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1 Alan Cole, Considering Potential International Corporate Tax Reforms in the US 1 (2025)

handle is hein.taxfoundation/csgplintl0001 and id is 1 raw text is: *%TAX FOUNDATION Considering Potential International Corporate Tax Reforms in the US Alan Cole Senior Economist March 2025 Key findings • Tax legislation in 2025 may have good reason to address international corporate income taxes, be- cause of scheduled changes slated to go into effect or because of international developments like the Pillar Two agreement. • International tax policy is difficult to optimize, but it should attempt to improve competitiveness, pro- tect the US tax base, and limit complexity. • The US international system dates to the 2017 Tax Cuts and Jobs Act (TCJA), and while much of it was well-considered, some elements unnecessarily hinder cross-border investment. • The US has unique characteristics that make its tax policy considerations different from those of other OECD countries; the Pillar Two global minimum tax agreement offers the US relatively few benefits. • Modeling international tax policies is subject to considerable uncertainty. However, taxes on US cor- porations' foreign earnings likely exceed the taxes implemented by the Pillar Two global minimum tax agreement. • A competitive US international tax policy plan would preserve the foreign-derived intangible income (FDII) provision and fix TCJA-era policies that unduly burden cross-border investment, while raising tax revenue at the much simpler level of distributed profits. The Tax Foundation is the world's leading nonpartisan tax policy 501 (c)(3) nonprofit. For over 80 years, our mission has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. TAX FOUNDATION 1325 G STREET, NW, SUITE 950, WASHINGTON, DC 20005 202-464-6200 1 laxfoundation.org