Monday, July 04, 2005

Recent Papers: The Four Ages of U.S. International Taxation and Criteria of International Tax Policy

In a recent stroll through SSRN(*), I found two interesting papers written by US scholars. The first one by Reuven S. Avi-Yonah (University of Michigan) analyses four periods of the history of U.S. international taxation, from the adoption of the Foreign Tax Credit in 1918 to the current times. From a different perspective, the paper of Herbert I. Lazerow (University of San Diego) deals with the issue of whether we can transpose certain criteria for evaluating income tax changes to the field of international tax. Find below the abstracts of the papers:

Reuven S. Avi-Yonah - All of a Piece Throughout: The Four Ages of U.S. International Taxation
This paper divides up the history of U.S. international taxation into four periods, on the basis of what was the basic theoretical principle underlying the major legislative enactments made in each period. The first period lasted from the adoption of the Foreign Tax Credit in 1918 to the end of the Eisenhower administration, and was dominated by the concept of the right to tax as flowing from benefits conferred by the taxing state. The second period lasted from 1960 until the end of the Carter administration and was dominated by the concept of capital export neutrality and an emphasis on residence-based taxation. The third period lasted from 1981 until 1997, and was driven by the need to preserve the competitiveness of the U.S. economy in an increasingly globalized marketplace, resulting in an emphasis on source-based taxation, albeit with significant exceptions. The last period began with the decision to cooperate with the OECD's harmful tax competition project in 1998, and is marked by a continuous attempt to coordinate residence and source taxation to prevent both double taxation and double non-taxation.

Herbert I. Lazerow - Criteria of International Tax Policy
Professor Joseph Sneed a generation ago developed seven macro-criteria for evaluating income tax changes. This paper asks whether those criteria are useful in the general field of international income tax. I conclude that Adequacy, Practicality, Equity, and Free Market Compatibility are important internationally, as is a new criterion, Balance-of-payments Enhancement, while the criteria of Reduced Economic Inequality, Stability and Political Order do not figure prominently in international tax.

(*) Social Science Research Network (SSRN) is a network devoted to the rapid worldwide dissemination of social science research. The SSRN eLibrary consists of two parts: an Abstract Database containing abstracts on over 95,200 scholarly working papers and forthcoming papers and an Electronic Paper Collection currently containing over 68,600 downloadable full text documents in Adobe Acrobat pdf format. The eLibrary also includes the research papers of a number of Fee Based Partner Publications.


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