The Connection between Competitiveness and International Taxation

27 Pages Posted: 21 Sep 2012

See all articles by Michael S. Knoll

Michael S. Knoll

University of Pennsylvania Law School; University of Pennsylvania Wharton School -- Real Estate Department

Date Written: Spring 2012

Abstract

The term “competitiveness” is a highly elastic concept that has been used in a myriad of different ways. However, in discussions of the connection between international taxation and competitiveness, there are two conceptions of competitiveness that are frequently used, but are not always clearly distinguished from one another. One conception emphasizes the competition between firms to be profitable and grow by acquiring productive assets. The other conception focuses on the competition between states to attract investment capital and people by varying their regulations.

Those two conceptions of competitiveness each imply a distinct definition of a domestic industry and a different mechanism whereby taxation affects competitiveness. Those two views also track popular positions in long standing policy debates. For example, each view is associated with a different tax neutrality benchmark. The first view is closely associated with capital export neutrality, whereas the second view is closely associated with capital ownership neutrality. Those two views also track opposing positions in the “Who Is Us?” debate from the 1990s.

Keywords: International Taxation, investment, international competitiveness, tax competition, foreign direct investment, asset acquisition, international finance, tax incentives, cross-border transactions, foreign tax credits, capital export neutrality, capital import neutrality, capital ownership neutrality

JEL Classification: F21, H25, K34

Suggested Citation

Knoll, Michael S., The Connection between Competitiveness and International Taxation (Spring 2012). Tax Law Review, Vol. 65, pp. 349, 2012; U of Penn, Inst for Law & Econ Research Paper No. 12-29. Available at SSRN: https://ssrn.com/abstract=2149804

Michael S. Knoll (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-6190 (Phone)
215-573-2025 (Fax)

University of Pennsylvania Wharton School -- Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
305
Abstract Views
1,640
rank
101,344
PlumX Metrics