U.S. International Tax Policy and Corporate America

48 The Journal of Corporation Law 261 (2023)

SMU Dedman School of Law Legal Studies Research Paper No. 594

34 Pages Posted: 4 Apr 2023

See all articles by Christopher H. Hanna

Christopher H. Hanna

Southern Methodist University - Dedman School of Law

Cody A. Wilson

Gibson, Dunn & Crutcher, LLP

Date Written: 2023

Abstract

Given the Republican-controlled House and narrow Democratic majority in the Senate, the Biden Administration has found itself in the perilous situation of needing to raise tax revenue while retaining the support of moderate Democrats. President Biden has proposed raising revenue by bringing the United States closer to a worldwide no deferral system and raising the corporate tax rate from 21 percent to 28 percent. These changes are unlikely to become law. Together, they simply do not have the support of moderate Democrats, Republicans, and, especially, Corporate America.

This Article aims to resolve the Biden Administration’s conundrum by proposing a worldwide no deferral system with a corporate tax rate in the mid to high teens. In fact, such a proposal has already, in some sense, been made by both the Biden Administration and Congress and recently enacted into law: the 15 percent corporate alternative minimum tax. But few recognize this new tax system as a worldwide no deferral system because it is imposed on financial accounting income and applies only to the largest corporations. This Article addresses a gap in existing proposals for U.S. international tax reform by discussing Corporate America’s focus on the interaction between financial accounting and tax accounting. Additionally, it proposes a U.S. international tax system that could have the support of tax scholars, policymakers, and Corporate America, all without sacrificing revenue.

Keywords: Tax revenue, Corporate tax rate, Taxation, Corporations, Alternative minimum tax, Biden Administration, Worldwide no deferral system, U.S. international tax reform, Tax accounting, Tax Cuts and Jobs Act, TCJA, Corporate America

JEL Classification: K34, H25

Suggested Citation

Hanna, Christopher H. and Wilson, Cody A., U.S. International Tax Policy and Corporate America ( 2023). 48 The Journal of Corporation Law 261 (2023), SMU Dedman School of Law Legal Studies Research Paper No. 594, Available at SSRN: https://ssrn.com/abstract=4408430

Christopher H. Hanna (Contact Author)

Southern Methodist University - Dedman School of Law ( email )

P.O. Box 750116
Dallas, TX 75275
United States

Cody A. Wilson

Gibson, Dunn & Crutcher, LLP

Dallas, TX

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