Papers by Reuven Avi-Yonah
SSRN Electronic Journal, 2000
The Cyclical Transformations of the Corporate Form: A Historical Perspective on Corporate Social Responsibility
SSRN Electronic Journal, 2000
... If members of a municipality or any corporate body appoint an attorney for legal business, it... more ... If members of a municipality or any corporate body appoint an attorney for legal business, it should not be said ... It seems they can, if the case is the society's, as it is a permitted society. ... On the contrary, yes, because a corporate body is nothing more than the people who are there. ...
SSRN Electronic Journal, 2000
This paper addresses the relationship between tax and trade law, as embodied in the network of bi... more This paper addresses the relationship between tax and trade law, as embodied in the network of bilateral tax treaties and the multilateral agreements underlying the WTO. The paper argues that: (1) There is considerable overlap in the goals to be achieved by tax and trade agreements, and full achievement of these goals is not possible without addressing both tax and trade policies. (2) Tax treaties contribute to the avoidance of double taxation but, because of their bilateral nature, cannot effectively address the problem of double non-taxation resulting from tax competition. The WTO agreements as currently drafted address some aspects of the tax competition issue (e.g., preferential tax regimes for trade in goods) but not others (competition for investment and trade in services, including traditional tax havens). (4) Fully achieving the goals of tax and trade agreements may require a multilateral agreement that will address services and investment issues, as well as goods. We remain agnostic whether the WTO or some other forum is the most appropriate one to effectuate such an agreement.
The Three Causes of Inversions: Reflections on Pfizer/Allergan and Notice 2015-79
SSRN Electronic Journal, 2000
Money on the Table: Why the U.S. Should Tax Inbound Capital Gains
SSRN Electronic Journal, 2000
ABSTRACT In 1992, Chairman Rostenkowski introduced legislation that imposed US capital gains tax ... more ABSTRACT 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 more inbound FDI now than there was in 1992. Congress should adopt the Rostenkowski legislation now.
Splitting the Unsplittable: Toward a Formulary Approach to Allocating Residuals Under Profit Split
SSRN Electronic Journal, 2000
What Can the U.S. Supreme Court and the European Court of Justice Learn from Each Other's Tax Jurisprudence?
SSRN Electronic Journal, 2000
The Inexorable Rise of the VAT: Is the US Next?
SSRN Electronic Journal, 2000
A Proposal to Adopt Formulary Apportionment for Corporate Income Taxation: The Hamilton Project
SSRN Electronic Journal, 2000
ABSTRACT The current system of taxing the income of multinational firms in the United States is f... more ABSTRACT 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 income outside the U.S. tax base. In this proposal, we advocate moving to a system of formulary apportionment for taxing the corporate income of multinational firms. Under our proposal, the U.S. tax base for multinational corporations would be calculated based on a fraction of their worldwide income. This fraction would simply be the share of their worldwide sales that occur in the United States. This system is similar to the current method that U.S. states use to allocate national income across states. The state system arose due to the widespread belief that it was impractical to account separately for what income is earned in each state when states are highly integrated economically. Similarly, in an increasingly global world economy, it is difficult to assign profits to individual countries, and attempts to do so are fraught with opportunities for tax avoidance. Under our proposed formulary apportionment system, firms would no longer have an artificial tax incentive to shift income to low-tax locations. This would help protect the U.S. tax base while reducing the distortionary features of the current tax system. In addition, the complexity and administrative burden of the system would be reduced. The proposed system would be both better suited to an integrated world economy and more compatible with the tax policy goals of efficiency, equity, and simplicity.
The International Tax Regime: A Centennial Reconsideration
SSRN Electronic Journal, 2000
Constructive Unilateralism: US Leadership and International Taxation
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
SSRN Electronic Journal
The current controversy surrounding President Obama’s international tax proposals seems like an o... more The current controversy surrounding President Obama’s international tax proposals seems like an opportune moment to try to consider them in context. How do these proposals fit in with an agenda for US corporate and international tax reform? Few observers doubt that such reforms are sorely needed, for several reasons. First, the long-term budgetary outlook is unsustainable. Second, the US corporate tax rate is among the highest in the OECD. Third, the current system raises relatively little revenue and large amounts of corporate income go untaxed. Finally, the system is horrendously convoluted and imposes high transaction costs. This paper will attempt to raise some proposals for US corporate and international tax reform. It will begin by asking why we need to tax corporations at all, since the rationale for the corporate tax is important for assessing reform proposals. It will then discuss options for corporate and international tax reform, beginning with long-term options (a 10 yea...
