Anmol Bhandari and Ellen McGrattan (Minnesota) have a new NBER working paper, “Foreign Tax Advantages after the U.S. Tax Reform of 2017” (September 2026). Here is the abstract:

We construct a firm-year panel of income-tax rate reconciliations from annual 10-K filings of public companies to study the effects of the Tax Cuts and Jobs Act (TCJA) on U.S. multinational profit shifting. These reconciliations decompose the gap between company-level effective tax rates and the federal statutory corporate tax rate, allowing us to isolate the contribution of foreign tax advantages before and after the reform. We find that TCJA significantly reduced the tax rate gap and increased effective tax rates for companies most exposed to pre-TCJA international tax benefits. This resulted in an onshoring of profits with foreign profit shares falling 1.3 percentage points per percentage point of tax increase. Among more exposed companies, we find no differential change in investment, employment, or the geographic distribution of sales and installed capital. A neoclassical model of a multinational that chooses where to book its income rationalizes this pattern: the reform raised the average tax on income booked abroad relative to income booked at home, which governs where profits are reported, while the marginal tax on capital, which governs investment, changed by an amount common to all firms. Controlling for deferred-tax windfall gains leaves our main results unchanged.