74 Tex. L. Rev. 1301 (1995-1996)
Structure of International Taxation: A Proposal for Simplification

handle is hein.journals/tlr74 and id is 1321 raw text is: Article
The Structure of International Taxation: A Proposal
for Simplification
Reuven S. Avi-Yonah*
I.   The Structure of International Taxation ............... .1305
A.   The Active or Passive Distinction in International Taxation 1305
1.   Historical Development    .................. 1305
2.   Present Consensus and the International Tax Treaty
Network ............................ 1306
3.   Reasons for the Distinction   ................ 1308
B.   Is the Consensus Justified?   ................... 1310
1.   Individuals ........................... 1311
2.   Multinational Enterprises   ................. 1313
II. The Active or Passive Distinction and United States International
Taxation ................................... 1316
A.   Foreign Taxpayers ......................... 1317
1.   Active Business and Effectively Connected Income . . 1318
2.   Passive Income ........................ 1319
a.   Capital Gains    ..................... 1320
b.   Interest  ......................... 1320
c.   Dividends ........................ 1321
d.   Rents and Royalties .................. 1323
* AssistantProfessor ofLaw, HarvardLaw School. B.A. 1983, Hebrew University; Ph.D. 1986,
J.D. 1989, Harvard University. I have benefited tremendously from comments on previous drafts of
this Article by the participants in the 1994 Harvard Seminar on Current Research in Taxation
(especially Michael Graetz, Louis Kaplow, Diane Ring, and Alvin Warren) and in workshops at Bar-
Ilan University and Tel-Aviv University Law Schools, and by members of the Washington International
Tax Group, as well as by Hugh Ault, Charles Kingson, Linda Swartz, and Philip West. My grateful
thanks go to all of them, as well as to my research assistants, Greg Lubkin and Jeff Hall, and my
administrative assistant, Christiane Wollaston-Joury. This Article could not have been written without
the love and support of Orli and Michael Avi-Yonah.

1301

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