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Who Invented The Single Tax Principle?: An Essay On The History Of Us Treaty Policy, Reuven S. Avi-Yonah

Articles

In 1997, I wrote an article on the international tax challenges posed by the then-nascent electronic commerce, in which I suggested that the international tax regime is based on two principles: the benefits principle and the single tax principle. The benefits principle states that active (business) income should be taxed primarily by the country of source, and passive (investment) income should be taxed primarily by the country of residence. This is the famous compromise reached by the four economists at the foundation of the regime in 1923 and is not particularly controversial. It is embodied in every one of the …