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The Case for Tax Integration and Current-Base Taxation
Get PDFThe U.S. tax system has many distortions, but two triumph them all. The first is debt-over-equity. Under the current corporate double taxation mechanism, C corporations are incentivized to borrow rather than issue equity, because interest is deductible, and dividends are not. The second is foreign-over-domestic investment. Under the current U.S. international tax regime, U.S. multinationals are subject to a reduced tax rate, and in certain occasions are also exempt from U.S. tax on their foreign earnings, while their domestic earnings are subject to full corporate tax rate.
In this Article, I call for the adoption of a Dividends-Paid Deduction form of tax integration and for current-base taxation of foreign earnings. The already reduced corporate tax rate (21%), combined with tax integration, will provide a significant relief from the relatively high burden of corporate double taxation, allowing U.S. multinationals to better compete in the global economy. It will eliminate (or substantially reduce) the debt-over-equity bias and the inefficient penalty on business activities carried through C corporations. Current-base taxation will eliminate the current incentive to invest and shift income abroad, while providing a very important source of revenue. It will also obliterate the need to distinguish between domestic and foreign earnings and as such will facilitate the adoption of tax integration, because all distributions of earnings that were previously taxed will give rise to the benefits of tax integration. Finally, in order to avoid a potential revenue loss as a result of this new dividends-paid deduction, a non-refundable full-rate withholding tax, or a new compensatory tax, equal to the rate of the corporate tax, should be introduced and implemented
THE CASE FOR TAX INTEGRATION AND CURRENT-BASE TAXATION
Get PDFThe U.S. tax system has many distortions, but two triumph them all. The first is debt-over-equity. Under the current corporate double taxation mechanism, C corporations are incentivized to borrow rather than issue equity, because interest is deductible, and dividends are not. The second is foreign-over-domestic investment. Under the current U.S. international tax regime, U.S. multinationals are subject to a reduced tax rate, and in certain occasions are also exempt from U.S. tax on their foreign earnings, while their domestic earnings are subject to full corporate tax rate.
In this Article, I call for the adoption of a Dividends-Paid Deduction form of tax integration and for current-base taxation of foreign earnings. The already reduced corporate tax rate (21%), combined with tax integration, will provide a significant relief from the relatively high burden of corporate double taxation, allowing U.S. multinationals to better compete in the global economy. It will eliminate (or substantially reduce) the debt-over-equity bias and the inefficient penalty on business activities carried through C corporations. Current-base taxation will eliminate the current incentive to invest and shift income abroad, while providing a very important source of revenue. It will also obliterate the need to distinguish between domestic and foreign earnings and as such will facilitate the adoption of tax integration, because all distributions of earnings that were previously taxed will give rise to the benefits of tax integration. Finally, in order to avoid a potential revenue loss as a result of this new dividends-paid deduction, a non-refundable full-rate withholding tax, or a new compensatory tax, equal to the rate of the corporate tax, should be introduced and implemented
Tax Expenditures and Horizontal Equity: A Present-Day Reassessment
Get PDFTax expenditures are “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.” The concept of tax expenditures was coined by the first Assistant Secretary for Tax Policy, Stanley S. Surrey, in the late 1960s, and was codified by the Congressional Budget Act of 1974, which requires that a list of tax expenditures be included in the U.S. budget. The concept relies on the Haig-Simons definition of income (with certain adjustments) as the baseline, a deviation from which is considered a tax expenditure.
There are two basic problems with attempts to define tax expenditures against a Haig-Simons baseline. First, it is not clear why the Haig-Simons, and not other definitions of income, should be used as a baseline. Second, it is not clear why such deviations are normatively problematic. Put bluntly, who cares whether a specific tax provision is a deviation from some theoretical definition of income?
This Article represents an attempt to recapture Surrey’s original view of tax expenditures and assess its present-day implications: most importantly, that tax expenditures should be viewed as an attempt to identify departures that violate principles of horizontal equity, i.e., the idea that taxpayers with equal ability to pay should bear an equal burden of tax. As such, eliminating tax expenditures means eliminating many of the biases that are currently an integral part of the tax system. Doing so will make the tax system much more equitable for most Americans than any tax reform currently contemplated by Congress
Going Beyond Counting First Authors in Author Co-citation Analysis
Get PDFThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Variations on the Author
Get PDF“Variations on the Author” discusses two of Eduardo Coutinho’s recent films (Um Dia na Vida, from 2010, and Últimas Conversas, posthumously released in 2015) and their contribution to the general question of documentary authorship. The director’s filmography is characterized by a consistent yet self-effacing form of authorial self-inscription: Coutinho often features as an interviewer that rather than express opinions propels discourses; an interviewer that is good at listening. This mode of self-inscription characterizes him as an author who is not expressive but who is nonetheless markedly present on the screen. In Um Dia na Vida, however, Coutinho is completely absent form the image, while Últimas Conversas, on the contrary, includes a confessional prologue that moves the director from the margins to the center of his films. This article examines the ways in which these works stand out in the filmography of a director who offers new insights into the notion of cinematic authorship
Appropriate Similarity Measures for Author Cocitation Analysis
Get PDFWe provide a number of new insights into the methodological discussion about author cocitation analysis. We first argue that the use of the Pearson correlation for measuring the similarity between authors’ cocitation profiles is not very satisfactory. We then discuss what kind of similarity measures may be used as an alternative to the Pearson correlation. We consider three similarity measures in particular. One is the well-known cosine. The other two similarity measures have not been used before in the bibliometric literature. Finally, we show by means of an example that our findings have a high practical relevance.information science;Pearson correlation;cosine;similarity measure;author cocitation analysis
What Would Surrey Say? The Long Reach of Stanley S. Surrey
No full textStanley S. Surrey died in 1984, two years before the enactment of the Tax Reform Act of 1986, which gave us the Internal Revenue Code of 1986 as amended. Historians have recently discovered Surrey’s work through his memoirs, published in 2022, and several articles based on the memoir and on the unpublished Surrey papers at Harvard Law School. There is no doubt that Surrey was a towering historical figure during his “Half-Century with the Internal Revenue Code.” As his protégé Donald Lubick, who served as Assistant Secretary for Tax Policy in both the Carter and the Clinton Administrations, stated, Surrey “dominated tax policy both in the United States and internationally in the 1960s and ‘70s.” As of 1970, Surrey was the most cited tax scholar, “with more than twice the citations of his closest contemporary and occasional rival, Boris I. Bittker.
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