Tuesday, February 7, 2012
Susan Morse (UC-Hastings) presents Worldwide Corporate Income Tax Consolidation and a Corporate Offshore Excise Tax at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:
The jurisdictional tussle of international tax reform necessarily involves some countries influencing others’ tax policy choices, and accordingly U.S. international tax policy decisions inevitably affect other countries, in a number of different ways. The literature, to the extent that it considers impact on non-U.S. countries, generally investigates the impact of a U.S. decision on the location of capital investment and/or ownership. In addition, the literature often considers the different advantages of ideal systems, rather than the likely incremental impact of a particular tax policy change. Yet it is the latter question that more closely resembles the actual policy framework faced by decision makers. This Article takes a different view. It builds a concept of tax imperialism that encompasses more than investment ownership and location effects. In particular, it identifies and analyzes two other cost and benefit factors through which a unilateral tax policy change undertaken by one nation can affect the tax policy of other nations: tax system design and tax revenue, and fiscal sovereignty. The Article places these cost and benefit factors in an explicitly marginal analytical framework, in an effort to isolate the question of the impact of a unilateral tax policy change in one nation on other countries. It applies the framework to the U.S. corporate income tax policy alternatives of adopting worldwide consolidation or territoriality.