Income Taxation and International Mobility.

• Author: Jorge, Antonio

Edited by Jagdish N. Bhagwati and John Douglas Wilson. Cambridge, Mass.: The MIT Press, 1989. Pp. xx, 226. $32.50.

This book consists of a collection of articles dealing with various topics relating to international migration and taxation. The fundamental topic has long been interest to Professor Bhagwati who has contributed the pioneering work in this field.

The idea of that citizens of a country even if residing abroad are still fiscally responsible to their nation is not a novel one. However, it has never enjoyed much acceptance either theoretically or practically. As for the first, the suggestion has never succeeded in firing the imagination of economic analysts. These, for the most part, have held to the notion that taxation is based on a social contract between government and residents. Those who bear the burden of taxation should also have access to public goods and services which are being financed by the proceeds generated by the tax system. As for the second, all countries of the world but two, the United States and the Philippines, have favored the schedular or residential principle of income taxation.

Ultimately, the proposals of Bhagwati and Wilson rest on the acceptance of the ability to pay as a legitimate taxation principle. This whole matter conjures up old debates about progressiveness and equity, not to forget the classical issue of societal utility maximization. Only that Bhagwati and Wilson have transferred these traditional questions to the international arena.

In effect, the editors apply the above notions to the particular contexture of economic underdevelopment. Specifically, to the emigration of labor from less developed to advanced countries. According to the editors, this movement deprives the former nations of human capital which embodied past public goods and services provided by them. In their view, this argument provides the rationale for justifying the remittance to less developed societies of tax proceeds collected from their emigrants to developed nations. Clearly, this constitutes as asymmetrical proposals insofar as no remittances to developed countries are contemplated by Bhagwati and Wilson. In the last instance, the suggested scheme...