Taxing Multinationals / Michael P. Devereux, R. Glenn Hubbard.

Format:

Book

Author/Creator:

Devereux, Michael P.

Contributor:

National Bureau of Economic Research.

Hubbard, R. Glenn.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7920.

NBER working paper series no. w7920

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

This paper analyzes the effects of tax policy on the strategic choices of a domestic multinational company competing with a foreign multinational company in a third country. We demonstrate the role of the effective average tax rate and the effective marginal tax rate on the company's choices. We consider the impact on national welfare of alternative tax policies for outbound investment. Our results differ from existing models. In contrast to Feldstein and Hartman (1979), in our model, taxing foreign source income on accrual with a deduction for foreign taxes is not generally optimal. However, unlike Mintz and Tulkens (1996), the optimal policy for domestic and outbound investment is linked through the strategic choices of the multinational.

Notes:

Print version record

September 2000.