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Lecture In Human Rights: Tax Policy, Global Economics, Labor And Justice In Light Of Covid-19, Reuven S. Avi-Yonah Apr 2021

Lecture In Human Rights: Tax Policy, Global Economics, Labor And Justice In Light Of Covid-19, Reuven S. Avi-Yonah

Articles

International Tax Law has extensive ramifications on the wealth gap between wealthy developed nations and poor developing nations. This divide in prosperity has been made clear again in the global response to the COVID-19 pandemic. Developing nations are currently ill-equipped to adapt to, and regulate, an equitable system of taxation on a domestic level. A further challenge is the difficulty of ensuring that foreign investors, especially multinational corporations, are able to comply with tax regulations. Developed nations such as the United States and members of the European Union must continue to work with developing nations to reduce tax evasion and …


Federalizing Tax Justice, Reuven Avi-Yonah, Orli Avi-Yonah, Nir Fishbien, Hayian Xu Feb 2021

Federalizing Tax Justice, Reuven Avi-Yonah, Orli Avi-Yonah, Nir Fishbien, Hayian Xu

Articles

The United States is the only large federal country that does not have an explicit way to reduce the economic disparities among more and less developed regions. In Germany, for example, federal revenues are distributed by a formula that takes into account the relative level of wealth of each state (the so-called Finanzausgleich, or fiscal equalization). Similar mechanisms are found in Australia, Canada, India, and other large federal countries. The United States, on the other hand, has no such explicit redistribution. Each state is generally considered equal and sovereign, and the federal government does not distribute revenues to equalize …


Does Capital Bear The U.S. Corporate Tax After All? New Evidence From Corporate Tax Returns, Edward Fox Mar 2020

Does Capital Bear The U.S. Corporate Tax After All? New Evidence From Corporate Tax Returns, Edward Fox

Articles

This article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957–2013, corporations had been subject to a hypothetical corporate cash flow tax—that is, a tax allowing for the immediate deduction of investments in long-lived assets like equipment and structures—rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995–2013) differed little from that under the hypothetical cash flow tax. This result has three important implications. First, capital owners appear to bear a large fraction of …


The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Kamin, David Gamage, Ari Glogower, Rebecca Kysar, Darien Shanske, Reuven S. Avi-Yonah, Lily Batchelder, J. Clifton Fleming, Daniel Hemel, Mitchell Kane, David Miller, Daniel Shaviro, Manoj Viswanathan Feb 2019

The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Kamin, David Gamage, Ari Glogower, Rebecca Kysar, Darien Shanske, Reuven S. Avi-Yonah, Lily Batchelder, J. Clifton Fleming, Daniel Hemel, Mitchell Kane, David Miller, Daniel Shaviro, Manoj Viswanathan

Articles

The 2017 tax legislation brought sweeping changes to the rules for taxing individuals and business, the deductibility of state and local taxes, and the international tax regime. The complex legislation was drafted and passed through a rushed and secretive process intended to limit public comment on one of the most consequential pieces of domestic policy enacted in recent history. This Article is an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage, and describes key problem areas in the new legislation. Many of the new changes fundamentally undermine the integrity of the tax …


The Futility Of Walls: How Traveling Corporations Threaten State Sovereignty, Darren Rosenblum Jan 2019

The Futility Of Walls: How Traveling Corporations Threaten State Sovereignty, Darren Rosenblum

Elisabeth Haub School of Law Faculty Publications

Inversions--mergers in which one firm merges with another abroad to avoid taxes in its home country--have spread as globalization has reduced many of the transactional costs associated with relocating. As firms acquire the power to choose the laws that govern them, they challenge the sovereignty of nation-states, who find their ability to tax and regulate firms depleted. States and firms compete in a game of cat and mouse to adapt to this new global reality. The subversion of state power by these firms reveals the futility of walls, both literal and regulatory. This Essay describes the phenomenon of these “traveling …


