Repatriated Earnings: A Carrot, Stick, and Cabbage Approach

9 Pages Posted: 11 Dec 2013

See all articles by John Everett

John Everett

Virginia Commonwealth University (VCU) - Department of Accounting

Cherie Hennig

University of North Carolina (UNC) at Wilmington - Department of Accountancy and Business Law

William A. Raabe

University of Wisconsin - Whitewater - College of Business and Economics

Date Written: June 4, 2012

Abstract

Political and economic forces are creating pressure to make it much more costly for businesses to defer federal income taxes on overseas profits and to provide cash in the United States by encouraging a repatriation of those profits. Accordingly, our approach combines:

• a penalty for not repatriating funds (an interest charge, or stick) with

• a basic reward for repatriating funds that meet an economic trigger (a dividends received deduction, or carrot) and

• an enhanced reward for repatriating funds that meet an enhanced economic trigger (a dividends received deduction that is twice the rate of the basic reward, or cabbage).

Keywords: repatriation, foreign earnings, overseas cash, tax deferral

JEL Classification: K34, E62, H21, H25

Suggested Citation

Everett, John and Hennig, Cherie and Raabe, William A., Repatriated Earnings: A Carrot, Stick, and Cabbage Approach (June 4, 2012). Tax Notes, 2012. Available at SSRN: https://ssrn.com/abstract=2365494

John Everett

Virginia Commonwealth University (VCU) - Department of Accounting ( email )

Richmond, VA 23284
United States

Cherie Hennig

University of North Carolina (UNC) at Wilmington - Department of Accountancy and Business Law ( email )

601 S. College Road
Wilmington, NC 28403
United States

William A. Raabe (Contact Author)

University of Wisconsin - Whitewater - College of Business and Economics ( email )

Whitewater, WI 53190
United States

HOME PAGE: http://billraabetax.com

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