance of the foreign tax credit to domestic taxpayers cannot be overstated.
ISSN:0196-3228