Holding U.S. Corporations Accountable: The Convergence Of U.S. International Tax Policy And Human Rights, Jacqueline Lainez Flanagan Jan 2018

Holding U.S. Corporations Accountable: The Convergence Of U.S. International Tax Policy And Human Rights, Jacqueline Lainez Flanagan

Journal Articles

International human rights litigation underscores the inverse relationship between corporate power and corporate accountability, with recent Supreme Court decisions demonstrating increased judicial protections of corporate rights and decreased corporate accountability. This article explores these recent decisions through a tax justice framework and argues that the convergence of international human rights law and U.S. international tax policy affords alternate methods to hold corporations accountable for violations of international law norms. The article specifically proposes higher scrutiny of foreign tax credits and an anti-deferral regime targeting the international activity of U.S. corporations that use subsidiaries to shelter income and decrease taxation while …


Before International Tax Reform, We Need To Understand Why Firms Invert, Michael S. Knoll Sep 2017

Before International Tax Reform, We Need To Understand Why Firms Invert, Michael S. Knoll

All Faculty Scholarship

A wave of corporate inversions by U.S. firms over the past two decades has generated substantial debate in academic, business, and policy circles.

The core of the debate hinges on a couple of key economic questions: Do U.S. tax laws disadvantage U.S.-domiciled companies relative to their foreign competitors? And, if so, do inversions improve the competitiveness of U.S. multinational firms both abroad and at home?

There is unfortunately little, if any, empirical work directly determining whether U.S.-based MNCs are currently tax-disadvantaged compared to their foreign rivals, or measuring the amount by which (if any) U.S.-based MNCs improve their competitive position …


Evaluating Beps, Reuven Avi-Yonah, Haiyan Xu Aug 2017

Evaluating Beps, Reuven Avi-Yonah, Haiyan Xu

Articles

This article evaluates the recently completed Base Erosion and Profit Shifting (BEPS) project of the G20 and OECD and offers some alternatives for reform.


Problems With Destination-Based Corporate Taxes And The Ryan Blueprint, Reuven S. Avi-Yonah, Kimberly Clausing Apr 2017

Problems With Destination-Based Corporate Taxes And The Ryan Blueprint, Reuven S. Avi-Yonah, Kimberly Clausing

Articles

With the election of Donald Trump and the Republican Party’s domination of Congress, House Speaker Paul Ryan’s blueprint for fundamental tax reform requires more careful analysis. The Ryan blueprint combines reduced individual rates with a destination-based cash flow type business tax applicable to all businesses. The destination-based business tax at the center of the blueprint has several major problems: It is incompatible with our WTO obligations, it is incompatible with our tax treaties, and it will not eliminate the problems of income shifting and inversions it is designed to address. In addition, these proposals generate vexing technical problems that are …


International Tax Avoidance -- Introduction, Reuven S. Avi-Yonah Mar 2017

International Tax Avoidance -- Introduction, Reuven S. Avi-Yonah

Articles

Tax avoidance and evasion is a hot topic. On the evasion (illegal activity by individuals) front, the various leaks culminating in the Panama Papers have once again revealed the scope of evasion by the global elite. Gabriel Zucman conservatively estimated the annual revenue loss at $200 billion. On the tax avoidance (legal activity by corporations) front, the OECD BEPS project has estimated the scope of avoidance by multinationals at between $100 and $240 billion per year. By comparison, total US corporate tax revenues are about $400 billion per year. The articles in this volume reflect various aspects of these troubling …


Tax Treatment Of A Marijuana Business, Douglas A. Kahn, Howard Bromberg Jan 2017

Tax Treatment Of A Marijuana Business, Douglas A. Kahn, Howard Bromberg

Articles

Currently, twenty-eight states and the District of Columbia allow the use of marijuana for medical purposes and permit the conduct of a business marketing of marijuana for that purpose. Eight of those states and the District of Columbia permit the recreational use of marijuana. There is reason to believe that more states will decriminalize the marketing of marijuana. However, marijuana is listed in Schedule 1 of the federal Controlled Substances Act of 1970 (CSA) which makes it illegal under federal law to manufacture or distribute marijuana even when it is legal to do so under local state law. In a …


