Taxation-Transnational Commons^™

Taxing Ai, Assaf Harpaz

Scholarly Works

Artificial intelligence (AI) is poised to transform the distribution and sources of income, with some experts predicting widespread job displacement. Even under optimistic projections, AI is expected to exacerbate wealth inequality, given that the technology’s ownership and immense value are concentrated within a subset of Big Tech companies and AI startups. These outcomes will have far-reaching impacts on the federal tax system, which heavily relies on taxing individual labor income and payroll, rather than capital or consumption.

This Article argues that AI threatens to disrupt the tax system’s ability to fulfill its fundamental goals of raising revenue, redistributing income, and …

From Relic To Relevance, The Resurgence Of Tariffs, Reuven S. Avi-Yonah, Doron Narotzki, Tamir Shanan

Law & Economics Working Papers

Modern legal scholarship has largely relegated tariffs to economic analysis, overlooking their legal and policy significance. This article challenges that view by examining tariffs as a potential pillar of fiscal policy, exploring their viability as a revenue source alongside or in place of traditional income and corporate taxation. While historically central to U.S. government funding, tariffs diminished in importance with the rise of income taxation and trade liberalization. However, their recent resurgence as a tool for trade protection raises broader questions about their role in national economic strategy. This article critically assesses the feasibility of a tariff-based tax system, drawing …

Preface: The Field Of International Economic Law, Gregory Shaffer, Michael Waibel

Georgetown Law Faculty Publications and Other Works

This is the preface to our forthcoming book Advanced Introduction to International Economic Law for Edward Elgar Publishing. The book is unique in multiple ways. It is the first book that addresses the breadth of international economic law thematically, instead of serially by sub-field of law. We examine the history of key sub-fields, their contested functions, and the ways that they disparately address issues of liberalization and market access, discrimination, state regulatory policy space, fairness, governance and dispute resolution. Unlike law and economic accounts, we do not naturalize the “functions” of international economic law. Rather, we note how different actors …

Un Tax Negotiations: North-South Tensions And The Challenge Of Institutional Legitimacy, Assaf Harpaz

Scholarly Works

The drafting process for a United Nations Framework Convention on International Tax Cooperation, along with two early protocols, is now underway. A UN framework convention represents a Global South effort to shift international tax policymaking from the OECD to the UN. For developing countries, the UN has long been viewed as a more inclusive space for tax policy negotiations, producing more favorable but historically less influential standards compared to the OECD.

Support for the UN framework convention, including its terms of reference, has been sharply divided across traditional Global North-South lines. The backlash following the OECD’s recent two-pillar reform triggered …

Taxation's Limits, Luís C. Calderón Gómez

Northwestern University Law Review

Countless pages have been devoted to the question of why everyone should pay tax, yet its opposite has gone largely unnoticed: why should some people and organizations not pay tax? Our tax system exempts from ordinary income taxation a wide and diverse array of people and organizations engaged in significant economic activity—from parents providing childcare services for their family to consular activities and charities operating animal shelters—seemingly without a convincing explanation. Perhaps because of the dizzying diversity of tax-exempt activities, scholars and policymakers have avoided comprehensively or coherently justifying our exemption regimes.

This Article develops a novel normative theory that …

Challenging The Johnson Amendment: What Safe Space Gets Right - And Wrong, Benjamin Leff

Scholarly Articles in Law Reviews & Journals

There has long been a scholarly debate about the so-called Johnson Amendment, which is the statutory provision that prohibits charities from “intervening” in campaigns for public office. Some scholars argue that the Johnson Amendment, or at least the IRS’s interpretation of it, unconstitutionally prevents charities from exercising their fundamental rights to speech or religious liberty. Activists have tried to provoke IRS enforcement of the prohibition so they could argue their interpretation of the Constitution in court, but the IRS appeared to be avoiding litigation on the issue. On March 18, Students and Academics for Free Expression, Speech, and Political Action …

The U.N. Framework Tax Convention: Can It Bridge The North-South Divide?, Assaf Harpaz

Scholarly Works

The United Nations recently concluded the second session of negotiations on terms of reference for a framework convention on international tax cooperation. The framework convention presents an opportunity to multilaterally address pressing global tax issues. Its goal is to “strengthen international tax cooperation and make it fully inclusive and more effective.” The extensively negotiated terms of reference make several substantive commitments, including the fair allocation of taxing rights; tax evasion and avoidance by high-net worth individuals; sustainable development; mutual administrative assistance in tax matters; tax-related illicit financial flows; and prevention and resolution of tax disputes. The ongoing multilateral effort brings …

