Addressing the Transfer-Pricing Problem in an Origin-Basis X Tax
In a previous paper I described how the tax design called the X Tax would facilitate an international tax system free of many of the complexities and avoidance opportunities plaguing the existing international tax regime and also have neutrality properties generally deemed desirable. A choice must, however, be made between two basic treatments of transborder business transactions--the origin and destination principles. The destination-principle approach sidesteps the need to identify arm's length terms of transborder transactions between related business entities--the transfer-pricing problem. This serious problem remains in the origin-principle approach, which, however, presents fewer challenges of monitoring the flow of goods and services across borders, obviates what I call the "tourism problem" whereby people can reduce their taxes by consuming in a low-tax jurisdiction and, arguably most important, avoids transition effects associated with introduction of the tax and subsequent tax rate changes that occur in the destination approach. In this paper I explore possible special rules for transborder transactions between related parties in an origin-based system to eliminate the transfer-pricing problem. Copyright 2003 by Kluwer Academic Publishers
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David F. Bradford, 1998.
"Transition to and Tax Rate Flexibility in a Cash-Flow Type Tax,"
NBER Working Papers
6465, National Bureau of Economic Research, Inc.
- David F. Bradford, 1998. "Transition to and Tax-Rate Flexibility in a Cash-Flow-Type Tax," NBER Chapters, in: Tax Policy and the Economy, Volume 12, pages 151-172 National Bureau of Economic Research, Inc.
- Zodrow, George R., 1995. "Taxation, uncertainty and the choice of a consumption tax base," Journal of Public Economics, Elsevier, vol. 58(2), pages 257-265, October.
- David Bradford, .
"Consumption Taxes: Some Fundamental Transition Issues,"
EPRU Working Paper Series
95-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- David F. Bradford, 1995. "Consumption Taxes: Some Fundamental Transition Issues," NBER Working Papers 5290, National Bureau of Economic Research, Inc.
- Boadway, Robin & Bruce, Neil, 1984.
"A general proposition on the design of a neutral business tax,"
Journal of Public Economics,
Elsevier, vol. 24(2), pages 231-239, July.
- Robin Boadway & Neil Bruce, 1982. "A General Proposition on the Design of a Neutral Business Tax," Working Papers 461, Queen's University, Department of Economics.
- Gordon, Roger H. & Hines, James Jr, 2002.
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 28, pages 1935-1995
- Robert E. Hall, 1996. "The Effects of Tax Reform on Prices and Asset Values," NBER Chapters, in: Tax Policy and the Economy, Volume 10, pages 71-88 National Bureau of Economic Research, Inc.
- Martin S. Feldstein & Paul R. Krugman, 1990.
"International Trade Effects of Value-Added Taxation,"
in: Taxation in the Global Economy, pages 263-282
National Bureau of Economic Research, Inc.
- Paul Krugman & Martin Feldstein, 1989. "International Trade Effects of Value Added Taxation," NBER Working Papers 3163, National Bureau of Economic Research, Inc.
- Alan Auerbach & David Bradford, 2001.
"Generalized Cash Flow Taxation,"
CESifo Working Paper Series
425, CESifo Group Munich.
- Alan A. Auerbach & David F. Bradford, 2001. "Generalized Cash Flow Taxation," NBER Working Papers 8122, National Bureau of Economic Research, Inc.
- Alan J. Auerbach & David F. Bradford, 2001. "Generalized Cash Flow Taxation," Working Papers 131, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
- Charles E. Mclure, 1987. "The Value Added Tax," Books, American Enterprise Institute, number 725195, April.
When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:10:y:2003:i:5:p:591-610. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.