Taxation-Transnational Commons^™

International Tax Law As International Law, Reuven S. Avi-Yonah

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Is international tax law part of international law? To an international lawyer, the question posed probably seems ridiculous. Of course international tax law is part of international law, just like tax treaties are treaties. But to an international tax lawyer, the question probably seems less obvious, because most international tax lawyers do not think of themselves primarily as international lawyers (public or private), but rather as tax lawyers who happen to deal with crossborder transactions. And indeed, once one delves into the details, it becomes clear that in some ways international tax law is different from "regular" international law. For …

Bridging The North/South Divide: International Redistribution And Tax Competition, Reuven S. Avi-Yonah

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The most important social problem facing humanity at the beginning of the 21st century is the yawning divide in standards of living between the rich nations of the global North and the poor nations of the global South. The following table gives some indicia of the current gap in living standards. It shows that the majority of the population in most developing countries lives on less than two dollars a day; that in some developing countries, over a quarter of children aged 10-14 are employed in the work force; that mortality for children under five in developing countries can be …

For Haven's Sake: Reflections On Inversion Transactions, Reuven S. Avi-Yonah

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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 …

Restoring Politics To The Commerce Clause: The Case For Abandoning The Dormant Commerce Clause Prohibition Of Discriminatory Taxation, Edward A. Zelinsky

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No abstract provided.

(How) Should Trade Agreements Deal With Income Tax Issues?, Joel Slemrod, Reuven S. Avi-Yonah

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What is the relationship between the international tax regime, as embodied in bilateral international tax treaties, and multilateral free trade agreements like the General Agreement on Tariffs and Trade (GATr)?' Are their fundamental goals consistent or inconsistent? If they are inconsistent, should the tax treaties or the GATT be changed to remedy the inconsistency? If they are consistent, should the scope of either be expanded to include the other?

Tax Competition And E-Commerce, Reuven S. Avi-Yonah

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In the last four years, there has been increasing concern by developed countries about the potential erosion of the corporate income tax base by "harmful tax competition" (in the European Union since 1997, in the OECD since 1998). However, the data on tax competition available to date present a mixed and somewhat puzzling picture. On the one hand, there is considerable evidence that effective corporate income tax rates in many countries have been declining, and that the worldwide effective tax rates on multinational enterprises (MNEs) have been going down as well. On the other hand, macroeconomic data from developed countries …

The Uneasy Marriage Of Export Incentives And The Income Tax, Mihir A. Desai, James R. Hines Jr.

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This paper investigates the economic effect of tax incentives for American exports. These incentives include a partial tax exemption for export profits (available by routing exports through foreign sales corporations) and the allocation of some export profits to foreign-source income for purposes of U.S. taxation. The analysis highlights three important aspects of these policies. First, official figures appear to understate dramatically the tax expenditures associated with some U.S. export incentives. Correctly measured, total export benefits provided through the income tax are equivalent to a 1-percent ad valorem subsidy. Second, the 1984 imposition of more rigorous requirements for obtaining export subsidies …

Globalization And Tax Competition: Implications For Developing Countries, Reuven S. Avi-Yonah

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This article analyses the effects of tax competition on developing countries. Since the 1980s, globalization and greater capital mobility have led many developing countries to adopt the policy of competing with one another to attract capital investment. One of the main forms taken by this competition has been the granting of tax holidays and other tax reductions to investing multinationals. This paper reviews the normative arguments for and against this type of tax competition, from a global perspective. It then examines these arguments in depth from the point of view of developing countries. The conclusion in general is that, since …

Globalization And Tax Competition: Implications For Developing Countries, Reuven S. Avi-Yonah

Articles

The current age of globalization can be distinguished from the previous one (from 1870 to 1914) by the much higher mobility of capital than labor (in the previous age, before immigration restrictions, labor was at least as mobile as capital). This increased mobility has been the result of technological changes (the ability to move funds electronically), and the relaxation of exchange controls. The mobility of capital has led to tax competition, in which sovereign countries lower their tax rates on income earned by foreigners within their borders in order to attract both portfolio and direct investment. Tax competition, in turn, …

Treating Tax Issues Through Trade Regimes (Symposium: International Tax Policy In The New Millennium), Reuven S. Avi-Yonah

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Professor Paul R. McDaniel has performed an extremely valuable service in clarifying the relationship between trade and tax law. In particular, he has done so by pointing out that, to a large extent, the two spheres do not overlap, much less clash in their objectives. This makes sense because, fundamentally, the goal of trade law is to facilitate trade, while the goal of tax law is to raise revenue. Thus, for example, an ideal tariff under trade law is set at zero, but an ideal tax under tax law is set at some positive rate. It therefore should not be …

Tax, Trade And Harmful Tax Competition: Reflections On The Fsc Controversy, Reuven S. Avi-Yonah

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This article contrasts three approaches to dealing with the BEPS problem: adopting a unitary taxation regime, ending deferral, and adopting anti-base-erosion measures. It concludes that while the first approach is the best long-term option, the other two are more promising as immediate candidates for adoption in the context of U.S. tax reform and the OECD BEPS project.

The Cash Balance Controversy, Edward A. Zelinsky

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No abstract provided.

