Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

The Effect of Taxes on Investment and Income Shifting to Puerto Rico

Harry Grubert and Joel Slemrod
The Review of Economics and Statistics
Vol. 80, No. 3 (Aug., 1998), pp. 365-373
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/2646745
Page Count: 9
  • Read Online (Free)
  • Download ($19.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
The Effect of Taxes on Investment and Income Shifting to Puerto Rico
Preview not available

Abstract

The income of Puerto Rican affiliates of U.S. corporations is essentially untaxed by either Puerto Rico or the United States. This lowers the tax penalty on investment there, and also makes it attractive to shift reported taxable income from the U.S. parent corporation to the Puerto Rican affiliate. This paper investigates these two interrelated impacts of taxation by developing a structural econometric model of the joint decisions regarding investment and income shifting, and estimating the model using firm-level data on the activity U.S. corporations in Puerto Rico. The results suggest that the income shifting advantages are the predominant reason for U.S. investment in Puerto Rico.

Page Thumbnails

  • Thumbnail: Page 
365
    365
  • Thumbnail: Page 
366
    366
  • Thumbnail: Page 
367
    367
  • Thumbnail: Page 
368
    368
  • Thumbnail: Page 
369
    369
  • Thumbnail: Page 
370
    370
  • Thumbnail: Page 
371
    371
  • Thumbnail: Page 
372
    372
  • Thumbnail: Page 
373
    373