June 11, 2024

The FACT Coalition: FACT Sheet: Congress Should Repeal a Wasteful Tax Break for Big Tech

ITEP Work in Action

The 2017 tax reform massively reshaped how U.S. multinationals are taxed on their foreign income, including through the application of a global minimum tax that grants corporations a substantial discount on their foreign profits. This discount gave big multinationals new incentives to stash their most valuable intangible assets – intellectual property like patents, trademarks, and other highly mobile properties – in foreign tax havens to avoid taxation at the full U.S. domestic rate. In an attempt to balance this perverse incentive, the 2017 law sought to bring investment back to the United States through a provision known as the Foreign-Derived Intangible Income (FDII) deduction, a massive tax break for corporations that earn income from their U.S. intellectual property by selling goods and services abroad.

Read the report here.