Designing International Tax Reform: What Went Wrong?

28 Pages Posted: 9 Jul 2020

See all articles by Mindy Herzfeld

Mindy Herzfeld

University of Florida Levin College of Law

Date Written: July 8, 2020


With the passage of the most significant change to the international tax rules since the early days of the income tax in the 1910s, the debate as to the merit of these changes has been ongoing. Academic commentary on the law known as the Tax Cuts & Jobs Act (TCJA) has been largely negative, with the law being criticized for reducing equity, benefiting wealthier business owners at the expense of individuals in the long term (while also increasing the deficit) and adding to complexity and tax planning opportunities.

These critiques give rise to the question of how best, and under what criteria, to evaluate the changes brought about by the tax law. This paper analyzes the tax law changes adopted in the TCJA that impact cross-border investment by measuring them under a “second best” approach – one that acknowledges that any international tax regime will necessarily involve a trade-off in maximizing different goals and making a choice between the inefficiencies introduced by any set of rules to allow for a more measured and realistic consideration of the benefits of the new law relative to the possible alternatives. The analysis indicates that many of the international tax law changes introduced by the TCJA closely followed proposals made by economists in the years leading up to the law’s passage. The divergence between the theory of what the law was intended to do and its results to date provides lessons for economists engaging in policymaking.

Suggested Citation

Herzfeld, Mindy, Designing International Tax Reform: What Went Wrong? (July 8, 2020). University of Florida Levin College of Law Research Paper, Available at SSRN: or

Mindy Herzfeld (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics