NAM Report Finds Proposed Foreign Tax Changes Could Hurt Jobs, Investments

In a report released August 12 by the National Association of Manufacturers, the Ernst & Young consulting firm’s economic group found that proposed changes to a section of the 2017 tax code covering revenue earned abroad could result in up to a million jobs lost and $20 billion in lost economic activity. Previous to 2017, foreign revenue was taxed based on money repatriated to the U.S. in dividends, which companies could and did defer to avoid paying taxes. The 2017 tax reforms passed by President Trump eliminated that tax, and, to discourage offshoring, introduced the GILTI provision, a 10.5% minimum tax targeting Global Intangible Low-Taxed Income—money earned in foreign countries from “intangible assets,” or patents, copyrights, and trademarks.