Tax Law as Foreign Policy

66 Pages Posted: 20 Oct 2021

See all articles by Ashley Deeks

Ashley Deeks

University of Virginia School of Law

Andrew T. Hayashi

University of Virginia School of Law

Date Written: October 20, 2021

Abstract

The use of economic statecraft is at a high-water mark. The United States uses sanctions, tariffs, and import and export controls more than ever before. But these tools have problems. They impose financial costs on domestic interests. They can induce retaliation by target states. And overuse of these tools could drive the United States from its central position in the global financial and economic system, undermining the effectiveness of U.S. economic statecraft in the long run. But there is a different and underappreciated tool that could perform valuable foreign policy work: tax law. We argue that tax law holds promise to advance U.S. foreign policy interests and that it is especially important to deploy tax tools now. Tax law has distinctive features that make it both a partial substitute and a partial complement to other tools of economic coercion, which means that it can extend the influence of U.S. economic power while reducing the risk of overusing other economic tools.

Keywords: international tax, national security, foreign policy, international law

Suggested Citation

Deeks, Ashley and Hayashi, Andrew T., Tax Law as Foreign Policy (October 20, 2021). Virginia Public Law and Legal Theory Research Paper No. 2021-50, Virginia Law and Economics Research Paper No. 2021-25, Available at SSRN: https://ssrn.com/abstract=3946390

Ashley Deeks

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

Andrew T. Hayashi (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

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