Reuven Avi-Yonah

Reuven S. Avi-Yonah is the Irwin I. Cohn Professor of Law and director of the International Tax LL.M. Program at the University of Michigan.

Recent Articles

The Tax Act Actually Promotes Off-Shore Tax Tricks

The Tax Act creates additional incentives to shift income offshore for purposes of tax avoidance, and what is worse, it creates incentives to shift actual jobs.

AP Photo/Marcio Jose Sanchez The exterior of Apple headquarters in Cupertino, California This article appears in the Summer 2018 issue of The American Prospect magazine. Subscribe here . T he 2017 Republican Tax Act, as passed by Congress and signed into law on December 22, 2017, represents the most far-reaching reform of the U.S. international tax rules since 1962. Most importantly, for the first time since the income tax was enacted in 1913, it changes the rule that U.S. resident taxpayers have to pay tax on all income “from whatever source derived.” Under the Tax Act, dividends paid to U.S. corporate shareholders from their foreign subsidiaries are exempt from U.S. tax. That remains true even if the dividend was paid out of earnings that were not subject to foreign tax in the country where the subsidiary is incorporated. Despite claims that tax reform would simplify the tax code or produce more domestic investment, this provision is an open invitation to U.S. multinationals to...

The Shame of Tax Havens

Taxes evaded in offshore havens could fund a lot of public services.  

Press Association via AP Images
Press Association via AP Images Action Aid protesters lampoon the role of Barclays Bank in helping clients set up offshore tax havens. This book review appears in the Fall 2015 issue of The American Prospect magazine. Subscribe here . The Hidden Wealth of Nations: The Scourge of Tax Havens By Gabriel Zucman 200 pp. University of Chicago Press $20.00 T ax havens cost the world’s governments hundreds of billions of dollars a year, promote corruption, and undermine the rule of law. They are part of a larger worrisome pattern in which the world’s corporations outrun the governing capacity of states. A tax haven is a nation that refuses to cooperate with major countries in order to lure multinational corporations and investors to nominally book transactions in its locale. These transactions can be outright illegal, or borderline, but beyond the reach of legitimate tax authorities. Gabriel Zucman, a young French economist now at the London School of Economics and the University of...

World-Class Tax Evasion

The current age of globalization can be distinguished from the previous one (1870-1914) by the much higher mobility of capital than labor. In the previous age, before immigration restrictions, labor was at least as mobile as capital. Today's increased capital mobility reflects both technological changes (the ability to move funds electronically) and policy changes (the relaxation of exchange controls and liberalization of trade rules). The mobility of capital in turn has led to tax competition, especially for foreign investment. Sovereign countries lower tax rates on income earned by foreigners within their borders in order to attract both portfolio and direct investment. Tax competition, in turn, threatens to undermine the individual and corporate income taxes that traditionally have been the main source of revenue for modern welfare states. The developed countries responded, first by shifting the tax burden from (mobile) capital to (less mobile) labor, and second, when further...