The Effects of U.S. Tax Policy on the Income Repatriation Patterns of U.S. Multinational Corporations

U.S. corporations owe taxes to the U.S. Treasury on income earned both inside and outside American borders. This paper examines the incentives created by the U.S. tax system for the legal avoidance of taxes on foreign source income. Using data from 1986 corporate tax returns, we investigate the extent to which U.S. corporations structure and coordinate remittances of income from their foreign subsidiaries to reduce their U.S. and foreign tax liabilities. In contrast to previous work in this area, our estimates of the tax consequences of income remittances from foreign subsidiaries to parent corporations explicitly take into account the ability to use foreign tax credits generated from one source of foreign income to offset the U.S. tax liability generated by other sources of foreign income, withholding tax rates on income remittances, variations in source country corporate income tax systems, and dynamic aspects of the U.S. tax system. Our findings indicate that U.S. multinationals are able to take advantage of the U.S. tax system to avoid paying much U.S. tax on their foreign source income.

Do Repatriation Taxes Matter? Evidence from the Tax Returns of U.S. Multinationals

An open question in the literature on the taxation of multinational corporations is whether repatriation taxes influence whether the profits of foreign subsidiaries are repatriated or reinvested abroad. Theoretical models suggest that dividend remittances should not be influenced by repatriation taxes. The results of recent empirical work indicate that dividend remittances are sensitive to repatriation taxes. This paper investigates whether the empirical evidence can be reconciled with the theoretical results by recognizing that repatriation taxes on dividends may vary over time and provide firms with an incentive to time repatriations so that they occur in years when repatriation tax rates are relatively low. We use information about cross-country differences in tax rates to separately estimate the influence of permanent tax changes, as would occur due to changes in statutory tax rates, and transitory tax changes on dividend repatriations. Our data contains U.S. tax return information for a large sample of U.S. corporations and their foreign subsidiaries. We find that the permanent tax price effect is significantly different from the transitory price effect and is not significantly different from zero, while the transitory tax price effect is negative and significant. This suggests that repatriation taxes do affect dividend repatriation behavior but only to the extent that they vary over time. Previous empirical work has apparently measured the effect of timing behavior.

The DNA Damage Response Pathway Contributes to the Stability of Chromosome III Derivatives Lacking Efficient Replicators

In eukaryotic chromosomes, DNA replication initiates at multiple origins. Large inter-origin gaps arise when several adjacent origins fail to fire. Little is known about how cells cope with this situation. We created a derivative of Saccharomyces cerevisiae chromosome III lacking all efficient origins, the 5ORIΔ-ΔR fragment, as a model for chromosomes with large inter-origin gaps. We used this construct in a modified synthetic genetic array screen to identify genes whose products facilitate replication of long inter-origin gaps. Genes identified are enriched in components of the DNA damage and replication stress signaling pathways. Mrc1p is activated by replication stress and mediates transduction of the replication stress signal to downstream proteins; however, the response-defective mrc1AQ allele did not affect 5ORIΔ-ΔR fragment maintenance, indicating that this pathway does not contribute to its stability. Deletions of genes encoding the DNA-damage-specific mediator, Rad9p, and several components shared between the two signaling pathways preferentially destabilized the 5ORIΔ-ΔR fragment, implicating the DNA damage response pathway in its maintenance. We found unexpected differences between contributions of components of the DNA damage response pathway to maintenance of ORIΔ chromosome derivatives and their contributions to DNA repair. Of the effector kinases encoded by RAD53 and CHK1, Chk1p appears to be more important in wild-type cells for reducing chromosomal instability caused by origin depletion, while Rad53p becomes important in the absence of Chk1p. In contrast, RAD53 plays a more important role than CHK1 in cell survival and replication fork stability following treatment with DNA damaging agents and hydroxyurea. Maintenance of ORIΔ chromosomes does not depend on homologous recombination. These observations suggest that a DNA-damage-independent mechanism enhances ORIΔ chromosome stability. Thus, components of the DNA damage response pathway contribute to genome stability, not simply by detecting and responding to DNA template damage, but also by facilitating replication of large inter-origin gaps

Analysis of the genome and transcriptome of Cryptococcus neoformans var. grubii reveals complex RNA expression and microevolution leading to virulence attenuation.

Cryptococcus neoformans is a pathogenic basidiomycetous yeast responsible for more than 600,000 deaths each year. It occurs as two serotypes (A and D) representing two varieties (i.e. grubii and neoformans, respectively). Here, we sequenced the genome and performed an RNA-Seq-based analysis of the C. neoformans var. grubii transcriptome structure. We determined the chromosomal locations, analyzed the sequence/structural features of the centromeres, and identified origins of replication. The genome was annotated based on automated and manual curation. More than 40,000 introns populating more than 99% of the expressed genes were identified. Although most of these introns are located in the coding DNA sequences (CDS), over 2,000 introns in the untranslated regions (UTRs) were also identified. Poly(A)-containing reads were employed to locate the polyadenylation sites of more than 80% of the genes. Examination of the sequences around these sites revealed a new poly(A)-site-associated motif (AUGHAH). In addition, 1,197 miscRNAs were identified. These miscRNAs can be spliced and/or polyadenylated, but do not appear to have obvious coding capacities. Finally, this genome sequence enabled a comparative analysis of strain H99 variants obtained after laboratory passage. The spectrum of mutations identified provides insights into the genetics underlying the micro-evolution of a laboratory strain, and identifies mutations involved in stress responses, mating efficiency, and virulence

