Taxing Corporate Income

67 Pages Posted: 13 Nov 2007

See all articles by Alan J. Auerbach

Alan J. Auerbach

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Michael P. Devereux

Centre for Business Taxation, Oxford University; CESifo (Center for Economic Studies and Ifo Institute); Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR); University of Oxford - Said Business School; University of Oxford - Said Business School

Helen Simpson

CMPO; Institute for Fiscal Studies (IFS)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2007

Abstract

Following Meade (1978), we reconsider issues in the design of taxes on corporate income. We outline developments in economies and in economic thought over the last thirty years, and investigate how these developments should affect the design of taxes on corporate income. We consider a number of tax systems which have been proposed, distinguishing them in two main dimensions: the definition of what is to be taxed, and where it is to be taxed. We propose that a tax levied on economic rent accruing in the corporate sector, and on a destination basis, merits serious consideration. We discuss alternative approaches, including both R-based and R+F-based flow- of-funds taxes and an ACE allowance. It is the destination basis - with border adjustments for exports and imports - which primarily distinguishes our proposals from those of Meade (1978).

JEL Classification: H2, H3

Suggested Citation

Auerbach, Alan Jeffrey and Devereux, Michael P. and Simpson, Helen, Taxing Corporate Income (November 2007). CESifo Working Paper No. 2139, Available at SSRN: https://ssrn.com/abstract=1029585 or http://dx.doi.org/10.2139/ssrn.1029585

Alan Jeffrey Auerbach (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Michael P. Devereux

Centre for Business Taxation, Oxford University ( email )

Said Business School
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CESifo (Center for Economic Studies and Ifo Institute)

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Institute for Fiscal Studies (IFS) ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Helen Simpson

CMPO ( email )

University of Bristol
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Bristol, BS8 ITX
United Kingdom

Institute for Fiscal Studies (IFS) ( email )

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London, WC1E 7AE
United Kingdom
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