In late February 2013, the U.S. Supreme Court will hear oral argument in PPL Corp. v. Commissioner. The Court took that case, which involves a claim by a U.S. corporation for foreign tax credits for taxes paid in accordance with the 1997 U.K. Windfall Profit Tax Act, in order to resolve a...

Judd's (1985) finding that the optimal long-run rate of tax on capital is zero—even if equity is an important social objective—has exerted substantial influence in academic and policy circles over the last quarter century. Only very recently has it become clear that Judd's zero-tax result...

Tax sparing occurs when a country with a worldwide tax system grants its citizens foreign tax credits for the taxes that they would have paid on income earned abroad, but that escapes taxation by virtue of foreign tax incentives. The supporters of tax sparing argue that it is a form of foreign...

The literature on optimal redistributional instruments begins with the assumption that society has some preference for equality, leaving the precise degree unspecified. It then asks: How should society pursue that preference? More specifically, what kinds of policy instruments — whether...

In 1927 the mathematician Frank Ramsey published a paper on optimal taxation in which he put forward what has come to be known as the “Ramsey rule”. Nearly one hundred years later, Ramsey’s paper remains a go-to reference for normative tax theory in a number of fields, including legal...

In the literature on optimal taxation, a “tag” is a government-observable taxpayer attribute that is effectively immutable – like blindness, race, gender, or even height. Conventional optimal tax theory prescribes that tags should be included in the tax base so long as they are in some way...

Hit hard by the financial crisis and recession, U.S. auto producers are seeking a massive bailout from the U.S. Congress. Many reasons are given for the U.S. auto industry's lack of competitiveness including the U.S. corporate income tax. Although it is regularly asserted that there is a direct...

To promote fair and sustainable capitalism and help business and labor work together to build an American economy that works for all, this paper presents a comprehensive proposal to reform the American corporate governance system by aligning the incentives of those who control large U.S....

The Base Erosion and Anti-Abuse Tax is generally regarded as among the most important changes wrought by the Tax Cuts and Jobs Act of 2017, which is itself regarded as among the most important pieces of tax legislation in the last several decades. This paper evaluates the new BEAT provision...

Around the world, policymakers are obsessed with the competitiveness of their domestic companies and domestically based multinational corporations (MNCs). Such concerns frequently influence policy, especially tax policy. In this paper, I develop a theory of how taxes affect the international...