Country By Country Reporting And Corporate Privacy: Some Unanswered Questions, Reuven S. Avi-Yonah Dec 2016

Country By Country Reporting And Corporate Privacy: Some Unanswered Questions, Reuven S. Avi-Yonah

Articles

Corporate privacy is an oxymoron. Individuals have a right to privacy, which the Supreme Court has recognized at least since Griswold v. Connecticut (1965). Warren and Brandeis’ famous defense of the right to privacy (1890) clearly applied only to individuals, because only individuals have the kind of feelings that are affected by invasions of privacy. Corporations are legal entities, and the concept of privacy does not apply to them, as the Supreme Court held in 1906. Thus, any objection to making corporate tax returns public cannot rest on the right to privacy. In fact, corporate returns were made public in …


Evaluating Beps: A Reconsideration Of The Benefits Principle And Proposal For Un Oversight, Reuven Avi-Yonah, Haiyan Xu Jan 2016

Evaluating Beps: A Reconsideration Of The Benefits Principle And Proposal For Un Oversight, Reuven Avi-Yonah, Haiyan Xu

Articles

The Financial Crisis of 2008 and Great Recession that followed have exacerbated income inequality within and between countries. In the aftermath of the economic turbulence, politicians have turned their attention to the twin problems of individual tax evasion and corporate tax avoidance. U.S. legislators enacted the Foreign Account Tax Compliance Act (FACTA), leading to the United States signing a series of Intergovernmental Agreements (IGAs) for the exchange of tax information. The Organization for Economic Co-operation and Development (OECD) developed the Multilateral Agreement for Administrative Assistance in Tax Matters (MAATM) and initiated the Base Erosion and Profit Shifting (BEPS) project to …


企業の社会的責任と戦略的租税行動 [Corporate Social Responsibility And Strategic Tax Behavior], Reuven S. Avi-Yonah, Keisaku Koga Translator Jan 2015

企業の社会的責任と戦略的租税行動 [Corporate Social Responsibility And Strategic Tax Behavior], Reuven S. Avi-Yonah, Keisaku Koga Translator

Articles

This paper addresses two questions. First, from the perspective of the corporation, should the corporation cooperate and pay the corporate tax, or should it engage in "strategic" tax behavior designed to minimize or eliminate its corporate tax burden? Second, from the perspective of the state, should the state use the corporate tax just to raise revenue, or should it also try to use it as a regulatory tool to steer corporate behavior in directions that it deems beneficial to society? The paper argues that whatever our view of the nature of the corporation and of the legitimacy of corporate social …


Reclassification Risks For Compensation Paid By S And C Corporations To Shareholder-Employees, Stephen R. Looney Nov 2014

Reclassification Risks For Compensation Paid By S And C Corporations To Shareholder-Employees, Stephen R. Looney

William & Mary Annual Tax Conference

No abstract provided.


Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah Jan 2014

Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah

Articles

This Article will address the question of whether publicly traded U.S. corporations owe a duty to their shareholders to minimize their corporate tax burden through any legal means, or if instead, strategic behaviors like aggressive tax-motivated transactions are inconsistent with corporate social responsibility (“CSR”). I believe the latter holds true, regardless of one’s view of the corporation. Under the “artificial entity” view, such behavior undermines the constitutive relationship between the corporation and the state. Under the “real view,” such behavior runs contrary to the normal obligation of citizens to comply with the law (even absent effective enforcement). And under the …


