A U.S. company has two international subsidiaries (one in Country A and one in Country B). The corporate tax rate in the United States (U.S.) is 35%, and the U.S. company pays out 50% of its earnings from each subsidiary. The following data in Table 3 relate to the subsidiaries: Table 3 Earnings Before Taxes Corporate Income Tax Rate Dividend Withholding Tax Rate Country A $2,000,000 40% 10% Country B $2,500,000 26% 0% The U.S. company averages the tax credits and liabilities of the two foreign units. Briefly explain this method of multinational tax management. Assuming a 50% payout rate from each, calculate the excess foreign tax credits and/or deficits from each subsidiary and explain if any additional U.S. taxes would be due. Explain your answer.