Sticks and snakes: derivatives and curtailing aggressive tax planning

David Schizer
Complex “derivative” financial instruments are often used in aggressive tax planning. In response, the government has implemented mark-to-market type reforms, but only partially. Considered in isolation,these incremental reforms are likely to seem well advised in measuring income more accurately. However, there is an important “second best” cost, emphasized in this Article: the ability of well-advised taxpayers...

Canada-U.S. Free Trade and Pressures for Tax Coordination

Roger Gordon
The economies of the United States and Canada are closely linked-trade between the two countries is substantial, their capital markets are highly integrated, and even movement of individual workers between the two countries is non eligible. The U.S. and Canada have now agreed to eliminate all remaining tariff barriers between the two countries during the next few years. To what degree does this increasing economic integration...

Comments on the OECD Proposal for Secret and Mandatory Arbitration of International Tax Disputes

Michael Mcintyre
The OECD has proposed amendments to its Model Tax Convention and Commentary that would establish a system for the mandatory arbitration of tax disputes between two treaty countries when the tax officials of those countries have been unable to resolve those disputes within a two-year period.[1] The proposal is undoubtedly well-meaning and does address a small but significant problem - the "rare cases" (OECD characterization)[2]...

Why Tax Incentives may be an ineffective tool to encouraging Investment? The role of Investment Climate

Stefan Van Parys
Stefan Van Parys,* Sebastian James Abstract: In this paper we first analyze theoretically how the investment climate affects the impact of the corporate tax rate on investment. We do so in a model where the tax revenues are used to improve the investment climate. We find that if the investment climate is very effective at enhancing the productivity of capital, capital can react positively to a rise...

Domestic Law and Tax Treaties: the United States

Anthony Infanti
1. Tax Treaties in the Hierarchy of Law In the United States, the paramount source of law is the U.S. Constitution.[2] Among other things, the Constitution enumerates and delineates the powers of each of the three branches of the federal government. A branch of the federal government cannot take action (e.g., enact legislation or hear a case) that exceeds the scope of the powers allocated to it by the Constitution....

Biometrics, Certified Software Solutions, and the Japanese Consumption Tax: a Proposal For the Tax Commission

Richard Ainsworth
Significant change is anticipated in the Japanese Consumption Tax. This is the conclusion of the Japanese Tax Commission in its mid-term report, presented to Prime Minister Junichiro Koizumi on June 17, 2003. When the Tax Commission’s Chairman, Professor Hiromitsu Ishi,[1]submitted A Sustainable Tax System for Japan’s Aging Society[2]the Commission indicated that it was responding to a“state of crisis…[brought...

The Never-Ending Battle

Bryan T. Camp
In every era and area of law you find a never-ending battle between two groups of legal thinkers: formalists and functionalists. Each is connected to long-standing and honorable traditions in Anglo-American jurisprudence. The formalists tend toward the law side of those traditions the search for order and certainty and the functionalists tend toward the equity side the search for justice and meaning. All can agree that...

Value Added Tax and Sales Tax (comparative overview)

Lyubomir Zabov
I. INTRODUCTION: The Value Added Tax (hereinafter referred to as VAT) and the sales tax are indirect consumption taxes. Nevertheless, there are substantial differences between them. This paper aims at comparing the VAT, as currently imposed in Republic of Bulgaria and the sales tax, as currently imposed in the Commonwealth of Pennsylvania. The paper will focus consecutively on some of the most important features of...

Endogenous Tax Policy and Economic Growth of Tax Havens

Luisa Blanco
Luisa Blanco* Cynthia Rogers** Abstract That tax haven policies contribute to favorable economic growth in tax haven countries is widely accepted in international policy dialogues. There is, however, minimal empirical evidence to substantiate this assertion. Empirical investigations are hampered by the likely endogeneity of tax haven policies to underlying growth outcomes. Using a sample of 155 countries...

Distributional Effects of Raising the Social Security Taxable Maximum

Kevin Whitman
As of 2009, Social Security’s Old-Age, Survivors, and Disability Insurance program limits the amount of annual earnings subject to taxation at $106,800, and this value generally increases annually based on changes in the national average wage index. This brief uses Modeling Income in the Near Term (MINT) projections to compare the distributional effects of four options for raising the maximum taxable earnings amount...
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