Wednesday, October 7, 2015

Taxation and Citizenship Workshop at U Michigan

This week at the University of Michigan Law School, Reuven Avi-Yonah and I are co-hosting an academic workshop on the topic of citizenship and taxation. Because it is a workshop, most of the papers are still in draft and won't be publicly available for some time. However, we will be doing a writeup of the proceedings and I'll post that when it is available, and of course I'll post when the symposium volume is published. Here are the speakers and topics:

  • Reuven Avi-Yonah (Michigan) Constructive Unilateralism : US Leadership and International Taxation 
  • Allison Christians (McGill) Uncle Sam Wants … Who? 
  • Wei Cui (UBC) Residence and Source as Interconnected Concepts 
  • Tessa Davis (South Carolina) Of Tax Crimes and “Bad” Citizens: How the Role of Tax Law in Making a Citizen Informs Tax Law and Policy 
  • Jane Frecknall-Hughes (Hull) Tax and the citizen: the philosophical underpinnings 
  • Christine Harlen (Leeds) Making America Exceptional: Perfectionist Civic Republicanism and the Taxation of Americans Abroad in the Progressive Era, 1890-1920 
  • Michael Kirsch (Notre Dame) The Taxation (or Non-Taxation) of Citizens’ Foreign Income: Distilling the Competing Normative Arguments 
  • Sagit Leviner (Ono) Citizenship Transcendent 
  • Patrick Martin (Procopio) Tax Simplification: The Need for Consistent Tax Treatment of All Individuals (Citizens, Lawful Permanent Residents, and Non-Citizens regardless of immigrant status) Residing Overseas, Including the Repeal of U.S. Citizenship Based Taxation 
  • Ruth Mason (Virginia) Citizenship Taxation 
  • Linneu Mello (Bichara) How the Brazilian Tax Authorities Control Information and What FATCA Has To Do With It 
  • Henry Ordower (St. Louis) Is the Expatriation Tax Constitutional? Mark to Market and the Macomber Conundrum 
  • Adam Rosenzweig (Washington St. Louis) Once a US Person, Always a US Person 
  • Daniel Shaviro (NYU) Taxing Potential Community Members’ Foreign Source Income 
  • Peter Spiro (Temple) Citizenship Overreach and the U.S. Tax Regime 
  • Saul Templeton (Calgary) Bill C-51, FATCA, and the End of Taxpayer Privacy 
  • Edward Zelinsky (Cardozo) The Problems of Defining Residence: The U.S. Experience
Student Panel

  • Montano Cabezas (Georgetown) Reasons for Citizenship-Based Taxation? 
  • Christine Kim (NYU) Considering “Citizenship Taxation” : In Defense of FATCA 
  • Gene Magidenko (UMich) – A Defense of Citizenship Taxation 
  • Gianluca Mazzoni (Brescia) The Interaction Between FATCA and Data Privacy 
  • Miguel Nicolas (UParis) FATCA and International Law 
The range of topics and viewpoints represented is encouraging and I look forward to the discussion.


  1. Looking forward to reading the papers when they're done, as well as what comes out of the Taxpayer's Rights conference in DC in November. Thank you for continued efforts!

  2. A basis of taxation is services in exchange. While people pay taxes it does not always mean they get services. However, it does mean that someone in their community in which they live get services. If you live in another country the US wants to tax you outside of the foreign earned income exclusion and tax credits allowed by tax treaty, yet for any US tax you pay none of it comes back to either yourself or anyone in your overseas community (services are provided by the country in which you live and to which you pay taxes). Therefore, such taxation by the US is inherently unfair and in contradiction to the founding principles of America which included 'no taxation without representation.' If you live overseas and don't get any services for your tax for yourself or anyone in your community then would you vote and approve of such taxation? Answer: no. Yet the laws make this assumption that it has been approved by yourself and those in your community.

    Restatement of the injustice of such taxation: Double Taxation Without Representation, Without Services, Without a Care by the US Government for your well being, and With Excessive Compliance Cost, and With Excessive Compliance Penalty is Tyranny.

  3. Reuven Avi Yonah's paper has already been published and I posted a link below. One issue I take with his paper is despite the title he in fact shows that "Constuctive Unilateralism" is at best successful less than 50% of the time. Not unsurprisingly he cites citizenship based taxation as an absolute failure of tax policy on the international level. However the example of "successful" unilateralism such as the Foreign Tax Credit and CFC's I personally don't really see as that successful. I am not sure the Foreign Tax Credit can be truly seen as a US origin idea perhaps in the sense the US set the ground work for it to be applied unilaterally(other countries had tax treaties long before the US had an income tax). On the subject of CFC's while other countries did adopt similar regimes after the US did I think it is quite evident that the as today in the year 2015 that in an economic sense CFC rules(differentiating passive vs active income) have become meaningless in the era of Apple, Google, Starbucks et all. I am not sure what harm at this point would be caused be just repealing CFC's altogether in that fact of Apple, Google, etc. I can't seem how it would make anything worse.

    In the whole scheme of things I wonder if many in the US are afraid of the implications of what Canadians call fiscal federalism. Basically the American governance system is based on the fact that the US federal gov't is more able to "collect" taxes than state governments. However, if you assume formulary apportionment for companies(as already practiced by the states) and RBT for individuals(as also practiced by the States) are "better" than the current system then what is the role of the US Federal government in tax collection. Clearly it is to redistribute revenue between wealthier and poorer states. If that become more explicitly understood it will become much of a political football as it is already in Canadian federalism.

  4. •Reuven Avi-Yonah (Michigan) Constructive Unilateralism : US Leadership and International Taxation

  5. I don't believe that the U.S. treasury actually "negotiated" FATCA's Intergovernmental Agreements (IGA) with any country. The right word is they "blackmailed" the countries. Currently first banks and insurance companies in Europe are fighting back: U.S. Persons are straight excluded from services not subject to minimum services required by EU laws (like a simple check account with a debit card or a plain savings account). While the banks have to comply with the identification process due to the IGA, they don't have to serve U.S. Persons, especially not U.S. Citizens born in the U.S. - at the end of the day they might have to choose to renounce or to return to the homeland.

    In Germany we might now face the start of a lawful discrimination based on U.S. Citizenship or based on once being a U.S. Persons according to FATCA's IGA as a result of CBT.

    1. Thanks for these comments. I recently published a paper on the topic of the iGAs and will post next week. If a German discrimination case materializes, please let me know the details.

  6. Where in this conference were the people affected by FATCA represented - ie, the non-tax-evaders living overseas whose bank accounts are being arbitrarily closed, mortgages called in, investments denied?

    1. This was an academic conference with a broad range of views presented. Papers will be published next year in a collected volume and I will post info on that when available; I will also post my draft paper on SSRN when it is ready.

  7. Sorry to say we are not pleased nor impressed by this one:

    IN DEFENSE OF FATCA 20 Fla. Tax Rev. 335 (2017):
    by Young Ran (Christine) Kim