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Territorial taxation would shift the US from a system where US firms pay US taxes on income they earn abroad to one where they pay US taxes only on income earned at home. On Monday, AEI's half-day international tax conference discussed literature on the tax-base erosion caused by profit shifting among firms in territorial systems and how newer, richer data sources will help create more evidence-based policy decisions.
The second panel discussed Japan's and the UK's experiences switching to territorial taxation systems, and the possible takeaways for the US. The third panel addressed firm redomiciliation practices, or how firms avoid high tax rates by changing the country under whose laws firms are registered or incorporated. Panelists agreed that company headquarters gravitate to tax-favorable locations, and repatriation taxes can cause inefficiencies in firm ownership and investment. They argued that removing distortions would yield significant welfare gains.
Jason Furman, chairman of the Council of Economic Advisers, focused on the necessity of business-tax reform that would remove tax distortions and improve both short- and long-term investment. He stressed that a more efficient tax system could boost growth by reducing base erosion, encouraging more investment in the US, and making the US more competitive abroad. Furman concluded by emphasizing the need to invest in public infrastructure and to support investments with positive externalities such as research and development.
As Congress deliberates business tax reform options, the international aspects often prove most complex. All Group of Eight countries other than the United States have territorial tax systems that exempt 95 to 100 percent of qualified dividends repatriated from foreign subsidiaries.
This half-day conference, cohosted by AEI and the International Tax Policy Forum, will explore the economic effects of territorial taxation. Panelists will use their international experience to examine the effects of international tax rules on base erosion and profit shifting, repatriation of foreign profits, and cross-border mergers and acquisitions and headquarters location. The conference will conclude with a luncheon address by Jason Furman, chairman of the White House Council of Economic Advisers.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Registration and Continental Breakfast
Alex Brill, AEI
John Samuels, General Electric
Panel I: Base erosion and profit shifting under worldwide and territorial taxation
Dhammika Dharmapala, University of Illinois
Kevin Markle, University of Waterloo
Alan D. Viard, AEI
Michael Graetz, Columbia University
Panel II: Repatriation of foreign profits in Japan, the UK, and the US
Sebastien Bradley, Drexel University
Fritz Foley, Harvard University
Martin Ruf, University of Tübingen, Business
Rosanne Altshuler, Rutgers University
Alan Auerbach, University of California–Berkeley
Panel III: Home-country tax effects on mergers, inversions, and headquarters location
Susan Morse, University of Texas at Austin
Paul Oosterhuis, Skadden
Johannes Voget, University of Mannheim
James Hines, University of Michigan
Mihir Desai, Harvard University
Arthur C. Brooks, AEI
Jason Furman, Council of Economic Advisers
For more information, please contact Brittany Pineros at [email protected], 202.862.5926.
For media inquiries, please contact [email protected], 202.862.5829.
Rosanne Altshuler is professor and chair of the Economics Department at Rutgers University. Her research focuses on federal tax policy and has appeared in numerous journals and books. She was an assistant professor at Columbia University and has been a visiting professor at Princeton University, the New York University (NYU) School of Law, and the Robert F. Wagner Graduate School of Public Service at NYU. Altshuler was editor of the National Tax Journal, a member of the board of directors of the National Tax Association, and a member of the Congressional Budget Office's Panel of Economic Advisers. She is currently on the board of trustees of the American Tax Policy Institute. She has also been active in the policy world, serving as director of the Urban-Brookings Tax Policy Center, senior economist to the 2005 President’s Advisory Panel for Federal Tax Reform, and special adviser to the Joint Committee on Taxation.
