Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198851
Authors: 
Boumans, Dorine
Fuest, Clemens
Krolage, Carla
Wohlrabe, Klaus
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper 7491
Abstract: 
The Tax Cuts and Jobs Act constitutes the largest change to the US tax system since the 1980s and thoroughly alters the way in which multinational companies are taxed. Current assessments on the reform’s international impact vary widely. This article sheds light on the tax reform’s expected effects on other countries. We first use representative German business survey data to analyse the impact of the reform on German firms. Many firms with substantial US revenues or production capacities in the US intend to expand US investment in response to the reform, in particular large firms and manufacturing companies. The effects on investment in Germany are ambiguous: While some firms substitute between investment locations, others expand in both countries. We subsequently extend our analysis to the global level using worldwide survey data. The results suggest a negative impact on tax revenues and investment in countries with close economic ties to the US.
Subjects: 
US tax reform
corporate tax
firm responses
survey
Germany
JEL: 
H25
H32
H71
E62
F62
Document Type: 
Working Paper

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