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18 Fla. St. U. Bus. Rev. 57 (2019)
Reagan-Era Economic Theory in the Tax Cuts and Jobs Act: Trickle-down Economics through Increased International Mobility of Certain Corporate Income

handle is hein.journals/fsubr18 and id is 64 raw text is: REAGAN-ERA ECONOMIC THEORY IN THE TAX CUTS AND JOBS ACT: TRICKLE-DOWN ECONOMICS THROUGH INCREASED INTERNATIONAL MOBILITY OF CERTAIN CORPORATE INCOME* MADELEINE BURNETTE-MCGRATH** ABSTRACT This Note describes certain changes made to the international provisions of the Internal Revenue Code (I.R.C.) by the Tax Cuts and Jobs Act (TCJA) enacted in 2017. These provisions include Foreign Derived Intangible Income, Global Intangible Low-Taxed Income, and a new 100% Dividends Received Deduction for certain dividends domestic corporations receive from specified foreign corporations. Following the description of these changes, this Note argues that the international provisions listed above were added to the I.R.C. in order to promote a trickle-down economic effect with the money earned through domestic corporations' specific interactions with certain foreign corporations. Additionally, this trickle-down economic effect proves to be ineffectual, as corporations tend to spend money on shareholder dividends. Prior to the TCJA, there was less incentive to move production overseas, and money that was made in a controlled foreign corporation was either taxed by the United States at the regular corporate rates or was deferred until repatriated, and therefore unusable in the United States until tax was paid. These new provisions have turned this standard way of taxation on its head and allowed for a low tax on certain foreign incomes, which in turn allow the post-taxed amounts to be wholly moveable and spendable as U.S. corporate shareholders see fit. This Note provides an argument as to the consequences of these new international tax provisions. These changes are the likes of which the United States has rarely seen, if ever. The consequences * (c) 2019, Madeleine Burnette-McGrath. ** J.D., cum laude, Ohio Northern University, Claude W. Pettit College of Law, 2019. This fall Madeleine will begin working in the Office of Chief Counsel for the Internal Revenue Service as Division Counsel (Large Business and International). While at Ohio Northern University, she was a student of tax, studying under Assistant Professor Rebecca Rosenberg. Madeleine recently published an international tax article with the Virginia Tax Review, worked as the Manuscript Editor of the Ohio Northern University Law Review, and participated as an advocate for Ohio Northern University's Moot Court team. Madeleine would like to thank Professor Rosenberg for all of her support and mentorship throughout the writing of this Note and for her infectious enthusiasm for tax law which is forever an inspiration.

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