Abstract
This paper uses survey evidence to estimate the compliance cost of the U.S. system of taxing foreign-source income. The evidence suggests that this cost is about 40 percent of the total tax-compliance cost of large U.S. corporations, which is disproportionately higher than the aggregate share of assets, sales, and employment that is abroad. It is also very high compared to the revenue raised by the United States from taxing foreign-source income, although this comparison must be qualified because arguably a principal purpose of this system is to protect U.S. revenues collected on domestic-source income. The disproportionate compliance cost of foreign-source income is not apparent in a survey of European-based multinational corporations.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Arlinghaus, Barry P., and Donald T. Anderson. (1986). “The Organization and Operation of the Tax Function of Large Corporations: A 1986 Update.” The Tax Executive, Summer.
Blumenthal, Marsha, and Joel Slemrod. (1992). “The Compliance Cost of the U.S. Individual lax System: A Second Look After Tax Reform.” National Tax Journal, 45(2) June, 85–202.
Blumenthal, Marsha, and Joel Slemrod. (1994). “The Compliance Costs of the U.S. Corporate Income Tax for Large Corporations.” Proceedings of the 86th Annual Conference of the National Tax Association, National Tax Association, Columbus, OH, 32–35.
Devereux, Michael. (1992). “The Impact of Taxation and International Business: Evidence from the Ruding Committee Survey.” Keele University Department of Economics Working Paper 92–10, May.
Grubert, Harry, and John Mutti. (1995). “Taxing Multinationals in a World with Portfolio Flows and R&D: Is Capital Export Neutrality Obsolete?” International Tax and Public Finance, forthcoming.
Pope, Jeff, Richard Fayle, and Dong-ling Chen. (1991). The Compliance Costs of Public Companies’ Income Taxation in Australia, 1986–7. Sydney: Australian Tax Research Foundation.
Sandford, Cedric, Michael Godwin, and Peter Hardwick. (1989). Administrative and Compliance Costs of Taxation. Bath, U.K.: Fiscal Publications.
Slemrod, Joel, and Marsha Blumenthal. (1993). “The Income Tax Compliance Cost of Big Business.” University of Michigan, Office of Tax Policy Research Working Paper 93–11, July.
Slemrod, Joel, and Nikki Sorum. (1984). “The Compliance Cost of the U.S. Individual Tax System.” National Tax Journal, 37(4) March, 461–74.
Tillinghast, David R. (1991). “International Tax Simplification.” American Journal of Tax Policy, 8(2), 187–247.
U.S. Department of Treasury. (1993). “International Tax Reform: An Interim Report.” Washington, DC, January 15.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1996 Kluwer Academic Publishers
About this chapter
Cite this chapter
Blumentha, M., Slemrod, J.B. (1996). The Compliance Cost of Taxing Foreign-Source Income: Its Magnitude, Determinants, and Policy Implications. In: Slemrod, J. (eds) The Taxation of Multinational Corporations. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-1818-4_3
Download citation
DOI: https://doi.org/10.1007/978-94-009-1818-4_3
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-7310-3
Online ISBN: 978-94-009-1818-4
eBook Packages: Springer Book Archive