When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons Jan 2014

When Subchapter S Meets Subchapter C, Martin J. Mcmahon Jr., Daniel L. Simmons

UF Law Faculty Publications

It is often said that “an S corporation is a corporation that is taxed like a partnership.” This statement is incorrect. An S corporation resembles a partnership only in that it generally does not pay income taxes and its income and losses pass through to the shareholders and retain their character as they pass through. Also, like a partnership, basis adjustments to an S corporation shareholder's stock reflect allocations of income, expense, loss, and distributions. However, no other rules of subchapter K governing partnership taxation apply to S corporations. Most of the rules governing the relationship between an S corporation …


Beyond Territoriality And Deferral: The Promise Of "Managed And Controlled", Reuven S. Avi-Yonah Aug 2011

Beyond Territoriality And Deferral: The Promise Of "Managed And Controlled", Reuven S. Avi-Yonah

Articles

In the new version of his Stop Tax Haven Abuse Act, Sen. Carl Levin, D-Mich., once again proposed to modify the definition of residence for domestic corporations (IRC section 7701). Section 103 of the act seeks to: stop companies run from the United States claiming foreign status by treating foreign corporations that are publicly traded or have gross assets of $50 million or more and whose management and control occur primarily in the United States as U.S. domestic corporations for income tax purposes. [Emphasis in original.] This is not a new suggestion. In response to the inversions of the early …


A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp Jun 2011

A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp

All Faculty Scholarship

Most legal historians speak of the period following classical legal thought as “progressive legal thought.” That term creates an unwarranted bias in characterization, however, creating the impression that conservatives clung to an obsolete “classical” ideology, when in fact they were in many ways just as revisionist as the progressives legal thinkers whom they critiqued. The Progressives and New Deal thinkers whom we identify with progressive legal thought were nearly all neoclassical, or marginalist, in their economics, but it is hardly true that all marginalists were progressives. For example, the lawyers and policy makers in the corporate finance battles of the …


Formulary Apportionment: Myths And Prospects - Promoting Better International Policy And Utilizing The Misunderstood And Under-Theorized Formulary Alternative, Reuven S. Avi-Yonah, Ilan Benshalom Jan 2011

Formulary Apportionment: Myths And Prospects - Promoting Better International Policy And Utilizing The Misunderstood And Under-Theorized Formulary Alternative, Reuven S. Avi-Yonah, Ilan Benshalom

Articles

This article seeks to re-examine the formulary alternative to transfer pricing by inquiring whether partial integration of formulary concepts into current practices would offer a reasonable alternative to transfer pricing rules. We believe that the key to achieving an equitable and efficient allocation of MNE income is to solve the problem of the residual, i.e., how to allocate income generated from mobile assets and activities whose risks are borne collectively by the entire MNE group. These assets and activities generate most of the current transfer pricing compliance and administrative costs, as well as tax avoidance opportunities. A limited formulary tax …


Déjà Vu All Over Again? Reflections On Auerbach's 'Modern Corporate Tax', Reuven S. Avi-Yonah Dec 2010

Déjà Vu All Over Again? Reflections On Auerbach's 'Modern Corporate Tax', Reuven S. Avi-Yonah

Law & Economics Working Papers

This paper comments on Alan Auerbach's "A Modern Corporate Tax" (Hamilton Project/CAP, December 2010) and argues that it is not a significant improvement over previous proposals to replace the corporate tax with a cash flow tax.


Using - And Not Losing - Tax Losses, Part 1: Protecting Tax Losses From A Section 382 Ownership Change (Slides), Mark C. Van Deusen Nov 2010

Using - And Not Losing - Tax Losses, Part 1: Protecting Tax Losses From A Section 382 Ownership Change (Slides), Mark C. Van Deusen

William & Mary Annual Tax Conference

No abstract provided.


Using - And Not Losing - Tax Losses, Part 2 (Slides), Steven M. Friedman Nov 2010

Using - And Not Losing - Tax Losses, Part 2 (Slides), Steven M. Friedman

William & Mary Annual Tax Conference

No abstract provided.


