The tax strategies of American (and other) multinationals increasingly driveall aspects of the data on America’s foreign direct investment.Yes, tax avoidance is the number one priority of US businesses.
As the IMF has reported—and a quick glance at the U.S. data confirms (see table 1)—the bulk of foreign direct investment these days touches a tax haven. The correct mental image of U.S. FDI abroad these days is less a GM factory in China and more Apple’s ownership stake in its Irish subsidiary (whose main asset is intellectual property that Apple has shifted to Ireland, not any tangible asset). And the bulk of the profits that U.S. firms report earning abroad these days are technically earned in low tax jurisdiction (check out the data from the IRS for 2016).
Mainly one reason, government spending in the USA is very inefficient. Enterprises know quite well that they do not get much service from Federal taxes.
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