The X Tax in the World Economy

63 Pages Posted: 2 Sep 2004 Last revised: 4 Sep 2022

See all articles by David F. Bradford

David F. Bradford

Princeton University, Woodrow Wilson School; NBER; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: August 2004

Abstract

This paper considers the treatment of multinational business in the system known as an X Tax. The focus is on the choice between origin and destination treatments of transborder transactions. The destination-principle approach sidesteps the transferpricing problem. It remains in the origin-principle approach, which, however, presents fewer challenges of monitoring imports, obviates the tourism problem' whereby people can reduce their taxes by consuming in a low-tax jurisdiction and avoids transition effects associated with introduction of the tax and subsequent tax rate changes. The paper suggests special rules for transborder transactions between related parties to deal with the transfer-pricing problem.

Suggested Citation

Bradford, David F., The X Tax in the World Economy (August 2004). NBER Working Paper No. w10676, Available at SSRN: https://ssrn.com/abstract=579819

David F. Bradford (Contact Author)

Princeton University, Woodrow Wilson School ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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