Tax Law as Foreign Policy

Andrew Hayashi; Ashley S. Deeks;

Tax Law as Foreign Policy

Andrew Hayashi

Ashley S. Deeks

PUBLISHER

University of Pennsylvania Law Review

DATE

2022-01

SSRN Website

UVA Law Faculty Affiliations

Andrew Hayashi

Ashley S. Deeks

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.

SSRN Website

Citation

Ashley S. Deeks & Andrew Hayashi, Tax Law as Foreign Policy, 170 University of Pennsylvania Law Review, 275–340 (2022).

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Tax Law as Foreign Policy

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