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Tailor Johnson, a U.S. maker of fine menswear, has a subsidiary in Ethiopia. This year, the subsidiary reported and repatriated earnings before interest and taxes

Tailor Johnson, a U.S. maker of fine menswear, has a subsidiary in Ethiopia. This year, the subsidiary reported and repatriated earnings before interest and taxes (EBIT) of 255 million Ethiopian birrs. The current exchange rate is 7.2441 birr/$ or S = $0.1380/birr. The Ethiopian tax rate on this activity is 36%. U.S. tax law requires Tailor Johnson to pay taxes on the Ethiopian earnings at the same rate as profits earned in the United States, which is currently 45%.However, the United States gives a full tax credit for foreign taxes paid up to the amount of the U.S. tax liability. What is Tailor Johnsons U.S. tax liability on its Ethiopian subsidiary?

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