tag:blogger.com,1999:blog-9208928.post830067046075227468..comments2024-03-19T03:16:26.691-04:00Comments on Start Making Sense: International tax policyDaniel Shavirohttp://www.blogger.com/profile/14710628584922961682noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-9208928.post-35524906998399876102007-09-28T09:04:00.000-04:002007-09-28T09:04:00.000-04:00Bill - Agreed that this may be. I'm not saying it...Bill - Agreed that this may be. I'm not saying it's impossible, just that this is what's necessary for it to happen. I have a harder time understanding the existence of rents if companies are competing with each other to capture them.Daniel Shavirohttps://www.blogger.com/profile/14710628584922961682noreply@blogger.comtag:blogger.com,1999:blog-9208928.post-76888999100189808772007-09-27T14:54:00.000-04:002007-09-27T14:54:00.000-04:00Dan --Your post is a bit long so I'm not sure if I...Dan --<BR/><BR/>Your post is a bit long so I'm not sure if I'm following all of it. I met John over the summer. I want to attribute to him (it might have been someone else who made the comment) the following simple phrase about international taxation that I've been kicking around in my head:<BR/><BR/>Academics view the MNC investment problem as "here vs. there" but for many companies the issue is "us vs. them." Here vs. there compares building a plant here or in France. Us vs. them is that someone will build turbines in France and the question is whether it will be a German firm or US firm. <BR/><BR/>With us vs. them, the question is about who gains when the profits go through a German firm or US firm -- which is like your case in your "next problem" paragraph. I think John would say that your financing point isn't quite right. While people in the US might not be saving, it is not necessarily true that rents associated with new projects accrue to the providers of the new financing -- they accrue to all s/h. Easy case: the financing comes through a debt contract from a European bank. With home bias in equity holdings, it is in the US's interest to have the US firm build the turbines in France (so we prefer us over them).<BR/><BR/>I'm not 100% sure this fits what you are talking about.Anonymousnoreply@blogger.com