In Praise of Tax Havens: International Tax Planning and Foreign Direct Investment

The multinationalization of corporate investment in recent years has given rise to a number of international tax avoidance schemes that may be eroding tax revenues in industrialized countries, but which may also reduce tax burdens on mobile capital and so facilitate investment. Both the welfare effects of and the optimal response to international tax planning are therefore ambiguous. Evaluating these factors in a simple general equilibrium model, we find that citizens of high-tax countries benefit from (some) tax planning. Paradoxically, if tax rates are not too high, an increase in tax planning activity causes a rise in optimal corporate tax rates, and a decline in multinational investment. Thus fears of a “race to the bottom” in corporate tax rates may be misplaced.income shifting, tax planning, foreign direct investment, tax competition, thin capitalization

Off-shell hydrodynamics from holography

We outline a program for obtaining an action principle for dissipative fluid dynamics by considering the holographic Wilsonian renormalization group applied to systems with a gravity dual. As a first step, in this paper we restrict to systems with a non-dissipative horizon. By integrating out gapped degrees of freedom in the bulk gravitational system between an asymptotic boundary and a horizon, we are led to a formulation of hydrodynamics where the dynamical variables are not standard velocity and temperature fields, but the relative embedding of the boundary and horizon hypersurfaces. At zeroth order, this action reduces to that proposed by Dubovsky et al. as an off-shell formulation of ideal fluid dynamics.Comment: 34 pages, 2 figures; v2: references added, clarifications added in Sec. I

A note on color neutrality in NJL-type models

By referring to the underlying physics behind the color charge neutrality condition in quark matter, we discuss how this condition should be properly imposed in NJL-type models in a phenomenologically meaningful way. In particular, we show that the standard assumption regarding the use of two color chemical potentials, chosen in a very special way, is not justified in general. When used uncritically, such an approach leads to wrong or unphysical conclusions.Comment: 4 pages, no figure; v2: minor clarifications, references adde

Many-to-One Boundary Labeling with Backbones

In this paper we study \emph{many-to-one boundary labeling with backbone leaders}. In this new many-to-one model, a horizontal backbone reaches out of each label into the feature-enclosing rectangle. Feature points that need to be connected to this label are linked via vertical line segments to the backbone. We present dynamic programming algorithms for label number and total leader length minimization of crossing-free backbone labelings. When crossings are allowed, we aim to obtain solutions with the minimum number of crossings. This can be achieved efficiently in the case of fixed label order, however, in the case of flexible label order we show that minimizing the number of leader crossings is NP-hard.Comment: 23 pages, 10 figures, this is the full version of a paper that is about to appear in GD'1