Consumption by Destination: The Practical Aspects of Adopting the Destination Principle

Gerald A. Byrnes

Volume 66, Issue 5, 1443-62

Corporate tax reform has been a “hot button” tax issue for numerous years now. The complex and inefficient double taxation model has proven to be particularly ill equipped to properly tax large multinational entities. One popular idea to solve these concerns is to switch to a consumption tax. However, there are still questions about how to model said tax, particularly in the international context: should a country tax be based on where products are destined for, or on where they originate? This Note focuses on the practical appeal of preferring the destination principle to the origin principle, should the United States adopt a corporate consumption tax. The practical benefits include aligning with international standards, facilitating corporate tax compliance in moving to the new system, preventing base erosion, and addressing complex tax issues such as the treatment of intellectual property across international lines.

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