Wednesday, September 28, 2005
Allison Christians (Wisconsin) presents Seventy Years is Enough: The Case for Aboloshing Tax Treaties in the United States at the University of Toronto today at 12:10 pm - 1:45 pm as part of the James Hausman Tax Law and Policy Workshop Series. Here is the abstract:
Treaties have been employed consistently over seven decades as the mechanism of choice for addressing matters of international income taxation, even though the past few decades have seen changes in the global commercial environment that make these agreements seem a relic of an earlier, less hurried, and more insular age. Yet some mechanism is arguably needed to achieve the international tax coordination currently addressed in tax treaties. One obvious alternative has always been the unilateral codification of treaty principles, either universally or in legislation conditioned on reciprocal treatment by foreign countries. For reasons perhaps less compelling today than when first considered, this alternative was rejected in favor of the bilateral treaty approach. Another alternative involves the use of statutes referred to as “executive agreements”—international compacts that function as treaties but that bypass the constitutional treaty-making procedure. Executive agreements have seen a marked rise in use in the international coordination of commercial matters, including tax matters, but generally have not been employed in the context of income taxation. This article explores why this has been so, discusses some of the reasons why tax treaties are a sub-optimal approach for global tax coordination today, and proposes that for reasons including the easing of administrative hurdles and the pursuit of more efficient and complete global coordination of tax matters, the historical framework should give way to the adoption of legislation in the form of both unilateral statutes, whether universal or reciprocal, and executive agreements.