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Title: |
The Optimal Taxation of Income from International Investment: A
Geometric Analysis |
| Author: |
Mackie, James;
Rousslang, Donald J. |
| Author
Affiliation: |
US Dept of
Treasury |
| Source: |
International Economic Journal, Winter 2000, v. 14, no. 4, pp. 77-86 |
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Publication Date: |
Winter 2000 |
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Abstract: |
This paper examines how a
capital-exporting country should tax foreign investment income when
saving is variable and the goal is to maximize global welfare. Other
recent studies have assumed either that countries cooperate to achieve
this goal, or that they act unilaterally to maximize the national
benefit. The present paper returns to the framework used by earlier
authors, in which the capital-exporting country acts unilaterally and
takes foreign tax rates as given. Unlike the previous studies, it is
found that if the capital-exporting country's investments do not alter
foreign rates of return, the optimal tax structure may involve higher
taxes for foreign than for domestic investment income. |
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