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Current & Recent Research at Penn Law

File: [View Document]
Author: Knoll, Michael
Citation: The Connection between Competitiveness and International Taxation, 65 TAX L. REV. 349 (2012).
Date Published: 2012
Date Posted: 09/25/2012
Subjects: Law and Business
Law and Economics
Law and the Global Community
Taxation
Keywords: Regulation of Transnational Financial Markets
Banking and Finance
Corporate Finance
International Banking
Taxation-Transnational
Abstract:
The term “competitiveness” is a highly elastic concept that has been used in a myriad of different ways. However, in discussions of the connection between international taxation and competitiveness, there are two conceptions of competitiveness that are frequently used, but are not always clearly distinguished from one another. One conception emphasizes the competition between firms to be profitable and grow by acquiring productive assets. The other conception focuses on the competition between states to attract investment capital and people by varying their regulations.

Those two conceptions of competitiveness each imply a distinct definition of a domestic industry and a different mechanism whereby taxation affects competitiveness. Those two views also track popular positions in long standing policy debates. For example, each view is associated with a different tax neutrality benchmark. The first view is closely associated with capital export neutrality, whereas the second view is closely associated with capital ownership neutrality. Those two views also track opposing positions in the “Who Is Us?” debate from the 1990s.