America touts its business bona fides by trumpeting companies like Apple, Microsoft, GE, IBM, and Google, which are among the most admired, successful, and innovative corporations in the world. Although they have grown into large, multinational conglomerates, each was born right here in the United States.

The taxation of U.S. multinational corporations is one of the most important policy items on the desks of elected officials in the nation’s capital. Those in favor of reducing the tax rate on multinational businesses argue that the current U.S. tax code puts American companies at a competitive disadvantage internationally, and leads corporations to shift profitable aspects of their companies to foreign countries offering tax relief.

Chris Sanchirico, the Samuel A. Blank Professor of Law, Business, and Public Policy at Penn Law School and co-director of Penn Law’s Center for Tax Law and Policy, says U.S. multinationals and their supporters make two principal arguments in support of tax-friendly policies: A competitive argument—keep taxes low to help American businesses—and a call for a repatriation tax holiday that would let companies bring their foreign assets to the United States at a reduced tax rate.

Sanchirico says both arguments are based on the presumption that these multinational companies are largely U.S.-owned.

“The truth is, we actually don’t know very much about who owns these companies,” he says.

The ownership nationality of large U.S. multinationals plays an important role in the current debate over how multinational corporations should be taxed. Multinational companies lobbying for a tax benefit claim it keeps them competitive, and that it is important for American companies to be competitive on the global scale.

“If the argument is that we should keep taxes low and give up tax revenue, which is very precious right now, in order to help someone win a competition, it seems important to know who that person is,” Sanchirico says.

“As American as Apple Inc.: International Tax and Ownership Nationality,” a paper recently written by Sanchirico that will be published later this year in the Tax Law Review, investigates the role of ownership nationality in the taxation debate, and to what extent these ostensible “U.S.” companies are owned by foreign investors. He says “much less is known” about the ownership of large U.S. multinationals than one might have imagined.

The Department of the Treasury collects information on foreign holdings of U.S. stocks, but Sanchirico says existing reports “reveal almost nothing about the foreign ownership share of large U.S. multinationals.” The companies themselves do not know their own foreign ownership share because not all shareholders are registered directly with the company. Sanchirico says establishing national ownership is nearly impossible.

Advocates of the repatriation tax day holiday contend that if U.S. multinationals are able to bring the reported $2 trillion they are legally holding in foreign subsidiaries back to the United States at a reduced tax rate, the money will flow through shareholders into the American economy and create jobs.

“Once again you see a premise, which is that the shareholders of the parent are largely U.S. persons,” Sanchirico says. “It’s an important piece of information. If the shareholders are sitting in Iowa, they’re more likely to plow that money back into the U.S. economy. If those shareholders are located in China or in France, you would imagine a lot more of it would go outside of the U.S. economy.”

Sanchirico is not anti-multinationals. He says economic integration and foreign investment are “wonderful,” but he questions the presumption employed by these companies that they are genuinely “American.”

Foreign investment is advantageous for U.S. multinationals, but Sanchirico says the companies should not be allowed to take advantage of the assumption that they are owned by U.S. shareholders.

“We need to be smarter about that,” he says. “We need to think harder about who actually owns these companies in evaluating the tax benefits that we offer them. There might be very good economic arguments for helping these companies, there might be arguments that go to global welfare. But until we sort out their ownership nationality we should be wary of patriotic arguments.”