Fiscal Paradise: Foreign Tax Havens and American Business / James R. Hines, Jr., Eric M. Rice.

Format:

Book

Author/Creator:

Hines, James R, Jr.

Contributor:

National Bureau of Economic Research.

Rice, Eric M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3477.

NBER working paper series no. w3477

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Fiscal Paradise

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

The offshore tax haven affiliates of American corporations account for more than a quarter of US foreign investment, an nearly a third of the foreign profits of US firms. This paper analyzes the origins of this tax haven activity and its implications for the US and foreign governments. Based on the behavior of US fins in 1982, it appears that American companies report extraordinarily high profit rates on both their real and their financial investments in tax havens. We calculate from this behavior that the tax rate that maximizes tax revenue for a typical haven is around 6%. The revenue implications for the US are more complicated, since tax havens may ultimately enhance the ability of the US government to tax the foreign earnings of American companies.

Notes:

Print version record

October 1990.