Bill Overview
Title: International Competition for American Jobs Act
Description: This bill modifies provisions relating to the taxation of foreign entities. Among other provisions, the bill makes permanent the look-thru rule for controlled foreign corporations (CFCs). (A look-thru rule provides that dividends, interest, rents and royalties that one CFC receives or accrues from a related CFC are not treated as foreign personal holding company income); modifies the tax deduction for foreign-derived intangible income and global intangible low-taxed income; modifies the base erosion minimum tax (10% minimum tax imposed to prevent corporations operating in the United States from avoiding tax liability by shifting profits out of the United States); modifies tax rules allocating certain tax deductions for purposes of the foreign tax credit limitation; restores the limitation on the attribution of stock ownership for purposes of applying constructive ownership rules; and includes specified amounts in the gross income of CFC shareholders.
Sponsors: Sen. Portman, Rob [R-OH]
Target Audience
Population: People working for or investing in multinational corporations
Estimated Size: 500000
- The bill impacts multinational corporations with foreign subsidiaries as it alters how income from these subsidiaries is taxed.
- Look-thru rules, foreign-derived intangible income, and base erosion measures primarily affect companies with significant international operations.
- The bill also impacts individual shareholders of controlled foreign corporations (CFCs) who might see changes in their taxable income.
- Individuals working for multinational firms, especially those in roles related to tax planning and compliance, might experience changes in their job functions.
Reasoning
- The target population largely consists of people employed by, or investing in, multinational corporations, due to the changes in taxation of foreign entities, which can influence corporate strategies.
- The budget constraints and policy focus mean individuals not associated with multinational firms will experience minimal or no impact.
- The Cantril wellbeing score is affected by financial security, job satisfaction, and overall economic environment, which are areas influenced by the policy for those employed in relevant sectors.
- Diverse backgrounds, from age and occupation to location, offer different perspectives on how the International Competition for American Jobs Act may influence their wellbeing.
Simulated Interviews
Tax Consultant (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The policy makes my role more complex due to changes in tax deductions and foreign tax credits.
- Overall, I see opportunities for career growth as companies navigate new tax landscapes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Investor (Los Angeles, CA)
Age: 38 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- The change in taxation may affect dividends from foreign investments.
- I'll need to reassess my portfolio to adapt to new policies potentially impacting my returns.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Software Engineer (Seattle, WA)
Age: 28 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- This policy might indirectly affect my company’s financial strategy.
- I hope to see more investment in technology given potential tax savings on foreign income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Financial Analyst (Houston, TX)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 6/20
Statement of Opinion:
- The act could complicate my work, as I'll need to incorporate additional tax considerations in our forecasts.
- There's potential for both challenges and learning opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Accountant (Chicago, IL)
Age: 33 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- The policy doesn’t significantly impact my role, as we have limited foreign transactions.
- I don't anticipate major changes in our company taxation practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Corporate Lawyer (Miami, FL)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 4/20
Statement of Opinion:
- The policy significantly impacts my field, providing both challenges and opportunities.
- It's crucial to understand how new tax rules affect corporate structures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Retiree (San Francisco, CA)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I’m concerned about the impact on dividends, which are a major part of my retirement income.
- Advisors may recommend altering my investment strategy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 7 |
Student (Boston, MA)
Age: 22 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- I am eager to see how this policy shapes the business landscape where I'll eventually work.
- Changes in tax responsibilities may influence future career paths.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Entrepreneur (Dallas, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The policy could influence the taxation landscape significantly as I plan to expand internationally.
- Understanding these changes is crucial for competitive growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Marketing Director (Atlanta, GA)
Age: 37 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 5/20
Statement of Opinion:
- The tax amendments might reshape our company’s marketing strategies as we adapt to evolving financial landscapes.
- Staying agile and informed is key to sustaining business growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $1000000000 (Low: $800000000, High: $1200000000)
Year 2: $1050000000 (Low: $850000000, High: $1250000000)
Year 3: $1100000000 (Low: $900000000, High: $1300000000)
Year 5: $1180000000 (Low: $950000000, High: $1380000000)
Year 10: $1300000000 (Low: $1050000000, High: $1550000000)
Year 100: $1500000000 (Low: $1200000000, High: $1800000000)
Key Considerations
- Implementation and administration of these tax changes will require government resources but may increase overall tax revenue by reducing avoidance.
- There may be lobbying opposition from affected multinational firms aimed at repealing or further modifying the provisions.
- The global tax environment is uncertain, with ongoing discussions about international tax coordination that could influence outcomes.