Abstract

http://ssrn.com/abstract=606222
 
 

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Citations (24)



 


 



Old Rules and New Realities: Corporate Tax Policy in a Global Setting


Mihir A. Desai


Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

James R. Hines Jr.


University of Michigan; NBER

October 2004

Ross School of Business Paper No. 920

Abstract:     
This paper reassesses the burden of the current U.S. international tax regime and reconsiders well-known welfare benchmarks used to guide international tax reform. Reinventing corporate tax policy requires that international considerations be placed front and center in the debate on how to tax corporate income. A simple framework for assessing current rules suggests a U.S. tax burden on foreign income in the neighborhood of $50 billion a year. This sizeable U.S. taxation of foreign investment income is inconsistent with promoting efficient ownership of capital assets, either from a national or a global perspective. Consequently, there are large potential welfare gains available from reducing the U.S. taxation of foreign income, a direction of reform that requires abandoning the comfortable, if misleading, logic of using similar systems to tax foreign and domestic income.

Number of Pages in PDF File: 34

Keywords: Corporate taxation, international taxation, multinational corporations, foreign tax credit

JEL Classification: H87, H21, F23

working papers series


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Date posted: October 19, 2004  

Suggested Citation

Desai, Mihir A. and Hines Jr., James R., Old Rules and New Realities: Corporate Tax Policy in a Global Setting (October 2004). Ross School of Business Paper No. 920. Available at SSRN: http://ssrn.com/abstract=606222 or http://dx.doi.org/10.2139/ssrn.606222

Contact Information

Mihir A. Desai
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6693 (Phone)
617-496-6592 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
James Rodger Hines (Contact Author)
University of Michigan ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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