San Francisco Chronicle: GOP tax bills could shield multinationals’ future overseas profits

Currently, the U.S. government taxes foreign earnings at the same 35 percent corporate rate charged on domestic profits, but only when the foreign earnings are returned to the United States. Under the bills moving through Congress, overseas profits would be mostly excluded from U.S. taxation.

Instead, those profits might be taxed by the nations where the profits were earned, reflecting a “territorial” system like many countries in Europe now use.

“The starting point for the House and Senate bills is that if it’s U.S. income, we’re going to tax it, but if it’s foreign income, we’re not going to tax it at all, ever,” said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a left-leaning research group. Read more

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