Unilateral introduction of destination-based cash-flow taxation

Becker, Johannes; Englisch, Joachim

doi:10.1007/s10797-019-09579-0

Cited by 12 publications

(6 citation statements)

References 12 publications

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“…l , which equals − N h l when N l h = 0 (recall that state h residents work only in state h in the case being considered). 28 The recent corporate tax literature has considered the effects of a country unilaterally adopting a destination based cash-flow tax (e.g., Bond and Gresik 2020;Becker and Englisch 2020).…”

Section: Unilateral Taxation Of Nonresident Teleworkersmentioning

confidence: 99%

Taxes and Telework: The Impacts of State Income Taxes in a Work-from-Home Economy

Agrawal

Brueckner

2022

SSRN Journal

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Section: Unilateral Taxation Of Nonresident Teleworkersmentioning

confidence: 99%

Taxes and Telework: The Impacts of State Income Taxes in a Work-from-Home Economy

Agrawal

Brueckner

2022

SSRN Journal

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“…We abstract from these short run effects and focus on long run adjustments. 6 The model in Becker and Englisch (2020) is essentially the same model as in AD.…”

Section: The Modelmentioning

confidence: 99%

“…Auerbach and Devereux (2018) establish the benefits of multilateral adoption of DBCFT relative to multilateral SBCFT, and they derive an analytic condition based on endogenous variables that holds prices and government spending fixed to assess unilateral deviation incentives from SBCFT. Becker and Englisch (2020) also consider the incentives for a country to deviate towards DBCFT from SBCFT in the same model developed in AD. Their main results (Propositions 3 and 4) are also stated in terms of endogenous variables, especially with regard to public good expenditures, which necessitates the use of simulations to establish unilateral incentives to deviate from SBCFT.…”

Section: Introductionmentioning

confidence: 99%

Can Destination-Based Cash Flow Taxes Arise in Equilibrium?

Gresik

Bond

2021

SSRN Journal

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We examine the effects of unilateral changes in a country's tax parameters in a two country model when both countries are part of a destination-based cash flow taxation (DBCFT) system. We consider deviations from a globally efficient DBCFT equilibrium by allowing each country to vary its corporate tax rate, degree of taxation of capital income, and level of border adjustment. We decompose the effect of policy changes into fiscal effects and price effects, and show that regardless of the similarity between the two countries, at least one country has an incentive to move toward taxation of capital income. If countries are identical, each has an incentive to move toward source-based taxation. In contrast, changes in corporate tax rates have neither fiscal or price effects, and thus can be set unilaterally. Our results show that an international agreement to establish multilateral DBCFT requires a commitment mechanism to prevent deviations from cash flow taxation and full border adjustments.

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“…Shome & Schutte (1993) and suggest that income shifting incentives via transfer prices persist under unilateral adoption of the DBCFT. Becker & Englisch (2019) study how the DBCFT works under unilateral adoption. Recently, Bond & Gresik (2020) study the economic effects of unilateral adoption of corporate tax policies that include destination-based taxes and/or cash-flow taxes in a heterogeneous agent model in which multinational firms can endogenously shift income between countries by using transfer prices.…”

Section: Introductionmentioning

confidence: 99%