In this paper, we consider tax enforcement policy in the presence of profit shifting towards tax havens. We show that, under separate accounting, tax enforcement levels may be too high due to negative fiscal externalities. In contrast, under formula apportionment, tax enforcement is likely to be...

Using confidential data on the foreign operations of US multinational firms, I examine innovation in the context of an unexpected policy shock that facilitated foreign tax arbitrage. I find that after the shock, US multinationals shifted more of their intellectual property and taxable income to...

Double taxation agreements pose a particular analytical problem. While they provide a coherent structure that encourages cross-border investment, the agreements also provide opportunities for taxpayers to avoid their domestic tax obligations. To prevent tax avoidance, some countries enact...

How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is...

How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is...