Ruth Mason (Connecticut) presents What Is Tax Discrimination? (with Michael Knoll (Pennsylvania)) at Yale today as part of its Faculty Workshop Series:

Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity, little agreement exists as to how tax discrimination should be defined. Lack of a clear definition of tax discrimination has led prior commentators to conclude that the concept is incoherent and in need of fundamental reform. In this Article, the authors draw on their prior work on capital and labor neutrality, competitiveness, and discrimination to propose coherent guidelines for interpreting tax discrimination to require, in the alternative, locational neutrality, savings neutrality, or ownership neutrality. After presenting these alternatives, the authors argue that because the nondiscrimination principle concerns maintaining a level playing field between domestic and foreign taxpayers, nondiscrimination provisions should be interpreted to prevent states from enacting tax policies that discourage equally or better qualified foreign taxpayers from participating in the economic activity of a country relative to its own domestic taxpayers. This conception of a level playing is best understood as an application of ownership neutrality.