The Impact of the Tax Cuts and Jobs Act on Foreign Investment in the United States
The Impact of the Tax Cuts and Jobs Act on Foreign Investment in the United States

Author: Mr. Alexander D Klemm

Publisher: International Monetary Fund

Published: 2022-05-06

Total Pages: 30

ISBN-13:

DOWNLOAD EBOOK

The 2017 Tax Cuts and Jobs Act (TCJA) sharply reduced effective corporate income tax rates on equity-financed US investment. This paper examines the reform’s impact on US inbound foreign direct investment (FDI) and investment in property, plant and equipment (PPE) by foreign-owned US companies. We first model effective marginal and average tax rates (EMTRs and EATRs) by country, industry, and method of finance, and then use those tax rates to calculate the tax semi-elasticities of inbound FDI and PPE investment. We find that both PPE investment and FDI financed with retained earnings responded positively to the TCJA reform, but FDI financed with new equity or debt did not. In country-level PPE regressions, inclusion of macroeconomic controls renders tax rate coefficients insignificant, suggesting that the increase in PPE investment after TCJA was driven by general economic growth. In regressions of FDI financed with retained earnings, however, tax coefficients were robust to inclusion of macroeconomic controls. As the literature predicts, EATRs have a greater impact on cross-border investment than EMTRs. Country-by-industry regressions showed a larger effect of taxes on PPE investment than aggregate country-level regressions, but industry-level tax rates appear to have no effect on earnings retention.

U.S. Investment Since the Tax Cuts and Jobs Act of 2017
U.S. Investment Since the Tax Cuts and Jobs Act of 2017

Author: Emanuel Kopp

Publisher: International Monetary Fund

Published: 2019-05-31

Total Pages: 37

ISBN-13: 1498317049

DOWNLOAD EBOOK

There is no consensus on how strongly the Tax Cuts and Jobs Act (TCJA) has stimulated U.S. private fixed investment. Some argue that the business tax provisions spurred investment by cutting the cost of capital. Others see the TCJA primarily as a windfall for shareholders. We find that U.S. business investment since 2017 has grown strongly compared to pre-TCJA forecasts and that the overriding factor driving it has been the strength of expected aggregate demand. Investment has, so far, fallen short of predictions based on the postwar relation with tax cuts. Model simulations and firm-level data suggest that much of this weaker response reflects a lower sensitivity of investment to tax policy changes in the current environment of greater corporate market power. Economic policy uncertainty in 2018 played a relatively small role in dampening investment growth.

The Regulation of Tax Competition
The Regulation of Tax Competition

Author: Chukwudumogu, Chidozie G.

Publisher: Edward Elgar Publishing

Published: 2021-12-10

Total Pages: 240

ISBN-13: 1802200355

DOWNLOAD EBOOK

This comprehensive book adopts a nuanced yet straightforward approach to analysing the complex phenomenon of international tax competition. Using the ongoing international efforts of the Organisation for Economic Co-operation and Development (OECD) and the European Union (EU) as a basis for its analysis, it explores the mixed effects of tax competition and offers an effective approach that takes account of the asymmetrical global context.

The Great American Jobs Scam
The Great American Jobs Scam

Author: Greg LeRoy

Publisher: Berrett-Koehler Publishers

Published: 2005-07-21

Total Pages: 299

ISBN-13: 1609943511

DOWNLOAD EBOOK

For the past 20 years, corporations have been receiving huge tax breaks and subsidies in the name of "jobs, jobs, jobs." But, as Greg LeRoy demonstrates in this important new book, it's become a costly scam. Playing states and communities off against each other in a bidding war for jobs, corporations reduce their taxes to next-to-nothing and win subsidy packages that routinely exceed $100,000 per job. But the subsidies come with few strings attached. So companies feel free to provide fewer jobs, or none at all, or even outsource and lay people off. They are also free to pay poverty wages without health care or other benefits. All too often, communities lose twice. They lose jobs--or gain jobs so low-paying they do nothing to help the community--and lose revenue due to the huge corporate tax breaks. That means fewer resources for maintaining schools, public services, and infrastructure. In the end, the local governments that were hoping for economic revitalization are actually worse off. They're forced to raise taxes on struggling small businesses and working families, or reduce services, or both. Greg LeRoy uses up-to-the-minute examples, naming names--including Wal-Mart, Raytheon, Fidelity, Bank of America, Dell, and Boeing--to reveal how the process works. He shows how carefully corporations orchestrate the bidding wars between states and communities. He exposes shadowy "site location consultants" who play both sides against the middle, and he dissects government and corporate mumbo-jumbo with plain talk. The book concludes by offering common-sense reforms that will give taxpayers powerful new tools to deter future abuses and redirect taxpayer investments in ways that will really pay off.

