Jotwell post on recent Zucman et al paper

A website called Jotwell (for Journal of Things WE Like Lots) encourages its contributors to write very short pieces calling out for praise particular recent articles that were published in one’s field.

I tend to participate in this annually, although with the press of other obligations I skipped 2017. But they have just posted this short piece that I wrote that discusses the recent Torslov, Wier, and Zucman NBER paper, The Missing Profits of Nations, which argues that big multinational firms are shifting A LOT (40% or more) of their economic profits to tax havens.

I note in my short piece that there is an ongoing dispute among leading empirical economists regarding whether the amounts being shifted are this high, or significantly lower. My own anecdotal sense of things is that the high estimates are likely to be correct, but I accept that there is a genuine empirical dispute here for the experts in such research to hash out. But in any event Zucman et al have found a creative and interesting new way of addressing the question, as I note very briefly in my piece and they explain at greater length in their paper.

As I note in my short comment, the greater the magnitude of such income-shifting, probably the less the real responses we ought to expect to, say, the recent U.S. corporate rate cut from 35% to 21%. But even if we get only minimal real responses because they do so much income-shifting anyway, it’s somewhat of a separate question whether there would be more real responses if the income-shifting were more substantially shut down.