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This article is based in part on the author’s U.S. Branch Report for Subject I of the 2003 Annual Congress of the International Fiscal Association, to be held next year in Sydney, Australia (forthcoming in Cahiers de droit fiscal international, 2003). He would like to thank Emil Sunley for his helpful comments on that earlier version, and Steve Bank, Michael Barr, David Bradford, Michael Graetz, and David Hasen for comments on this version. Special thanks are due to Yoram Keinan for his meticulous work on the EU regimes (see Appendix). All errors are the author’s. In this report, Prof. Avi-Yonah critiques the proposal to exempt dividends, either as a way to revive the economy or the stock market or as a way of achieving corporate-shareholder tax integration. Any efficiency gains from such integration may be more than offset by efficiency losses when the international aspects of the proposal are considered.


This article was republished at: Avi-Yonah, Reuven S. "Back to the 1930s? The Shaky Case for Exempting Dividends." Tax Notes Int'l 29, no. 1 (2003): 91-100. Reprinted with the permission of Tax Analysts.