Working Paper: NBER ID: w4783
Authors: Andrew B. Lyon; Gerald Silverstein
Abstract: This paper examines the extent to which U.S.-based multinational corporations are affected by the alternative minimum tax. More than half of all foreign-source income received by corporations in 1990 was earned by corporations subject to the alternative minimum tax. The AMT rules potentially affect multinational corporations in a manner different from their effect on domestic corporations. The paper examines the differential incentives the AMT creates for locating investment either domestically or abroad and considers how the incentives for the repatriation of foreign-source income are affected by the AMT. Tax return data of U.S.-based multinationals are examined to see the extent to which these incentives may influence the repatriation of foreign-source income.
Keywords: Alternative Minimum Tax; Multinational Corporations; Tax Policy; Investment Incentives
JEL Codes: H25; H32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| AMT rules (H26) | MNCs taxable income calculations (F23) |
| AMT rules (H26) | MNCs investment strategies (F23) |
| AMT rules (H26) | MNCs repatriation strategies (F23) |
| AMT (20% tax rate) (H29) | MNCs repatriate income from low-tax jurisdictions (F23) |
| AMT provision limiting foreign tax credits (F38) | U.S. tax on repatriated dividends (H24) |
| AMT rules (H26) | MNCs overall tax liability (F23) |