The David R. Tillinghast Lecture: The Rising Tax-Electivity of U.S. Corporate Residence
New York University School of Law
October 1, 2010
NYU Law and Economics Research Paper No. 10-45
NYU School of Law, Public Law Research Paper No. 10-72
In an increasingly integrated global economy, with rising cross-border stock listings and share ownership, U.S. corporate residence for income tax purposes, which relies on one’s place of incorporation, may become increasingly elective for new equity. Existing equity in U.S. companies, however, is effectively trapped here, given the difficulty of expatriating for tax purposes absent a bona fide acquisition by new owners.
Both the prospect of rising tax electivity for new equity and the very different situation facing old U.S. equity have important implications for U.S. international tax policy. This paper therefore explores three main questions: (1) the extent to which U.S. corporate residence actually is becoming elective for new equity, (2) the implications of rising electivity for the age-old (though often mutually misguided) debate between proponents of residence-based worldwide corporate taxation on the one hand and a territorial or exemption system for foreign source income on the other, and (3) the transition issues for old equity if a territorial system is adopted.
Number of Pages in PDF File: 55
Keywords: international taxation, worldwide taxation, territorial taxation, tax-electivity
JEL Classification: H20, H21, H23, H25, H73Accepted Paper Series
Date posted: September 27, 2010 ; Last revised: September 6, 2011
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.313 seconds