Fordham JCFL’s 2018 Symposium: The Future of the New International Tax Regime


The Fordham Journal of Corporate & Financial Law held its annual symposium on Friday, October 27, 2018, entitled “The Future of the New International Tax Regime.” The event featured the nation’s leading legal and economic experts on international taxation. The discussion focused on the new tax regime established by the Tax Cuts and Jobs Act of 2017 (“TCJA”).

Keynote and First Panel: TCJA Provisions and the Importance of Tax Treaties

The event began with a keynote address by Rosanne Altshuler, Professor of Economics at Rutgers University, entitled “Why I’m Guilty of Liking the GILTI: The Case for a Minimum Tax on Low-Taxed Foreign Income.” In comparison to the system of international taxation prior to the TCJA, Professor Altshuler found greater economic advantages in imposing a minimum tax on low-taxed foreign income. Professor Altshuler further argued that the similarities, between the new tax regime and the minimum tax research in her study, indicate that the GILTI is a positive step for U.S. international tax policy.                

The first panel featured five international tax legal experts, who discussed their views on the TCJA. Professor Rebecca Kysar of Fordham University School of Law acknowledged that the new international tax regime has not fully settled on the “right” amount of international profit shifting. Professor Kysar also noted that the fundamental issue of taxing “where sold” vs. “where originated” is an important international tax question that may significantly impact current and future international tax treaties.

Professor Daniel Shaviro of New York University emphasized that empirical studies are needed to assess the effectiveness of certain provisions arising out of the TCJA, such as the Base Erosion Anti-Abuse Tax Provision (“BEAT”) and Global Intangible Low-Taxed Income (“GILTI”). Professor Susan Morse of the University of Texas School of Law voiced her concerns about the U.S. Treasury Department issuing guidance to clarify the new allocation and deduction rules. Professor Morse suggested that taxpayers should figure out the rules without the Treasury’s guidance. Professor Michael Gaetz of Columbia Law School was skeptical of the taxpayer’s ability to “figure it out” without guidance. Professor Gaetz was concerned that the TCJA will substantially accelerate U.S. deficits during the next decade. Professor Gaetz further argues that the BEAT was a rushed solution to deal with GILTI and urged us to now focus on whether to fix it or eliminate it.

The panelists also discussed their opinions concerning the worldwide vs. territorial tax framework, with Professor Shaviro stating that all tax systems are a mix of the two. The panelists debated the utility and practicality of tax treaties in the evolving world economy. While acknowledging that international cooperation is important, the views of the panelists ranged widely regarding the obligations and options for the U.S. under its current tax treaties. In particular, Professor Fadi Sheehan of Rutgers Law School stressed the importance of maintaining international tax treaties because it provides both fiscal cooperation and legal stability. Some of the panelists noted that the removal of tax treaties meant that countries could not to settle international tax disputes, which may result in retaliation against U.S. companies.

Second Panel: TCJA Criticisms and Upcoming Legislation

The last panel featured several practitioners with experience in policy, practice, and academia. Professor David Rosenbloom, who graduated from New York University and currently works at Caplin & Drysdale, remarked that the TCJA was not a general improvement over the previous tax regime. In particular, he mentioned weaknesses in the lack of earnings and profits test under GILTI. He admonished the BEAT as irrational because of its denial of the foreign tax credit. Relatedly, Professor Stephen Shay of Harvard Law School noted that the current trend of aggressive taxation of foreign corporations was likely to continue.

Danielle Rolfes, a partner at KPMG, compared the current international tax policy to the Obama Administration’s prior tax reform proposal. Ms. Rolfes mentioned that Obama’s minimum tax proposal would have, inter alia, ended lockout (i.e., income tax would be applied immediately or not at all). Lastly, Richard Phillips, a senior policy analyst at the Institute on Taxation and Economic Policy, summarized his proposal for how to fix the “broken” international tax code. He emphasized that legislators must equalize the rates between the U.S. and foreign countries, eliminate corporate inversions, and ensure transparency in country-by-country financial information. Mr. Phillips mentioned the following pending Congressional legislation: 1) No Tax Breaks for Outsourcing Act introduced by Senator Sheldon Whitehouse, 2) Close Tax Loopholes That Outsource American Jobs Act introduced by Representative Rosa DeLauro, and 3) Per-Country Minimum Act introduced by Representative Peter DeFazio

Closing Remarks: A “Constitutional Moment” for International Tax Cooperation

In closing remarks, Steven Dean, Vice Dean of Brooklyn Law School, spoke directly to the students in the audience. He noted that for the past one-hundred years, the goal of international tax cooperation was to eliminate double taxation. Now, we are in a “constitutional moment” where the U.S. is questioning whether an international tax regime is even in the national interest; a notion once regarded as untenable. He expressed his enthusiasm for the dynamic nature of tax law and policy. Finally, he highlighted the many job opportunities that now exist in the tax field. These opportunities will only grow as experts continue to learn about the repercussions of the new international tax regime.


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Fordham Journal of Corporate & Financial Law