Papers & Reports

This article explores how the advent of global minimum taxes transforms the foundational assumptions of international corporate tax policy, shifting the focus from whether corporate income will be taxed to which governments will collect the tax, and at whose expense. Historically, the possibility that a corporation might avoid income taxation altogether was central to tax planning and policy concerns. In contrast, the current global tax landscape, driven by frameworks like Pillar Two, increasingly ensures that corporate profits will be taxed somewhere, if not immediately, then eventually. This reorientation elevates questions of cross-border equity and wealth distribution, bringing to the forefront the role of corporate taxation as a mechanism for international redistribution. The article argues that under this new paradigm, corporate income taxes should be understood as tools for reallocating global wealth among nations, thereby requiring normative analysis that explicitly accounts for international distributive justice and fiscal sovereignty. 

This article examines the IMF’s evolving analysis of economic spillovers since 2011, emphasizing why international corporate taxation has become a key concern. Initially focused on the external effects of the five largest economies—China, the Euro Area, Japan, the UK, and the US—the IMF’s spillover reports later adopted a thematic lens to highlight issues with cross-border significance. The prominence of international taxation in these reports stems from its implications for macroeconomic stability and the rising global attention on multinational tax avoidance. The article underscores how these concerns have been elevated in multilateral policy dialogue to promote coordinated international responses.

This article analyzes the unequal inflationary impact of U.S. tariffs across socio-demographic groups using a structural vector autoregression model that accounts for key macroeconomic variables including oil prices, output growth, policy rates, and exchange rates. It estimates an aggregate tariff pass-through to inflation of 0.53, with tariffs contributing to 18% of overall inflation volatility. Disaggregated findings reveal that while lower-income groups face a smaller pass-through, they endure greater volatility in inflation due to tariffs. Among occupations, armed forces personnel face the highest pass-through, and students the lowest. By race, Native Americans are most affected, while unclassified racial groups experience the least impact. The lowest pass-through occurs among individuals aged 75 and older, followed by those under 25. This article concludes with targeted policy recommendations aimed at reducing the disproportionate inflationary burden tariffs impose on vulnerable demographic groups.

This article argues that the global minimum tax, while designed to curb tax competition over profits, may inadvertently intensify competition for real investment. By imposing a floor on effective tax rates, jurisdictions can no longer attract multinationals through profit shifting alone, prompting them to compete more aggressively on non-tax factors such as subsidies, regulatory concessions, or infrastructure support to attract real business activity. This article offers the first formal analysis of this trade-off, revealing counterintuitive consequences and proposing reforms to the global minimum tax that address this unintended dynamic. In doing so, it sheds light on broader tensions in international tax policy and legal theory, particularly regarding the shifting boundaries between legitimate competition and harmful tax practices.

This paper analyzes the America First Trade Policy introduced under President Trump as a fundamental shift in U.S. trade strategy, emphasizing the use of tariffs to reduce trade deficits and address national security concerns. Drawing on natural experiments such as Section 232 and 301 tariffs and Brexit, the paper shows that conventional trade theory—which predicted inefficiencies and economic losses—was vindicated by these outcomes, casting doubt on the policy’s likely success. It further draws a historical parallel with the Nixon Measures of 1971, arguing that, like then, uncoordinated and abrupt departures from established economic norms are likely to trigger unpredictable systemic consequences, including disruptions in global finance, supply chain shifts, and geopolitical instability. The paper concludes that the America First Trade Policy is undermined by internal contradictions within populist trade economics, and poses significant risks of unintended, destabilizing effects on the global economic order.

This article explores the underexamined area of sovereign tax immunity—the federal income tax treatment of foreign governments investing in the United States—arguing that it has significant potential as a national security tool. Amid growing calls to reconceptualize taxation through a national security lens, the article critiques recent legislative proposals that seek to modify sovereign tax immunity without fully considering their broader implications. Through an interdisciplinary analysis spanning tax law, national security policy, and international law, the article warns that altering the U.S. approach to sovereign tax immunity risks conflicting with established interpretations of customary international law, potentially undermining the legitimacy of international norms, harming U.S. diplomatic relationships, and provoking retaliatory actions. While recognizing the strategic utility of sovereign tax immunity, the article emphasizes that changes must be carefully crafted to avoid unintended diplomatic and legal consequences. It concludes by proposing a legislative framework for leveraging sovereign tax immunity in a way that aligns with U.S. foreign policy and national security interests while preserving international legal coherence and credibility.

