Why isn’t there more work on comparative tax law, and why hasn’t a more sophisticated methodology developed to address comparative law tax issues? A new book and two forthcoming articles deal with these questions.
The book is the third edition of Hugh Ault and Brian Arnold’s Comparative Income Taxation: A Structural Analysis, which appeared earlier this year. One of the few comprehensive works on the subject—Victor Thuronyi’s 2003 volume also stands out in particular—the new Ault and Arnold reflects several changes, now covering nine (albeit primarily advanced) countries and including an additional section that covers individual, business, and international tax rules in topical as opposed to country-by-country fashion. While the book remains primarily descriptive in nature, any comparativist will tell you that gathering information is half the battle, and much of what is needed, at least for the major OECD countries, is contained here.
The two articles are “An Evolutionary Approach to Comparative Taxation: Theory, Methods and Agenda for Research” by Carlo Garbarino of Bocconi University in Milan, (forthcoming in Theoretical Inquiries in Law) and “The Discursive Failure in Comparative Tax Law,” forthcoming in the American Journal of Comparative Law and authored by Omri Marian, currently an associate at Sullivan and Cromwell and previously a Michigan SJD student who also spent six years as an officer in the Israeli Navy. As one might expect from someone with this resume, Marian’s article pulls few punches. He argues that while there have been numerous works on comparative tax law, these have generally not communicated with or even appeared to be aware of each other, and (taken together) they have “fail[ed] to produce even the faintest form of paradigmatic discourse.”
Marian attempts to jumpstart such a discourse by connecting comparative tax to a larger debate about the purpose and methods of comparative law generally, including the functionalist method, which asserts that different legal systems perform similar functions (albeit if in different ways) and that comparing how they perform these functions is a useful first step toward more general description; the harmonization of legal systems; and the legal transplant problem. He then proceeds to discuss the work of various existing tax scholars, who knowingly or unknowingly adopt one or the other of these approaches, or else variants that emphasize economic, critical, or cultural approaches. Although he has strong opinions, Marion’s purpose appears to be less to take sides than to situate the tax debate and stimulate a more sophisticated—or indeed any—debate among its practitioners. But this is an immensely important service: a common methodology or methodologies is the sine qua non of any academic field, and Marion has taken an important first step toward achieving it for comparative tax scholarship.
Marian’s article was the impetus for a brief conference last fall at the Michigan Law School, at which a vigorous discussion of the topic ensued. As often happens, there was an element of “reinventing the wheel” here. Hugh Ault, who was in attendance, suggested that he and Mary Ann Glendon—author of one of the leading casebooks on comparative law—had discussions about comparative law and taxation two decades ago which addressed many of the same issues as arise in the current debate.
Also in attendance was Carlo Garbarino, whose article proposes a “functional evolutionary” approach to comparative taxation organized around themes of institutional analysis, tax transplants, and the effort to define a “common core” of tax law across different legal systems. Garbarino concludes by proposing five challenges for comparative taxation of which three (providing a comprehensive theoretical framework, studying tax convergence and divergence, and analyzing the “circulation” of tax models by means of tax transplants) are of general interest while the remaining two relate to specific EU concerns. While Marian and Garbarino disagree on several points—the former is notably skeptical about the latter’s functional emphasis—they agree that comparative tax is undeveloped as compared both to domestic taxation and comparative law generally. Their differences pertain primarily to tone and, perhaps, geography, with Marian emphasizing American scholars and Garbarino trying to bring comparative tax law into the mainstream European comparative tradition.
Garbarino and Marian’s work is important in beginning to establish a firmer theoretical foundation for comparative tax work. As the volume of comparative studies mounts, there is an inevitable need to move beyond simple description and toward meaningful, well, comparison: in particular, the issue of convergence and divergence or (what is really the same thing) the question of legal culture and its effect on tax outcomes. By taking even modest steps in this direction, the authors make an important and overdue contribution.