IDEAS home Printed from https://ideas.repec.org/a/spr/intere/v53y2018i2d10.1007_s10272-018-0727-6.html
   My bibliography  Save this article

Implications of the US Tax Reform for Transatlantic FDI

Author

Listed:
  • Friedrich Heinemann

    (Centre for European Economic Research (ZEW)
    University of Heidelberg)

  • Marcel Olbert

    (University of Mannheim)

  • Olena Pfeiffer

    (Centre for European Economic Research (ZEW)
    University of Heidelberg)

  • Thomas Schwab

    (Centre for European Economic Research (ZEW)
    University of Mannheim)

  • Christoph Spengel

    (Centre for European Economic Research (ZEW)
    University of Mannheim)

  • Kathrin Stutzenberger

    (University of Mannheim)

Abstract

On 22 December 2017 President Trump signed the Tax Cuts and Jobs Act. This corporate tax reform can be considered the most significant amendment of the US corporate tax code since 1986. Besides the reduction of the corporate income tax rate from 35% to 21%, the Tax Cuts and Jobs Act entails features like a switch from worldwide income taxation to territorial taxation, as well as immediate deductions for certain assets. This leads to a substantial improvement for the US in global tax competition. In this paper, we analyse the effects of the US tax reform on FDI flows between Europe and the US. We find that European high-tax countries in particular will suffer from a net outflow of FDI.

Suggested Citation

  • Friedrich Heinemann & Marcel Olbert & Olena Pfeiffer & Thomas Schwab & Christoph Spengel & Kathrin Stutzenberger, 2018. "Implications of the US Tax Reform for Transatlantic FDI," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 53(2), pages 87-93, March.
    • Handle: RePEc:spr:intere:v:53:y:2018:i:2:d:10.1007_s10272-018-0727-6
    DOI: 10.1007/s10272-018-0727-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10272-018-0727-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10272-018-0727-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bofinger, Peter & Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Wieland, Volker, 2018. "Vor wichtigen wirtschaftspolitischen Weichenstellungen. Jahresgutachten 2018/19 [Setting the Right Course for Economic Policy. Annual Report 2018/19]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201819, February.
    2. Casi, Elisa & Spengel, Christoph & Stage, Barbara M.B., 2020. "Cross-border tax evasion after the common reporting standard: Game over?," Journal of Public Economics, Elsevier, vol. 190(C).
    3. Mindy Herzfeld, 2021. "Designing international tax reform: lessons from TCJA," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(5), pages 1163-1187, October.
    4. Dorine Boumans & Clemens Fuest & Carla Krolage & Klaus Wohlrabe, 2020. "Expected effects of the US tax reform on other countries: global and local survey evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(6), pages 1608-1630, December.
    5. Ann-Christin Rathje & Klaus Wohlrabe, 2018. "Der internationale Steuerwettbewerb aus Unternehmenssicht," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(21), pages 46-55, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:intere:v:53:y:2018:i:2:d:10.1007_s10272-018-0727-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.