Income Taxation and International Mobility
Jagdish N. Bhagwati, John Douglas Wilson
MIT Press, 1989 - Business & Economics - 226 pages
Today millions of people work in countries where they are not citizens. Income Taxation and International Mobility addresses the novel theoretical and practical problems that this growing phenomenon of international personal mobility creates for the design of a country's tax system and takes up questions that have grown largely out of the extensive debate over Jagdish Bhagwati's proposal in the early 1970s to "tax the brain drain."
The contributors, who include many of the leading theorists of international economics and public finance, look at how the difficult question of how horizontal equity is to be defined - between nationals at home and abroad or between nationals abroad and foreign citizens abroad - and tackle such questions as Should a country exercise income tax jurisdiction over its citizens abroad? If so, in what way? Is it practical to do so? The issues that these questions raise are complex, lying on the interface of politics, sociology, and economics.
Income Taxation and International Mobility breaks significant new ground by analyzing these questions and building on the modern theory of optimal income taxation to examine the consequences of the possibility of outmigration on the appropriate exercise and design of income tax jurisdiction on those who live outside their native country.
Theoretical analyses are presented in six chapters by the editors and by James Mirrlees, William Baumol, and Koichi Hamada. The well known tax law expert, Richard Pomp, examines the Philippines experience in taxing citizens abroad. The editors provide a substantial introduction that synthesizes the book's major analytical approaches and conclusions, and Richard Musgrave provides an insightful view of the issues in his Foreword.
Jagdish Bhagwati is Arthur Lehman Professor of Economics and Professor of Political Science at Columbia University. John Wilson is Associate Professor of Economics at Indiana University.
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ability levels administrative analysis assume assumption Bhagwati and Hamada brain drain chapter citizens abroad closing the economy consumption CR allocation criterion deductions Discussions with officials economy TPF effect equal equity feasible Filipinos foreign income foreign tax global efficiency home country home residents host DC Idem income distribution frontier income taxation increase indifference curves labor LDC tax lemma linear income tax locus lower the optimal marginal tax rate maximize migration Mirrlees net wage nonmigrants nonresident citizens open economy optimal income tax optimal marginal tax optimal tax partially closed economy percent Philippine tax poll subsidy Pomp and Oldman potential emigration problem proposition raises the optimal Rawlsian redistribution renunciation of citizenship result social welfare function surtax tax change tax emigrants tax on migrants tax parameters tax revenue tax schedule tax-feasibility taxable taxpayers tion TLBs U.S. dollar U.S. tax United utility function world tax system world wage system