Tax Loophole From 1960s Could Let Wealthy Tap 21% Corporate Rate
- Passive income held offshore may benefit from arcane provision
- Investors save now, but would face hit if they collect in U.S.
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An obscure tax provision from the 1960s that was left untouched by President Donald Trump’s overhaul could let wealthy individual investors seize for themselves the largest corporate tax cut in U.S. history.
The measure -- signed into law by President John F. Kennedy -- was designed to prevent Americans from indefinitely shielding themselves from taxes by keeping investments offshore. It forced them to pay taxes annually on these investments, but gave them the option to have that income taxed at the corporate rate instead of at individual rates.