I've previously posted word here of my SSRN paper, "The Case Against Foreign Tax Credits," a revised (and I think significantly improved / clarified) version of which should be available through SSRN shortly.
But I have also now posted a much shorter version, less than half the length, with the title "Rethinking Foreign Tax Creditability." I find the shorter version more fun to read, but the longer one does address more issues, and each (I hope) is properly adapted for the setting in which I expect it to be published in the next few months.
"Rethinking" will be in the National Tax Journal's December issue, containing papers from the National Tax Association's 2010 Spring Symposium, and is directed as much (if not more) to economists, accountants, policymakers, etc. as to lawyers. "The Case Against" will be in a faculty-edited law review, the newly established Journal of Legal Analysis, I believe early next year. It attempts more comprehensive issue coverage of a sort that I felt was appropriate and indeed desirable in that setting.
Anyway, here is the SSRN link for "Rethinking Foreign Tax Creditability." The abstract is as follows:
"International tax policy experts often mistakenly conflate two distinct margins: (1) the overall tax burden on outbound investment, and (2) the marginal reimbursement rate (MRR) for foreign taxes paid, which is 100 percent under a foreign tax credit system, but equals the marginal tax rate for foreign source income under an explicit or implicit deductibility system (such as exemption). From a unilateral national welfare standpoint, whatever the right answer at margin (1), deductibility is clearly optimal, and creditability dangerously over-generous, at margin (2)."
Redundancy warning: these are indeed effectively the same paper, and they have much text in common (albeit with distinct introductory and concluding sections). But the version I've linked to here is under 6,000 words, and potentially worth it, even if you've read the first draft of the long version, if you are sufficiently interested in the topic and found that first draft less pellucid than I had hoped it would be.