51 Pages Posted: 17 Dec 2008 Last revised: 1 Sep 2010
Date Written: August 25, 2010
Using data from a survey of tax executives, we examine the corporate response to the one-time dividends received deduction in the American Jobs Creation Act of 2004. We describe the firms’ reported sources and uses of the cash repatriated and we also examine non-tax costs companies incurred to avoid the repatriation tax prior to the Act. Finally, we examine whether firms would repatriate cash again if a similar Act were to occur in the future. Overall, the evidence is consistent with a substantial lockout effect resulting from the current U.S. policy of taxing the worldwide profits of U.S. multinationals.
Keywords: Repatriation, Tax, American Jobs Creation Act, Homeland Investment Act, Dividends Received Deduction, Trapped Equity, International Tax, Trapped Cash, Section 965, Stimulus, Tax Amnesty
JEL Classification: H20, G32, G38, G35, M40, G15
Suggested Citation: Suggested Citation
Graham, John R. and Hanlon, Michelle and Shevlin, Terry J., Barriers to Mobility: The Lockout Effect of U.S. Taxation of Worldwide Corporate Profits (August 25, 2010). Available at SSRN: https://ssrn.com/abstract=1316576 or http://dx.doi.org/10.2139/ssrn.1316576
By Ramin Baghai