Global Tax Revolution
Global Tax Revolution

Author: Chris R. Edwards

Publisher: Cato Institute

Published: 2008

Total Pages: 267

ISBN-13: 1933995181

DOWNLOAD EBOOK

Introduction -- Capital explosion -- Tax cut revolution -- Flat tax club -- Mobile brains and mobile wealth -- Taxing businesses in the global economy -- The economics of tax competition -- The battle for freedom and competition -- The moral case for tax competition -- Options for U.S. policy.

Failure to Adjust
Failure to Adjust

Author: Edward Alden

Publisher: Rowman & Littlefield

Published: 2017-09-15

Total Pages: 269

ISBN-13: 1538109093

DOWNLOAD EBOOK

*Updated edition with a new foreword on the Trump administration's trade policy* The vast benefits promised by the supporters of globalization, and by their own government, have never materialized for many Americans. In Failure to Adjust Edward Alden provides a compelling history of the last four decades of US economic and trade policies that have left too many Americans unable to adapt to or compete in the current global marketplace. He tells the story of what went wrong and how to correct the course. Originally published on the eve of the 2016 presidential election, Alden’s book captured the zeitgeist that would propel Donald J. Trump to the presidency. In a new introduction to the paperback edition, Alden addresses the economic challenges now facing the Trump administration, and warns that economic disruption will continue to be among the most pressing issues facing the United States. If the failure to adjust continues, Alden predicts, the political disruptions of the future will be larger still.

Taxing Wages 2021
Taxing Wages 2021

Author: OECD

Publisher: OECD Publishing

Published: 2021-04-29

Total Pages: 651

ISBN-13: 9264438181

DOWNLOAD EBOOK

This annual publication provides details of taxes paid on wages in OECD countries. It covers personal income taxes and social security contributions paid by employees, social security contributions and payroll taxes paid by employers, and cash benefits received by workers. Taxing Wages 2021 includes a special feature entitled: “Impact of COVID-19 on the Tax Wedge in OECD Countries”.

Globalization and Poverty
Globalization and Poverty

Author: Ann Harrison

Publisher: University of Chicago Press

Published: 2007-11-01

Total Pages: 674

ISBN-13: 0226318001

DOWNLOAD EBOOK

Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.

What is the Impact of Increased Business Competition?
What is the Impact of Increased Business Competition?

Author: Sónia Félix

Publisher: International Monetary Fund

Published: 2019-12-13

Total Pages: 57

ISBN-13: 1513521519

DOWNLOAD EBOOK

This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.

The Politics Industry
The Politics Industry

Author: Katherine M. Gehl

Publisher: Harvard Business Press

Published: 2020-06-23

Total Pages: 316

ISBN-13: 1633699242

DOWNLOAD EBOOK

Leading political innovation activist Katherine Gehl and world-renowned business strategist Michael Porter bring fresh perspective, deep scholarship, and a real and actionable solution, Final Five Voting, to the grand challenge of our broken political and democratic system. Final Five Voting has already been adopted in Alaska and is being advanced in states across the country. The truth is, the American political system is working exactly how it is designed to work, and it isn't designed or optimized today to work for us—for ordinary citizens. Most people believe that our political system is a public institution with high-minded principles and impartial rules derived from the Constitution. In reality, it has become a private industry dominated by a textbook duopoly—the Democrats and the Republicans—and plagued and perverted by unhealthy competition between the players. Tragically, it has therefore become incapable of delivering solutions to America's key economic and social challenges. In fact, there's virtually no connection between our political leaders solving problems and getting reelected. In The Politics Industry, business leader and path-breaking political innovator Katherine Gehl and world-renowned business strategist Michael Porter take a radical new approach. They ingeniously apply the tools of business analysis—and Porter's distinctive Five Forces framework—to show how the political system functions just as every other competitive industry does, and how the duopoly has led to the devastating outcomes we see today. Using this competition lens, Gehl and Porter identify the most powerful lever for change—a strategy comprised of a clear set of choices in two key areas: how our elections work and how we make our laws. Their bracing assessment and practical recommendations cut through the endless debate about various proposed fixes, such as term limits and campaign finance reform. The result: true political innovation. The Politics Industry is an original and completely nonpartisan guide that will open your eyes to the true dynamics and profound challenges of the American political system and provide real solutions for reshaping the system for the benefit of all. THE INSTITUTE FOR POLITICAL INNOVATION The authors will donate all royalties from the sale of this book to the Institute for Political Innovation.