University of Michigan Law School University of Michigan Law School Scholarship Repository Articles Faculty Scholarship 2009 Reconsidering the Taxation of Foreign Income James R. Hines Jr. University of Michigan Law School,
[email protected] Available at: https://repository.law.umich.edu/articles/199 Follow this and additional works at: https://repository.law.umich.edu/articles Part of the Taxation-Transnational Commons, and the Tax Law Commons Recommended Citation Hines, James R., Jr. "Reconsidering the Taxation of Foreign Income." Tax L. Rev. 62, no. 2 (2009): 269-98. This Article is brought to you for free and open access by the Faculty Scholarship at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Articles by an authorized administrator of University of Michigan Law School Scholarship Repository. For more information, please contact
[email protected]. Reconsidering the Taxation of Foreign Income JAMES R. HINES JR.* I. INTRODUCTION A policy of taxing worldwide income on a residence basis holds enormous intuitive appeal, since if income is to be taxed, it would seem to follow that the income tax should be broadly and uniformly applied regardless of the source of income. Whether or not worldwide income taxation is in fact a desirable policy requires analysis ex- tending well beyond the first pass of intuition, however, since the con- sequences of worldwide taxation reflect international economic considerations that incorporate the actions of foreign governments and taxpayers. Once these actions are properly accounted for, world- wide taxation starts to look considerably less attractive. Viewed through a modern lens, worldwide income taxation by a country such as the United States has the effect of reducing the incomes of Ameri- cans and the economic welfare of the world as a whole, prompting the question of why the United States, or any other country, would ever want to maintain such a tax regime.