Thursday, April 24, 2008
Fleming Presents Some Perspectives from America on the Worldwide Taxation vs. Territorial Taxation Debate Today in Budapest
J. Clifton Fleming, Jr. (BYU) presents Some Perspectives from America on the Worldwide Taxation vs. Territorial Taxation Debate (with Robert J. Peroni (Texas) & Stephen E. Shay (Ropes & Gray, Boston)) today at Central European University, Budapest, Hungary. Here is the abstract:
This debate is usually framed as a contest between the highly flawed U.S. system of taxing the worldwide incomes of U.S. residents vs. a well-designed system under which foreign active business income of U.S. multinational corporations would be exempt from U.S. tax. This is a highly prejudicial approach that virtually assures a victory for the exemption alternative. A properly framed debate would match a well-designed worldwide system against a well-designed exemption system. When this is done, we conclude that efficiency considerations and ability-to-pay fairness considerations indicate that worldwide taxation with a foreign tax credit is the better approach. We also conclude that the new ownership neutrality defense of exemption systems is unsuccessful.