US corporate tax reform depends on issue linkage

Significance

Corporate tax may be one area where it could be possible to find some common ground between the otherwise gridlocked Republican Congress and the Democratic White House. President Barack Obama has proposed a one-time repatriation tax on cash held overseas by companies to be followed by a full-spectrum tax code overhaul.

Impacts

• Lobbyists may support a repatriation amnesty, but will obstruct any initiative that raises effective tax rates.
• European Commission independence from member states may see the EU lead on corporate tax investigations.
• Australia will move slowly on corporate tax reform if the coalition government remains distracted by leadership disputes.