Allocating Business Profits for Tax Purposes: A Proposal To Adopt a Formulary Profit Split

Reuven S. Avi-yonah
Written by: Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst I. Introduction[4] 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...

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]...

Optimal Indirect Taxation Under Imperfect Competition

Hao Wang
1. Introduction It is commonly suggested in economic textbooks that indirect taxation or market power generates “deadweight loss” or “excess burden” to society, because they distorts the relative prices of commodities. The magnitudes of the welfare losses depend on the slopes of demand and supply (or marginal cost) curves. In order to minimize the aggregate deadweight loss, an optimal indirect tax structure...

Up or Down? Capital Income Taxation in the United States and the United Kingdom

Vito Polito
Abstract Empirical evidence suggests that the Effective Marginal Tax Rate (EMTR) on income from capital has increased considerably in both the United States and the United Kingdom over the period 1982-2005. This evidence contradicts the corporate tax literature which predicts that the EMTR should instead fall over time as a result of increasing international capital mobility and higher tax competition between governments....

Common Trust Funds: The Living Fossil of Passthroughs

Calvin Johnson
A common trust fund (CTF) is a fund maintained by a bank exclusively for the collective investment of the funds of trust clients. Under section 584 of the code, a CTF pays no tax, but each participant must include its proportionate share of income and losses computed at the CTF level, even if the common trust makes no distributions. Examining the Common Trust Fund bears a resemblence to coming upon a coelacanth, a...

More Cooperation, Less Uniformity: Tax Deharmonization and The Future of the International Tax Regime

Steve Dean
Efforts to foster improved international tax cooperation have become preoccupied with tax harmonization. Deharmonization offers the possibility of harmony without uniformity. By exploring two examples of tax deharmonization in practice and considering the origins and limitations of tax harmonization, this Article brings the traditional emphasis on harmonization into question. It then makes the case that deharmonization—cooperation...

Tax as Urban Legend

Anthony Infanti
forthcoming in the HARVARD BLACKLETTER LAW JOURNAL AMERICAN TAXATION, AMERICAN SLAVERY. By Robin L. Einhorn. Chicago and London: University of Chicago Press. 2006. Pp. xii, 337. Cloth, $35.00. What do race, gender, sexual orientation, and other non-economic characteristics of individuals have to do with tax policy? Shouldn’t tax policy debates focus on neutral, objective, and quantifiable economic factors rather...

Judicial Decisions as Tax Legislation

Nancy Staudt
Written by: Nancy C. Staudt[*] René Lindstaedt and Jason O’Connor ABSTRACT This article provides a new understanding of the Court-Congress dynamic. It responds to an important literature that for several decades now has misconstrued inter- branch relations as fraught with antagonism, hostility, and distrust. This unfriendly dynamic, it is argued, is evidenced by the repeated congressional overrides of Supreme...

Enhanced opportunities to appeal collection actions

Burton J. Haynes
As all of us who represent taxpayers before the IRS Collection Division know only too well, the Revenue Officer handling a particular client's case may not agree with our ever so reasonable suggestions about what should be done. In these situations, thanks to the IRS Restructuring and Reform Act of 1998, we now have greatly expanded rights to bypass the Revenue Officer and pursue an independent administrative appeal....

Is There a Gender Gap in Fiscal Political Preferences?

Edward Mccaffery
Written by: R. Michael Alvarez and Edward J. McCaffery Abstract This paper examines the relationship between attitudes on potential uses of the budget surplus and gender. Survey results show relatively weak support overall for using a projected surplus to reduce taxes, with respondents much likelier to prefer increased social spending on education or social security. There is a significant gender gap with men being...
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