Response to Comments on Fixing U.S. International Taxation

Abstract

In responding to the thoughtful comments offered by Stephen Shay, Yariv Brauner, and Fadi Shaheen, my first priority is to thank both of them and the editors of the Jerusalem Review of Legal Studies. The book symposium is a great format, offering the focused attention that authors more often want than get, and here its potential has been richly fulfilled. Each commentator either disagrees with, or at least significantly augments, certain aspects of the discussion in Fixing U.S. International Taxation. For example, Shay questions my policy suggestions, based on the importance of existing tax treaties and the difficulty of revising them. Brauner suggests that I am too critical of formulary apportionment, and that ‘‘correctness’’ in sourcing income is even less promising and useful as an evaluative perspective than I suggest. Shaheen augments my analysis of how home country deferral for foreign source income interacts with foreign tax creditability, by more fully addressing the scenario in which higher after-foreign-tax returns are persistently available for income that is reported as arising in low-tax than in high-tax countries. Fundamentally, however, all three commentators appear not just to share my dissatisfaction with the ‘‘quality and scope of U.S. international tax policy discussion,’’ but to ascribe some value and interest to my proposed analytical framework Even the most critical comments in the three reviews can be viewed either as friendly amendments or as suggesting that countervailing considerations limit the practical feasibility of adjusting the U.S. international tax rules in response to analytically correct points that I make. Given the limited scope of disagreement, along with the importance, in my view, of revamping the dominant intellectual framework for international tax policy analysis, this response will mainly focus on summarizing the book’s motivation and chief aims.