Income Shifting Incentives and Offshored U.S. Jobs

Posted: 10 Nov 2015 Last revised: 2 Mar 2018

See all articles by Braden Williams

Braden Williams

University of Texas at Austin - Department of Accounting

Date Written: September 15, 2015

Abstract

This paper examines if, when, and to what extent international income shifting incentives explain where multinational firms move offshored U.S. jobs. Using a small, detailed sample of offshored jobs from a program within the Department of Labor called Trade Adjustment Assistance (TAA), I find that tax incentives have a material impact on where firms move offshored U.S. jobs. However, across certain sourcing arrangements, types of firms, and types of jobs, the results indicate that tax incentives have little or no association with where offshored U.S. jobs are moved, suggesting that there is significant cross-sectional variation in the degree to which tax incentives distort labor offshoring decisions. These findings are relevant to those seeking to understand the real effects and welfare consequences of incentives created by current U.S. international tax policy.

Keywords: Income shifting, offshoring, outsourcing

JEL Classification: H25, H26, F23

Suggested Citation

Williams, Braden, Income Shifting Incentives and Offshored U.S. Jobs (September 15, 2015). The Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2688709 or http://dx.doi.org/10.2139/ssrn.2688709

Braden Williams (Contact Author)

University of Texas at Austin - Department of Accounting ( email )

Austin, TX 78712
United States

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