1. Do all U.S. corporations have an incentive to reduce their foreign taxes paid? Why or why not? 2. How is the foreign tax credit limitation determined? How does worldwide averaging work? If the firm...

1. Do all U.S. corporations have an incentive to reduce their foreign taxes paid? Why or why not?

2. How is the foreign tax credit limitation determined? How does worldwide averaging work? If the firm had no plans to repatriate income from a low-tax country, would it be advisable to do so if foreign tax credit carry forwards from the repatriation of income from high-tax countries were about to expire?

3. Under what circumstances will a U.S. corporation have an incentive to shift U.S.-source income to be foreign-source income?