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1 1 (July 20, 2021)

handle is hein.amenin/aeiaebj0001 and id is 1 raw text is: Bliden's Refforrns to the Tax Treatrment of US Multinational Corporations: s By Kyle Pomerleau The Joe hiden adninstration has proposed significant changes to th.e tax treatment of US mu tinational c oporations aimed at raising reveinue and curbg p roflt shiting and base erosion. The proposals would move tie US residence-based tax and irtroduce new anti- overview of th-e tax traatment of multinational istration's proposals, and some irnplications corporate incorne rax closer to a worldwide or base erosion protect ions. This rerport provics an corporatians under surrent law, the Biden admin- of the adrninistra.tion's aoproach. in 2017. Republican lawmakers passed and inner President Donald Trump signed into law the Tax Cuts and JObs Act (TCJA . Along With reducing the corporate income tax rate, this tax code over- haul reformed the tax treamnent of multinational corporations. More than three years later, Presiden Joe Biden is proposing an inerease to the corporate incon tax rate and additional reforms affecting the taxa- tion of nmultinational corporations. The president's proposals aim to raise the tax brden on mulina- tional corporations and address sevcral perc.ve weaknesses of the current tax regime, including profit sIh Ftinag and ofishorn g of investment. The proposal also seeks to combat what the admin- istration calls the race to the bottom, a general reduction. in corporate tax rates globally over the past few decades. The '.iden adrmini stration's proposed reforras would move the corporate income tax closer to a pure worldwide or residence-based, system that taxes the global profits of US--based multinational corporations. The refirms would also strengthen and introduce several new anti-base erosion pro- vions. Although the Green Book released by the adnmin- istration on May 28 (US Department of Treasury zozia) outlines how each reform would work, several sgnificant aspects of how these policies would affect profit-shifting incentives, the incen- tive to invest, and the incentive for firms to locate headquarters in the United States remain unclear. This report provides an overview of the tax treatment of muitin.ationa. corporations under cu- rent law and the Biden administration's proposals. It aiso discusses otner recent internationai tax proposals, some unresolved policy concerns, and some inplications ofthe admini str ation's approach. Background Before the TCJA, the US had a worldwide, or residence-based, corporate income tax with defer- raL Under this system, mnu tinational corporations juy 21

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