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U.S. Direct Investment Abroad: Trends and Current Issues
Summary
The United States is the largest direct investor abroad and the largest recipient of foreign direct
investment in the world. For some Americans, the national gains attributed to investing overseas
are offset by such perceived losses as offshoring facilities, displacing U.S. workers, and lowering
wages. Some observers believe U.S. firms invest abroad to avoid U.S. labor unions or high U.S.
wages, but 74% of the accumulated U.S. foreign direct investment is concentrated in high-income
developed countries. In recent years, the share of investment going to developing countries has
fallen. Most economists argue that there is no conclusive evidence that direct investment abroad
as a whole leads to fewer jobs or lower incomes overall for Americans. Instead, they argue that
the majority of jobs lost among U.S. manufacturing firms over the past decade reflect a broad
restructuring of U.S. manufacturing industries responding primarily to domestic economic forces.
In recent Congresses, Members have introduced a number of measures that would affect U.S.
multinational companies in their foreign investment activities. In the 115th Congress, H.R. 685
and S. 247 (Bring Jobs Home Act) would provide certain tax exemptions to U.S. multinational
firms to induce them to redirect economic activity from a foreign subsidiary to a domestic U.S.
operation. In the 114th Congress, Members also introduced similar measures, including H.R. 297,
the Stop Tax Haven Abuse Act of 2015, introduced by Representative Lloyd Doggett on January
13, 2015, and companion measure S. 174, introduced by Senator Sheldon Whitehouse; and H.R.
415, the Stop Corporate Inversions Act of 2015, introduced by Representative Sander Levin on
January 20, 2015, and companion measure S. 198, introduced by Senator Richard Durbin. While
H.R. 415 and S. 198 are directed at tax inversions, H.R. 297 and S. 174 address a number of tax
and financial issues relative to U.S. multinational firms, including the use of foreign tax havens to
evade U.S. taxes; money laundering; corporate offshore tax avoidance; and corporate tax
inversions.Congressional Research Service
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Jackson, James K. U.S. Direct Investment Abroad: Trends and Current Issues, report, June 29, 2017; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1043294/m1/2/: accessed August 15, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.