Taxing the multinational enterprise: On the forced redesign of global value chains and other inefficiencies

• 成果类型: Article
• 署名作者: Foss, Nicolai J.; Mudambi, Ram; Murtinu, Samuele
• 署名单位: Bocconi University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University; University of Groningen
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-018-0159-3
• 发表日期: 2019
• 页码: 1644-1655
• 关键词: finance; taxation; corporate profit taxation; transfer pricing; public goods

摘要

The taxation of the multinational enterprise (MNE) has been a continuing concern for policymakers. We argue that the changing nature of the mobile MNE (e.g., its improved ability to fine-slice the value chain and disperse it geographically) makes it increasingly important to rethink current tax policies. First, there should be more focus on the inefficiencies that arise when taxation leads to the inefficient location of MNE activities. Thus, MNEs may shift activities to low-tax jurisdictions that offer lucrative pecuniary and non-pecuniary incentives, but do not enable their investments to maximize their contribution to global value creation. Second, international tax regimes should ensure that MNEs pay for their consumption of local public goods, and public finance scholars have long known that the taxation-based distortions are minimized when the tax objects are immobile. However, the bulk of current tax policies are aimed at corporate profits that are both poor proxies for the consumption of local public goods as well as extremely mobile. Integrating theory from international business, public finance and economic geography, our analysis demonstrates that moving the incidence of taxation from corporate profits to dividends and consumption would unambiguously improve both wealth creation and efficiency.