The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms:
This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jur...
Gespeichert in:
| Beteiligte Personen: | , |
|---|---|
| Format: | Buch |
| Sprache: | Englisch |
| Veröffentlicht: |
Cambridge, Mass.
NBER
2000
|
| Schriftenreihe: | NBER working paper series
7903 |
| Schlagwörter: | |
| Links: | http://papers.nber.org/papers/w7903.pdf |
| Zusammenfassung: | This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jurisdictions. These same rule changes were not applied to other forms of income; in particular, income generated from active manufacturing operations was still eligible for deferral after the Act. We use information from the tax returns of U.S. corporations to examine how local taxes affect the allocation of assets held abroad. We find that, before the Act, the location of assets in financial subsidiaries was responsive to differences in host country tax rates across jurisdictions. However, after the Act, differences in host country tax rates no longer explain the distribution of assets held in financial services subsidiaries abroad. In contrast, we find that assets held in manufacturing subsidiaries have become more sensitive to variations in tax rates. Our results suggest that the tightening of the anti-deferral provisions applicable to financial services companies has been successful in neutralizing the effect of host country income taxes on investment location decisions. |
| Umfang: | 27, [8] S. 22 cm |
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| 245 | 1 | 0 | |a The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms |c Rosanne Altshuler ; R. Glenn Hubbard |
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| 520 | |a This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jurisdictions. These same rule changes were not applied to other forms of income; in particular, income generated from active manufacturing operations was still eligible for deferral after the Act. We use information from the tax returns of U.S. corporations to examine how local taxes affect the allocation of assets held abroad. We find that, before the Act, the location of assets in financial subsidiaries was responsive to differences in host country tax rates across jurisdictions. However, after the Act, differences in host country tax rates no longer explain the distribution of assets held in financial services subsidiaries abroad. In contrast, we find that assets held in manufacturing subsidiaries have become more sensitive to variations in tax rates. Our results suggest that the tightening of the anti-deferral provisions applicable to financial services companies has been successful in neutralizing the effect of host country income taxes on investment location decisions. | ||
| 648 | 4 | |a 1984-1994 | |
| 650 | 4 | |a Steuerreform / Internationales Steuerrecht / Kapitalertragsteuer / Finanzsektor / Auslandsniederlassung / Multinationales Unternehmen / Betriebliche Standortwahl / USA | |
| 700 | 1 | |a Hubbard, R. Glenn |d 1958- |e Verfasser |0 (DE-588)124552064 |4 aut | |
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Datensatz im Suchindex
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| author | Altshuler, Rosanne Hubbard, R. Glenn 1958- |
| author_GND | (DE-588)131401939 (DE-588)124552064 |
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| author_sort | Altshuler, Rosanne |
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| id | DE-604.BV023589575 |
| illustrated | Not Illustrated |
| indexdate | 2024-12-20T13:23:12Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016904905 |
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| physical | 27, [8] S. 22 cm |
| publishDate | 2000 |
| publishDateSearch | 2000 |
| publishDateSort | 2000 |
| publisher | NBER |
| record_format | marc |
| series | NBER working paper series |
| series2 | NBER working paper series |
| spelling | Altshuler, Rosanne Verfasser (DE-588)131401939 aut The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms Rosanne Altshuler ; R. Glenn Hubbard Cambridge, Mass. NBER 2000 27, [8] S. 22 cm txt rdacontent n rdamedia nc rdacarrier NBER working paper series 7903 This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax jurisdictions. These same rule changes were not applied to other forms of income; in particular, income generated from active manufacturing operations was still eligible for deferral after the Act. We use information from the tax returns of U.S. corporations to examine how local taxes affect the allocation of assets held abroad. We find that, before the Act, the location of assets in financial subsidiaries was responsive to differences in host country tax rates across jurisdictions. However, after the Act, differences in host country tax rates no longer explain the distribution of assets held in financial services subsidiaries abroad. In contrast, we find that assets held in manufacturing subsidiaries have become more sensitive to variations in tax rates. Our results suggest that the tightening of the anti-deferral provisions applicable to financial services companies has been successful in neutralizing the effect of host country income taxes on investment location decisions. 1984-1994 Steuerreform / Internationales Steuerrecht / Kapitalertragsteuer / Finanzsektor / Auslandsniederlassung / Multinationales Unternehmen / Betriebliche Standortwahl / USA Hubbard, R. Glenn 1958- Verfasser (DE-588)124552064 aut Erscheint auch als Online-Ausgabe NBER working paper series 7903 (DE-604)BV002801238 7903 http://papers.nber.org/papers/w7903.pdf kostenfrei Volltext |
| spellingShingle | Altshuler, Rosanne Hubbard, R. Glenn 1958- The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms NBER working paper series Steuerreform / Internationales Steuerrecht / Kapitalertragsteuer / Finanzsektor / Auslandsniederlassung / Multinationales Unternehmen / Betriebliche Standortwahl / USA |
| title | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms |
| title_auth | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms |
| title_exact_search | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms |
| title_full | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms Rosanne Altshuler ; R. Glenn Hubbard |
| title_fullStr | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms Rosanne Altshuler ; R. Glenn Hubbard |
| title_full_unstemmed | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms Rosanne Altshuler ; R. Glenn Hubbard |
| title_short | The effect of the Tax Reform Act of 1986 on the location of assets in financial services firms |
| title_sort | the effect of the tax reform act of 1986 on the location of assets in financial services firms |
| topic | Steuerreform / Internationales Steuerrecht / Kapitalertragsteuer / Finanzsektor / Auslandsniederlassung / Multinationales Unternehmen / Betriebliche Standortwahl / USA |
| topic_facet | Steuerreform / Internationales Steuerrecht / Kapitalertragsteuer / Finanzsektor / Auslandsniederlassung / Multinationales Unternehmen / Betriebliche Standortwahl / USA |
| url | http://papers.nber.org/papers/w7903.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT altshulerrosanne theeffectofthetaxreformactof1986onthelocationofassetsinfinancialservicesfirms AT hubbardrglenn theeffectofthetaxreformactof1986onthelocationofassetsinfinancialservicesfirms |