The Redemption Puzzle, Reuven S. Avi-Yonah Aug 2010

The Redemption Puzzle, Reuven S. Avi-Yonah

Articles

After the adoption of partial integration in 2003, there has been only a modest rise in dividends, but a sixfold increase in redemptions. This article argues that the explanation for that lies in the different treatment of dividends and capital gains to foreign shareholders and that Congress should respond by making sections 302 and 304 inapplicable to foreign shareholders.


The Redemption Puzzle, Reuven S. Avi-Yonah Jul 2010

The Redemption Puzzle, Reuven S. Avi-Yonah

Law & Economics Working Papers

Following the adoption of partial integration in 2003, there was only a modest increase in dividends during the period 2004-7, from about 300 to about 500 (if 1987 levels are set at 100). Redemptions, however, showed a remarkable increase, jumping from about the same as dividends (300) to 1,800. This, therefore, leads to a new puzzle: Why the sudden sharp increase in redemptions following 2003?

Like the dividend puzzle, the redemption puzzle is susceptible to several explanations. For example, Bratton and Wachter note that managers who hold stock options tend to favor redemptions over dividends. But in this case, I …


A Primer On Protecting Tax Losses From A Section 382 Ownership Change, Mark C. Van Deusen Jan 2010

A Primer On Protecting Tax Losses From A Section 382 Ownership Change, Mark C. Van Deusen

William & Mary Annual Tax Conference

No abstract provided.


Between Formulary Apportionment And The Oecd Guidelines: A Proposal For Reconciliation, Reuven S. Avi-Yonah Jan 2010

Between Formulary Apportionment And The Oecd Guidelines: A Proposal For Reconciliation, Reuven S. Avi-Yonah

Articles

In the last 30 years, a debate has been raging in international tax circles between advocates of the OECD Transfer Pricing Guidelines and the arm’s length standard (ALS) they embody, on the one hand, and advocates of formulary apportionment (FA) on the other. After the adoption of the 1995 regulations and the new OECD Guidelines, the debate became quieter for a while, because everyone was waiting to see whether the issue had been resolved. However, while there have been few decided cases, it is clear by now that the transfer pricing problem is as bad as it ever was. That …


A Comprehensive Theory Of Deal Structure: Understanding How Transactional Structure Creates Value, Michael S. Knoll, Daniel M. G. Raff Jan 2010

A Comprehensive Theory Of Deal Structure: Understanding How Transactional Structure Creates Value, Michael S. Knoll, Daniel M. G. Raff

All Faculty Scholarship

No abstract provided.


International Capital Taxation., Rachel Griffith, James R. Hines Jr., Peter Birch Sørensen Jan 2010

International Capital Taxation., Rachel Griffith, James R. Hines Jr., Peter Birch Sørensen

Book Chapters

Globalization carries profound implications for tax systems, yet most tax systems, including that of the UK, still retain many features more suited to closed economies. The purpose of this chapter is to assess how tax policy should reflect the changing international economic environment. Institutional barriers to the movement of goods, services, capital, and (to a lesser extent) labour have fallen dramatically since the Meade Report (Meade, 1978) was published. So have the costs of moving both real activity and taxable profits between tax jurisdictions. These changes mean that capital and taxable profits in particular are more mobile between jurisdictions than …


Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst Dec 2008

Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst

Law & Economics Working Papers Archive: 2003-2009

The current system of taxing the income of multinational firms in the United States is flawed across multiple dimensions. The system provides an artificial tax incentive to earn income in low-tax countries, rewards aggressive tax planning, and is not compatible with any common metrics of efficiency. The U.S. system is also notoriously complex; observers are nearly unanimous in lamenting the heavy compliance burdens and the impracticality of coherent enforcement. Further, despite a corporate tax rate one standard deviation above that of other OECD countries, the U.S. corporate tax system raises relatively little revenue, due in part to the shifting of …