While almost everyone agrees that the current U.S. system for taxing foreign proäts of American corporations is counterproductive, there has been heated partisan debate about what should be done. Now, with Republican dominance of Congress and the White House, we should look carefully at House Speaker Paul Ryan’s path-breaking plan for corporate tax reform.
Under current law, foreign proäts of American corporations are legally subject to a 35 percent U.S. tax — the highest corporate tax rate among industrialized countries. In fact, American corporations do not pay this tax unless and until they bring these foreign proäts back to the U.S.
Thus, the current system mainly beneäts tax lawyers and accountants.