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International taxation

International Trade Law

2008

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Full-Text Articles in Law

Business Taxes And International Competitiveness, Michael S. Knoll May 2008

Business Taxes And International Competitiveness, Michael S. Knoll

Faculty Scholarship at Penn Law

Around the world, policymakers are obsessed with the competitiveness of their domestic companies and domestically based multinational corporations (MNCs). Such concerns frequently influence policy, especially tax policy. In this paper, I develop a theory of how taxes affect the international competitiveness of businesses. I then use that theory to evaluate basic tax policy decisions, such as the choice between residence- and source-based taxation and the level of tax rates, and to understand the impact various provisions in the U.S. Internal Revenue Code are likely to have on the competitiveness of U.S.-based corporations and MNCs.