Number: RL32429
Title: Foreign Investment and Tax Incentives: Analysis of Current Law and Legislative Proposals
Authors: David L. Brumbaugh, Government and Finance Division 
Abstract: This analysis looks at two questions that the policy debate addresses. First, what is the impact of the U.S. tax system on the flow of investment abroad? Second, what would be the impact of the principal legislative proposals on that flow? It concludes that under current law, the tax system poses a patchwork of incentives and disincentives for overseas investment, in some cases encouraging U.S. firms to shift operations abroad, in some cases discouraging overseas investment. The overall, net impact of the system on incentives defines generalization. The current legislative proposals likewise contain a mixture of tax incentives for domestic and foreign investment and whether they would, on balance, encourage overseas or domestic investment is not clear.
Pages: 18
Date: November 12, 2004