Alan Auerbach is the Robert D. Burch Professor of Economics and Law, director of the Robert D. Burch Center for Tax Policy and Public Finance, and former chair of the Economics Department at the University of California, Berkeley. He is a research associate with the National Bureau of Economic Research and previously taught at Harvard and the University of Pennsylvania, where he also served as the chair of the Economics Department. Auerbach was deputy chief of staff of the US Joint Committee on Taxation in 1992 and has been a consultant to several government agencies and institutions in the United States and abroad. A former executive committee member and vice president of the American Economic Association (AEA), Auerbach also served as editor of the AEA Journal of Economic Perspectives and the American Economic Journal: Economic Policy. Auerbach is a fellow of the American Academy of Arts and Sciences, the Econometric Society, and the National Academy of Social Insurance. He is currently vice president of the National Tax Association, from which he received the Daniel M. Holland Medal in 2011.
Alex Brill is a research fellow at AEI, where he studies the impact of tax policy on the US economy as well as the fiscal, economic, and political consequences of tax, budget, health care, retirement security, and trade policies. He also works on health care reform, pharmaceutical spending and drug innovation, and unemployment insurance reform. Brill is the author of a pro-growth proposal to reduce the corporate tax rate to 25 percent and “The Real Tax Burden: More than Dollars and Cents” (AEI Press, 2011), coauthored with Alan D. Viard. He has testified numerous times before Congress on tax policy, labor markets and unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biologic drug competition. Before joining AEI, Brill served as the policy director and chief economist of the House Ways and Means Committee. Previously, he served on the staff of the White House Council of Economic Advisers. He has also served on the staff of the president's fiscal commission and the Republican platform committee.
Arthur C. Brooks is the president of and Beth and Ravenel Curry Scholar in Free Enterprise at AEI. Immediately before joining AEI, Brooks was the Louis A. Bantle Professor of Business and Government at Syracuse University, where he taught economics and social entrepreneurship. Brooks is the author of 10 books and hundreds of articles on topics including the role of government, fairness, economic opportunity, happiness, and the morality of free enterprise. His latest book, “The Road to Freedom: How to Win the Fight for Free Enterprise” (Basic Books, 2012), was a New York Times bestseller. Among his earlier books are “Gross National Happiness” (Basic Books, 2008), “Social Entrepreneurship” (Prentice-Hall, 2008), and “Who Really Cares” (Basic Books, 2006). Before pursuing his work in public policy, Brooks spent 12 years as a classical musician in the United States and Spain. He is a frequent guest on national TV and radio talk shows and has been published widely in publications including The New York Times, The Wall Street Journal, and The Washington Post.
Mihir Desai is the Mizuho Financial Group Professor of Finance and the chair of doctoral programs at Harvard Business School. He is a research associate for the Public Economics and Corporate Finance programs at the National Bureau of Economic Research (NBER) and is the codirector of NBER's India program. He is also on the advisory board of the International Tax Policy Forum. Desai’s work emphasizes the appropriate design of tax policy in a globalized setting, the links between corporate governance and taxation, and the internal capital markets of multinational firms. His research has been cited in The Economist, Businessweek, The New York Times, and several other publications. He is also the author of “International Finance: A Casebook” (John Wiley & Sons, 2006), which features his many case studies on international corporate finance.
Dhammika Dharmapala is a professor of law and professor of finance at the University of Illinois at Urbana-Champaign. He is also an international research fellow at the Oxford University Centre for Business Taxation and a fellow of the Center for Economic Studies and Ifo Institute Research Network . He has previously held postdoctoral and visiting positions at Harvard University, the University of Michigan, Georgetown University Law Center, and the Australian National University. Currently the editor-in-chief of International Tax and Public Finance, Dharmapala serves on the editorial boards of the American Economic Journal: Economic Policy and the Review of Law & Economics. He is also a member of the board of directors of the American Law and Economics Association and formerly served on the board of directors of the National Tax Association.