Moore V. United States: The U.S. Supreme Court’S Impending Revisiting Of The Definition Of “Income”, Beckett Cantley, Geoffrey Dietrich

University of Miami Business Law Review

The passing of the Tax Cuts and Jobs Act (“TCJA”) in December 2017 made significant changes that affect both domestic and international businesses income taxes. One of the most notable changes involves the Internal Revenue Code (“IRC”) section 965 transition tax on foreign earnings of foreign subsidiaries of U.S. companies, which deems those earnings to be repatriated. Effectively, this transition tax disregards the realization element thought by some to be a U.S. Constitutional requirement. As such, questions have arisen in the courts regarding the constitutionality of these laws. The most noteworthy case of Moore v. United States has found its …

Addressing Base Erosion: Impact Of The No Tax Breaks For Outsourcing Act On Tax Inversions And Profit Shifting, T. Scott Shogren

American University Business Law Review

The modern landscape of international taxation presents complex challenges arising from cross-border transactions and diverse tax regimes. This Comment delves into the intricate world of tax inversions, a process whereby U.S. firms shift their corporate headquarters abroad, thereby exploiting different tax jurisdictions. The implications of tax inversions are significant, and some scholars estimate there are substantial global tax revenue losses.

This Comment examines the mechanics of tax inversions, analyzing the tools employed by multinational corporations to reduce their tax liabilities, such as debt concentration and earnings stripping. This Comment also explores legislative responses, including the No Tax Breaks for Outsourcing …

Interlinking Between Income Tax, Citizenship And Democracy? A Case Study Of Canada And China, Jinyan Li

Conference Papers

The interlink between taxation, citizenship and democracy appears to be obvious in Western democracies: citizens are voters, taxpayers and beneficiaries of public spending funded by tax revenues. The literature on the politics of taxation suggests that democratic institutions affect taxation at every stage of the policy-making process, the type of elections and governance model influence the level of redistribution and complexity of the tax system, democracies generally choose policies that are more favorable to the poor than non-democracies, the tax mix varies with the nature of the political regime, and more repressive governments rely less on personal income taxation. Political …

Tinjauan Hukum Penerapan Hak Mendahulu Utang Pajak Dalam Perkara Kepailitan Pt Industries Badja Garuda Berdasarkan Undang-Undang Nomor 37 Tahun 2004 Tentang Kepailitan Dan Penundaan Kewajiban Pembayaran Utang, Siti Fatimah Citra Nurislamiati

"Dharmasisya” Jurnal Program Magister Hukum FHUI

This paper discusses the application of pre-emptive rights over tax debt collection in bankruptcy disputes regulated in Article 41 paragraph (3) of Law Number 37 of 2004 concerning the Bankruptcy and Deferral of Debt Payment Obligations displayed by the Directorate General of Taxes. Tax debts outside the bankruptcy process for compulsory taxes are being filed for bankruptcy by requesting the Commercial Court to return all tax liabilities that would harm the interests of the country. In the event that a taxpayer has been declared bankrupt, the Directorate General of Taxes still has the right to overtake and is privileged, requesting …

International Tax Reform: Who Gets A Seat At The Table?, Assaf Harpaz

Scholarly Works

The international tax framework relies on early-twentieth-century principles and favors the interests of the Global North, which created it. It bases taxing rights on a corporation’s physical presence and mostly allocates profits to the country of residence. Moreover, it has been slow to adapt to modern business practices. In the digital economy, companies shift profits with relative ease and often do not require a physical presence in the location of their consumers. International taxation needs reform, but leading proposals do not reflect meaningful input from the Global South and are unlikely to serve the needs of developing countries.

In 2021, …

Disabusing The Tax Aid Narrative: What Inter-National Tax Equity Really Means For "Poor" Countries And How To (Re)Frame It, Okanga Ogbu Okanga

PhD Dissertations

International tax regimes (e.g., the “double taxation regime”) are created by states with competing tax jurisdiction to coordinate their tax rules and, specifically, to address common efficiency problems like international double taxation. In developing such regimes, states attempt to balance competing tax policy priorities: efficiency, administrability, and equity. This work engages with equity, as a policy norm of international tax (inter-national tax equity). It is my thesis that the framing/articulation of inter-national tax equity suffers from a narrative problem that, perhaps, stems from its apparent conceptual unclarity and multifarious usage. This narrative problem is most evident in the articulation of …

A Major Simplification Of The Oecd’S Pillar 1 Proposal, Michael J. Graetz

Faculty Scholarship

In this report, Graetz suggests major modifications to the OECD’s pillar 1 blueprint proposal to create a new taxing right for multinational digital income and some product sales that would greatly simplify the proposal. The modifications rely on readily available existing financial information and would achieve certainty in the application of pillar 1, while adhering to its fundamental structure and policies.

