Read the attached case study (Links to an external site.) and then answer the following requirements:

1. Tax inversions have occurred infrequently over the past 30 years.Describe a tax inversion and the factors that impact a company’sdecision to complete a tax inversion.
2. The earliest inversions were usually in tax haven countries. Thecompanies subsequently relocated their headquarters to Europe. Why didthese companies decide to move headquarters to European countries?
3. Most recent inversions either meet a substantial activity test orare accomplished through mergers. What companies are the most likelytargets for these types of inversions?
4. A primary benefit of an inversion is avoiding U.S. tax onforeign-source income. How do multinational companies also useinversions to reduce U.S. tax on U.S.-source income?
5. Using the information in Table 2, calculate Transocean’s effectivetax rate for each of the four years (1998, 2000, 2009, 2015). Estimatethe dollar amount of the annual reduction in taxes for the initial moveto the Grand Cayman Islands.
6. The Congressional Budget Office (2017) (Links to an external site.)reports that 60 inversion transactions have occurred. The CBO estimatesthat the average annual reduction in U.S. tax expense for thesecompanies is $65 million. What is the amount of total annual revenueloss to the U.S. government? What is the amount of total annual revenueloss to the U.S. government as a percentage of total corporate taxes(search for the total corporate taxes in the CBO report or other onlinesource)?
7. The U.S. recently reduced the top statutory corporate tax rate from35 percent to 21 percent. In addition, the U.S. changed from a global toa territorial tax system for multinational corporations. Evaluate thelikely effects of these tax law changes on inversion activities.
8. Should companies be allowed to enter into inversions? Consider theperspective of shareholders and the U.S. Treasury in developing yourresponse. Do you believe the changes in U.S. tax law to lower corporatetaxes will eliminate inversion activity permanently?

Reference:

Albring, S. M., Elder, R. J., Franklin, M. A. (2019). Transocean and the history of tax inversions. Issues in Accounting Education, 34(1), 1-12.

Congressional Budget Office. (2017). An analysis of corporate inversions. https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53093-inversions.pdf (Links to an external site.)

Submission Requirements:

• Write a paper of 10-12 pages, double-spaced in length, not counting the title and the reference pages, which you must include. Submissions in excess of 12 pages are acceptable.
• Copy and paste each one of the Questions into your paper in bold type (Questions are to be single-spaced) to ensure you have answered each of the Assignment Requirements.
• Use terms, evidence, and concepts from class readings, including professional business language.
• Cite at least 5 credible, academic or professional sources supporting your answers for this assignment. The CSU Global Library (Links to an external site.) is a great place to find resources.