Graduation Year
2019
Date of Submission
12-2018
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics-Accounting
Reader 1
Andrew Finley
Terms of Use & License Information
Rights Information
2018 Ryan J Motter
OCLC Record Number
1089451973
Abstract
In this paper, I talk about Section 965, also known as the transition tax, enacted in the Tax Cuts and Jobs Act (TCJA). First, I examine loopholes under the old tax regime that allowed for the accumulation of offshore earnings and how the TCJA closes those loopholes. After detailing the legislation of the transition tax and a comparison with Section 965 included in the American Jobs Creation Act in 2004, I compare firms’ recorded provisions of the transition tax with an estimation based on the past disclosures of firms’ permanently reinvested earnings and finds that the transition tax will generate an estimated $308 billion in tax revenue. Lastly, I propose three alternate scenarios to the transition tax: taxing all offshore earnings under the GILTI regime, treating offshore cash as eligible for the 21% corporate rate, and a ratable payment plan compared to the current phase-in payment plan.
Recommended Citation
Motter, Ryan, "The Transition Tax: Why it was Created and How it Could be Altered" (2019). CMC Senior Theses. 2095.
https://scholarship.claremont.edu/cmc_theses/2095
