Common Markets, Common Tax Problems

31 Pages Posted: 16 Dec 2007 Last revised: 2 May 2008

See all articles by Ruth Mason

Ruth Mason

University of Virginia School of Law


Different in more ways than it is possible to easily enumerate, the formation of the United States and the European Union (EU) had a striking similarity of purpose: to increase citizens' welfare by uniting a collection of independent states, each with its own politics, culture, and economy. Of course, the unification of the U.S. states, never as divided culturally, politically, or economically as the countries of Europe, is an achievement largely in the past. In contrast, significant integration in Europe has taken place in our own time. This Essay explores the common tax problems confronting the U.S. and EU common markets. These include horizontal federalism issues, such as state tax discrimination, disharmonies between state tax bases, and interstate tax competition. The Essay also contains a limited discussion of vertical federal questions, including states' competence to tax income of foreign legal entities and to enter into tax treaties with foreign countries. The Essay was delivered at the University of Florida, Levin College of Law's Annual International Tax Symposium in September 2007.

Keywords: common market, tax, comparative fiscal federalism, United States, European Union, U.S., EU, Commerce Clause, Foreign Commerce Clause, treaty power, external tax competence, tax discrimination, Schumacker, Lunding, Moorman, Cuno, West Lynn Creamery, tax competition, tax sovereignty, tax harmonization

JEL Classification: F15, P52, H20, H24, H25, H70, H71, H73, H77, K34

Suggested Citation

Mason, Ruth, Common Markets, Common Tax Problems. Florida Tax Review, Vol. 8, 2007, Available at SSRN:

Ruth Mason (Contact Author)

University of Virginia School of Law ( email )

United States

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