American Servicemembers\u27 Protection Act of 2002

On July 1, 2002, the Rome Statute of the International Criminal Court ( ICC ) entered into force, establishing the first permanent international criminal tribunal. Although seventy-six countries had ratified the Rome Statute by that date, the United States was not among them. Instead, Congress responded to the creation of the ICC by passing a bill sponsored by House Majority Whip Tom DeLay (R-Tex.) that Republican legislators had been trying to get through the House and Senate for several years. On August 2, 2002, the American Servicemembers\u27 Protection Act of 2002 ( ASPA ) became law. The Act was designed to prevent United States participation in the ICC and to discourage other members of the international community from participating in the Court or assisting it in any way

The Luxembourg Effect: Patent Boxes and the Limits of International Cooperation

This article uses patent boxes, which reduce taxes on income from patents and other IP assets, to illustrate the fact that the jurisprudence of the European Court of Justice has a longer reach than has previously been recognized. This article argues that, along with having effects within the European Union, the ECJ’s decisions can also have effects on countries outside of the EU. In the direct tax context, the ECJ’s jurisprudence has hampered the ability of both EU and non-EU countries to police international tax avoidance. In 2015, the Organisation for Economic Co-operation and Development (OECD) proposed restrictions on patent boxes that were designed to limit income-shifting opportunities. As this article points out, these restrictions are weaker than they could have been due to EU legal constraints. Although the majority of countries involved in the OECD’s work on patent boxes were not EU Member States, they were all constrained by the ECJ’s permissive definition of tax avoidance. This article argues that the tax jurisprudence of the ECJ placed downward pressure on international tax avoidance standards and that this in turn shows that countries both within and without the European Union are losing the ability to prevent international tax avoidance to the degree that would have been possible in the absence of the ECJ’s tax jurisprudence. This article refers to this downward pressure as the Luxembourg effect. This effect is even more important in the context of the United Kingdom’s “Brexit” vote to leave the European Union since it highlights that a vote to be free of EU law may not have the desired effect if even non-EU countries are subject to the consequences of the ECJ’s jurisprudence

The Hidden Limits of the Charitable Deduction: An Introduction to Hypersalience

Behavioral economics introduced the concept of salience to law and economics. In the area of tax policy, salience refers to the prominence of taxes in the minds of taxpayers. This article complicates the literature on salience and taxation by introducing the concept of “hypersalience,” which is in many ways the mirror image of hidden taxation. While a revenue-raising tax provision must be hidden for taxpayers to underestimate their tax bill, a revenue-reducing tax provision – such as a deduction, exclusion, or credit – must be more than fully salient for taxpayers to underestimate their tax bill. In other words, the provision itself must be salient, but the limits of that provision must be hidden, or low-salience. This article uses the charitable deduction to illustrate the concept of hypersalience. While the charitable deduction is extremely salient to many taxpayers, not all taxpayers who believe that they will benefit from the deduction are correct. In fact, even though many Americans are aware that donations are tax-deductible, fewer than 50% of taxpayers can take advantage of the charitable deduction. The concept of hypersalience is important for several reasons. First, it highlights the role of non-governmental actors in fostering taxpayer ignorance about the tax system. This article suggests that the hypersalience of the charitable deduction is at least partly due to marketing efforts by private third-party beneficiaries. Second, it complicates economic models, such as those of price elasticity of giving, and suggests that certain tax provisions may be more treasury efficient than previously thought. Third, it may lead to increased consumption of certain goods. This article concludes that, although hypersalience may mean that the government is able to induce greater behavioral distortions without losing revenue, the costs of this phenomenon outweigh its benefits. Because hypersalience is due to taxpayer misunderstanding and the actions of third-party beneficiaries acting in their own interest, this article proposes several possible avenues for curtailing this phenomenon

