Getting from Here to There: The Transition Tax Issue

13 Pages Posted: 5 Apr 2017 Last revised: 16 May 2017

J. Clifton Fleming Jr.

Brigham Young University - J. Reuben Clark Law School

Robert J. Peroni

University of Texas at Austin - School of Law

Stephen E. Shay

Harvard Law School

Date Written: March 27, 2017

Abstract

If there is fundamental U.S. international income tax reform, regardless of the reform option chosen, the United States must decide how to handle the $2.4 trillion to $2.6 trillion of previously untaxed foreign income accumulated by U.S. multinational corporations. In this report, Fleming, Peroni, and Shay argue that the proper approach is to treat the income as a subpart F inclusion in the year before the effective date of fundamental reform and to tax it at regular rates with an option to make the payments in installments that bear market-rate interest. The authors explain why the case for a low or deferred tax on this income is inferior to the case for full immediate taxation.

Suggested Citation

Fleming, J. Clifton and Peroni, Robert J. and Shay, Stephen E., Getting from Here to There: The Transition Tax Issue (March 27, 2017). 154 Tax Notes, March 27, 2017, at 69; U of Texas Law, Public Law Research Paper No. 671. Available at SSRN: https://ssrn.com/abstract=2945693

J. Clifton Fleming Jr. (Contact Author)

Brigham Young University - J. Reuben Clark Law School ( email )

430 JRCB
Brigham Young University
Provo, UT 84602
United States

Robert Joseph Peroni

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

Stephen E. Shay

Harvard Law School ( email )

1563 Manssachusetts Avenue
Cambridge, MA 02138
United States

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