THE EFFECTS OF TAXES AND RATES OF RETURN ON FOREIGN DIRECT INVESTMENT IN THE UNITED STATES
This paper provides an analysis of the effects of domestic taxes and rates of return on foreign direct investment in the United States. The results show that, whereas foreign direct investment through retained earnings may be elastic with respect to tax rates and rates of return, foreign direct inve...
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| Veröffentlicht in: | National tax journal 1988-03, Vol.41 (1), p.109-121 |
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| creator | YOUNG, KAN H. |
| description | This paper provides an analysis of the effects of domestic taxes and rates of return on foreign direct investment in the United States. The results show that, whereas foreign direct investment through retained earnings may be elastic with respect to tax rates and rates of return, foreign direct investment through new funds is inelastic with respect to tax rates and rates of return. Overall, the study indicates that the 1981-82 tax incentives increased total annual foreign direct investment in the United States by $1.7 to $4.8 billion (or 8 percent to 22 percent). On the other hand, the recent 1986 tax reform may decrease total annual foreign direct investment in the United States by $1.8 to $5.4 billion (or 8 percent to 25 percent). The welfare effect of these tax impacts is moderate, because tax revenue derived from total foreign direct investment appears to be inelastic with respect to the tax rate applicable to foreigners. |
| doi_str_mv | 10.1086/ntj41788713 |
| format | Article |
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The results show that, whereas foreign direct investment through retained earnings may be elastic with respect to tax rates and rates of return, foreign direct investment through new funds is inelastic with respect to tax rates and rates of return. Overall, the study indicates that the 1981-82 tax incentives increased total annual foreign direct investment in the United States by $1.7 to $4.8 billion (or 8 percent to 22 percent). On the other hand, the recent 1986 tax reform may decrease total annual foreign direct investment in the United States by $1.8 to $5.4 billion (or 8 percent to 25 percent). The welfare effect of these tax impacts is moderate, because tax revenue derived from total foreign direct investment appears to be inelastic with respect to the tax rate applicable to foreigners.</description><identifier>ISSN: 0028-0283</identifier><identifier>EISSN: 1944-7477</identifier><identifier>DOI: 10.1086/ntj41788713</identifier><identifier>CODEN: NTXJAC</identifier><language>eng</language><publisher>Chicago, Ill: National Tax Association</publisher><subject>Corporate taxes ; Econometrics ; Economic models ; Effects ; Federal taxes ; Financial investments ; Foreign direct investments ; Foreign investment ; Foreign investments ; GNP ; Gross National Product ; Income taxes ; Investment return rates ; Investment tax credits ; Investors ; Rates of return ; Regression analysis ; Retained earnings ; Statistical analysis ; Studies ; Tax aspects ; Tax rates ; United States</subject><ispartof>National tax journal, 1988-03, Vol.41 (1), p.109-121</ispartof><rights>Copyright 1988 National Tax Association—Tax Institute of America</rights><rights>This article is in the public domain.</rights><rights>Copyright National Tax Association Mar 1988</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c433t-9f22a172934a6cbeadb984e875e098971a0c28684170aaee22a3146e27bbe1593</citedby></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/41788713$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/41788713$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,780,784,803,27865,27869,27924,27925,58017,58250</link.rule.ids></links><search><creatorcontrib>YOUNG, KAN H.</creatorcontrib><title>THE EFFECTS OF TAXES AND RATES OF RETURN ON FOREIGN DIRECT INVESTMENT IN THE UNITED STATES</title><title>National tax journal</title><description>This paper provides an analysis of the effects of domestic taxes and rates of return on foreign direct investment in the United States. The results show that, whereas foreign direct investment through retained earnings may be elastic with respect to tax rates and rates of return, foreign direct investment through new funds is inelastic with respect to tax rates and rates of return. Overall, the study indicates that the 1981-82 tax incentives increased total annual foreign direct investment in the United States by $1.7 to $4.8 billion (or 8 percent to 22 percent). On the other hand, the recent 1986 tax reform may decrease total annual foreign direct investment in the United States by $1.8 to $5.4 billion (or 8 percent to 25 percent). The welfare effect of these tax impacts is moderate, because tax revenue derived from total foreign direct investment appears to be inelastic with respect to the tax rate applicable to foreigners.