Elements of international income taxation PDF

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Income taxation is the fuel and vector of the economic policy of many states. This concise book, destined to students, practitioners and policy makers, explains the issues of taxation of transnational income in a world of sovereign states: how to prevent unjust and inefficient double taxation of the same income, by allocating the tax base between source and residence state and properly allowing in the latter for the tax levied in the former? How to prevent abuse by taxpayers or states, furthering tax evasion or avoidance and causing other but equally significant injustices and inefficiencies? Solutions developed over a century of practice are analyzed. That field of the legal art & science is still young and the paradigm for ideal taxation in the global village of the XXIst century is yet to be invented.

An appendix includes the juxtalinear texts of the OECD and UN Model Conventions.

A 2009 study of 26 European countries found that: « In France, Liechtenstein, Luxembourg and Portugal, couples are jointly assessed. In the United States, the spouse to whom the income is fictionally attributed does not pay payroll tax on that « split » earned income, while the benefit of that spouse’s lower rate does accrue to the greater earner. The « split » is thus ignored in that context while it is applied in the income tax context. In part because of these concerns, as well as child welfare policies that advocate recognizing both parents having personal responsibility for children in order to support their development without distortion, fictional income splitting is becoming rare globally, and, since 1970, it has been abolished in many countries. Some countries require joint returns but measure the tax on income individually, while others use only individual returns. Tax laws in these countries generally have regulations preventing the direct transfer of earned income from one spouse to another to reduce taxes. There are often still methods of using income splitting to reduce taxes in these jurisdictions.

Tax Policy Center as one of the debt-ballooning policies of the Bush tax cuts. While its effects on the national debt have increased substantially in recent years, income splitting became required for married persons filing jointly in the United States in 1948. After two successive vetoes by President Harry S. Income splitting was not a part of Canada’s tax system until the 21st century.

From the introduction of income tax, Canadian households were almost exclusively deemed to be single income households. We conclude that the present system is lacking in essential fairness between families in similar circumstances and that attempts to prevent abuses of the system have produced serious anomalies and rigidities. Most of these results are inherent in the concept that each individual is a separate taxable entity. Households of similar gross incomes are bearing broadly different tax obligations. On an individual basis this is not the case. After enacting income splitting for retired couples in 2006, in 2011 the Conservative Party of Canada led by Stephen Harper won a majority government with a platform promising limited income splitting.

A 2013 study by the C. Howe Institute study went far beyond the scope of the limited proposal in the Conservative campaign platform by including the consequences of the provinces following suit. In February 2014, a day after introducing the 2014 budget, Finance Minister Jim Flaherty distanced himself from the concept of income splitting, but others within the Cabinet still support the idea. The 2015 Canadian federal budget proposed measures to allow families to split their income. Fiscal system and female employment in Europe – PDF ».