DP3401 Cash Flow Taxes in an Open Economy

Author(s): Stephen Roy Bond, Michael P. Devereux
Publication Date: May 2002
Keyword(s): corporation tax, investment, location
JEL(s): F21, F23, H25, H32, H87
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3401

Academic and policy debates generally consider levying tax on corporate profit on either a residence basis or on a source basis. We explore two alternatives, based on the location of consumption, rather than production ? destination-based, as opposed to source-based or residence-based, taxes. We analyse the properties of these taxes, especially with respect to their impact on location decisions and domestic welfare.