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Tax Law

Obama's Corporate Minimum Tax

President Obama has given us his framework for corporate tax reform. There's much talk about his proposed minimum tax on offshore profits. The framework is thin on details, but we're able to provide the following preview of how the tax might operate.

The minimum tax would take the form of a low-tax kickout rule that limits the ability of U.S. firms to defer foreign profits. It draws a line in the sand, so to speak, at half the U.S. statutory rate, which drops to 28% under Obama's framework. That targets an effective rate of 14% (half of 28%) as the threshold for the kickout rule.


Here are three examples of how the President's corporate minimum tax might work in practice:


This raises a fundamental question which President Obama and his advisors will need to address: Is the goal of corporate tax reform to stamp out deferral wherever it occurs ... or merely to prevent the shifting of profits to tax havens? Stated differently, should anyone care whether U.S. firms park their foreign profits in countries with normal tax rates ... say Germany or France?

View TaxAnalysts'® Robert Goulder's opinion in its entirety on


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