Adam Hal Spencer
Congress is currently considering substantial reform of the United States tax code. One important component of reform which has been largely overlooked is the treatment of corporate income of multinational firms. The bills under consideration move the U.S. from a worldwide system to a territorial one that taxes only domestic activity. My research shows that this change would lead to higher output, wages, and productivity in the U.S. In addition, while official government estimates suggest that removing this “repatriation tax” would cost hundreds of billions of dollars, I find that the increased economic activity resulting from the reform makes it roughly revenue neutral.