Barriers to Mobility: The Lockout Effect of U.S. Taxation of Worldwide Corporate Profits

John R. Graham, Michelle Hanlon and Terry Shevlin

National Tax Journal, 2010, vol. 63, issue 4, 1111-1144

Abstract: Using data from a survey of tax executives, we examine the corporate response to the one-time dividends received deduction in the American Jobs Creation Act of 2004. We describe the firms’ reported sources and uses of the cash repatriated and we also examine non-tax costs companies incurred to avoid the repatriation tax prior to the Act. Finally, we examine whether firms would repatriate cash again if a similar Act were to occur in the future. Overall, the evidence is consistent with a substantial lockout effect resulting from the current U.S. policy of taxing the worldwide profits of U.S. multinationals.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:63:y:2010:i:4:p:1111-1144

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