Bittker's Pendulum and the Taxation of Multinationals
Tax Notes International, Volume 104, November 1, 2021
20 Pages Posted: 28 Nov 2021 Last revised: 7 Mar 2022
Date Written: November 1, 2021
Abstract
Recent calls for increased entity-level corporate income taxation of multinationals, on both a source and a residence basis, have a distinctly back-to-the-future cast. At least as to the bottom line, they have far more in common with 1986-era thinking than with which has often prevailed in more recent decades. However, their intellectual basis has substantially changed, reflecting the evolution of economic thinking to reflect twenty-first century trends.
This historical back-and-forth has ample parallels in other areas, and precedents from earlier eras. In corporate and international tax policy, as well with regard to taxing capital income and addressing high-end inequality more generally, the rise of standard neoclassical Econ 101 precepts that, in the preceding period, had been underappreciated was succeeded by a growing awareness of what those precepts leave out. Meanwhile, the popular back-and-forth has reflected fluctuating public perceptions regarding, not just the importance of distributional issues, but also unfettered free market capitalism’s merits and performance.
Keywords: corporate income taxation, tax competition, tax history
JEL Classification: H20, H25, B20
Suggested Citation: Suggested Citation