Taxing Profit in a Global Economy

The international tax system is in dire need of reform. It allows multinational companies to shift profits to low tax jurisdictions and thus reduce their global effective tax rates. A major international project, launched in 2013, aimed to fix the system, but failed to seriously analyse thefundamental aims and rationales for the taxation of multinationals' profit, and in particular where profit should be taxed. As this project nears its completion, it is becoming increasingly clear that the fundamental structural weaknesses in the system will remain.This book, produced by a group of economists and lawyers, adopts a different approach and starts from first principles in order to generate an international tax system fit for the 21st century. This approach examines fundamental issues of principle and practice in the taxation of business profit andthe allocation of taxing rights over such profit amongst countries, paying attention to the interests and circumstances of advanced and developing countries. Once this conceptual framework is developed, the book evaluates the existing system and potential reform options against it.A number of reform options are considered, ranging from those requiring marginal change to radically different systems. Some options have been discussed widely. Others, particularly Residual Profit Split systems and a Destination Based Cash-Flow Tax, are more innovative and have been developed atsome length and in depth for the first time in this book. Their common feature is that they assign taxing rights partly/fully to the location of relatively immobile factors: shareholders or consumers.Stepping back from current political debates on combatting profit shifting and how taxing rights over the profits of the digitalized economy should be allocated, this book undertakes a fundamental review of the existing international system of taxing business profit. It argues that the existingsystem is fundamentally flawed, and that there is a need for radical reform.

Business & Money

Vella, John

Auerbach, Alan J.

Keen, Michael

Devereux, Michael P.

Oosterhuis, Paul

Schön, Wolfgang

Business Culture

Oxford University Press

Review\n"The ability for a lay reader to distil (however broadly) some essentials about current and future approaches to international tax indicates an impressive marshalling of arguments in this most labyrinthine of areas." -- Tom Proverbs-Garbett, Law Society Gazette\nThis book undertakes a fundamental review of the existing international system of taxing business profit. It steps back from the current political debates on how to combat profit shifting and how taxing rights over the profits of the digitalized economy should be allocated. Instead, it starts from first principles to ask how we should evaluate a tax on business profit―and whether there is any good rationale for such a tax in the first place. It then goes on to evaluate the existing system and a number of alternatives that have been proposed. It argues that the existing system is fundamentally flawed, and that there is a need for radical reform. The key conclusion from the analysis is that there would be significant gains from a reform that moved the system towards taxing profit in the country in which a business made its sales to third parties. That conclusion informs two proposals that are put forward in detail and evaluated: the Residual Profit Allocation by Income (RPAI) and 
the Destination-based Cash Flow Tax (DBCFT).\nThe book is authored by group of economists and lawyers―the Oxford International Tax Group, chaired by Michael P. Devereux. It draws insights from both economics and law―including economic theory, empirical evidence on the impact of taxes, and an examination of practical issues of implementation―to assess the existing system and to consider fundamental reforms. This book will be useful to tax policy makers, tax professionals, academics, and anyone interested in tax policy.

Many undergraduate texts treat macroeconomics as a set of distinct topics rather than as a unified body of theory and empirical findings. In contrast, this text by Alan Auerbach and Laurence Kotlikoff uses a single analytic framework -- the two-period life-cycle model -- to explore and connect each of the major issues in contemporary macroeconomics. The model describes the evolution of the economy over time in terms of the behavior of overlapping generations of individuals, each of whom lives for two periods: youth and old age. This versatile framework can encompass most macroeconomic schools of thought through the alteration of key assumptions. The use of one basic model also allows the authors to explore important topics not always addressed adequately in other texts; these include credit constraints, real business cycles, generational accounting, and international capital flows markets.
Written in a clear, accessible style, this shortened and simplified second edition provides a systematic way to interpret macroeconomic outcomes, to understand various policy proposals, and to appreciate how individuals and firms fit into the big picture.

Macroeconomics - 2nd Edition: An Integrated Approach

Kotlikoff, Laurence J.

Economics

Mit Pr

Many undergraduate texts treat macroeconomics as a set of distinct topics rather than as a unified body of theory and empirical findings. In contrast, this text by Alan Auerbach and Laurence Kotlikoff uses a single analytic framework―the two-period life-cycle model―to explore and connect each of the major issues in contemporary macroeconomics. The model describes the evolution of the economy over time in terms of the behavior of overlapping generations of individuals, each of whom lives for two periods: youth and old age. This versatile framework can encompass most macroeconomic schools of thought through the alteration of key assumptions. The use of one basic model also allows the authors to explore important topics not always addressed adequately in other texts; these include credit constraints, real business cycles, generational accounting, and international capital flows markets.
Written in a clear, accessible style, this shortened and simplified second edition provides a systematic way to interpret macroeconomic outcomes, to understand various policy proposals, and to appreciate how individuals and firms fit into the big picture.

Literature & Fiction

Dramas & Plays

The MIT Press

Book by Auerbach, Alan J., Kotlikoff, Laurence J.

Dynamic Fiscal Policy

Cambridge University Press

This text integrates the issues of macroeconomics in a way that should make it easy for students to understand, including undergraduates. Both Keynsian and neoclassical issues are covered in this text so students get an overall feel of how economics really works. The text contains the same breadth of material as existing texts, but conveys a simple version of contemporary macroeconomics theory in the process.

Macroeconomics: An Integrated Approach

South-Western Pub.

This important contribution to tax analysis presents seven related theoretical essays that examine the effects of capital income taxation on the behavior of firms. It is divided into three sections, focusing on optimal tax design, firm financial policy, and inflation. Taken together, the essays demonstrate the powerful role taxes play in shaping the behavior of American corporations, and also provide insights into the difficult task of tax reform.Auerbach’s results suggest policies the government might adopt to promote the optimal accumulation of capital. He examines the implications for capital taxation of discrepancies between nominal depreciation rates and real economic depreciation, and suggests appropriate rules of thumb for determining when capital taxation is neutral among alternative investment projects. He also makes important contributions to the debate over the integration of corporate and personal taxes on capital income and to the behavioral puzzle of why corporations pay dividends to their shareholders.

The Taxation of Capital Income (Harvard Economic Studies)

Harvard University Press

See the best price to sell, buy, or rent books by Auerbach, Alan J.. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Books by Auerbach, Alan J.

See the best price to sell, buy, or rent books by Auerbach, Alan J.. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Taxing Profit in a Global Economy

Taxing Profit in a Global Economy

Macroeconomics - 2nd Edition: An Integrated Approach

Macroeconomics - 2nd Edition: An Integrated Approach

Dynamic Fiscal Policy

Macroeconomics: An Integrated Approach

The Taxation of Capital Income (Harvard Economic Studies)