International Tax: Tax Treaties, Kim Brooks

OER Texts

This compendium of materials is designed to support the study of tax treaties around the world.

Racialized Tax Inequity: Wealth, Racism, And The U.S. System Of Taxation, Palma Joy Strand, Nicholas A. Mirkay

Northwestern Journal of Law & Social Policy

This Article describes the connection between wealth inequality and the increasing structural racism in the U.S. tax system since the 1980s. A long-term sociological view (the why) reveals the historical racialization of wealth and a shift in the tax system overall beginning around 1980 to protect and exacerbate wealth inequality, which has been fueled by racial animus and anxiety. A critical tax view (the how) highlights a shift over the same time period at both federal and state levels from taxes on wealth, to taxes on income, and then to taxes on consumption—from greater to less progressivity. Both of these …

A Review Of The Proposals For Taxation Of Profits Of Businesses In The Digitalized Economy, Chukwuebuka Stanley Ndibe

Master of Laws Research Papers Repository

The advent of information technology and digitalization has changed and continues to change everyday life, including the manner in which business operations are carried out. Years back, to run a taxi business, you would need to own vehicles and employ drivers. Today, some digitalized businesses are able to operate the same business by just owning a digital interface and related intellectual property rights. This change in the way things are done has significant impact on traditional legal systems. In the realm of tax law, digitalization has impacted on traditional international tax rules including the threshold for allocating taxing rights. In. …

The Oecd Unified Approach: Nexus, Scope, And Coexisting With Dsts, Assaf Harpaz

Scholarly Works

This article comments on the OECD Secretariat Proposal for a “Unified Approach” under Pillar One, released October 9, 2019. The article focuses on the proposal’s scope, nexus, administration and compliance, proposed “Amount C” and compatibility with unilateral digital service taxes. The article suggests a nexus that does not consider size-limiting worldwide revenue thresholds and offers an alternative de minimis country-specific sale-based proposal. Comments on the OECD proposal were submitted by the author as part of the OECD’s public consultation process in November 2019.

Attacking Innovation, Jeffrey A. Maine

Faculty Publications

Economists generally agree that innovation is important to economic growth and that government support for innovation is necessary. Historically, the U.S. government has supported innovation in a variety of ways: (1) a strong legal system for patents; (2) direct support through research performed by government agencies, grants, loans, and loan guarantees; and (3) indirect support through various tax incentives for private firms. In recent years, however, we have seen a weakening of the U.S. patent system, a decline in direct funding of research, and a weakening of tax policy tools used to encourage new innovation. These disruptive changes threaten the …

Symposium: The Future Of The New International Tax Regime, Rosanne Altshuler, Fadi Shaheen, Jeffrey Colon, Michael Graetz, Rebecca Kysar, Susan Morse, Daniel Shaviro, Richard Phillips, Daniel Rolfes, Daniel Rosenbloom, Stephen Shay, Steven Dean

Faculty Scholarship

The symposium was held at Fordham University School of Law on October 26, 2018. It has been edited to remove minor cadences of speech that appear awkward in writing and to provide sources and references to other explanatory materials in respect to certain statements made by the speakers.

Holding U.S. Corporations Accountable: Toward A Convergence Of U.S. International Tax Policy And International Human Rights, Jacqueline Laínez Flanagan

Pepperdine Law Review

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. This 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 …

A New Deal For Europe? The Commerce Clause As The Solution To Tax Discrimination And Double Taxation In The European Union, Charles Edward Andrew Lincoln Iv

The Journal of Business, Entrepreneurship & the Law

No abstract provided.

Tax Compliance In A Decentralizing Economy, Manoj Viswanathan

Georgia State University Law Review

Tax compliance in the United States has long relied on information from centralized intermediaries—the financial institutions,employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities,consumers and businesses are not. New technologies, such as sharing economy platforms (companies such as Airbnb, Uber, and Instacart)and the blockchain (the platform on which various cryptocurrencies are based) are providing new, decentralized options for exchanging goods and services.

Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance. Until now, legal …

The Future Of The New International Tax Regime, Rosanne Altshuler, Fadi Shaheen, Jeffrey Colon, Michael Graetz, Rebecca Kysar, Susan Morse, Daniel Shaviro, Richard Phillips, Danielle Rolfes, David Rosenbloom, Stephen Shay, Steven Dean

Fordham Journal of Corporate & Financial Law

No abstract provided.

Taxing Systemic Risk, Eric D. Chason

The University of New Hampshire Law Review

A tax on the harmful elements of finance—a tax on systemic risk—would raise revenue and also lower the likelihood of future crisis. Financial institutions, which pay the tax, would try to minimize its cost by lowering their systemic risk. In theory, a tax on systemic risk is perfect policy. In practice, however, this perfect policy is unattainable. Tax laws need clear definitions to be administrable. Our current understanding of systemic risk is too abstract and too metaphorical to serve as a target for taxation.

Despite the absence of a clear definition of systemic risk, academics and policy makers continue to …

Nobody’S Stock Compares To Your Own: How Treasury Can Revive Stock Compensation In Cost-Sharing Agreements, Tyler Johnson

Northwestern University Law Review

In Altera Corp. v. Commissioner, the United States Tax Court invalidated a 2003 Treasury Regulation for failing to meet State Farm’s reasoned decisionmaking standard under the Administrative Procedure Act (APA). Invalidating this specific regulation eliminates one of the federal government’s latest attempts to limit income tax avoidance by some of the world’s largest and wealthiest corporations in the murky world of transfer pricing. This Note demonstrates that the Tax Court’s ruling must be limited to its specific APA holding and argues that Treasury may enact a similar regulation under the existing statutory and regulatory framework of the arm’s length …

Multinational Efforts To Limit Intellectual Property Income Shifting: The Oecd's Base Erosion And Profit Shifting (Beps) Project, Jeffrey A. Maine

Faculty Publications

Before 2017, there were two major international movements going on at the same time: (1) the Trans-Pacific Partnership (TPP) Agreement; and (2) the Organization for Economic Cooperation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) Project. The movements presented a unique opportunity to consider the intersection of a behemoth multinational trade agreement and ambitious multinational efforts to close international tax loopholes.

Although the TPP is essentially dead, as newly elected U.S. President Donald Trump unsigned the TPP as a matter of unilateral Executive power, the OECD’s BEPS Project is not. Indeed, many nations have been adopting BEPS Project proposals …

Citizens Abroad And Social Cohesion At Home: Refocusing A Cross-Border Tax Policy Debate, Michael S. Kirsch

Journal Articles

Modern developments raise significant questions about the future importance (or non-importance) of formal citizenship status. For example, while many have interpreted the European Union project, with its emphasis on the free movement of individuals, as portending the decreasing relevance of nationality, recent developments, such as the “Brexit” vote, suggest that national identity remains an important factor for many individuals. While much of the public debate over citizenship focuses on areas, such as immigration, that are more obviously tied to formal citizenship status, this debate also impacts cross-border tax policy.

Over the past decade, several scholars have addressed the use of …

Treaties In The Aftermath Of Beps, Yariv Brauner

UF Law Faculty Publications

The article argues that, despite the fanfare around it, the outcome of the BEPS project is unlikely to be dramatic, at least in the short term. Beyond a period of increased legal uncertainty and aggressive enforcement by some countries, it expects little substantive change in tax treaties. The challenges to the dominance of the OECD and the richest countries would likely be assuaged with marginal concessions, most or all of which not be affecting tax treaties. Yet, the article sees a silver lining in the non-substantive, structural, and instrumental outcomes of the BEPS project. It argues that even if unintended, …

Transfer Pricing Challenges In The Cloud, Orly Mazur

Faculty Journal Articles and Book Chapters

Cloud computing - the provision of information technology resources in a virtual environment - has fundamentally changed how companies operate. Companies have quickly adapted by moving their businesses to the cloud, but international tax standards have failed to follow suit. As a result, taxpayers and tax administrations confront significant tax challenges in applying outdated tax principles to this new environment. One particular area that raises perplexing tax issues is the transfer pricing rules. The transfer pricing rules set forth the intercompany price a cloud service provider must charge an affiliate using its cloud services, which ultimately affects in which jurisdiction …