Lost in Translation: Excess Returns and the Search for Substantial Activities

Since 2010, international tax policymakers have proposed a variety of minimum taxes on excess returns, but every proposal has defined excess returns differently. This Article asks what excess returns are supposed to represent—and concludes that the answer is very different from what policymakers have suggested. The trend of targeting so-called excess returns started in 2010 with a one-page idea in the Obama Treasury’s proposed budget. Over the next decade, this idea became the basis for one of the major inter¬national tax reform provisions in the 2017 U.S. tax reform and is now being considered as part of Pillar Two of the OECD’s current digital tax project. The idea in question is a minimum tax on foreign excess returns. Yet even though the general idea of a minimum tax on foreign excess returns has stayed the same across administrations and juris¬dictions, the specifics of this idea have changed with every iteration, and the proponents of this idea have justified each version differently and defined its various elements differently. This Article tells the story of the many recent proposals for min¬imum taxes on foreign excess returns, starting with the Obama Trea¬sury’s brief proposal and ending with the OECD’s two-pillar solution to the challenges of the digital economy. This Article highlights the common threads that link all of these rules, and it also shows how dif¬ferently the drafters of each rule have understood the purpose and design of a minimum tax on foreign excess returns. This Article argues that, despite claims by the policymakers advocating for these minimum taxes, none of these taxes on excess returns is supported by the economic the¬ory of excess returns. Instead, policymakers are using the term “excess returns” to mean different things in the context of different proposals, and they are masking the policy choices they are making by using a term that appears to have support in the economic literature

Sovereignty, Integration and Tax Avoidance in the European Union: Striking the Proper Balance

As the need to raise revenue becomes more pressing and public opposition to tax avoidance increases, the European Court of Justice has made it more difficult for the twenty-seven Member States of the European Union to prevent tax avoidance and shape fiscal policy. This article introduces the new anti-avoidance doctrine of the European Court of Justice and analyzes it from the perspective of taxpayers, Member States and the European Union legal order as a whole. This doctrine is problematic becasue it has created a legislative vacuum in Europe. No European Union institution has the authority to regulate direct taxation without the unanimous support of all twenty-seven Member States. As the European Court of Justice strikes down Member State efforts to prevent tax avoidance, no institution can step in to replace these Member State provisions. Member States are thus losing sovereignty over policy tax avoidance, but no legislative move toward an integrated approach is possible without the support of Member States. This article proposes several solutions to the problems posed by the doctrine

Lost in Translation: Excess Returns and the Search for Substantial Activities

Since 2010, international tax policymakers have proposed a variety of minimum taxes on excess returns, but every proposal has defined excess returns differently. This Article asks what excess returns are supposed to represent—and concludes that the answer is very different from what policymakers have suggested. The trend of targeting so-called excess returns started in 2010 with a one-page idea in the Obama Treasury’s proposed budget. Over the next decade, this idea became the basis for one of the major inter¬national tax reform provisions in the 2017 U.S. tax reform and is now being considered as part of Pillar Two of the OECD’s current digital tax project. The idea in question is a minimum tax on foreign excess returns. Yet even though the general idea of a minimum tax on foreign excess returns has stayed the same across administrations and juris¬dictions, the specifics of this idea have changed with every iteration, and the proponents of this idea have justified each version differently and defined its various elements differently. This Article tells the story of the many recent proposals for min¬imum taxes on foreign excess returns, starting with the Obama Trea¬sury’s brief proposal and ending with the OECD’s two-pillar solution to the challenges of the digital economy. This Article highlights the common threads that link all of these rules, and it also shows how dif¬ferently the drafters of each rule have understood the purpose and design of a minimum tax on foreign excess returns. This Article argues that, despite claims by the policymakers advocating for these minimum taxes, none of these taxes on excess returns is supported by the economic the¬ory of excess returns. Instead, policymakers are using the term “excess returns” to mean different things in the context of different proposals, and they are masking the policy choices they are making by using a term that appears to have support in the economic literature

Cured Meat and Idaho Potatoes: A Comparative Analysis of European and American Protection and Enforcement of Geographic Indications of Foodstuffs

Geographic indications, as defined by the Agreement on Trade-Related Aspects of Intellectual Property Rights ( TRIPS Agreement ), are indications which identify a good as originating in the territory of a member or region or locality in that territory where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. While the general concept of protecting geographically-significant products from competition has existed for centuries, the protection provided to geographic indications varies significantly, both between countries and according to the product being protected. Since the protection of foodstuffs in both Europe and America is a less settled area of law than the protection of wines and spirits, this Note will explore the different protection and enforcement of geographic indications of foodstuffs in the European Union and the United States