Why Invest in The USA

Inflation and economic recovery

There is the possibility of tax increases. This might be because of COVID-19 resurgence becoming the top concern by 17% of respondents. 

Inflationary pressures are the top concern for 13% of respondents, but the vast majority believe that inflationary pressures will persist for some time. The average likelihood that inflationary pressures will subside by the middle of 2022, a view held by many economists, is 19%. Respondents believe there is a 60% likelihood inflationary pressures will linger into 2023 or beyond and a 25% likelihood they will persist beyond 2023.

Corporate Tax Increase

The likeliest responses to a corporate tax increase would be no change in operations (39%) or decrease in capital expenditures (33%). Only 11% of respondents said they would hire fewer employees.

This is a significant change from the February 2021 Tax Barometer, when 37% of respondents stated the likeliest response would be to hire fewer employees and 17% selected decreased capital expenditures.

Tax Credit or Incentive

The vast majority (87%) report that their company, industry or organization has modeled the impacts of the House Ways & Means tax plan at least a little. Among those saying the corporate income tax rate would not change, nearly 20% said global intangible low-taxed income (GILTI) changes (tax rate or per country limitation) would be the most impactful.

The renewable energy incentives in these proposals are seen as the most important by respondents to their company, industry or organization.

US tax developments

Two major revenue-raising provisions of the Tax Cuts and Jobs Act (TCJA), the EBIT-based interest expense limitation and the amortization of certain research and experimentation (R&E) expenditures, are set to go fully into force in 2022.

Of those surveyed, 43% say the more stringent EBIT-based expense limitation is at least very likely to go fully into force at the beginning of 2022, an increase from 34% and 36% in the February 2021 and May 2019 Tax Barometers, respectively. However, it is still below December 2018 levels (48%). 

Global Tax Developments

There are many global tax developments that could impact respondents’ companies, industries or organizations:

Respondents believe that the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Sharing (BEPS) 2.0 Pillar 1 and Pillar 2 and the international tax provisions included in the reconciliation bill are equally impactful.

A higher US corporate income tax rate was also widely seen as one of the more impactful developments.

Respondents, on average, believe the earliest that BEPS 2.0 policies will start taking effect is 2024 or earlier (59% likelihood). However, the average likelihood that the BEPS 2.0 policies will start taking effect beyond 2025 or not at all is 23%. Respondents gave only a 6% likelihood that the BEPS 2.0 policies will start taking effect in 2022.