In this article, Rocco Femia discusses the causes of and potential policy responses to the income shifting phenomenon, whereby U.S.-based multinationals earn profits in lower tax jurisdictions that are disproportionate to sales, payroll, or assets in those jurisdictions. The article observes that it is not clear the extent to which such results are due to practices inconsistent with current transfer pricing norms. The article concludes that to the extent policymakers view income shifting consistent with current transfer pricing norms as a problem, such concerns may best be addressed by altering the current incentives on U.S. multinationals to shift income.