Download this Paper Open PDF in Browser

Tit for Tat: How Will Other Countries React to the Tax Cuts and Jobs Act?

3 Pages Posted: 20 Dec 2017 Last revised: 12 Jan 2018

Reuven S. Avi-Yonah

University of Michigan Law School

Gianluca Mazzoni

University of Michigan at Ann Arbor - Law School - SJD Candidate

Date Written: December 21, 2017

Abstract

The Tax Cuts and Jobs Act of 2017 (TRA17) represents the most comprehensive reform of US international tax rules since 1962. An important question in evaluating TRA17 is how US trading partners will respond to its provisions. In general, US trading partners may take steps to negate the competitive advantage gained by the US from the lower rate of corporate tax, expensing and the “patent box”. They may also take advantage of the participation exemption and the cross-crediting feature of GILTI to increase taxes on US multinationals. Finally, they are likely to copy the BEAT and apply it to US multinationals. The end result would be that the anticipated benefit of attracting investment into the US is unlikely to materialize.

Keywords: Tax Reform, Tax Cuts, Jobs Act

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S. and Mazzoni, Gianluca, Tit for Tat: How Will Other Countries React to the Tax Cuts and Jobs Act? (December 21, 2017). U of Michigan Law & Econ Research Paper No. 17-022; U of Michigan Public Law Research Paper No. 581. Available at SSRN: https://ssrn.com/abstract=3089052

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

Gianluca Mazzoni

University of Michigan at Ann Arbor - Law School - SJD Candidate ( email )

Ann Arbor, MI
United States

Paper statistics

Downloads
151
rank
169,463
Abstract Views
446