Immunohistochemical estimation of cell cycle phase in laryngeal neoplasia

We previously developed an immunohistochemical method for estimating cell cycle state and phase in tissue samples, including biopsies that are too small for flow cytometry. We have used our technique to examine whether primary abnormalities of the cell cycle exist in laryngeal neoplasia. Antibodies against the markers of cell cycle entry, minichromosome maintenance protein-2 (Mcm-2) and Ki67, and putative markers of cell cycle phase, cyclin D1 (G1-phase), cyclin A (S-phase), cyclin B1 (G2-phase) and phosphohistone H3 (Mitosis) were applied to paraffin-embedded sections of normal larynx (n=8), laryngeal dysplasia (n=10) and laryngeal squamous cell carcinoma (n=10). Cells expressing each marker were determined as a percentage of total cells, termed the labelling index (LI), and as a percentage of Mcm-2-positive cells, termed the labelling fraction (LF). The frequency of coexpression of each putative phase marker was investigated by confocal microscopy. There was a correlation between Mcm-2 and Ki67 LIs (ρ=0.93) but Mcm-2 LIs were consistently higher. All cells expressing a phase marker coexpressed Mcm-2, whereas Ki67 was not expressed in a proportion of these cells. The putative phase markers showed little coexpression. Labelling index values increased on progression from normal larynx through laryngeal dysplasia to squamous cell carcinoma for Mcm-2 (P=0.001), Ki67 (P=0.0002), cyclin D1 (P=0.015), cyclin A (P=0.0001) and cyclin B1 (P=0.0004). There was no evidence of an increase in the LF for any phase marker. Immunohistochemistry can be used to estimate cell cycle state and phase in laryngeal biopsies. Our data argues against primary cell cycle phase abnormalities in laryngeal neoplasia

H2A.Z Demarcates Intergenic Regions of the Plasmodium falciparum Epigenome That Are Dynamically Marked by H3K9ac and H3K4me3

Epigenetic regulatory mechanisms and their enzymes are promising targets for malaria therapeutic intervention; however, the epigenetic component of gene expression in P. falciparum is poorly understood. Dynamic or stable association of epigenetic marks with genomic features provides important clues about their function and helps to understand how histone variants/modifications are used for indexing the Plasmodium epigenome. We describe a novel, linear amplification method for next-generation sequencing (NGS) that allows unbiased analysis of the extremely AT-rich Plasmodium genome. We used this method for high resolution, genome-wide analysis of a histone H2A variant, H2A.Z and two histone H3 marks throughout parasite intraerythrocytic development. Unlike in other organisms, H2A.Z is a constant, ubiquitous feature of euchromatic intergenic regions throughout the intraerythrocytic cycle. The almost perfect colocalisation of H2A.Z with H3K9ac and H3K4me3 suggests that these marks are preferentially deposited on H2A.Z-containing nucleosomes. By performing RNA-seq on 8 time-points, we show that acetylation of H3K9 at promoter regions correlates very well with the transcriptional status whereas H3K4me3 appears to have stage-specific regulation, being low at early stages, peaking at trophozoite stage, but does not closely follow changes in gene expression. Our improved NGS library preparation procedure provides a foundation to exploit the malaria epigenome in detail. Furthermore, our findings place H2A.Z at the cradle of P. falciparum epigenetic regulation by stably defining intergenic regions and providing a platform for dynamic assembly of epigenetic and other transcription related complexes

Has U.S. Investment Abroad Become More Sensitive to Tax Rates?

We use data from the U.S. Treasury corporate tax files for 1984 and 1992 to address two related questions concerning the investment decisions of U.S. multinational corporations. First, how sensitive are investment location decisions to tax rate differences across countries? And second, have investment location choices become more sensitive to differences in host country tax rates? We regress a measure of the real capital held in the manufacturing affiliates of U.S. manufacturing firms in each of the 58 countries in our sample on tax rate variables and measures of non-tax characteristics of countries. The availability of two years of data allows us to control for unmeasured country fixed effects. We find large estimated tax elasticities for investment abroad. Our basic estimates yield an elasticity of real capital to after-tax rates of return of close to three in 1992 and about 1.5 in 1984; both the elasticities and the difference between them are significant at standard levels. The increase of more than one in the estimated elasticities from 1984 to 1992 suggests that the allocation of real capital abroad may have become more sensitive to differences in host country taxes in recent years. These results are consistent with increasing mobility of capital and globalization of production.foreign direct investment; international taxation; multinationals;

The mitotic stability of deletion derivatives of chromosome III in yeast.

We have constructed a series of deletion derivatives of chromosome III in yeast. Two telocentric chromosomes, one with a deletion of about 100 kilobases (kb) from the left arm and another with a deletion of about 240 kb from the right arm, are mitotically stable, showing only a 2- to 3-fold decrease in stability compared to a normal chromosome III. Chromosomes as small as 100 kb with deletions on both the left and right arms show only slight decreases in mitotic stability. Slight decreases in size in chromosomes smaller than 100 kb produce dramatic decreases in mitotic stability. In general, deletion chromosomes of similar size but different structure display similar stabilities. We find no evidence for the existence of any new cis-acting elements [besides the centromere, autonomously replicating sequences (ARS elements) and telomeres] essential for the stabilization of chromosome III