To avoid paying U.S. taxes on income made in other countries, many U.S. companies are ________ outside the USA but ________ inside the USA.

Question

Quizplus · Accepted Answer

By becoming cash-rich outside the USA, U.S. companies are able to avoid paying U.S. taxes on income made in other countries. To bring that money back into the USA, they incorporate inside the USA, which allows them to benefit from lower tax rates on repatriated earnings. Therefore, the best choice would be B, where companies become cash-rich outside the USA to avoid paying U.S. taxes on income made in other countries and become cash-poor inside the USA through incorporation to benefit from lower tax rates on repatriated earnings.

To Avoid Paying U