Fritz Foley is the André R. Jakurski Professor of Business Administration at Harvard Business School (HBS). He is also a faculty research fellow in the National Bureau of Economic Research’s Corporate Finance and International Trade and Investment programs and an associate editor of the Journal of International Economics. Foley’s research focuses on corporate finance, with a particular emphasis on the activities of multinational firms. He has received awards for his research and course development efforts and his work has been funded by grants from the US National Science Foundation, World Bank, and Asian Development Bank. His recent projects analyze how international trade is financed, how firms respond to the tax costs of repatriating foreign earnings, and what behaviors and attributes make chief financial officers effective. Before joining HBS, Foley was on the faculty at the Stephen M. Ross School of Business at the University of Michigan, Ann Arbor. He has also worked as a strategy consultant at Monitor Company and has conducted research as a Fulbright scholar on multinational firms in the apparel export sector in Sri Lanka.
Jason Furman is the chairman of the Council of Economic Advisers. Before this role, he served as principal deputy director of the National Economic Council. From 2007 to 2008, Furman was a senior fellow in economic studies and director of the Hamilton Project at the Brookings Institution. Previously, he served as a staff economist at the Council of Economic Advisers, a special assistant to the president for economic policy at the National Economic Council under Bill Clinton, and senior adviser to the chief economist and senior vice president of the World Bank. Furman was the economic policy director for Obama for America. He has also served as visiting scholar at New York University’s Wagner Graduate School of Public Service, a visiting lecturer at Yale and Columbia Universities, and a senior fellow at the Center on Budget and Policy Priorities. He has conducted research in a wide range of areas, including fiscal policy, tax policy, health economics, Social Security, and monetary policy. In addition to numerous articles in scholarly journals and periodicals, Furman is the editor of several books on economic policy, including “Path to Prosperity: Hamilton Project Ideas on Income Security, Education, and Taxes” (Brookings Institution Press, 2008) and “Who Has the Cure: Hamilton Project Ideas on Health Care” (Brookings Institution Press, 2008).
Michael Graetz is the Isidor and Seville Sulzbacher Professor of Law and the Columbia Alumni Professor of Tax Law at Columbia Law School. He is also a fellow at the American Academy of Arts and Sciences. Before joining Columbia in 2009 he was the Justus S. Hotchkiss Professor of Law at Yale Law School, a professor of law at the University of Virginia School of Law and the University of Southern California Gould School of Law, and a professor of law and social sciences at the California Institute of Technology. He has authored a leading law school text and more than 60 articles on a wide range of tax, international taxation, health policy, and social insurance issues in books and scholarly journals. His most recent book is “100 Million Unnecessary Returns: A Simple, Fair, and Competitive Tax Plan for the United States” (Yale University Press, 2008). Graetz has served both as assistant to the secretary and special counsel and as deputy assistant secretary for tax policy at the US Department of the Treasury. He was a John Simon Guggenheim Memorial Fellow and received an award from Esquire magazine for his courses and work concerning the provision of shelter for the homeless.
James Hines is the L. Hart Wright Collegiate Professor of Law at the University of Michigan Law School and the Richard A. Musgrave Collegiate Professor of Economics at the University of Michigan. He also serves as the research director of the Office of Tax Policy Research in the Stephen M. Ross School of Business. His research is focused on various aspects of taxation. He taught at Princeton University and at Harvard University before joining the Michigan faculty in 1997 and has held visiting appointments at Columbia University, the London School of Economics, Harvard Law School, and the University of California, Berkeley. He is a research associate of the National Bureau of Economic Research, coeditor of the Journal of Public Economics, and was once an economist at the US Department of Commerce.
Kevin Markle is an assistant professor at the University of Waterloo. Previously, he was a visiting assistant professor at the Tuck School of Business at Dartmouth College. His research currently focuses on international tax and the ways in which multinational corporations reduce their tax burdens using international tax planning. His work has been published in the National Tax Journal and Tax Law Review.
