Monday, October 9, 2023
Yariv Brauner (Florida; Google Scholar) presents Taxing People, Not Residents at Florida today as part of its Marshall M. Criser Distinguished Internal Faculty Workshop:
Essentially all states tax their residents’ worldwide income. This norm is difficult to justify beyond vague notions of state provided benefits enjoyed by residents. Past limited mobility of individuals curbed challenges to the desirability of residence taxation. Recent increased mobility (particularly mobility of wealthy individuals) and the growing importance of remote work and digital nomadism renew such challenges, especially considering multiple new tax residence schemes, such as residence-for-investment and non-domicile residence (non) taxation, that deviate from traditional ideas of residence.
The erosion of individual tax residence in the twenty-first century raises the question of alternatives. This draft examines whether exclusive source taxation of individuals could replace the existing rules which are based on a compromise between residence and source taxation. The draft concludes that exclusive source taxation of individuals is both feasible and desirable, mainly due to its fairness and legitimacy traits. It also considers alternative reforms, such as citizenship-based taxation, concluding that source taxation is superior to the alternatives since it provides the best chance of preserving the stability of the existing international tax regime.