by Kyle Pomerleau
May 23, 2014
Every year, there are news stories outlining how much multinational corporations are paying in taxes. Many of the more sensational stories lead people to believe that U.S. companies pay little or nothing in taxes on their foreign earnings. Some politicians suggest implementing a “minimum tax” on corporate foreign earnings to prevent tax avoidance. Unfortunately, legislation that would impose these types of taxes on multinational corporations is based on a misunderstanding of how U.S. international tax rules work. In any discussion of U.S. corporate tax policy and tax reform, it is important to understand how and to what extent multinational firms’ foreign earnings are taxed.