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Business Taxes And International Competitiveness: Understanding How Taxes Can Distort Capital Ownership And Designing A Nondistortive International Tax System, Michael S. Knoll
Business Taxes And International Competitiveness: Understanding How Taxes Can Distort Capital Ownership And Designing A Nondistortive International Tax System, Michael S. Knoll
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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.
The Corporate Income Tax And The Competitiveness Of U.S. Industries, Michael S. Knoll
The Corporate Income Tax And The Competitiveness Of U.S. Industries, Michael S. Knoll
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Hit hard by the financial crisis and recession, U.S. auto producers are seeking a massive bailout from the U.S. Congress. Many reasons are given for the U.S. auto industry’s lack of competitiveness including the U.S. corporate income tax. Although it is regularly asserted that there is a direct connection between the corporate income tax and competitiveness, what that connection is has not been carefully spelled out. In this essay, I describe how the corporate income tax directly harms the competitiveness of U.S. industries. I show that the mechanism differs depending upon whether the U.S. industry is defined as the global …