US Taxation of Foreign Income

Hufbauer (Reginald Jones Senior Fellow, Peter G. Peterson Institute for International Economics) and Assa, a tax attorney, recommend tax policy reforms that would encourage multinational enterprises to locate both headquarters activities and high-technology production in the US. To achieve these goals, they propose that the US tax regime be shifted toward a territorial system, coupled with favorable expense allocation rules. They suggest a new approach for taxing royalty and fee income earned abroad so that high-technology production in the US is not penalized by comparison with production abroad, and urge the US to take the lead in creating a cooperative international system that would discourage underreporting of foreign portfolio income. They contend that these proposed reforms would collect more tax revenue than the present system. About 135 pages of appendices offer summaries of the histories of various US tax laws and other background information. Annotation c2008 Book News, Inc., Portland, OR (booknews.com)

Gary Clyde Hufbauer, Reginald Jones Senior Fellow since 1992, was formerly the Maurice Greenberg Chair and Director of Studies at the Council on Foreign Relations (1996–98), the Marcus Wallenberg Professor of International Finance Diplomacy at Georgetown University (1985–92), senior fellow at the Institute (1981–85), deputy director of the International Law Institute at Georgetown University (1979–81); deputy assistant secretary for international trade and investment policy of the US Treasury (1977–79); and director of the international tax staff at the Treasury (1974–76).

Ariel Assa is a tax counsel for JP Morgan Chase & Co. in New York City. He was a tax attorney at the law firms of Willkie, Farr & Gallagher LLP in New York City (2003-07) and Herzog, Fox & Neeman in Tel Aviv (1999-2001). He also served as a tax agent in Israel's Income Tax Authority (1994-99) and an assistant professor in several tax courses at Tel Aviv University (1996-2001). He earned his law, accounting, and MBA degrees from Tel Aviv University and is a graduate of the LLM program in taxation at Georgetown University Law Center (2002).