Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 18 of 18
Full-Text Articles in Law
Beps, Atap, And The New Tax Dialogue: "A Transatlantic Competition?", Reuven Avi-Yonah, Gianluca Mazzoni
Beps, Atap, And The New Tax Dialogue: "A Transatlantic Competition?", Reuven Avi-Yonah, Gianluca Mazzoni
Articles
Since its launch in 2013, the US actively participated in all aspects of the BEPS project. However, until recently, the general view was that following the conclusion of the BEPS negotiations and the change of Administration the US is stepping back from the BEPS process. While the EU was charging ahead with implementing BEPS through the Anti-Tax Avoidance Directive (ATAD), the US stated that it was already in compliance with all BEPS minimum standards and therefore other than Country-by-Country Reporting (CbCR) it had no further BEPS obligations. The US decided not to sign the Multilateral Instrument (MLI) to implement BEPS …
Problems With Destination-Based Corporate Taxes And The Ryan Blueprint, Reuven S. Avi-Yonah, Kimberly Clausing
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 …
The Devil In The Details: Reflections On The Camp Draft, Reuven S. Avi-Yonah
The Devil In The Details: Reflections On The Camp Draft, Reuven S. Avi-Yonah
Articles
The discussion draft of the Tax Reform Act of 2014 (TRA 14) released by House Ways and Means Committee Chair Dave Camp, R-Mich., on February 26 represents a major effort for fundamental and far-reaching reform of U.S. tax law. Unfortunately, while many parts of the proposal seem sensible as an effort to bring back the spirit of 1986, the international tax reform proposals are deeply flawed and based on obsolete assumptions of the world that faces U.S. multinationals in 2014.
The 1 Percent Solution: Corporate Tax Returns Should Be Public (And How To Get There), Reuven S. Avi-Yonah, Ariel Siman
The 1 Percent Solution: Corporate Tax Returns Should Be Public (And How To Get There), Reuven S. Avi-Yonah, Ariel Siman
Articles
The justification for publishing corporate tax returns is that corporations are given immense benefits by the state that bestows upon them unlimited life and limited liability, and therefore they owe the public the information of how they treat the state that created them. Tax returns, like the financial disclosures that publicly traded corporations must file with the SEC, also provide useful information to shareholders, creditors, and the investing public.
Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah
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 …
How Serious Is The Problem Of Base Erosion And Profit Shifting?, James R. Hines Jr.
How Serious Is The Problem Of Base Erosion And Profit Shifting?, James R. Hines Jr.
Articles
In recent years, the problem of base erosion and profit shifting (BEPS) by multinational corporations has entered the public consciousness as a potentially important impediment to tax collections. The purpose of this article is to identify the nature of BEPS, consider empirical evidence of its magnitude, and evaluate proposed policy responses. There is considerable evidence that multinational firms arrange their affairs in a tax-sensitive manner, from which it is easy—indeed, perhaps a little too easy—to infer that beps is a serious problem. There are journalistic accounts of apparently spectacular international tax-avoidance schemes used by multinational corporations, though these stories commonly …
Corporate And International Tax Reform: Proposals For The Second Obama Administration (And Beyond), Reuven S. Avi-Yonah
Corporate And International Tax Reform: Proposals For The Second Obama Administration (And Beyond), Reuven S. Avi-Yonah
Articles
The passage of the American Taxpayer Relief Act of 2012 (ATRA) offers an opportune moment to consider proposals for corporate and international tax reform. With the debate over individual tax rates for the income and estate tax settled for the present, the President and Congress are free to consider broader reforms. Few observers doubt that such reforms are sorely needed, for several reasons. First, the long-term budgetary outlook is unsustainable. Second, the U.S. corporate tax rate is the highest in the Organisation for Economic Co-Operation and Development (OECD). Third, the current system raises relatively little revenue and large amounts of …
The Effective Tax Rate Of The Largest Us And Eu Multinationals, Reuven S. Avi-Yonah, Yaron Lahav
The Effective Tax Rate Of The Largest Us And Eu Multinationals, Reuven S. Avi-Yonah, Yaron Lahav
Articles
The United States has the second highest statutory corporate tax rate in the Organization for Economic Co-Operation and Development (OECD) (after Japan).1 This has not always been the case. After the Tax Reform Act of 1986 lowered the U.S. rate from 46% to 34%,2 the United States had one of the lowest statutory corporate tax rates in the OECD.3 In the past twenty-five years, however, the U.S. rate has remained essentially unchanged (it was raised to 35% in 1993),4 while most other OECD countries reduced their statutory rate so that the OECD average statutory corporate tax rate is 25.1%.
Symposium On International Taxation And Competitiveness: Introduction And Overview, Reuven S. Avi-Yonah, Nicola Sartori
Symposium On International Taxation And Competitiveness: Introduction And Overview, Reuven S. Avi-Yonah, Nicola Sartori
Articles
In February, 2012, the Treasury and White House unveiled President Obama's Framework for Business Tax Reform. A major proposal was to abolish the deferral on income earned by foreign subsidiaries of U.S. corporations ("CFCs").
