Assaf Razin, Efraim Sadka, 18 December 2017

The ongoing advance of globalisation has created a genuine need for international tax reforms. This column explores potential reforms and their likely effects, using a model with flexible prices. Residence-based income taxation is shown to have welfare advantages over source-based taxation, though at the cost of a larger trade deficit. Non-transitory border taxes are shown to be ineffective at reducing this deficit.

Sijbren Cnossen, Arjan Lejour, Maarten van ’t Riet, 24 November 2017

Some US multinationals have displayed a willingness to relinquish their American nationality and move their headquarters abroad. Such ‘inversions’ generally aim to avoid and minimise taxes. This column argues that the new Trump tax plan is likely to halt tax inversions by US multinationals. However, the plan will increase treaty shopping, incentivising multinationals to redirect dividends through third-party countries with generous tax treaties.

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