This report looks at how corporate income taxes have changed over the past two decades, what incentives they provide for domestic and international investment, and whether changes in the international economy have helped shape these reforms.

It is observed in the real world that taxes matter for location decisions and that multinationals shift profits by transfer pricing. The US and Canada use Formula Apportionment (FA) to tax corporate income, and the EU is debating a switch from Separate Accounting (SA) to FA. This paper develops...