Jeffery Kadet (U. Washington), Full-Inclusion Is Better Than Territorial System, 139 Tax Notes 295 (2013) http://t.co/EPmi4xk4lH
— Paul Caron (@SoCalTaxProf) June 13, 2013
Kadet: Full-Inclusion Is Better Than Territorial System
Jeffery M. Kadet (U. Washington), U.S. Tax Reform: Full-Inclusion Over Territorial System Compelling, 139 Tax Notes 295 (Apr. 15, 2013):
The territorial system strongly lobbied for by U.S. multinational corporations that stand to benefit from that system is not what’s best for our country or our society. It is bad tax policy for many reasons, including the strong motivation it provides our multinational corporations to continue moving operations, jobs, risks, and assets outside the United States to achieve double non-taxation. A worldwide full-inclusion system would severely curtail or completely eliminate that strong motivation because double nontaxation would no longer be possible because of a current federal tax on all earnings that cannot be eliminated through any tax schemes or creative avoidance. A worldwide system also would increase the tax base and help make possible the lower overall corporate tax rate that both political parties desire.
He seems to think/assume that companies do not pay local taxes on their earnings outside the United States. Unless I am misreading this paragraph, Mr. Kadet is arguing for corporations to be subjected to the equivalent of “citizenship-based taxation”. Should this happen it will be the end of:
1. Any company being incorporated in the United States;
2. Any U.S. person owning a company outside the United States.