This note discusses the potential alternatives for international tax reform and evaluates them based upon the Chicago school of economic theory principles and the ability to eliminate "tax plays." The United States could modify the existing international taxation system with (1) the 2015 Obama Administration proposals, (2) a modified territorial system as proposed by Rep. Dave Camp, (3) a credit system with source-of-income rules without the deferral privilege, or (4) formulary apportionment system based on either a single-factor or a three-factor system. By eliminating a U.S. multinational corporation's ability to participate in "tax plays," inefficient rent-seeking behavior can be curtailed, which will increase economic efficiency and, thus, overall economic wealth.
Michael J. Veneri Jr.,
Deep Dive, Chicago Style: A Roadmap for Understanding International Tax Reform,
5 Global Bus. L. Rev.
available at http://engagedscholarship.csuohio.edu/gblr/vol5/iss1/5