Date of Award
Bachelor of Science
Professor William Butos
Professor Joshua Stillwagon
The phenomenon of tax inversion has returned to the public eye as American companies in every sector explore expatriation as a means to avoid the highest corporate tax rate in the developed world. In response to billions of dollars in tax revenue flowing overseas, legislators have proposed dozens of laws over the past four decades aimed at curbing this technique, but to no avail. In 2015 alone, tens of billions of dollars' worth of tax inversion transactions were announced. This thesis analyzes the motivations behind corporate emigration using both legal and economic framework, and models this behavior using Probit analysis. We conclude that run rate tax differentials, rather than the distinction between worldwide and territorial systems, motivate corporate inversion. We suggest that a tax holiday would limit the short-term benefits of expatriation and provide time for a new administration to work with Congress to enact a competitive reduction in the corporate income tax rate.
Dowling, Brendan R., "Motivations and Implications of Corporate Tax Inversion". Senior Theses, Trinity College, Hartford, CT 2016.
Trinity College Digital Repository, https://digitalrepository.trincoll.edu/theses/554