What are the ramifications and/or impacts of the US switching to a territorial tax system?

Abstract

AbstractIn this article, we focus on the potential impacts of switching to a territorial tax system in the US. Under the worldwide tax system the US used over the years, income is included in the firm's taxable income, but their foreign income taxes paid can be claimed as deductions or credit to avoid double taxation With a territorial tax system approach, firms would only be paying taxes on the portion of their income being made in their home country. We focus on different studies that analyze the ways in which the US has moved towards a territorial tax system over the years. We also use studies done on the UK and Japan, G‐7 nations that have switched to a complete territorial tax system in recent years, to compare their motives and outcomes to what would potentially happen in the US.