U.S. multinationals' alternatives to paying taxes

Jeremiah Harris and William O'Brien

Journal of Corporate Finance, 2025, vol. 91, issue C

Abstract: We examine the impact of potential repatriation taxes on U.S. multinationals' pre-2018 tax planning actions and capital structure policies. We construct a proxy for exogenous changes to repatriation tax rates and find that repatriation-tax-sensitive multinationals are more likely to pursue tax-free repatriation techniques, with examples provided. We also find a positive relationship between repatriation tax increases and both bond issuance and debt ratios, but only for repatriation-tax-sensitive multinationals. These results are concentrated in firms with lower costs of debt capital, while no increased likelihood of inversions is found. Our findings have important implications for current and proposed U.S. tax policies.

Keywords: Taxes; Multinational firms; Capital structure; Corporate innovation; Financial policy (search for similar items in EconPapers)
JEL-codes: G3 G34 G38 H26 H32 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119924001846
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:91:y:2025:i:c:s0929119924001846

DOI: 10.1016/j.jcorpfin.2024.102722

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().