Double or Nothing: A Tax Treaty for the 21st Century
SSRN Electronic Journal
The current tax treaty network was developed in the 1920s and 1930s in order to prevent double re... more The current tax treaty network was developed in the 1920s and 1930s in order to prevent double residence/source taxation. This kind of double taxation rarely exists any more because most countries have adopted either an exemption system or a foreign tax credit regime in their domestic (non-treaty) law, which effectively prevents residence/source double taxation even in the absence of a treaty. Instead, as Tsilly Dagan has pointed out, the current treaties serve mostly to transfer revenue from the source country to the residence country. This suggests that treaties may be unnecessary because exemption from withholding taxes by source countries can be done unilaterally. However, in the era of globalization (post 1980), the treaties have developed two new functions, both of which apply primarily to individual taxpayers: First, to prevent double non-taxation by ensuring that withholding taxes are collected if there is no assurance of taxation by the residence country. Second, to enforce...
Comparative Tax Law in Theory and Practice
SSRN Electronic Journal, 2000
ABSTRACT On October 3, 2009, a Conference on Comparative Tax Law in Theory and Practice took plac... more ABSTRACT On October 3, 2009, a Conference on Comparative Tax Law in Theory and Practice took place at the University of Michigan Law School, and the proceedings are summarized in this paper. The conference explored the importance of comparative tax law as a venue for new academic scholarship as well as its legal practical applications. The conference was divided into two sessions. The first session discussed the theory of comparative tax law. Garbarino presented his work on methods of comparative taxation and provided an outline of an evolutionary approach to this new field of study. Then, Omri Marian presented his dissertation responding in part to Garbarino and, following this, Nicola Sartori addressed agency tensions and conflicts that may emerge between managers (agents) and shareholders (principals) as a result of aggressive tax planning strategies adopted by publicly held corporations. The second session dealt with the practice of comparative tax law by having two round tables, both hosted by Reuven Avi-Yonah. At the first round table, Hugh Ault, Brian Arnold, and Victor Thuronyi discussed the “Practical Implications of Comparative Tax Law”. At the second round table, Michael Livingston, Assaf Likhovski and William Barker discussed the question: “Can Comparative Tax Law Have Practical Applications‘” Discussions and conclusions from the conference are expected to contribute to an ongoing dialogue on international comparative tax law and produce a better understanding of this field of study.
Find It and Tax It: From TIEAs to IGAs
SSRN Electronic Journal, 2000
Should the US Dictate World Tax Policy? Reflections on PPL Corporation v. Commissioner
SSRN Electronic Journal, 2000
ABSTRACT The Supreme Court’s decision to grant certiorari in the PPL case offers it a unique oppo... more ABSTRACT The Supreme Court’s decision to grant certiorari in the PPL case offers it a unique opportunity to change the law regarding foreign tax credits that has significantly impeded the ability of other countries to engage in meaningful tax reform. In 1938, the Court said in dicta that to qualify for the foreign tax credit a tax had to be an income or excess profits tax (or a tax imposed in lieu thereof) under US tax principles. This statement has led to an elaborate set of regulations defining what is an income tax, which has significantly hampered the ability of foreign countries to adopt tax reforms for fear that their taxes would not be creditable. It is time for the Court to declare that any tax whose burden falls on the taxpayer, i.e. any direct tax, is a creditable tax, and do away with the cumbersome structure of the IRC section 901 regulations.
Taxation in a Small Country: Review of Sven-Olof Lodin's 'The Making of Tax Law - The Development of Swedish Taxation
SSRN Electronic Journal, 2000
ABSTRACT Imagine that a single person had been responsible for all US tax reforms enacted from 19... more ABSTRACT Imagine that a single person had been responsible for all US tax reforms enacted from 1969 to 2010. Such was the position of Seven-Olof Lodin, the former President of the International Fiscal Association. For over 40 years, Professor Lodin was the most influential voice in Swedish tax policy. This was not in an official governmental capacity, but rather as a member of over twenty Government Commissions and working parties on taxation, which were responsible for all the major changes in Swedish tax law in recent decades, including the “Tax Reform of the Century” in 1991. In this insightful and important book, Prof. Lodin describes in detail how the Swedish tax system evolved from 1948 to 2010. As a result, the reader gains a deep understanding of the Swedish political process and how it led to tax policy changes. Prof. Lodin also provides interesting descriptions of all the major political players.
The One Percent Solution: Corporate Tax Returns Should Be Public (And How to Get There)
SSRN Electronic Journal, 2000
Accounting, Economics, and Law, 2011
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Papers by Reuven Avi-Yonah