The article first identifies and elaborates on this contemporary trend of conceding integration. Part II discusses the recent moves away from integration in some major economies, and analyzes the reasons for such moves. It tracks them to the international dimension of integration which has never been comprehensively explored even in the golden era of imputation, a neglect which came back to haunt them at the turn of the century.
Part III follows with an analysis of the international aspects of integration and the ways they have affected tax policies to date. It establishes the argument that current tax policies arise from the non-cooperative fundamental features of the current international tax regime. As retaliation and undesirable spillovers became more significant and material, it was not sufficient that integration was considered the most desirable policy from a domestic perspective, since the potential revenue flight that resulted from it made integration an undesirable policy overall.
Part IV concludes with a suggestion that enhanced international cooperation and coordination of tax policies may allow countries to pursue integration, while minimizing the problems of revenue flight risk or retaliation that plagued the imputation systems. Such cooperation would enable countries to capture much of the efficiency gains associated with the lower effective tax rates under integration regimes.
