Consider what you know about global tax strategies and capital budgeting (NPV) analysis. The current U.S....

80.2K

Verified Solution

Question

Finance

Consider what you know about global tax strategies and capitalbudgeting (NPV) analysis. The current U.S. marginal corporate taxrate is 35%. This has provided an incentive to U.S.-based firms tocreate profit (therefore jobs) outside the United States (in lowtax regimes) and leave it outside the United States.
Many in Congress are currently advocating a one-time,repatriation tax of 5% in order to create jobs. (i.e. any profitsheld outside the United States may be returned to United States andtaxed at only 5%, rather than 35%. This would be a one-time event,the underlying tax law and rates would not be changed). Would therepatriation tax be likely – or unlikely – to have the desiredeffect of creating jobs in United States. Why or whynot?

Answer & Explanation Solved by verified expert

4.3 Ratings (828 Votes)

Repatriation of foreign earnings to Unites States through taxing them at a marginal rate may sound like a good idea for economy as a whole but the story is exactly opposite The desired benefit of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Consider what you know about global tax strategies and capitalbudgeting (NPV) analysis. The current U.S. marginal corporate taxrate is 35%. This has provided an incentive to U.S.-based firms tocreate profit (therefore jobs) outside the United States (in lowtax regimes) and leave it outside the United States.Many in Congress are currently advocating a one-time,repatriation tax of 5% in order to create jobs. (i.e. any profitsheld outside the United States may be returned to United States andtaxed at only 5%, rather than 35%. This would be a one-time event,the underlying tax law and rates would not be changed). Would therepatriation tax be likely – or unlikely – to have the desiredeffect of creating jobs in United States. Why or whynot?