TY  - JOUR
AU  - Giovannini,Alberto
AU  - Hines,James R., Jr.
TI  - Capital Flight and Tax Competition: Are There Viable Solutions to Both Problems?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3333
PY  - 1990
Y2  - April 1990
UR  - http://www.nber.org/papers/w3333
L1  - http://www.nber.org/papers/w3333.pdf
N1  - Author contact info:
Alberto Giovannini
Unifortune Asset Management
Via Donizetti 53
20122 Milano, Italy
E-Mail: alberto.giovannini@alum.mit.edu

James R. Hines
Department of Economics
University of Michigan
343 Lorch Hall
611 Tappan Street
Ann Arbor, MI  48109-1220
Tel: 734/764-2320
Fax: 734/764-2769
E-Mail: jrhines@umich.edu
AB  - This paper discusses a model corporate tax system based on the application of the residence principle. This tax system, while preserving national sovereignties, minimizes the distortions from international capital mobility. The paper is motivated by an analysis of European capital income tax systems, and of the distortions they might give rise to as obstacles to international capital flows diminish. The alternative system we analyze has two main properties: it exploits the territoriality of law enforcement, and allows countries to set the corporate tax rate - and the extent of double taxation of corporate income - independently from their partners. The paper concludes with some suggestive evidence of the potential revenue effects among European countries of this tax system.
ER  -