Document Type

Article

Publication Date

2025

Abstract

In this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah explains the three primary goals of taxation — revenue, redistribution, and regulation — and shows how VAT, the individual tax, and the corporate tax each uniquely match one of the goals. On January 20 President Trump signed two executive orders related to international taxation, marking a sharp policy shift from the prior administration. The first renounced any prior U.S. commitments to the OECD/inclusive framework global anti-base-erosion (GLOBE) project, stating that “the Global Tax Deal has no force or effect in the United States.” The order argued that the GLOBE project infringed on U.S. tax sovereignty and disadvantaged U.S. businesses. The order also directed the Treasury Department, in coordination with the U.S. Trade Representative, to investigate foreign tax policies that are “extraterritorial or disproportionately affect American companies.” The second order was more specific, threatening to invoke section 891 against “discriminatory or extraterritorial” foreign taxes.

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Reprinted with the permission of Tax Analysts

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