IDEAS home Printed from https://ideas.repec.org/p/zbw/bayfat/200903.html
   My bibliography  Save this paper

Symmetric cash flow-taxation and cross-border investments

Author

Listed:
  • Kramer, Frank

Abstract

The discussion about income versus consumption as the ideal tax base looks back on a long history. In recent years, the debate about income versus consumption as the better tax base reemerged in the United States (2002) and in Germany (2006). In view of the long history of the debate, it is surprising that still relatively little research has been done on crossborder-investments in a cash flow-tax system. The presented article tries to fill this gap. For the case of a harmonized introduction of symmetric cash flow-tax systems in several countries, rules are developed that could guarantee a systematic and feasible treatment of crossborder investments. Preference is given to the RF-base-cash flow-tax on the personal level without a separate company tax. As a result the presented article states, that a coordinated introduction of symmetric cash flow-tax systems in several neighboring countries could be possible. To guarantee the success of the reform, each country must be willing to commit to intensive cooperation in tax matters. A unilateral introduction of a cash flow-tax and the resulting clash of a consumption-based tax system with an income-based tax system - the socalled collision-case - will be addressed in a following paper.

Suggested Citation

  • Kramer, Frank, 2009. "Symmetric cash flow-taxation and cross-border investments," Bayreuth Working Papers on Finance, Accounting and Taxation (FAcT-Papers) 2009-03, University of Bayreuth, Chair of Finance and Banking.
  • Handle: RePEc:zbw:bayfat:200903
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/54955/1/683479199.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Heinhold & Silke Hüsing & Helmut Pasch, 2000. "Consumption-Based Tax Systems And Investment Neutrality: Does The Corporation Income Tax Depreciation Method Impact Investment Capital Value?," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 52(3), pages 261-281, July.
    2. McLure, Charles E. Jr., 1992. "Substituting Consumption-Based Direct Taxation for Income Taxes as the International Norm," National Tax Journal, National Tax Association;National Tax Journal, vol. 45(2), pages 145-154, June.
    3. Zodrow,George R. & Mieszkowski,Peter (ed.), 2002. "United States Tax Reform in the 21st Century," Cambridge Books, Cambridge University Press, number 9780521803830, September.
    4. Zodrow, George R. & McLure, Charles E. Jr., 1988. "Implementing direct consumption taxes in developing countries," Policy Research Working Paper Series 131, The World Bank.
    5. Syed M. Ahsan & Panagiotis Tsigaris, 2003. "Choice of Tax Base Revisited: Cash Flow vs. Prepayment Approaches to Consumption Taxation," CESifo Working Paper Series 983, CESifo.
    6. McLure, Charles E. Jr., 1992. "Substituting Consumption-Based Direct Taxation for Income Taxes as the International Norm," National Tax Journal, National Tax Association, vol. 45(2), pages 145-54, June.
    7. Michael Keen & John King, 2002. "The Croatian profit tax: an ACE in practice," Fiscal Studies, Institute for Fiscal Studies, vol. 23(3), pages 401-418, September.
    8. George R. Zodrow, 2019. "Taxation, Uncertainty and the Choice of a Consumption Tax Base," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 8, pages 227-237, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sijbren Cnossen, 2002. "Tax Policy in the European Union: A Review of Issues and Options," CESifo Working Paper Series 758, CESifo.
    2. George R. Zodrow, 2010. "International Taxation and Company Tax Policy in Small Open Economies," Chapters, in: Iris Claus & Norman Gemmell & Michelle Harding & David White (ed.), Tax Reform in Open Economies, chapter 6, Edward Elgar Publishing.
    3. Ira Horowitz & R. Horowitz, 1999. "Risky Assets and the Choice of Tax Base," Public Finance Review, , vol. 27(5), pages 467-480, September.
    4. David F. Bradford, 2003. "The X Tax in the World Economy," Working Papers 109, Princeton University, Department of Economics, Center for Economic Policy Studies..
    5. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," EPRU Working Paper Series 06-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    6. Cnossen, S., 2002. "Tax policy in the European Union : a review of issues and options," Research Memorandum 023, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    7. Avi-Yonah, Reuven S., 1996. "Comment on Grubert and Newlon, "The International Implications of Consumption Tax Proposals"," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(2), pages 259-265, June.
    8. Peter Birch Sørensen, 2006. "Can Capital Income Taxes Survive? And Should They?," CESifo Working Paper Series 1793, CESifo.
    9. John W. Diamond & George R. Zodrow, 2006. "Economic Effects of a Personal Capital Income Tax Add-On to a Consumption Tax," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0629, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    10. repec:pri:cepsud:93bradford is not listed on IDEAS
    11. Avi-Yonah, Reuven S., 1996. "Comment on Grubert and Newlon, "The International Implications of Consumption Tax Proposals"," National Tax Journal, National Tax Association, vol. 49(2), pages 259-65, June.
    12. George Zodrow, 2006. "Capital Mobility and Source-Based Taxation of Capital Income in Small Open Economies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(2), pages 269-294, May.
    13. Michael P. Devereux & Peter Birch Sørensen, 2006. "The Corporate Income Tax: international trends and options for fundamental reform," European Economy - Economic Papers 2008 - 2015 264, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. David F. Bradford, 2003. "The X Tax in the World Economy," Working Papers 109, Princeton University, Department of Economics, Center for Economic Policy Studies..
    15. Omar Sebastián Cabrera Cabrera, 2016. "El Establecimiento Permanente: Especial Énfasis En La Cláusula De Agencia," Books, Universidad Externado de Colombia, Facultad de Derecho, number 849, July.
    16. Charles E. McLure, Jr. & George R. Zodrow, 2007. "Consumption-based Direct Taxes: A Guided Tour of the Amusement Park," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(2), pages 285-307, June.
    17. Zodrow, George R, 2003. "Tax Competition and Tax Coordination in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 651-671, November.
    18. Mr. Shafik Hebous & Andualem Mengistu, 2024. "Efficient Economic Rent Taxation under a Global Minimum Corporate Tax," IMF Working Papers 2024/057, International Monetary Fund.
    19. Rainer Niemann & Mariana Sailer, 2023. "Is analytical tax research alive and kicking? Insights from 2000 until 2022," Journal of Business Economics, Springer, vol. 93(6), pages 1149-1212, August.
    20. Nils aus dem Moore, 2014. "Taxes and Corporate Financing Decisions – Evidence from the Belgian ACE Reform," Ruhr Economic Papers 0533, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    21. Syed M. Ahsan & Panagiotis Tsigaris, 2009. "The Efficiency Loss of Capital Income Taxation under Imperfect Loss Offset Provisions," Public Finance Review, , vol. 37(6), pages 710-731, November.

    More about this item

    Keywords

    Cash flow-tax; consumption tax; international taxation; cross-border investments;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:bayfat:200903. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/rwbayde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.