Why It's Better


The Tax Cut and Jobs Act improved the former international tax rules but created a complex patchwork system. It was particularly unsuccessful at balancing the effective tax rate scales between Domestic corporations and Multinationals, sometimes known as the Corporate Tax Differential. 

Sales Factor Apportionment is the fundamental solution to the Corporate Tax Differential because it would:

  • Simplify the amount of corporate profit the U.S. taxes with a simple formula. 
  • Level the playing field between purely domestic businesses and multinational enterprises. 
  • Create an authentic and valid territorial system. 
  • Eliminates the tax incentives to locate jobs, factories, and corporate headquarters offshore.
  • Boosting employment, exports, and U.S. tax revenue. (Inversions are pointless.)
  • Estimated to increase revenue without raising rates because the revenue comes from multinational companies paying what their domestic competition does.

Sales Factor Apportionment is more straightforward and more effective than our new system which attempts — and fails — to tax all corporations fairly.

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