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The Capitol dome, silhouetted by the rising sun. Photo: Carolyn Kaster / AP

Tax experts say the new legislation "fails to eliminate long-standing incentives for companies to move overseas and, in some cases, may even increase them," the WashPost's David J. Lynch writes in the Business section lead:

Why it matters: "As a candidate, Trump vowed to stop companies from moving offshore ... But presidential jawboning has been no match for the market."

What's changing: "Under current law, the 35% corporate tax is due on profit earned overseas only when it is returned stateside. The legislation ... would permit the estimated $2.6 trillion that corporations have stockpiled outside the country to return to the United States subject to a rate expected to be around 15%."

  • "In the future, corporations would be required to pay about a 10% minimum tax on overseas income above a certain level. The provision is billed as a way to discourage the movement of jobs and profit overseas."

But the fine print of the new global minimum tax could make the problem worse for three reasons, nonpartisan tax specialists said:

  1. "[A] corporation would pay global minimum tax only on profit above a 'routine' rate of return on the tangible assets — such as factories — it has overseas. So the more equipment a corporation has in other countries, the more tax-free income it can earn."
  2. "[T]he bill sets the 'routine' return at [a generous] 10% ... Such allowances are normally fixed a couple of percentage points above risk-free Treasury yields, ... currently around 2.4%."
  3. "[T]he minimum levy would be calculated on a global average rather than for individual countries where a corporation operates. So a U.S. multinational could lower its tax bill by shifting profit from U.S. locations to tax havens such as the Cayman Islands."

Be smart: The new law will include lots of what you might call unintended consequences — although often they were intended by the hidden hands that put them there.

Go deeper

Updated 2 hours ago - Politics & Policy

In photos: The Biden and Harris inauguration

President Biden and first lady Jill Biden watch a fireworks show on the National Mall from the Truman Balcony at the White House on Wednesday night. Photo: Chip Somodevilla/Getty Images

President Biden signed his first executive orders into law from the Oval Office on Wednesday evening after walking in a brief inaugural parade to the White House with First Lady Jill Biden and members of their family. He was inaugurated with Vice President Kamala Harris at the U.S. Capitol on Wednesday morning.

Why it matters: Many of Biden's day one actions immediately reverse key Trump administration policies, including rejoining the Paris Agreement and the World Health Organization, launching a racial equity initiative and reversing the Muslim travel ban.

Republicans pledge to set aside differences and work with Biden

President Biden speaks to Sen. Mitch McConnell after being sworn in at the West Front of the U.S. Capitol on Wednesday. Photo: Erin Schaff-Pool/Getty Images

Several Republicans praised President Biden's calls for unity during his inaugural address on Wednesday and pledged to work together for the benefit of the American people.

Why it matters: The Democrats only have a slim majority in the Senate and Biden will likely need to work with the GOP to pass his legislative agenda.

The Biden protection plan

Joe Biden announces his first run for the presidency in June 1987. Photo: Howard L. Sachs/CNP/Getty Images

The Joe Biden who became the 46th president on Wednesday isn't the same blabbermouth who failed in 1988 and 2008.

Why it matters: Biden now heeds guidance about staying on task with speeches and no longer worries a gaffe or two will cost him an election. His staff also limits the places where he speaks freely and off the cuff. This Biden protective bubble will only tighten in the months ahead, aides tell Axios.

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