Browsing by Author "McLure, Charles E. Jr."
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Item Consumption-Based Direct Taxes: A Guided Tour of the Amusement Park(James A. Baker III Institute for Public Policy) McLure, Charles E. Jr.; Zodrow, George R.; James A. Baker III Institute for Public PolicyAlthough consumption-based direct taxation has long been advocated in academic and policy circles, very few countries have actually implemented such taxes. This article provides an overview of alternative approaches to direct consumption taxation and examines arguments favoring consumption taxes over income taxes. It then describes and analyzes efforts at “fundamental tax reform” involving replacing an income tax with a consumption tax in both the United States and several developing countries and countries in transition from socialism in which the authors have been involved. This paper is a preliminary version of a paper that is forthcoming in the journal FinanzArchiv. The paper was originally presented at a conference on “Alternative Methods of Taxing Individuals,” Andrew Young School of Policy Studies, International Studies Program, Georgia State University, Atlanta, Georgia, June 8-9, 2006.Item Time for US Tax Reform? The Tax Reform Panel's RecommendationsZodrow, George R.; McLure, Charles E. Jr.; James A. Baker III Institute for Public PolicyItem US Supreme Court unanimously chooses substance over form in foreign tax credit case: implications of the PPL decision for the creditability of cash-flow taxes(Springer) McLure, Charles E. Jr.; Mintz, Jack; Zodrow, George R.; James A. Baker III Institute for Public PolicyIn a recent unanimous decision in the PPL case, the US Supreme Court ruled that a one-time retroactive British “Windfall Tax” levied on 32 public utilities that were privatized between 1984 and 1996 was eligible for the US foreign tax credit (FTC). The Court rejected the contention of the US Internal Revenue Service that eligibility for the FTC should be governed by the legislative form of the tax rather than its economic substance. This decision could have far-reaching implications for the creditability of taxes that are not ordinarily thought to be income taxes, including various cash-flow business taxes that are key elements of several proposals recommending replacement of the income tax with a consumption-based tax. This article examines these issues, arguing that one and arguably both of the most common forms of cash-flow consumption-based taxes should be creditable; it also discusses questions that remain about the interpretation of key regulatory requirements that govern creditability.