</description><subject>Corporate taxes</subject><subject>Econometrics</subject><subject>Economic models</subject><subject>Effects</subject><subject>Federal taxes</subject><subject>Financial investments</subject><subject>Foreign direct investments</subject><subject>Foreign investment</subject><subject>Foreign investments</subject><subject>GNP</subject><subject>Gross National Product</subject><subject>Income taxes</subject><subject>Investment return rates</subject><subject>Investment tax credits</subject><subject>Investors</subject><subject>Rates of return</subject><subject>Regression analysis</subject><subject>Retained earnings</subject><subject>Statistical analysis</subject><subject>Studies</subject><subject>Tax aspects</subject><subject>Tax rates</subject><subject>United 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EFFECTS OF TAXES AND RATES OF RETURN ON FOREIGN DIRECT INVESTMENT IN THE UNITED STATES</title><author>YOUNG, KAN H.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c433t-9f22a172934a6cbeadb984e875e098971a0c28684170aaee22a3146e27bbe1593</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>1988</creationdate><topic>Corporate taxes</topic><topic>Econometrics</topic><topic>Economic models</topic><topic>Effects</topic><topic>Federal taxes</topic><topic>Financial investments</topic><topic>Foreign direct investments</topic><topic>Foreign investment</topic><topic>Foreign investments</topic><topic>GNP</topic><topic>Gross National Product</topic><topic>Income taxes</topic><topic>Investment return rates</topic><topic>Investment tax credits</topic><topic>Investors</topic><topic>Rates of return</topic><topic>Regression analysis</topic><topic>Retained earnings</topic><topic>Statistical 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journal</jtitle><date>1988-03-01</date><risdate>1988</risdate><volume>41</volume><issue>1</issue><spage>109</spage><epage>121</epage><pages>109-121</pages><issn>0028-0283</issn><eissn>1944-7477</eissn><coden>NTXJAC</coden><abstract>This paper provides an analysis of the effects of domestic taxes and rates of return on foreign direct investment in the United States. The results show that, whereas foreign direct investment through retained earnings may be elastic with respect to tax rates and rates of return, foreign direct investment through new funds is inelastic with respect to tax rates and rates of return. Overall, the study indicates that the 1981-82 tax incentives increased total annual foreign direct investment in the United States by $1.7 to $4.8 billion (or 8 percent to 22 percent). On the other hand, the recent 1986 tax reform may decrease total annual foreign direct investment in the United States by $1.8 to $5.4 billion (or 8 percent to 25 percent). The welfare effect of these tax impacts is moderate, because tax revenue derived from total foreign direct investment appears to be inelastic with respect to the tax rate applicable to foreigners.</abstract><cop>Chicago, Ill</cop><pub>National Tax Association</pub><doi>10.1086/ntj41788713</doi><tpages>13</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0028-0283 |
| ispartof | National tax journal, 1988-03, Vol.41 (1), p.109-121 |
| issn | 0028-0283 1944-7477 |
| language | eng |
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| source | PAIS Index; Business Source Complete; Periodicals Index Online; JSTOR Archive Collection A-Z Listing; EBSCOhost Education Source; Alma/SFX Local Collection |
| subjects | Corporate taxes Econometrics Economic models Effects Federal taxes Financial investments Foreign direct investments Foreign investment Foreign investments GNP Gross National Product Income taxes Investment return rates Investment tax credits Investors Rates of return Regression analysis Retained earnings Statistical analysis Studies Tax aspects Tax rates United States |
| title | THE EFFECTS OF TAXES AND RATES OF RETURN ON FOREIGN DIRECT INVESTMENT IN THE UNITED STATES |
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