The Revenue Effects of Multinational Firm Income Shifting

Abstract

This article updates Clausing’s prior work on the U.S. government revenue costs resulting from income shifting by multinational corporations. Extending the analysis to 2008, the author finds that the revenue costs of income-shifting practices have increased in recent years along with the rise in corporate profits of foreign affiliates of U.S. firms.

Keywords: income shifting, tax avoidance, international taxation, transfer pricing, multinational corporations