AN INTERNATIONAL TAX ORGANIZATION AND UNITARY TAXATION FOR GLOBAL TAXPAYERS

This article argues that the current international tax system, based on transfer pricing rules and bilateral tax treaties between jurisdictions, is ill-suited to effectively and equitably tax increasingly mobile and globalized economic activities. These include not only the goods and services provided by multinational corporations but also the wealth of high-net-worth individuals and families. We therefore propose the creation of a unitary tax for global taxpayers, administered by an international tax organization. This architecture would end tax competition for the segment of global taxpayers, as it would eliminate the incentive to localize activities in different jurisdictions. The revenue collected would be directed toward funding global public goods, thereby ensuring large-scale investments where they are most needed, while avoiding the challenges associated with formulary apportionment as the spending is also centralized.