Thursday, April 6, 2023
Yariv Brauner (Florida; Google Scholar) presents Taxation of Information and the Data Revolution at Florida today as part of a celebration of his academic contribution and appointment to the Hugh Culverhouse Eminent Scholar Chair in Taxation hosted by Charlene Luke:
One cannot escape the data revolution; it is all around us. Advancements in information collection, collation, and analysis are fundamentally altering our world. They are transforming the economy, society, and even ourselves. These dramatic, fast-paced changes place demands on the law and even challenge the role of law in society, resulting in a thriving academic debate. Tax scholarship has yet to join this discourse. This article begins to fill the void, explaining the impediment and exploring realistic policy options.
The first and most dramatic contribution of this article is its conclusion that existing and universal income tax rules are inherently incompatible with an economy in which information plays a significant and growing role. This article contends that income taxation is incapable of effectively taxing information. It goes on to argue that this inability necessitates immediate reform, and it offers three viable paths to such reform: consumption taxation, data taxes, and formulary taxation.
Finally, this article concludes that formulary taxation is currently the most desirable and plausible path to effective reform, owing to its promise to best stabilize and maintain the legitimacy of the international tax regime. Formulary taxation can be incorporated into the existing regime most naturally, and its use of multi-factor formulae gives it the best chances of legitimacy because such reform does not pre-determine winners and losers.
Commentator: Kim Brooks (Provost, Dalhousie; Google Scholar)