Coase-Sandor Working Paper Series in Law and Economics

Publication Date

2014

Publication Title

Coase-Sandor Working Paper Series in Law and Economics

Abstract

This paper analyzes the use of neutrality conditions, such as capital export neutrality, capital import neutrality, capital ownership neutrality, and market neutrality, in international tax policy. Neutralities are not appropriate tools for designing tax policy. They each identify a possible margin where taxation may distort business activities. Because these neutralities cannot be all satisfied simultaneously, however, they do not allow analysts to determine the appropriate trade-offs of these distortions, unlike deadweight loss measures used in other areas of tax policy. International tax policy should instead be tied directly to the reasons for taxing capital income, reasons which are derived from optimal tax or similar models.

Number

697

Included in

Law Commons

Share

COinS