Influence of Tax Laws on Cash Flow to MNC Parents The appendix to this chapter explains how tax laws can affect how much earnings subsidiaries remit to their parents. Explain why the U.S. tax rules prior to 2017 encouraged foreign subsidiaries of U.S.-based MNCs to reinvest their earnings in their location rather than remit the earnings to the MNC parent. How did the Tax Cuts and Jobs Act of 2017 cause a higher proportion of subsidiary earnings to be remitted to the U.S. parents?
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