Researching tax-change implications and outcomes

International tax provisions could affect economic growth.


by Jess Nickels (‘21)

Associate Professor in the School of Accounting, Andy Duxbury.

SUMMARY: Associate Professor Andy Duxbury looks to the past and future to understand changing tax provisions.

When Andy Duxbury was just starting out as a public accountant, he discovered that he liked the multiple moving parts of a practice specializing in international tax. Then, in 2016, with 20 years of experience under his belt, Duxbury decided he would like to try sharing some of his knowledge with students as a member of the faculty in JMU’s School of Accounting.  

Currently, he is collaborating with students on two different research papers that deal with topics in the realm of international tax. One looks to the past in an effort to understand whether reforms have worked the way they were intended to work. The other looks to the future and the possibility that circumstances may change.

It’s no secret that we all pay taxes, but when changes are made to the tax code we hardly ever stop to think about the consequences and outcomes. Duxbury says, “When you throw a rock into a pond, what do you see first? You see a big splash, which is probably the intended consequence, but then you have the ripples the rock created. Those are unintended, but still happened. International tax is loaded with unforeseeable factors, like the ripples.”

With the passage in 2018 of a very significant tax-reform package, Duxbury’s goal is to try to understand whether the objectives set forth when the legislation was first crafted have been achieved.

The idea for the paper was spurred by the interest of a student in his class who has become his co-author. “I’ve become interested in looking at whether the new law has worked in the way generally expected,” says Duxbury. His focus is on seeing how much additional revenue has been raised since the reform package was adopted, and on who is paying the taxes. Duxbury explains, “It’s been some years since this happened, so we now have real data that points to the performance of the reform.” 

His second work-in-progress centers on the Organization for Economic Co-operation and Development's proposal to implement a 15 percent tax on all income, no matter where it is earned. The OECD is an international group in which the governments of 37 democracies with market-based economies collaborate to develop policy standards that promote sustainable economic growth. The 15 percent proposal comes in response to an identified issue with large companies which choose to report their income in jurisdictions that do not levy a tax on income. 

Some countries have already decided to implement the 15 percent income tax beginning in 2024, but Duxbury is looking ahead and hypothesizing how he thinks countries and companies are going to respond. “Generally, companies will do things to lower their taxes, so what might they do in response to this? Additionally, how will they ‘lobby’ their local governments to make rules favorable to them?” he wonders.

When additional information about the OECD’s 15 percent proposal was released, Duxbury was left to ponder the question, “If I were trying to reduce my own taxes what would I do?” So he began to look at what he thought were the weak points and to gather data. 

Duxbury concludes that while the effects of these changes in tax law are still making themselves felt, even newer changes will eventually be enacted. But, he says, while “the splash from the rock thrown in the pond gets the most attention,” the ripples are usually the most important of the changes that occur.

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Published: Thursday, March 30, 2023

Last Updated: Monday, January 8, 2024

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