The tax landscape is changing for the amount U.S. multinational
corporations may claim through the foreign tax credit. This
change is the result of the Statutory Pay-As-You-Go Act of 2010
that requires any increased spending must be offset by a
corresponding increase in revenue. The foreign tax credit
modifications narrowly escaped becoming the offsetting revenue
raising provisions of the Unemployment Compensation Extension
Act of 2010 that extended unemployment benefits. However, the
success was short-lived, as these modifications were added to
Pub. L. No. 111-226. This legislation provides $10 billion of
elementary and secondary education funding to protect teacher
jobs from being cut. Nearly $10 billion over ten years is
expected to be raised by altering various rules that
corporations leverage to calculate their foreign tax credits and
foreign-source income, providing the necessary revenue offset
for this law. Here, we will examine the concept behind foreign
tax credits offered in the United States; the h