America’s status as an innovative beacon for the world could be dashed because of little-understood changes to international tax law. If left unanswered by Congress, these changes could lead to severe and irreparable economic harm to the U.S. economy.
The findings of the paper are:
- Countries competing with the U.S. for innovative investment and jobs have put in place preferential tax rates for intellectual property (IP).
- These preferential rates, combined with a relatively high U.S. corporate rate, has contributed to the two trillion dollars in assets held by U.S. multinational firms abroad.
- The OECD’s Modified Nexus rule requires multinational firms to locate IP creation in the same jurisdiction where IP-related income is taxed.
- If Congress fails to implement reform, billions of dollars of investment and thousands of high-skilled jobs are at risk.
The Clock is Ticking on American Innovation by Hamilton Place Strategies