A Burden-Neutral Shift from Foreign Tax Creditability to Deductibility?

Kimberly A. Clausing Daniel Shaviro I. INTRODUCTION As one of the authors has explained, analysis of the issues raised by foreign tax creditability often conflates two distinct margins affecting multinational firms.[1] The first is the marginal incentive to invest abroad, which depends on expected domestic tax burdens with respect to such investment. The domestic tax treatment of foreign tax liabilities is just one input into this marginal incentive, which also…