Alan Auerbach, 26 October 2017

The rising importance of multinational companies and the changing nature of production represents a challenge to the traditional ways that countries try to tax corporate profits. This column examines one potential policy response – a destination-based cash-flow tax – which it argues would confront the key international problems of existing tax systems. It also addresses some of the concerns arising in particular from US proposals to introduce such a tax.

Maarten van ’t Riet, Arjan Lejour, 05 January 2015

The recent actions of the US Treasury to rein in corporate tax inversions leave their rationale largely intact. This column discusses new evidence suggesting that the potential tax benefits of inversions are still huge. The recent Treasury measures raised legal obstacles, but the heart of the problem remains unaddressed. At some point a new technique is likely to be found to circumvent the new measures – just as happened with earlier measures. This is a worldwide problem.

Ruud de Mooij, Michael Keen, Victoria Perry, 14 September 2014

Multinational companies’ ability to pay little corporate income tax has grabbed headlines recently. This column argues that the details of international tax rules matter for macroeconomic performance – especially in low-income countries. This emphasises the importance of the G20–OECD Action Plan on Base Erosion and Profit Shifting. However, dealing properly with tax spillovers will require a deeper global debate about the international tax architecture itself.

Laurence Kotlikoff, 14 January 2014

Though taxing corporations may be a political no-brainer, it may be a big economic mistake. This column discusses recent research showing that the tax is not paid primarily by rich corporate shareholders. They can, and do, move their capital away from countries that have high corporate rates. Eliminating the US corporate tax by, for example, taxing accrued global corporate profits as personal income can produce dramatic increases in US investment, output, real wages, and saving. Modest gains accrue to early generations with very sizable gains going to young and future generations, both skilled and unskilled.

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