IMF Working Paper: Tax Spillovers from U.S. Corporate Income Tax Reform

This IMF Working Paper describes and tentatively quantifies likely tax spillovers from the U.S. 2017 corporate income tax reform. It calculates effective tax rates under various assumptions, and tentatively estimates that under constant policies elsewhere, the rate cut will reduce tax revenue from multinationals in other countries by on average 1.6 to 5.2 percent. If other countries react in line with historical reaction functions, the revenue loss from multinationals rises to an average of 4.5 to 13.5 percent. The paper also discusses profit-shifting, real location, and policy reactions from the more complex features of the reform.

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By Beer, Sebastian; Klemm, Alexander D.; and Matheson, Thornton, posted on Wednesday July 25, 2018
Tax Reform

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