House Bill’s $164 Billion Giveaway to Multinational Corporations Puts America Last

The House of Representatives’ recently passed tax bill changes course on taxing multinational corporations engaged in shifting U.S. profits overseas, offering massive tax giveaways that weaken American revenues and risk sending more American corporate investment offshore.

In 2017, the Republican Congress and President Trump enacted a trio of corporate tax measures designed to discourage American companies from shifting U.S. profits into offshore tax havens: Global Intangible Low-Taxed Income (GILTI), Foreign Derived Intangible Income (FDII), and the Base Erosion and Anti-Abuse Tax (BEAT). Under that bill, these provisions began with very low, preferential rates ranging from 10 to 13.125 percent before eventually rising to the slightly higher range of 12.5 to 16.4 percent in 2026. For comparison, the profits these companies report as being earned in America are subject to the statutory tax rate of 21 percent.

House Tax Bill Locks in Low Corporate Rates

Source: Institute on Taxation and Economic Policy, May 2025

But the new House tax bill would cancel nearly all (94 percent) of those planned increases and instead lock in exceptionally low tax rates on a permanent basis, at a cost of approximately $164 billion over the next decade. For comparison, the Trump administration’s much-touted proposals to exempt tips and overtime pay from the income tax would account for an identical $164 billion of the bill’s tax cuts over the same period.

These tax cuts for multinational corporations will reward companies that choose to invest more overseas. The 2017 tax law’s GILTI provision, in particular, includes a perverse incentive structure under which companies making more tangible investments in other countries, such as factories and equipment, can exclude more of their income from U.S. tax. This is because the law allows for an overly generous deduction equal to 10 percent of the value of foreign capital investments before even a dime of tax is owed under the preferential, 10.5 percent GILTI rate.

Similarly, FDII allows more income to be taxed at a reduced rate of 13.125 percent when companies invest less in the U.S. FDII income is calculated as foreign export income minus 10 percent of U.S. capital investment, such as warehouses and factories. Companies like to have their income classified as FDII to enjoy the preferential rate but having a large amount of capital investment in the U.S. directly undercuts the amount of income categorized as FDII.

Last year, ITEP reported on big corporations cashing in on these tax breaks at an accelerating pace, with just 10 Fortune 500 companies (Alphabet, Meta, Microsoft, Intel, Qualcomm, Texas Instruments, Nvidia, Cisco Systems, Apple and Nike) receiving over $31 billion in tax benefits over the first six years of the law. Over a third, or $13 billion, of those tax cuts were claimed in the most recent year analyzed.

Kim Clausing, a professor of tax law and policy at UCLA and former assistant secretary for tax analysis at the U.S. Treasury, has advocated for removing the 10 percent capital investment deductions from GILTI and FDII to nullify incentives for offshoring these investments. Additionally, she argues that moving toward a country-by-country assessment of GILTI would prevent corporations from using higher taxes paid in countries such as India and Germany to reduce U.S. taxes owed on profits in tax havens with low to no corporate taxes. Taken together, these policies would curtail incentives in the tax code that preference offshoring of capital investments and profits.

Instead of fixing the tax law to prioritize U.S. investment, the House bill would instead squander $164 billion over the next 10 years to keep tax rates on multinational corporations with profits and investments overseas much lower than rates faced by corporations on their ordinary domestic profits. Compounding the problem, this move would also reduce state revenues in the 10 states with enforceable GILTI provisions that conform to federal exemption levels, as well as the 28 states that have conformed to FDII.

As this debate unfolds, it is important to keep in mind that a staggering 70 percent of Americans think that corporations already pay too little in tax. It is abundantly clear that the public is not clamoring to cut taxes for multinational corporations with suspiciously large amounts of overseas profit. Yet if the House bill is enacted into law that is precisely what will happen.

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