TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, July 27, 2005

Grubert Debates Desai & Hines on U.S. Tax Burden on Foreign Income

Ntj_logo_1 Harry Grubert Ttreasury Department) has published Comment on Desai and Hines, Old Rules and New Realities: Corporate Tax Policy in a Global Setting, 58 National Tax Journal 263-74 (June 2005). Here is the abstract:

In the December 2004 issue of the National Tax Journal, Desai and Hines claim that the current "U.S. tax burden on foreign income is in the neighborhood of $50 billion a year."  This note shows that each step in their analysis is based on flawed theory and the misinterpretation of data.

Mihir A. Desai (Harvard Business School) & James R. Hines Jr. (University of Michigan Business School) have published Reply to Grubert, 58 National Tax Journal 275-78 (June 2005). Here is the abstract:

The spirited comment by Grubert (2005) on Desai and Hines (2004) is a useful continuation in the ongoing debate on the appropriate taxation of foreign income. It raises numerous points on which intuition can easily go astray and, thereby, indirectly illustrates the benefits of hard and dispassionate analysis. While it is tempting to reply individually to every point raised in this comment, its length suggests that interested readers would benefit most from revisiting the original article. Accordingly, the function of this reply is to address some of the central issues in a manner that may serve to prevent further confusion.

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