Tax Papers At Junior Faculty Forum At Richmond

Tax presentations at this week's Junior Faculty Forum at Richmond (program):

Assaf Harpaz (Drexel; Google Scholar), International Tax Reform: Challenges to Multilateral Cooperation, 44 U. Pa. J. Int'l L. __ (2023):

In 2021, the OECD proposed new rules for the cross-border taxation of multinational corporations. The proposed rules set forth the most significant reform to international tax rules in several decades. They follow approximately a decade of multilateral negotiation led by the OECD and drafted by a broader Inclusive Framework of over 140 countries. The goal of this Article is to highlight the importance of multilateral cooperation and illuminate the obstacles to implementing international tax reform. It argues that the new international tax framework requires unprecedented multilateral cooperation to reallocate taxing rights and limit profit shifting. But such ambitious cooperation may be more than countries can accomplish. The new rules are largely an outcome of political compromises rather than a principled approach to tax policy. They infringe on tax sovereignty, limit tax competition, and undermine the economic interests of the world’s developing countries.

The Article begins by outlining the OECD’s two-pillar approach for addressing the tax challenges of digitalization and profit shifting. It examines the OECD’s role in designing international tax rules and explores the obstacles to implementing the OECD’s reform. The Article then assesses the anticipated winners and losers from the reform and considers the new approach as a political compromise. It evaluates limitations on tax sovereignty and competition and reflects on the involvement of developing countries in the policymaking process.

Blaine Saito (Northeastern; Google Scholar), Public Tax Actors: 

The U.S. federal tax system is failing to promote values of democracy and egalitarianism. Powerful interests like the wealthy and multinational entities (MNEs) have bent the tax system to their whim. Meanwhile disadvantaged groups and the working class have little voice or input in the development of tax policy, even as taxation serves as the foundation of the state and touches almost every aspect of people’s lives. The result then is a system that further entrenches these interests.

This article seeks to intervene to restore democratic values to taxation. It advances the idea of democratic equality as a guiding value for the tax system, as it encompasses many of the various concepts scholars involved in the intersection of tax and democracy have raised. The idea is that taxation should aid in providing people with access to capabilities to participate in all aspects of civil society and that in developing policies everyone should be treated with equal regard. Under its current structure, the tax system fails.

This failure is particularly noticeable in the developing Treasury Regulations and guidance. Not only are these interests the only ones who comment, but many of them have access to Treasury and the IRS prior to the development of a Notice of Proposed Rulemaking. Many proposals to fix this problem lack regard for democratic values. Furthermore, the system is captured both in traditional and nontraditional ways such as information capture, whereby only certain voices produce reams of information for regulatory decisions, and cultural capture, whereby the people working are more culturally aligned and interact more regularly with people who represent already well-off interests.

The intervention proposed is to create a grant program to develop tax capacity in a broad range of civil society organizations. Drawing from parallels in state utility rate hearings and the superfund, which provide similar types of payments, these grants would go to groups ranging from local organizations to large national organizations. These grants could then help connect new constituencies to the development of Treasury Regulations. Additionally, Treasury and the IRS should seek to engage all grant recipients actively, seeking input not only through comments, but even during the development of regulatory priorities. Such a program could help advance democratic equality in the tax system as well as improve the overall outcomes of taxation.

Danny Schaffa (Richmond), Measuring Tax Complexity