U.S. interest-allocation rules: Effects and policy

Rosanne Altshuler, Jack M. Mintz

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

In 1986, the U.S. government undertook a significant reform of its income tax system. One important change for U.S. multinational corporations is related to the allocation of interest expense. This work analyzes the impact of the new U.S. interest allocation rules on the investment and financial decisions of U.S. multinationals. We test the effect of these rules on financing behavior using data from a survey of multinationals assembled by Price Waterhouse for this project. We also calculate effective tax rates for investments at home and abroad, taking the interest allocation rules into account.

Original languageEnglish (US)
Pages (from-to)7-35
Number of pages29
JournalInternational Tax and Public Finance
Volume2
Issue number1
DOIs
StatePublished - Feb 1 1995

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Keywords

  • interest allocation rules
  • multinational corporations

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