The Effect Of Taxes On Investment And Income Shifting To Puerto Rico
Harry Grubert and
Joel Slemrod ()
The Review of Economics and Statistics, 1998, vol. 80, issue 3, pages 365-373
The income of Puerto Rican affiliates of U.S. corporations is essentially untaxed by either Puerto Rico or the United States. This lowers the tax penalty on investment there, and also makes it attractive to shift reported taxable income from the U.S. parent corporation to the Puerto Rican affiliate. This paper investigates these two interrelated impacts of taxation by developing a structural econometric model of the joint decisions regarding investment and income shifting, and estimating the model using firm-level data on the activity U.S. corporations in Puerto Rico. The results suggest that the income shifting advantages are the predominant reason for U.S. investment in Puerto Rico. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
References: Add references at CitEc
Citations View citations in EconPapers (39) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: The Effect of Taxes on Investment and Income Shifting to Puerto Rico (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:tpr:restat:v:80:y:1998:i:3:p:365-373
Ordering information: This journal article can be ordered from
http://mitpress.mit. ... me.tcl?issn=00346535
Access Statistics for this article
The Review of Economics and Statistics is edited by Daron Acemoglu, George J. Borjas, Dani Rodrik and Julio J. Rotemberg
More articles in The Review of Economics and Statistics from MIT Press
Series data maintained by Karie Kirkpatrick ().