Thursday, April 16, 2009
Ruth Mason (UConn) presents Tax Expenditures and Global Labor Mobility at Northwestern today as part of its Advanced Topics in Taxation Series organized by Tom Brennan and Charlotte Crane. Here is the abstract:
Governments often deliver social welfare benefits through "tax expenditures," provisions of the tax code - such as home mortgage deductions and child care credits-designed to serve social policy rather than income measurement objectives. While an enormous body of scholarship has analyzed personal tax expenditures in the domestic context and business tax expenditures in the international context, no scholar has considered the criteria for conferring tax expenditures on cross-border workers, individuals who work outside the state where they reside. International tax norms currently assign the primary right to tax labor income to the state where the taxpayer works, but they assign the obligation to confer personal tax benefits exclusively to the state where the taxpayer resides. This Article argues that the disjunction between the entitlement to tax and the obligation to provide tax benefits has important distributive implications for taxpayers, previously unnoticed effects on global labor mobility, and counterintuitive impacts on the global distribution of tax revenues among states. In constructing these arguments, this Article introduces the concepts of "labor export neutrality" and "labor import neutrality" as tools for analyzing government policies that affect global labor mobility. A policy is labor export neutral if it does not distort taxpayers' decisions about whether to work at home or abroad. A policy is labor import neutral if it does not distort competition among workers within a particular country.