Taxing Multinationals

Michael Devereux and Robert Hubbard

No 7920, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: H2 (search for similar items in EconPapers)
Date: 2000-09
Note: IFM PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published as Devereux, Michael P. and R. Glenn Hubbard. "Taxing Multinationals," International Tax and Public Finance, 2003, v10(4,Aug), 469-487.

Downloads: (external link)
http://www.nber.org/papers/w7920.pdf (application/pdf)

Related works:
Journal Article: Taxing Multinationals (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:7920

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7920

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().