U.S. Tax Reform: “The Four Ages Of U.S. International Tax”
Keywords:
U.S. International Taxation, Capital Export Neutrality, Deferral, GILTI, Pillar Two, BEPS, TCJAAbstract
This article traces the evolution of the U.S. international tax regime across four distinct historical periods: the age of benefits (1918–1960), the age of neutrality (1960–1980), the age of competition (1981–1997), and the age of cooperation (post-1998). It examines how foundational principles such as capital export neutrality, residence-based taxation, and anti-deferral measures have shaped legislative enactments from the Foreign Tax Credit of 1918 through the Tax Cuts and Jobs Act of 2017. While the framework has succeeded in balancing double taxation relief and U.S. business competitiveness, longstanding features like deferral and check the box elections have facilitated base erosion. The paper highlights the resilience of these core structures despite global reforms, questioning whether the U.S. approach remains optimal amid OECD Pillar Two’s push for minimum taxes. The study provides essential context for understanding current debates on aligning U.S. tax policy with global standards.
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