Wednesday, October 27, 2004
Paul McDaniel (Florida) delivered the Davd R. Tillinghast Lecture on International Taxation at NYU, Trade Agreements and Income Taxation: Interactions, Conflicts, and Resolutions, 57 Tax L. Rev. 275 (2004). Here is the Conclusion:
This Article analyzes the WTO decisions in the FSC/ETI cases from three perspectives. From the legal/structural perspective, it argues that the decisions against the United States under the terms of the SCM agreements were legally correct and were structurally necessary to prevent countries from avoiding the strictures of SCM simply by drafting their export subsidies as tax measures rather than as direct spending provisions. From an economic perspective, the decisions also were sound. They increased both U.S. and global welfare. Finally, the Article argues that U.S. sovereignty concerns are adequately protected by existing U.S. rules governing treaties and concludes that the political argument justifying the FSC/ETI regimes on an argument that the U.S. international tax system puts U.S. multinationals at a competitive disadvantage vis-à-vis multinationals from exemption countries has no rational basis.