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Thursday, April 6, 2017

Fleming, Peroni & Shay:  The Transition Tax Issue

J. Clifton Fleming Jr. (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Harvard), Getting from Here to There: The Transition Tax Issue, 154 Tax Notes 69 (Mar. 27, 2017):

If there is fundamental U.S. international income tax reform, regardless of the reform option chosen, the United States must decide how to handle the $2.4 trillion to $2.6 trillion of previously untaxed foreign income accumulated by U.S. multinational corporations. In this report, Fleming, Peroni, and Shay argue that the proper approach is to treat the income as a subpart F inclusion in the year before the effective date of fundamental reform and to tax it at regular rates with an option to make the payments in installments that bear market-rate interest.

The authors explain why the case for a low or deferred tax on this income is inferior to the case for full immediate taxation.

http://taxprof.typepad.com/taxprof_blog/2017/04/fleming-peroni-shaythe-transition-tax-issue.html

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