Lost in Translation: Excess Returns and the Search for Substantial Activities

Lilian V. Faulhaber
{"title":"Lost in Translation: Excess Returns and the Search for Substantial Activities","authors":"Lilian V. Faulhaber","doi":"10.2139/ssrn.3907496","DOIUrl":null,"url":null,"abstract":"Since 2010, international tax policymakers have proposed a variety of minimum taxes on excess returns, but every proposal has defined excess returns differently. This Article asks what excess returns are supposed to represent – and concludes that the answer is very different from what policymakers have suggested. The trend of targeting so-called excess returns started in 2010 with a one-page idea in the Obama Treasury’s proposed budget. Over the next decade, this idea became the basis for one of the major international tax reform provisions in the 2017 U.S. tax reform and is now being considered as part of Pillar Two of the OECD’s current digital tax project. The idea in question is a minimum tax on foreign excess returns. Yet even though the general idea of a minimum tax on foreign excess returns has stayed the same across administrations and jurisdictions, the specifics of this idea have changed with every iteration, and the proponents of this idea have justified each version differently and defined its various elements differently. This Article tells the story of the many recent proposals for minimum taxes on foreign excess returns, starting with the Obama Treasury’s brief proposal and ending with the OECD’s current negotiations over digital taxation. This Article highlights the common threads that link all of these rules, and it also shows how differently the drafters of each rule have understood the purpose and design of a minimum tax on foreign excess returns. This Article argues that, despite claims by the policymakers advocating for these minimum taxes, none of these taxes on excess returns is supported by the economic theory of excess returns. Instead, policymakers are using the term “excess returns” to mean different things in the context of different proposals, and they are masking the policy choices they are making by using a term that appears to have support in the economic literature.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"6 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2021-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Political Economy - Development: Fiscal & Monetary Policy eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3907496","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 2

Abstract

Since 2010, international tax policymakers have proposed a variety of minimum taxes on excess returns, but every proposal has defined excess returns differently. This Article asks what excess returns are supposed to represent – and concludes that the answer is very different from what policymakers have suggested. The trend of targeting so-called excess returns started in 2010 with a one-page idea in the Obama Treasury’s proposed budget. Over the next decade, this idea became the basis for one of the major international tax reform provisions in the 2017 U.S. tax reform and is now being considered as part of Pillar Two of the OECD’s current digital tax project. The idea in question is a minimum tax on foreign excess returns. Yet even though the general idea of a minimum tax on foreign excess returns has stayed the same across administrations and jurisdictions, the specifics of this idea have changed with every iteration, and the proponents of this idea have justified each version differently and defined its various elements differently. This Article tells the story of the many recent proposals for minimum taxes on foreign excess returns, starting with the Obama Treasury’s brief proposal and ending with the OECD’s current negotiations over digital taxation. This Article highlights the common threads that link all of these rules, and it also shows how differently the drafters of each rule have understood the purpose and design of a minimum tax on foreign excess returns. This Article argues that, despite claims by the policymakers advocating for these minimum taxes, none of these taxes on excess returns is supported by the economic theory of excess returns. Instead, policymakers are using the term “excess returns” to mean different things in the context of different proposals, and they are masking the policy choices they are making by using a term that appears to have support in the economic literature.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
迷失在翻译中:超额回报和寻找实质性活动
自2010年以来,国际税收政策制定者提出了各种针对超额回报的最低税率,但每种提案对超额回报的定义都不同。本文提出了一个问题:超额回报应该代表什么?结论是,答案与政策制定者的建议大不相同。瞄准所谓超额回报的趋势始于2010年,当时奥巴马财政部提出的预算方案只有一页纸。在接下来的十年里,这一想法成为2017年美国税收改革中主要国际税收改革条款之一的基础,目前正被视为经合组织当前数字税收项目第二支柱的一部分。这个想法是对外国超额回报征收最低税。然而,尽管对外国超额回报征收最低税的总体理念在各届政府和司法管辖区都保持不变,但这一理念的具体内容却在每次迭代中都有所变化,这一理念的支持者对每个版本的论证都有所不同,对其各种要素的定义也有所不同。本文讲述了最近对外国超额回报征收最低税的许多提议,从奥巴马财政部的简短提议开始,到经合组织目前就数字税进行的谈判结束。本文强调了连接所有这些规则的共同线索,它也显示了每个规则的起草者对外国超额回报最低税的目的和设计的理解是多么不同。本文认为,尽管政策制定者主张这些最低税,但这些超额回报税都没有得到超额回报经济学理论的支持。相反,政策制定者在不同提案的背景下使用“超额回报”一词来表示不同的东西,他们通过使用一个似乎得到经济文献支持的术语来掩盖他们正在做出的政策选择。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
自引率
0.00%
发文量
0
期刊最新文献
Democratic Dilemmas of Elite Institutions: Comparing the Court and the Fed The Signaling Value of Legal Form in Debt Financing Estimating the Effect of Immigration on Public Finances: Evidence from the Influx of Venezuelan Migrants to Colombia Competitividad y Entorno Institucional en Colombia (Competitiveness and Institutional Environment in Colombia) Economía colombiana en medio del paro nacional 2021 y la recuperación pospandemia (Colombian Economy in the Midst of the 2021 National Strike and Post-Pandemic Recovery)
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1