Layla Asali and Rocco Femia commented on the Obama Administration's 2016 budget and its proposed changes to the United States' international tax system. These changes would create a quasi-territorial regime and require a per-country minimum tax on foreign income. Asali characterized the proposal as one that would impact nearly every business with international operations. Femia commented on the proposed minimum rate. "The minimum tax is an extraordinarily strong anti-abuse rule," he said. "At some point, the minimum tax is so high and applied so broadly that it is the dominant feature of the system."

Asali noted that the terms used to describe the proposal illustrate difficulties in defining different tax systems. "You can see how it could be described as a territorial plan -- albeit not one in line with the territorial systems we see in our major trading partners -- or a worldwide plan more along the lines of what we have today, depending on one's perspective," Asali said. "It shows that those terms are not that useful." Further describing the proposed minimum tax on foreign income, Asali explained that the plan would exempt earnings to the extent of an allowance for corporate equity (ACE). "If the only income you are earning in this foreign country is income up to this risk-free rate of return on your assets in that country, then that amount of income is exempted from the minimum tax," she said. And, the proposed transition tax may be a difficult obstacle for companies who have reinvested their earnings abroad. "In addition to the minimum tax, taxpayers would still have to navigate the rules around foreign base company sales income and foreign base company services income," she added.