A Theory of International Taxation

A Theory of International Taxation combines qualitative and quantitative analyses to shed light on the shaping of the international tax regime (ITR) over the last century. It offers a theory of the ITR as the product of the strategic interaction between three small groups with market power: international investors, tax hubs and endpoint jurisdictions. These actors play different yet interrelated roles within the same ecosystem. The analyses show how each of the three small groups has influenced the emergence and governance structure of the ITR since its inception in the 1920s. The analyses cover the impact of nine external and internal shocks on the interaction between the three small groups. The book submits a normative proposal to induce the emergence of a fourth actor, which would represent the large group of developing countries, making the ITR more inclusive. Two unique databases ground the three small groups’ theory. The first database maps all inputs on the ITR structure submitted by the three small groups to the League of Nations and then to the OECD over ninety-eight years. The second database consists of tax treaty disputes involving the same small groups, spanning fifty-five years. The theoretical framework is built on David Hume’s group-size paradox and antitrust law concepts