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Law & Economics Working Papers

Tax Law

2011

Articles 1 - 4 of 4

Full-Text Articles in Law

The Effective Tax Rate Of The Largest Us And Eu Multinationals, Reuven S. Avi-Yonah, Yaron Lahav Oct 2011

The Effective Tax Rate Of The Largest Us And Eu Multinationals, Reuven S. Avi-Yonah, Yaron Lahav

Law & Economics Working Papers

This paper compares the effective tax rates of the 100 largest US multinationals to the 100 largest EU multinationals for the period 2001-2010, based on financial disclosures. The paper finds that despite the higher US statutory rate the effective tax rates are comparable and that EU multinationals tend to have a higher effective tax rate. The likely explanation is that EU corporate taxes have a broader base. The paper concludes that current US tax law does not subject US based multinationals to a competitive disadvantage against their EU based competitors.


Exclusion From Income Of Compensation For Services And Pooling Of Labor Occurring In A Noncommercial Setting, Douglas A. Kahn Jul 2011

Exclusion From Income Of Compensation For Services And Pooling Of Labor Occurring In A Noncommercial Setting, Douglas A. Kahn

Law & Economics Working Papers

Compensation for services, regardless of the form, constitutes income to the recipient. Consequently, the exchange of services by two individuals is treated as income to each. However, there are numerous examples of an exchange of services that the IRS has never sought to tax. The most common example is an exchange of services by a married couple who divide the household chores between them. The focus of this article is to propose a principled reason for not taxing those exchanges and to explore the limits of that exclusion. The author contends that the income tax operates exclusively on commercial transactions, …


Real Time Audit – It Is The Time To Act?, Reuven S. Avi-Yonah, Oz Halabi Jun 2011

Real Time Audit – It Is The Time To Act?, Reuven S. Avi-Yonah, Oz Halabi

Law & Economics Working Papers

The U.S. is facing one of its hardest economic crises. Its economy has not recovered from the 2008 downturn, and the light at the end of the tunnel is far, far away. The government and the Internal Revenue Service (“IRS”) are seeking revenue sources in order to reduce its budget deficit. However, raising the income tax rates is politically difficult and may lead to further loss of jobs. In this political situation, it is important to try to find ways to raise more revenue without raising tax rates. One possibility of doing so is “real time audit”: Auditing transactions when …


Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah Jun 2011

Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah

Law & Economics Working Papers

In 1992, Chairman Rostenkowski introduced legislation that imposed US capital gains tax on foreign sellers of large blocks of shares (10 percent or more) in US corporations. The legislation was not a treaty override, although it added an anti-treaty shopping provision similar to those adopted for the branch profit tax in 1986. It also had anti-abuse provisions that addressed holding company structures. Today, the US faces a large budget deficit and seeks to impose higher burdens on its own multinationals. While that is also justified, there is no reason to let foreigners off the hook, especially since there is much …