DP3401 | Cash Flow Taxes in an Open Economy

Publication Date

20/05/2002

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Abstract

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.