Working Paper: NBER ID: w24204
Authors: Assaf Razin; Efraim Sadka
Abstract: The growing spread of globalization creates a genuine need for international tax reforms. In this we establish the neutrality of border-tax adjustments of the income tax; the welfare dominance of residence-based over source-based income taxation, albeit at the cost of a larger trade deficit; and the ineffectiveness of non-transitory border taxes as a means for reducing the trade deficit.
Keywords: International Tax Reforms; Border-Tax Adjustments; Income Tax; Trade Deficit
JEL Codes: F0; G20; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| border-tax adjustments (F38) | equilibrium (D50) |
| residence-based taxation (H20) | welfare (I38) |
| residence-based taxation (H20) | trade deficit (F14) |
| non-transitory border taxes (F55) | trade balance (F14) |