Commentary (Response To Article By H. David Rosenbloom), Reuven S. Avi-Yonah

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David Rosenbloom has delivered an important lecture on an important topic:' whether exploiting differences between the tax system of two different jurisdictions to minimize the taxes paid to either or both ("international tax arbitrage") is a problem, and if so, whether anything can be done about it in a world without a "world tax organization." As Rosenbloom states, international tax arbitrage is "the planning focus of the future,"2 and recently has been the focus of considerable discussion and debate (for example, upon the promulgation and subsequent withdrawal under fire of Notice 98-11).3 Rosenbloom's lecture is one of the first attempts …

Globalization, Tax Competition, And The Fiscal Crisis Of The Welfare State, Reuven S. Avi-Yonah

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This Article examines the increased use of tax incentives as weapons in the international competition to attract investment. Professor Avi-Yonah argues that the establishment of tax havens allows large amounts of capital to go untaxed, depriving both developed and developing countries of revenue and forcing them to rely on forms of taxation less progressive than the income tax. He points to social insurance programs, many of which are already on uncertain courses as aging populations imperil their fiscal health, as likely to bear the brunt of the revenue loss that tax havens cause. Professor Avi-Yonah contends that both economic efficiency …

Bonus Questions--Executive Compensation In The Era Of Pay For Performance, Charles M. Yablon

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The article critically examines the evolution of executive compensation, particularly the shift from traditional pay structures to performance-based systems, and argues that this shift has not resolved the underlying issues of excessive pay and misaligned incentives. Instead, it has introduced new conflicts of interest and inefficiencies. The author proposes a regulatory solution—a deductibility cap on executive pay—to curb excessive compensation and better align executive incentives with shareholder interests.

The Hazards Of Tinkering With The Common Law Of Future Interests: The California Experience, Laura E. Cunningham

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No abstract provided.

International Taxation Of Electronic Commerce, Reuven S. Avi-Yonah

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This article submits proposals for taxing the digital economy on the basis of the benefits and single tax principles.

The Unsolved Problem Of The Unfunded Mandate, Edward A. Zelinsky

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No abstract provided.

The Structure Of International Taxation: A Proposal For Simplification, Reuven S. Avi-Yonah

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The article explains the structure of the international tax regime and offers suggestions for improvement.

Unfunded Mandates, Hidden Taxation, And The Tenth Amendment: On Public Choice, Public Interest, And Public Services, Edward A. Zelinsky

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Few contemporary issues concern state and local policymakers as intensely as unfunded mandates. Mayors, county executives, city councilmen, and the professional associations representing them routinely argue that the federal and state governments have, in recent years, imposed at an accelerating rate expensive requirements on municipalities without granting corresponding funds for compliance, thereby irresponsibly straining the fiscal capacity of municipalities, hampering their ability to provide essential services, and improperly infringing upon the scope of local control. The complaints of municipal policymakers have provoked a variety of proposals for restraining unfunded mandates: obligatory disclosure of the projected costs of proposed mandates, requirements …

Realization, Recognition, Reconciliation, Rationality And The Structure Of The Federal Income Tax System, Patricia D. White

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No abstract provided.

Taxation And U.S. Multinational Investment, James R. Hines Jr.

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In 1985, nonbank U.S. multinational companies employed 24.5 million workers, had worldwide sales of almost $3.5 trillion, and net income of $150 billion on assets of $4.2 trillion. The foreign (non-U.S.) affiliates of these companies had 6.4 million employees, $900 billion of those sales, and $43 billion of net income, with assets of $838 billion. United States multinationals accounted for roughly three-quarters of total American merchandise exports in 1985 and half of total imports, with approximately 40 percent of each category arising from transfers within U.S. multinationals between American parent firms and their own foreign affiliates. And 1985 is widely …

The Deductibility Of State And Local Taxes: Income Measurement, Tax Expenditures And Partial, Functional Deductibility, Edward A. Zelinsky

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No abstract provided.

Tax Accrual Workpapers: Protected By A Limited Privilege?, Patricia D. White

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United States of America

v.

Arthur Young & Company and Amerada Hess Corporation

(Docket No. 82-687)

To be argued January 16, 1984

Transfer Taxation Without Transfer: Reflections On Employer-Provided Death Benefits, Section 2039, Disclaimers, New Forms Of Wealth, And The Evolution Of The Federal Estate Tax, Edward A. Zelinsky

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No abstract provided.

An Essay On The Conceptual Foundations Of The Tax Benefit Rule, Patricia D. White

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A good deal has been written over the past forty-odd years about the tax benefit rule. Over this period the federal courts have decided many cases in which its application has been at issue, and the law journals have published a small but steady stream of commentary on the rule and its manifestations. Last term, in Hillsboro National Bank v. Commissioner, the Supreme Court issued an opinion that focused squarely, and at some length, on the tax benefit rule. Despite this attention, relatively little has been done to examine the conceptual foundations of the tax benefit rule and to …

Hawaii Tax Held Invalid: Court Decides First Case Of The Term, Patricia D. White

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Aloha Airlines, Inc.

v.

Director of Taxation, State of Hawaii (Docket No. 82-585)

Hawaiian Airlines, Inc.

v.

Director of Taxation, State of Hawaii (Docket No. 82-566)

Argued October 4. 1983. Decided November 1, 1983

The Estate And Gift Tax Changes Of 1981: A Brief Essay On Historical Perspective, Edward A. Zelinsky

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No abstract provided.

United States Tax Treaty Policy: An Overview, H. David Rosenbloom, Stanley Langbein

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No abstract provided.