Obama's International Tax Plan: A Major Step Forward, Reuven S. Avi-Yonah
Obama's International Tax Plan: A Major Step Forward, Reuven S. Avi-Yonah
Articles
President Barack Obama last week personally introduced a set of proposals to reform U.S. international taxation that are the most significant advance toward preserving the income tax on cross-border transactions since the enactment of the subpart F rules by the Kennedy administration in 1962. (For prior coverage, see Doc 2009-10047 or 2009 TNT 84-1.) In essence, the Obama proposals introduce a 21stcentury version of the vision begun by Thomas Adams in 1918 and continued by Stanley Surrey in 1961: a world in which source and residence taxation are coordinated so as to achieve the underlying goals of the international tax …
How Globalization Affects Tax Design, James R. Hines Jr., Lawrence H. Summers
How Globalization Affects Tax Design, James R. Hines Jr., Lawrence H. Summers
Articles
The economic changes associated with globalization tighten financial pressures on governments of high-income countries by increasing the demand for government spending while making it more costly to raise tax revenue. Greater international mobility of economic activity, and associated responsiveness of the tax base to tax rates, increases the economic distortions created by taxation. Countries with small open economies have relatively mobile tax bases; as a result, they rely much less heavily on corporate and personal income taxes than do other countries. The evidence indicates that a ten percent smaller population in 1999 is associated with a one percent smaller ratio …
Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst
Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst
Articles
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 …
Back To The Future? The Potential Revival Of Territoriality, Reuven S. Avi-Yonah
Back To The Future? The Potential Revival Of Territoriality, Reuven S. Avi-Yonah
Articles
Since 1994, the trend in the United States and other developed countries appears to be to reduce the scope of residence jurisdiction and increase the emphasis on source jurisdiction. If this trend continues, these countries are likely to move toward territoriality and decrease the emphasis on their CFC rules. In the author’s opinion, the reason for this trend is political and economic, not legal. It is part of tax competition, specifically the competition to be the headquarters jurisdiction for multinationals. The author also thinks, however, that it is not necessary to go down this road because the solution to the …
Federalism And The Commerce Clause: A Comparative Perspective, Reuven S. Avi-Yonah
Federalism And The Commerce Clause: A Comparative Perspective, Reuven S. Avi-Yonah
Articles
The U.S. Supreme Court has on numerous occasions addressed the constitutionality of state taxes under the U.S. Constitution (most often under the Commerce Clause, but sometimes under the Equal Protection and Due Process Clauses). In general, the Supreme Court has granted wide leeway to the states to adopt any tax system they wish, only striking down the most egregious cases of discrimination against out-of-state residents. Thus, for example, the Court has generally refused to intervene against state tax competition to attract business into the state. It has twice upheld a method of calculating how much income of a multinational enterprise …
Taxation And Multinational Activity: New Evidence, New Interpretations, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.
Taxation And Multinational Activity: New Evidence, New Interpretations, Mihir A. Desai, C. Fritz Foley, James R. Hines Jr.
Articles
In the midst of rapid integration and globalization, multinational firms still face tax systems that differ among countries, and these differences have the potential to affect major investment and financing decisions. This research covers a wide range of topics, including the impact of indirect taxes as well as of corporate income taxes, the sensitivity of financing decisions to tax rates, the effects of taxes on repatriation policies, the demand for, and impact of, tax havens, and the use of indirect ownership as a means of avoiding taxes. The behavior of US multinational firms as revealed by the evidence collected by …
The Ingenious Kerry Tax Plan, Reuven S. Avi-Yonah
The Ingenious Kerry Tax Plan, Reuven S. Avi-Yonah
Articles
The tax plan proposed by Democratic presidential candidate John Kerry at Wayne State University on March 26 is an ingenious set of ideas to encourage domestic job creation. Its greatest strength, however, may be its contribution to long-term economic growth, fairness, and tax law simplification. In this article I will first describe the Kerry proposal, then analyze its advantages, and finally address some counterarguments.
For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah
For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah
Articles
This article discusses “inversion” transactions, in which a publicly traded U.S. corporation becomes a subsidiary of a newly established tax haven parent corporation. In the last three years, an increasing number of these transactions have been taking place, undeterred by the shareholderlevel tax imposed by the IRS on them in 1994. The article first discusses the reasons for the increasing popularity of the transactions and the tax goals they aim at achieving (primarily avoiding subpart F and U.S. earnings stripping). The article then discusses the tax policy implications of these transactions. In the short run, the article suggests that the …
The U.S. Treasury's Subpart F Report: Plus Ça Change, Plus C'Est La Même Chose?, Reuven S. Avi-Yonah
The U.S. Treasury's Subpart F Report: Plus Ça Change, Plus C'Est La Même Chose?, Reuven S. Avi-Yonah
Articles
On 29 December 2000, the U.S. Treasury Department released its long-awaited study of Subpart F, entitled “The Deferral of Income Earned through U.S. Controlled Foreign Corporations." This study was commenced in the aftermath of the controversy that ensued from the issuance and subsequent withdrawal of Notice 98-11. The study was originally expected to be issued in 1999 in response to the report published that year by the National Foreign Trade Council, which advocated significant changes in Subpart F. The Treasury Study’s delayed issuance at the end of the Clinton Administration means that it only has (at best) persuasive force for …