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 Shaky Case Against Wealth Taxation

Contrary to the skeptics, taxing wealth is both feasible and constitutional. It’s also the most progressive form of taxation available.

Associated Press We have the means to tax the assets of the super-rich, and it is high time we did so, especially when faced with inequality that rivals the Gilded Age. Ever since Senator Elizabeth Warren (D-MA) introduced her proposed wealth tax, there has been a storm of criticism against it not just from predictable sources like the Tax Foundation or Fortune magazine, but also from Democrats like former Secretary of the Treasury Larry Summers. This criticism is misguided and should not prevent other Democrats from supporting Senator Warren’s proposal. Under Warren’s wealth tax plan, the richest 75,000 American households would pay an annual 2 percent tax on all assets—net worth—above $50 million, and a 3 percent tax on every dollar of net worth above $1 billion. University of California, Berkeley, economists Gabriel Zucman and Emmanuel Saez, who study wealth inequality, say Warren’s tax would raise around $2.75 trillion over ten years. The revenue...

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.

This article appears in the Summer 2018 issue of The American Prospect magazine. Subscribe here . The 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 shift even more of their income to their foreign subsidiaries, because before the...

International Tax Evasion: What Can Be Done?

Multinationals save hundreds of billions of dollars by offshoring income and manipulating their books — and it's perfectly legal.

(Photo: AP/J. Scott Applewhite)
This article ran in the Spring 2016 issue of The American Prospect magazine. Subscribe here. Sam Wyly is a rich Texas businessman. In 2006, Forbes estimated his net worth as $1.1 billion. He and his brother Charles made their money in computers, a steakhouse chain, and Michael’s Arts and Crafts, which they bought in 1982 and sold in 2006 to a group of private equity firms, including Bain Capital, for $6 billion. Sam is a major philanthropist: A $10 million gift resulted in the naming of Sam Wyly Hall at the University of Michigan Ross School of Business. He is also an avid Republican. In 2004, Sam Wyly helped finance the “Swift Boat” ad campaign that scuttled John Kerry’s bid for the presidency. But Sam Wyly is now bankrupt. In 2006, a hearing of the U.S. Senate Permanent Subcommittee on Investigations (PSI) revealed that he had been evading U.S. tax laws by hiding his money in trusts in the Isle of Man, a notorious tax haven. He began by transferring stock...

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 Tax 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...

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...