Cui on False Idols in the Early History of International Taxation @AllardLaw

Wei Cui, University of British Columbia Faculty of Law, has published False Idols in the Early History of International Taxation. Here is the abstract.

A careful reading of recent scholarship on the early history of international taxation, especially on the League of Nations' work on "double taxation," ought to have dislodged many myths about this history. But more often than not, such scholarship is taken to offer mere details without altering our fundamental understanding. This paper suggests that this reception reflects a longstanding pattern in discourses about international taxation: participants perpetuate or cling onto narratives that are easily seen to be false. The paper exposes this pattern by summarizing evidence for four rarely-acknowledged conclusions about the League's output on international taxation. First, rather than advancing any agreed proposal, the 1923 "Four Economists Report" reflected fundamental disagreements (in both theory and practice) between the world's then two leading capital exporters, the U.S. and Britain. Second, the League's 1925 Technical Experts Report substantially changed the topic from the Four Economists Report. By focusing on coordination conventions among countries imposing only source-based taxation, it offered little of interest to the U.S. and Britain, and rendered international agreement even more difficult by conflating distinct policy issues. Meanwhile, it launched an institutional narrative that, whatever the problems of international taxation were, the League offered relevant solutions. Third, this narrative began to allow lobbyists like Mitchell Carroll to advance business interests under the League's disguise in the 1930s. Fourth, by the time of the Mexico Model, "the League's" double taxation work served little more than narrow institutional and personal interests. In each of these last three stages of the League's work, despite the lack of genuine intellectual continuity, parties appealed to earlier League outputs to legitimize their own (often questionable) pursuits. This practice continued in the activities of the Organisation for European Economic Cooperation in the 1950s, and one suspects that it is even more significant today. The paper suggests that the durability of this practice may be attributable to both ambiguous principal-agent relationships in the context of weak international organizations sponsoring informal norm setting, and persistent intellectual confusion about the subject of international taxation.

Download the article from SSRN at the link.