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Corporate Taxation and US MNCs: Ensuring a Competitive Economy

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  • Gary Clyde Hufbauer

    (Peterson Institute for International Economics)

  • Martin Vieiro

    (Peterson Institute for International Economics)

Abstract

The debate about "tax reform," during the 2012 presidential race and congressional budget battles this year has centered on closing loopholes, creating new incentives for growth, and raising revenue through higher personal taxation of wealthy Americans. But the debate overlooks an important priority for future US economic growth: the urgent need to reform the corporate tax. US-based multinational corporations (MNCs) are hobbled by an outmoded tax structure as they compete in the age of globalization. Reform would make American MNCs stronger competitors in markets abroad and enable them to expand and invest more at home. Tax rates should be lowered, both on profits earned in the United States and profits earned abroad.

Suggested Citation

  • Gary Clyde Hufbauer & Martin Vieiro, 2013. "Corporate Taxation and US MNCs: Ensuring a Competitive Economy," Policy Briefs PB13-9, Peterson Institute for International Economics.
    • Handle: RePEc:iie:pbrief:pb13-9
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    References listed on IDEAS

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    1. Grubert, Harry, 2012. "Foreign Taxes and the Growing Share of U.S. Multinational Company Income Abroad: Profits, Not Sales, Are Being Globalized," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(2), pages 247-281, June.
    2. Clausing, Kimberly A., 2009. "Multinational Firm Tax Avoidance and Tax Policy," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(4), pages 703-725, December.
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    4. Michael Faulkender & Mitchell Petersen, 2012. "Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act," The Review of Financial Studies, Society for Financial Studies, vol. 25(11), pages 3351-3388.
    5. Alan J. Auerbach, 2007. "Why Have Corporate Tax Revenues Declined? Another Look," CESifo Economic Studies, CESifo Group, vol. 53(2), pages 153-171, June.
    6. Dhammika Dharmapala & C. Fritz Foley & Kristin J. Forbes, 2011. "Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act," Journal of Finance, American Finance Association, vol. 66(3), pages 753-787, June.
    7. Gary Clyde Hufbauer & Woan Foong Wong, 2011. "Corporate Tax Reform for a New Century," Policy Briefs PB11-2, Peterson Institute for International Economics.
    8. Gary Clyde Hufbauer & Martin Vieiro, 2011. "US Tax Discrimination Against Large Corporations Should Be Discarded," Policy Briefs PB11-16, Peterson Institute for International Economics.
    9. Gary Clyde Hufbauer & Paul Grieco, 2005. "Reforming the US Corporate Tax," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3845, April.
    10. Gary Clyde Hufbauer & Martin Vieiro, 2012. "Right Idea, Wrong Direction: Obama’s Corporate Tax Reform Proposals," Policy Briefs PB12-13, Peterson Institute for International Economics.
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    Cited by:

    1. Margherita Gerolimetto & Stefano Magrini, 2014. "Spatial analysis of employment multilpliers in Spanish labor markets," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 68(3-4), pages 87-94, July-Dece.
    2. Margherita Gerolimetto & Stefano Magrini, 2016. "A spatial analysis of employment multipliers in the US," Letters in Spatial and Resource Sciences, Springer, vol. 9(3), pages 277-285, October.
    3. Gary Clyde Hufbauer & Euijin Jung & Tyler Moran & Martian Vieiro, 2015. "The OECD's "Action Plan" to Raise Taxes on Multinational Corporations," Working Paper Series WP15-14, Peterson Institute for International Economics.
    4. Caroline Freund, 2014. "Rethinking the National Export Initiative," Policy Briefs PB14-7, Peterson Institute for International Economics.

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