The United States approach to taxing foreign-source income is a hybrid worldwide system in form. However, because of deferral of U.S. tax on foreign-source active business income, liberal cross crediting opportunities and other defects, the U.S. system can actually produce a...

This paper empirically estimates the effects of a new thin-capitalization rule on the financing behavior of German corporations employing a fixed effects difference-in-difference approach. We compare treatment and control groups separated by a hypothetical application of the new rule in three...

This paper examines the effects of the Tax Reform Act of 1986 on the international location decisions of U.S. financial services firms. The Act included rule changes that made it substantially more difficult for U.S. firms to defer U.S. taxes on overseas financial services income held in low-tax...

Firms are heterogeneous in size, productivity, ownership concentration, governance, financial structure and other dimensions. This paper introduces a stylized theoretical framework to account for such differences and to explain the heterogeneous tax sensitivity of firm-level investments across...

This paper contributes to resolving the puzzle that in practice most countries use ad valorem (corporate income) taxation, while a large part of the tax competition literature views business taxes as unit (wealth) taxation. We point to the dual role that corporate taxation plays in attracting...

This paper analyzes the sources of heterogeneity in legal tax avoidance strategies across individuals. Three conditions are required for a taxpayer to participate in tax avoidance: incentive, access, and awareness. Using rich Swedish administrative panel data with a unique link between corporate...