Susan Morse is an assistant professor at the University of Texas School of Law. She studies and writes about international tax reform and tax compliance. In 2013 she served as the Abe Greenbaum Fellow at the University of New South Wales School of Taxation and Business Law in Sydney. Previously, Morse clerked for the Honorable Michael Boudin of the US Court of Appeals for the First Circuit. She spent seven years in business tax practice at Ropes & Gray (Boston) and Wilson Sonsini Goodrich & Rosati (Palo Alto) and regularly speaks on panels at practitioner conferences. She has recently published papers in Tax Notes International, Florida Tax Review, National Tax Journal, North Carolina Law Review, and Villanova Law Review.
Paul Oosterhuis is an international tax partner in the Washington, DC, office of Skadden, Arps, Slate, Meagher & Flom and is the firmwide leader of its various regulatory practice groups. He has extensive experience in cross-border acquisition and disposition transactions, financing arrangements, and tax planning for US and foreign-based multinational corporations. He also frequently represents clients on international tax controversy matters, intercompany pricing matters such as Advance Pricing Agreement and Competent Authority negotiations, and regulations and rulings proceedings with the Internal Revenue Service. In 1973 he became a legislation attorney for the Joint Committee on Taxation of the US Congress, and in 1977 and 1978 served as the Committee's legislation counsel. He has also served as an adjunct professor of law at Georgetown University Law Center, where he taught international taxation.
Martin Ruf is a full professor at the University of Tübingen School of Business and Economics, an affiliated member of the Norwegian Center for Taxation, and a guest researcher at Deutsche Bundesbank. His research interests include tax accounting, business taxation, empirical tax research, and international corporate tax law. He has served as a visiting professor at the Tuck School of Business at Dartmouth College, an assistant professor at the University of Mannheim, and a visiting scholar at the Oxford University Centre for Business Taxation. From 2004 to 2006 he was a tax adviser for the leading German tax law firm Flick Gocke Schaumburg.
John Samuels is the vice president and senior counsel for tax policy and planning at General Electric (GE). He is responsible for GE’s worldwide tax organization and for the company’s global tax planning and tax compliance operations. He is a member of GE’s corporate executive council, the GE capital corporation board of directors, the GE finance council, and the GE pension board. Before joining GE in 1988, he was a partner in the law firm of Dewey Ballantine in Washington, DC, and New York City. From 1976 to 1981, Samuels served as the deputy tax legislative counsel and tax legislative counsel of the US Department of the Treasury. He is also the chairman of the International Tax Policy Forum, a fellow of the American College of Tax Counsel, and a member of the University of Chicago Law School Visiting Committee. Samuels was an adjunct professor of taxation at the New York University School of Law and is currently the Jacquin D. Bierman Visiting Lecturer at Yale Law School where he teaches courses in international taxation.
Alan D. Viard is a resident scholar at AEI, where he studies federal tax and budget policy. Before joining AEI, Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University. He has also been a visiting scholar at the US Department of the Treasury's Office of Tax Analysis, a senior economist at the White House's Council of Economic Advisers, and a staff economist at the Joint Committee on Taxation of the US Congress. While at AEI, Viard has also taught public finance at Georgetown University’s Public Policy Institute. Earlier in his career, Viard spent time in Japan as a visiting scholar at Osaka University’s Institute of Social and Economic Research. He is a frequent contributor to AEI’s On the Margin column in Tax Notes and was nominated for Tax Notes’ 2009 Tax Person of the Year. He has also testified before Congress, and his work has been featured in a wide range of publications. Viard is the coauthor of “Progressive Consumption Taxation: The X Tax Revisited” (AEI Press, 2012) and “The Real Tax Burden: Beyond Dollars and Cents” (AEI Press, 2011) and the editor of “Tax Policy Lessons from the 2000s” (AEI Press, 2009).
Johannes Voget has held the chair of taxation and finance at the University of Mannheim since 2010. Voget is affiliated with the Tilburg University Center for Economic Research and the Oxford University Centre for Business Taxation where he served as research fellow. His academic work has been published by journals including the Journal of Finance and the Journal of Public Economics. His current research interests include mergers and acquisitions, firm relocations, taxation, and information exchange.