Most of the discussion about “Tax Reform” has centered on individual and business rates. Far less attention has been given to international tax changes, even though they contribute more than $250 billion in revenue (over 10 years) to hold down the cost current proposal.

A little background: The U.S. is one of the few countries that imposes “worldwide” taxation. That is, U.S. taxpayers (both corporate and individual) pay tax on both their U.S. and foreign income (profits). Taxpayers can also deduct taxes paid to other countries, so taxpayers only pay U.S. taxes on foreign income if they exceed the foreign taxes.

But, corporations get a special benefit.

Corporations only pay U.S. tax on their foreign earnings when those profits are brought back (“repatriated”) to the U.S. Any profits left outside the US are not subject to current tax.

Both the House and Senate bill would end worldwide taxation for corporations. The new system would be “territorial,” which is common outside the U.S.

The high U.S. corporate rate (35 percent) has led many companies to “park” vast profits overseas, where they are not currently subject to U.S. tax. The total amount of US corporate profits held overseas is estimated at $2.6 trillion. Those overseas profits must be taxed once when the U.S. system switches from worldwide to territorial, because those profits were always subject to tax when the money was made. In a future territorial system, overseas profits would never be subject to tax. Not taxing overseas profits when switching systems would be tantamount to tax amnesty for corporations.

Corporations are banking on policymakers to give them at least partial amnesty. Why? Because it has happened before. In 2004, congress temporarily allowed corporations to bring home foreign profits, subject only to a 5.25 percent tax rate. The amount of profits stashed overseas has grown by roughly $1.5 trillion since the 2004 tax holiday.

To tax the current stash of overseas profits, both the House and Senate bills “deem” them repatriated. That means, whether the profits come home or not, they are taxed once, but at a special rate. The House bill would tax foreign profits held overseas at 14 percent for cash and 7 percent for non-liquid assets over an eight-year period. The Senate bill follows roughly the same strategy but at 14.5 and 7 percent respectively. These provisions yield $293 billion in the House bill and $298 billion in the Senate.

But that’s one-time revenue that is paying for permanent changes. In other words, it’s a gimmick that is going to cost taxpayers in the long-run.

Even though the legislation cuts corporate tax rate to 20 percent (reportedly 21 percent in the final agreement), the shift to territorial system creates a risk that U.S. companies will still move to offshore tax havens (or not return) or use other measures to evade U.S. taxes. To combat that both bills include global minimum taxes of 10-12.5 percent on U.S. corporations with foreign subsidiaries and other base erosion rules. According the Joint Committee on Taxation (JCT) these rules would yield $196 billion in the House bill and $285.4 billion in the Senate bill.

You can bet clever tax lawyers are already figuring out how to game the system just as they have in the past. That’s why it is so important to have deficit-neutral tax reform. Because even though the JCT indicates that, after taking into effect economic impact, these bills will increase the deficit by a little more than $1 trillion over the next decade, the reality is gimmicks and legal tax avoidance will put that number much higher. Perhaps unintentionally, Sen. Ron Johnson (R-WI) explained this as “We’re literally trying to squeeze about $2 trillion in tax reform into a $1.5 trillion box, and that’s been a problem.”

Yes, indeed it is a problem. Because while it may score as only a $1.5 trillion loss in revenue for budget score-keeping purposes, it will add a real $2 trillion to our already $20 trillion debt.