The Global Market for Tax and Legal Rules

The canonical literature in law and economics argues that tax laws are more efficient than other areas of law (such as private law) in redistributing income. Focusing on two basic features of globalization—marketization of the state-constituent relationship and the fragmentation of sovereignty—the Article challenges this conventional wisdom. In the globalized economy, (some) people and businesses can pick and choose the laws applicable to their activities: they can reside in one jurisdiction, do business in another, register their IP in a third, invest under the rules of a fourth, and pay taxes, if any, in a fifth. Thus, in determining which rule is a better platform for efficient redistribution, states should look beyond their domestic dynamics and respond to the elasticity of taxpayers’ choices among jurisdictions. Tax rules, with the many opportunities they offer to (particularly well-off) taxpayers to opt out of the taxing jurisdiction, lose their a priori advantage over nontax rules as a framework of redistribution

Tax Treaties as a Network Product

The copiousness of tax treaties is often presented as proof, not only of their success but also of their desirability. In focusing on alleviating double taxation by allocating tax revenues, however, the treaties project is a missed opportunity. This article explains that an international tax standard is a network product and uses network theory to explore the potential advantages and drawbacks of the tax treaty network in entrenching such a standard. Networks facilitate stability and self-enforcement. By joining (and remaining in) a network, users benefit from the compatibility with other users; this, in turn, incentivizes new users to join and current users to remain, even in the absence of an enforcement mechanism. These advantages are not, however, without costs. Similar to other types of networks, the tax treaties network is locked into a suboptimal standard, which leaves unattended points of friction between jurisdictions as well as allows the network initiators (i.e., developed countries) to disproportionately benefit from the network at the expense of other users (i.e., developing countries) and, potentially, of taxpayers

Tax Treaties as a Network Product

The copiousness of tax treaties is often presented as proof, not only of their success but also of their desirability. In focusing on alleviating double taxation by allocating tax revenues, however, the treaties project is a missed opportunity. This article explains that an international tax standard is a network product and uses network theory to explore the potential advantages and drawbacks of the tax treaty network in entrenching such a standard. Networks facilitate stability and self-enforcement. By joining (and remaining in) a network, users benefit from the compatibility with other users; this, in turn, incentivizes new users to join and current users to remain, even in the absence of an enforcement mechanism. These advantages are not, however, without costs. Similar to other types of networks, the tax treaties network is locked into a suboptimal standard, which leaves unattended points of friction between jurisdictions as well as allows the network initiators (i.e., developed countries) to disproportionately benefit from the network at the expense of other users (i.e., developing countries) and, potentially, of taxpayers

State Inc.

The central objective of this paper is to put the marketization of the state debate into context, both on the descriptive level and on the normative level, by viewing it through the prisms of the ideal types of interaction between states and individuals, and against the background of global competition. At the outset of the paper, we begin by presenting various manifestations of citizenship for sale and the marketization of the state-individual interaction. We then turn to portray two ideal types of state-individual interactions, which we termed the democratic model and the consumerist model, and depicted the erosion of the state-market dichotomy as a shift from the democratic to the consumerist ideal type. But this, we claim, is only part of the story: for, when global competition is taken into account these two ideal types no longer serve as discrete end points on the spectrum. Rather, they become inherently interconnected, and the infiltration of market logic into the state-individual interaction becomes inevitable. In a world in which the state is forced to compete for residents and resources, its position as a market player inevitably infiltrates into its interaction with individuals, and defines its political realm. The political realm, in other words, is constituted by the market, and cannot operate in a manner that is detached from consumerist logic

State Inc.

The central objective of this paper is to put the marketization of the state debate into context, both on the descriptive level and on the normative level, by viewing it through the prisms of the ideal types of interaction between states and individuals, and against the background of global competition. At the outset of the paper, we begin by presenting various manifestations of citizenship for sale and the marketization of the state-individual interaction. We then turn to portray two ideal types of state-individual interactions, which we termed the democratic model and the consumerist model, and depicted the erosion of the state-market dichotomy as a shift from the democratic to the consumerist ideal type. But this, we claim, is only part of the story: for, when global competition is taken into account these two ideal types no longer serve as discrete end points on the spectrum. Rather, they become inherently interconnected, and the infiltration of market logic into the state-individual interaction becomes inevitable. In a world in which the state is forced to compete for residents and resources, its position as a market player inevitably infiltrates into its interaction with individuals, and defines its political realm. The political realm, in other words, is constituted by the market, and cannot operate in a manner that is detached from consumerist logic

Questioning Market Aversion in Gender Equality Strategies: Designing Legal Mechanisms for the Promotion of Gender Equality in the Family and the Market

This Article suggests that tax and welfare policies that promote gender equality require creative thinking about the design of social mechanisms for the promotion of women. It offers a framework for expanding the institutional imagination in order to recalibrate welfare state reforms to promote women. In particular, we advocate the creative use of legal tools and doctrine to dismantle existing dichotomies between private and public, understand the various goals different mechanisms can serve and reassemble them to promote different mixes of normative goals. We propose doing so by looking simultaneously at two fields of redistribution: welfare state benefits and services on the one hand and income taxation on the other. These two fields serve similar goals and accordingly, we argue, should be analyzed in light of the same policy considerations and normative underpinnings. Since the goals of these two fields are comparable, the mechanisms that both fields use should also be compatible

Questioning Market Aversion in Gender Equality Strategies: Designing Legal Mechanisms for the Promotion of Gender Equality in the Family and the Market

This Article suggests that tax and welfare policies that promote gender equality require creative thinking about the design of social mechanisms for the promotion of women. It offers a framework for expanding the institutional imagination in order to recalibrate welfare state reforms to promote women. In particular, we advocate the creative use of legal tools and doctrine to dismantle existing dichotomies between private and public, understand the various goals different mechanisms can serve and reassemble them to promote different mixes of normative goals. We propose doing so by looking simultaneously at two fields of redistribution: welfare state benefits and services on the one hand and income taxation on the other. These two fields serve similar goals and accordingly, we argue, should be analyzed in light of the same policy considerations and normative underpinnings. Since the goals of these two fields are comparable, the mechanisms that both fields use should also be compatible

The Currency of Taxation

In its canonical rendition, income taxation aspires to achieve the sometimes-conflicting goals of maximizing social welfare and promoting distributive justice. We do not usually think about tax law as participating in the formation of our identities, shaping the ways in which we perceive ourselves, or influencing how we interact with others. I argue, however, that income tax is a powerful social instrument that plays an important role in the construction of our identities and interactions with one another. Income tax law, I claim, simultaneously reflects and shapes our identities, self-perceptions, and social interactions in various contexts, including within our families and communities, as well as our sense of social solidarity and participation in political institutions