Can a 20th Century Business Income Tax Regime Serve a 21st Century Economy?

18 Pages Posted: 26 Sep 2015 Last revised: 22 Oct 2015

See all articles by Michael J. Graetz

Michael J. Graetz

Columbia Law School; Yale Law School

Date Written: April 20, 2015


This article is the text of the Parsons Lecture given by Michael Graetz at the University of Sydney Law School in April 2015. In it the author reviews the contemporary challenges involved in making international tax policy. These challenges include the tensions of international tax competition whilst balancing both sound economic theory, and politics. The author explains how the 20th Century international tax system that we have is poorly equipped to cope with the 21st Century’s technologically impelled, integrated global economy. With this background the author comments on the potential for tax reform in the US; the options for tax reform in Australia; and key features of the OECD’s Base Erosion and Profit Shifting (BEPS) initiatives. The lecture concludes with 12 predictions about the directions international tax policy will follow. These range from continued international economic competition using tax law; through greater application of anti‑avoidance rules; to broader consumption taxes and more equitable taxation of capital probably involving retention of politically popular, economically problematic, corporate income taxes.

Suggested Citation

Graetz, Michael J., Can a 20th Century Business Income Tax Regime Serve a 21st Century Economy? (April 20, 2015). Australian Tax Forum, Vol. 30, 2015, Available at SSRN:

Michael J. Graetz (Contact Author)

Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States


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