Penn Wharton released updated cost estimates for the OBBBA International Tax Reforms:

Summary: We project that corporate tax revenue will decrease by $276 billion over 10 years on a conventional basis due to changes in international tax provisions related to the Section 250 deduction under OBBBA.

• We estimate that foreign-derived intangible income (FDII) has grown almost twice as fast over time as global intangible low-taxed income (GILTI) since their inception in the 2017 Tax Cuts and Jobs Act. The value of the Section 250 deduction, which determines the effective tax rate on these income categories, reached $517 billion in 2022.

• We estimate that OBBBA’s reforms to the Section 250 deduction will reduce corporate tax revenue by $276 billion between 2026 and 2035 on a conventional basis, assuming that the other OBBBA provisions are current law. About half of the revenue loss is attributable to rate changes to the FDII deduction with the other half mainly caused by rate changes to the GILTI deduction and the GILTI foreign tax credit. This reduction is larger than the $118 billion value estimated by the Joint Committee on Taxation (JCT) for the same provisions.