DP3401 Cash Flow Taxes in an Open Economy

Author(s): Stephen Roy Bond , Michael P. Devereux

Publication Date: May 2002

Keyword(s): corporation tax , investment , location

JEL(s): F21 , F23 , H25 , H32 , H87

Programme Areas: Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP3401.asp

Academic and policy debates generally consider levying tax on corporate profit on either a residence basis or on a source basis. We explore two alternatives, based on the location of consumption, rather than production – destination-based, as opposed to source-based or residence-based, taxes. We analyse the properties of these taxes, especially with respect to their impact on location decisions and domestic welfare.