Principles of International Taxation

Abstract

This dissertation articulates a new approach to the international allocation of taxing rights. Broadly, it argues that taxing rights should be allocated so as to bring about egalitarian distributions of social advantages among individuals.

Part I criticizes the traditional approach to international taxation. The traditional approach asserts that taxing rights should be allocated on the basis of perceived allegiances between taxpayers and states. It is animated by two principles. The first, which I call the “Capture Principle,” holds that states should have rights to tax income generated from economic activities that they host, rights whose value should be proportionate to the amount of income so generated. The second principle, which I call the “Affiliation Principle,” holds that states should have rights to tax individuals on their worldwide income if and only if those people are members of the taxing states. I provide an internal critique of both principles: I show that the values that appear to justify these principles do not, in fact, support them.

Part II establishes a controversial claim about distributive justice that informs my approach to the allocation of taxing rights. Philosophers are notoriously divided between cosmopolitans, who believe that distributions between people who do not share a state can be unjustly unequal, and statists, who do not. Statists also tend to believe that the people of one state need not concern themselves with inequalities within any other. That belief, I argue, is mistaken. If statism is true, it should be universal in form: The people of one state ought to give significant weight to inequalities within others.

Part III develops my approach in two important practical contexts. The first is the allocation of rights to tax corporate rents. The second is the allocation of rights to tax expatriates.