What are the ramifications and/or impacts of the US switching to a territorial tax system?

Abstract

In this article, we focus on the potential impacts of switching to a territorial tax system in the US. Under the worldwide tax system the US used over the years, income is included in the firm's taxable income, but their foreign income taxes paid can be claimed as deductions or credit to avoid double taxation With a territorial tax system approach, firms would only be paying taxes on the portion of their income being made in their home country. We focus on different studies that analyze the ways in which the US has moved towards a territorial tax system over the years. We also use studies done on the UK and Japan, G-7 nations that have switched to a complete territorial tax system in recent years, to compare their motives and outcomes to what would potentially happen in the US.

Is This Tax Reform, or Just Confusion?

“…But the comprehensive Tax Reform Act of 1986 did survive the political process, and was signed by President Reagan on October 22, 1986. 3 It had wide bipartisan support: among Democrats, only 12 senators and 74 House members voted against the bill; among Republicans, only 11 senators and 62 House members voted against the bill-almost the same level of opposition as from the Democrats.…”