Politico reports:

The average tax rate on U.S. corporations fell by more than half, to 7.8 percent, in the wake of Republicans’ 2017 tax overhaul, according to a new government analysis.

In a report sure to inflame the debate over corporate taxation, the official Joint Committee on Taxation also said businesses continue to make extensive use of offshore tax havens such as the Cayman Islands and Bermuda to reduce their tax bills.

At the same time, the nonpartisan office said, a tax created by Republicans to target that money stowed in low-tax jurisdictions, known as “GILTI,” is succeeding at dunning at least some of that money.

Companies paid an average total tax rate of 16 percent on that GILTI income, with 5.5 percent going to the IRS and the remainder paid to foreign governments.

The study also found that business investments in things like plants and equipment, as well as employment in the U.S., increased following enactment of the law.

The report comes as Democrats, searching for budget savings to finance their big-ticket spending initiatives, are eyeing multinational corporations. Senate Finance Chair Ron Wyden (D-Ore.) is preparing to release a new framework on international taxes that is expected to call for making provisions like GILTI much more stringent. His committee is planning a hearing Thursday on international tax rules.

Democrats, who’ve long argued corporations are not paying nearly enough, are likely to seize on the reported tax rates as much too low. Republicans, meanwhile, will likely be cheered by the increases JCT found in U.S. investment and employment. [Continue reading…]