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U.S. Multinational Companies, Dividends, and Taxes

Author

Listed:
  • Ralph Kozlow
  • Patricia Abaroa

    (Bureau of Economic Analysis)

Abstract

The passage of the American Jobs Creation Act of 2004 (AJCA) provided U.S. tax incentives for U.S. multinational companies that receive large dividends from their foreign affiliates. In 2005, dividends paid by foreign affiliates to their U.S. parents were 4 times as large as in 2004. With most international financial transactions, it is usually difficult for an observer to determine whether tax considerations were a primary factor in motivating the transactions versus just one of many important factors. However, given Congress' stated motivation for passing the AJCA and the substantial increase in dividends received by U.S. parent companies after enactment, there certainly does appear to be a casual relationship (with tax considerations playing a primary role) in at least this instance.

Suggested Citation

  • Ralph Kozlow & Patricia Abaroa, 2006. "U.S. Multinational Companies, Dividends, and Taxes," BEA Papers 0065, Bureau of Economic Analysis.
    • Handle: RePEc:bea:papers:0065
    as

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    File URL: https://www.bea.gov/system/files/papers/P2006-4.pdf
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    Cited by:

    1. Frederick Bird & Thomas Vance & Peter Woolstencroft, 2009. "Fairness in International Trade and Investment: North American Perspectives," Journal of Business Ethics, Springer, vol. 84(3), pages 405-425, February.
    2. Bridgman, Benjamin, 2014. "Do intangible assets explain high U.S. foreign direct investment returns?," Journal of Macroeconomics, Elsevier, vol. 40(C), pages 159-171.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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