On Wednesday, September 27, 2017, the White House and Congressional Republicans revealed a new tax plan. Obtained and reported by the Washington Post, Congress released a nine-page document titled, “Unified Framework for Fixing Our Broken Tax Code,” which summarizes the proposed tax code reformations. With this tax plan, President Trump expects to bring “revolutionary change” to the United States, especially to the middle class and American businesses. One of the single greatest revisions that Congress’ plan proposes is the transition of the U.S. from a worldwide to a territorial based tax system. That is, the United States would depart from its position to tax U.S. citizens and corporations on worldwide income. To better explain how the current worldwide tax system works, here is an example. Currently, a U.S. Corporation that receives a dividend from a foreign corporation will be taxed both in that foreign country and by the U.S. Under this worldwide system, a U.S. corporation is allowed to credit a portion of the foreign corporate income tax, or, “deemed to have paid” a portion of the foreign income tax, if the U.S. corporation owns at least 10% voting stock in the foreign corporation (S 902(A) of the Internal Revenue [read more]