U.S. Taxation of Overseas Investment and Income: Background and Issues (CRS Report for Congress)
A full-text PDF of the latest version is currently unavailable.
| Release Date |
Revised Jan. 28, 2009 |
| Report Number |
RL32749 |
| Report Type |
Report |
| Authors |
David L. Brumbaugh, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
-
Premium Revised May 21, 2008 (17 pages, $24.95)
add
-
Premium Jan. 31, 2005 (20 pages, $24.95)
add
|
Summary:
Investment abroad by U.S. individuals and firms is substantial and growing -- an important aspect of the increased integration of the U.S. economy with the rest of the world. At the end of 2006, the overall stock of private U.S. investment abroad was 38.4% of the total U.S. stock of private capital; the proportion has more than doubled over the past two decades. Because investment outflows have grown, it is not surprising that U.S. taxation of overseas investment has been and is likely to remain a prominent issue before Congress. First, because investment abroad is an increasingly important part of the economy, the effects of taxation on foreign investment are potentially more important. Second, the increased mobility of capital has changed the environment in which taxes apply; some have suggested that capital's mobility may call for a change in U.S. tax policy. [â¦]The varied effects of the U.S. tax system suggest an ambivalence towards overseas investment on the part of policymakers and the public. In the 110th Congress, H.R. 3970 proposes to implement changes that vary in their likely effect on foreign investment -- echoing the underlying tax system. This implied ambivalence -- along with foreign investment's growing importance -- suggests that debate over U.S. international taxation will continue in Congress in 2008 and beyond. Some possible issues include the place of international taxation in a possible movement towards fundamental tax reform; and whether the United States should move towards a 'territorial' tax system or -- alternatively -- adopt provisions designed to either promote tax neutrality or limit 'offshore outsourcing.' This report was originally written by David L. Brumbaugh, Specialist in Public Finance, who has retired from CRS. It will be updated as legislative events occur.