This article investigates how the EU prohibition of State aid affects the tax allocation of multinational profits, focusing on the application of the arm’s length standard across EU Member States. While designed to ensure market-based transfer pricing, the standard can unintentionally result in prohibited State aid, both through its regulatory structure and enforcement practices. These concerns have intensified in light of recent EU State aid cases involving individual tax rulings granted to major multinationals, which were reviewed by the European Court of Justice. This contribution offers a systematic analysis of the broader tensions between transfer pricing regulations and the EU State aid framework, using the latest jurisprudence as a basis. The article first dissects the objectives and internal contradictions of the arm’s length standard to construct a reference point for identifying selective advantages. It then explores how deviations from this standard—whether through special regimes or individual rulings—may constitute unlawful State aid under EU law, raising questions about the compatibility of transfer pricing enforcement with internal market rules.

This paper analyzes the implications of Donald Trump’s proposed 25% across-the-board tariff on U.S. imports, including those from Canada, framing it as a fundamental break from the post-WWII U.S.-led trade system. While past retaliatory tariffs—such as those in response to Trump’s steel and aluminum duties—were effective in prompting reversals, the current geopolitical and ideological climate suggests retaliation may no longer yield the same results. A new populist trade narrative in the U.S., centered on deindustrialization, national security, and anti-globalization sentiment, particularly with regard to China, indicates that protectionism may be entrenched for the long term. Given this shift and the potential for a prolonged disruption to North American trade, the paper proposes a resilient Canadian policy response modeled on past crisis management strategies and the long-term success of firms like Lincoln Electric. Key recommendations include: strengthening the social safety net, especially in anticipation of AI-driven labor disruptions; investing in modern infrastructure; accelerating innovation in the intangibles economy; and supporting domestic start-ups by redirecting subsidies away from foreign multinationals. This approach aims to reduce vulnerability to U.S. trade shocks and build a self-sustaining, innovation-driven Canadian economy.

This article examines three recent court decisions—Toulouse, Christensen, and Bruyea—that address whether U.S. tax treaties provide an independent basis for claiming a foreign tax credit against the Net Investment Income Tax (NIIT), which is not creditable under the Internal Revenue Code. In Toulouse, the Tax Court denied a treaty-based credit, while in Christensen, the Court of Federal Claims reached the opposite conclusion, distinguishing Toulouse. The Bruyea decision went further, broadly permitting the credit and, crucially, addressing whether the NIIT constitutes a treaty override. The court's reasoning in Bruyea raises the broader and potentially far-reaching implication that no 21st-century U.S. tax legislation—such as the BEAT (Base Erosion and Anti-Abuse Tax)—overrides U.S. treaty obligations. Given the substantial revenue consequences of holding that BEAT and similar provisions may not apply to treaty residents, the article argues that Congress must clarify the relationship between newer tax laws and existing treaty commitments in upcoming tax legislation.

This paper analyzes the economic impact of trade frictions between the U.S., Canada, Mexico, and China using a computable general equilibrium (CGE) model that incorporates Armington elasticity and the Eaton-Kortum approach. By simulating various tariff scenarios and retaliatory measures, the study finds that tariff increases lead to GDP declines of up to 16.5% for Canada, 6.6% for Mexico, 0.3% for China, and 0.19% for the U.S., while benefiting major trading partners of these nations. The results show that retaliatory tariffs do not significantly mitigate economic losses for Mexico, Canada, or China. Additionally, the study challenges the assumption that trade frictions promote domestic production in the U.S., revealing that broad-based tariffs on Canada, Mexico, and China could instead reduce U.S. import and export trade flows, prompting global trade to bypass the U.S. altogether. These findings underscore the unintended consequences of protectionist policies and highlight the shifting dynamics of global trade.