TY  - JOUR
AU  - Gordon,Roger H.
AU  - Wilson,John D.
TI  - An Examination of Multijurisdictional Corporate Income Taxes Under Formula Apportionment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1369
PY  - 1984
Y2  - June 1984
UR  - http://www.nber.org/papers/w1369
L1  - http://www.nber.org/papers/w1369.pdf
N1  - Author contact info:
Roger H. Gordon
Department of Economics 0508
University of California, San Diego
9500 Gilman Drive, Dept. 0508
La Jolla, CA 92093
Tel: 858/534-4828
Fax: 858/534-7040
E-Mail: rogordon@ucsd.edu

John Wilson
Bureau of Statistics
Middle Eastern Department, Rm 3-544
700 19th Street, NW
Washington, DC 20431
E-Mail: jwilson@itic.org
AB  - This paper examines how corporate taxation of multijurisdictional firms using formula apportionment affects the incentives faced by individual firms and individual states. We find that formula apportionment creates factor price distortions which vary in general among firms within a state, and in such a way as often to put multistate firms at a competitive advantage. Formula apportionment also creates incentives for cross-hauling of output,with production in low tax rate states more profitably sold in hightax rate states, and conversely. Politically, formula apportionment appears to be very unstable --states face an incentive to shift to some other form of taxation. None of these problems exist when a corporate tax uses separate accounting.
ER  -