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  • National Tax Journal

Do Strong Fences Make Strong Neighbors?

By: Mihir Desai and Dhammika Dharmapala
  • Format:Print
  • | Pages:18
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Abstract

Many features of U.S. tax policy towards multinational firms-including the governing principle of capital export neutrality, the byzantine system of expense allocation, and anti-inversion legislation-reflect the intuition that building "strong fences" around the United States advances American interests. This paper examines the interaction of a strong fences policy with the increasingly important global markets for corporate residence, corporate control, and corporate equities. These markets provide opportunities for entrepreneurs, managers, and investors to circumvent a strong fences policy. The paper provides simple descriptive evidence of the growing importance of these markets and considers the implications for U.S. tax policy.

Keywords

International Taxation; Initial Public Offerings; Foreign Portfolio Investment; Policy; Taxation; Multinational Firms and Management; Globalized Markets and Industries; Initial Public Offering; Mergers and Acquisitions; Foreign Direct Investment; United States

Citation

Desai, Mihir, and Dhammika Dharmapala. "Do Strong Fences Make Strong Neighbors?" National Tax Journal 63, no. 4 (December 2010): 723–740.
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About The Author

Mihir A. Desai

Finance
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