Constructive Unilateralism: US Leadership and International Taxation

15 Pages Posted: 25 Jun 2015 Last revised: 21 Jul 2015

Date Written: June 25, 2015


In recent years, various US international tax proposals have been advanced on the basis that we should follow the lead of our major trading partners. For example, it has been argued that we should adopt a “territorial” tax system (really, an exemption for dividends from controlled subsidiaries of US multinationals) because most of our trading partners have done so, or that we should adopt a “patent box” because some EU countries have one. But is this an adequate policy argument? Historically, most of the advances in international taxation occurred because the US led, not because it has followed. This paper reviews the history of instances in which other countries followed US international tax reforms, and then argues that positive results can be expected if the US maintains its leadership by “constructive unilateralism”.

Keywords: Territoriality, international tax

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Constructive Unilateralism: US Leadership and International Taxation (June 25, 2015). U of Michigan Public Law Research Paper No. 463, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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