Reconciling Data on Transition Tax Payments: An Examination of Tax, Economic, and Financial Sources
Presentation
Presentation by Molly Saunders-Scott and Jennifer Shand, analysts in CBO’s Tax Analysis Division, at the National Tax Association’s 112th Annual Conference on Taxation.
The 2017 tax act (Public Law 115-97) changed the way that the foreign income of U.S. corporations was taxed. Before those changes, many types of foreign income were not taxed by the United States until the income was brought back, or repatriated, to the United States. As part of the transition to the new system, a onetime tax was imposed on the existing unrepatriated foreign earnings of U.S. corporations. Corporations must pay the tax regardless of whether they actually repatriate the earnings to the United States. This presentation explains how estimates of those tax payments affect CBO’s baseline projections of corporate income tax revenues.