How Much Global FDI Is Subject to BEPS Pillar Two?

Abstract

In the United States, the capital share of income grew over the 1990s and 2000s and the expansion of pass-through businesses played a large role. Household survey data show business income was a primary component behind the rise in income inequality. The same data indicate households at the top of the income distribution also have a high marginal propensity to save. A model accounting for heterogeneity in saving behavior across households demonstrates the capital income shock can have a relatively large effect on the equilibrium interest rate due to the combined effect on capital demand and supply.