This week, Blaine Saito (Ohio State, Google Scholar) reviews a new work by Noam Noked (CUHK, Google Scholar), Young Ran (Christine) Kim (Cardozo, Google Scholar) & Reuven S. Avi-Yonah (Michigan, Google Scholar), How the U.S. Constitution Shapes International Tax Law: Instrument Choice in Tax Agreements (Feb. 26, 2026).
The United States has not ratified a major new tax treaty in over a decade. While the President possesses the Article II power to negotiate and sign these instruments, they remain essentially dead on arrival without the advice and consent of two-thirds of the Senate. This supermajority requirement has effectively handed a veto to a motivated minority, allowing the U.S. treaty network to stagnate even as the global tax landscape undergoes its most significant transformation in a century. This paralysis is not merely a bureaucratic hurdle. As Noam Noked, Young Ran (Christine) Kim, and Reuven Avi-Yonah argue in their vital new piece, How the U.S. Constitution Shapes International Tax Law: Instrument Choice in Tax Agreements, this constitutional bottleneck is fundamentally reshaping how international tax standards are set and enforced.
The authors begin by addressing a curious anomaly in American law. In the realm of international trade, the United States shifted away from Article II treaties long ago, favoring congressional-executive agreements that require only a simple majority in both houses. Yet in the world of tax, Article II treaties have remained the rigid norm for nearly a century. There are persistent questions regarding whether Article II is the sole constitutional means for addressing tax issues, but as the authors note, the courts have generally stayed out of this particular thicket. This has left the executive branch in a bind. Since 2011, the Senate has become a graveyard for tax conventions, often due to the objections of a single senator or a small faction concerned with privacy or perceived sovereignty issues.
As the Article II route has stalled, the authors show that the Executive Branch and the international community have pivoted toward treaty avoidance strategies. This shift takes two primary forms. First, there is the surge in sole executive agreements and FATCA Intergovernmental Agreements (IGAs) that bypass the Senate entirely. Second, there is the rise of coordinated unilateralism, where countries adopt mirrored domestic legislation without a formal international agreement. This strategy is currently the primary vehicle for the implementation of the OECD’s Pillar Two global minimum tax. These workarounds allow for progress, but they come with a high price. The authors warn that these are ultimately second-best solutions. Relying on executive agreements or unilateralism raises serious concerns regarding legitimacy, extraterritoriality, and potential violations of existing treaty obligations.
The authors highlight a significant and perhaps precedent-shattering development in this trend through the United States-Taiwan Expedited Double Taxation Relief Act. Because the U.S. does not maintain formal diplomatic relations with Taiwan, a standard Article II treaty was never an option. Instead, the act seeks to grant treaty-like benefits through statutory reciprocal exemptions. From an institutional design perspective, this move is fascinating. It suggests that the path of least resistance is no longer the Senate alone, but rather the full legislative process. Despite the need to clear both chambers, the simple majority requirement in the House and Senate is becoming an easier hurdle than the two-thirds supermajority required for treaties. If this model succeeds, it could provide a roadmap for future tax agreements that bypass the Senate’s traditional gatekeeping role.
The cost of this constitutional friction is a bifurcated international tax order. As the rest of the world moves toward multilateral cooperation, the United States is increasingly left on the outside looking in, unable to credibly commit to the very standards it helped negotiate. This piece adds real heft to the understanding of how constitutional veto points hamper effective governance. The Senate’s undemocratic nature, compounded by the Treaty Clause’s heightened requirements, allows representatives from states representing a small fraction of the population to hold the global tax order hostage.
This is not merely a technical problem for tax practitioners. It is a pathology of the American constitutional order that undermines our ability to lead. There is a reputational cost to this dysfunction. If the United States cannot reliably approve a treaty, our power to shape the emerging international order diminishes. Other nations have little reason to listen to demands that we cannot structurally fulfill. We risk legislating our own irrelevance and leaving American multinational enterprises to navigate a global system designed without our formal participation. While the United States remains a large enough economy to demand a seat at the table, our exceptionalist internal structures are slowly eroding our seat at the head of it.
Here is the rest of this week’s SSRN Tax Roundup:
Gary Cornell (Scitility PBC), Time Is of the Essence: A Unified Theory of Wealth Tax Avoidance and Its Single Remedy (Mar. 21, 2026)
Bridget J. Crawford (Pace), Foreign Gift Tax Penalties and the Court Opinion That Wasn’t, 190 Tax Notes Fed. 1645 (2026) (Mar. 21, 2026)
Sourav Kumar Gupta (KPMG), OECD Pillar Two and U.S. GILTI: Comparative Analysis and Policy Implications for Multinational Tax Compliance (Mar. 20, 2026)
Jeffrey L. Hoopes (UNC), Galle v Rauh: Comparing Two Revenue Estimates for California Billionaire Taxation (Mar. 27, 2026)
Antonio Lopo Martinez (Coimbra), OECD Pillar Two and U.S. GILTI: Comparative Analysis and Policy Implications for Multinational Tax Compliance (Mar. 20, 2026)
Antonio Lopo Martinez (Coimbra), Taxpayer Rights and Duties as an Institutional Contract: Reciprocity, Legitimacy and Tax Compliance in the Digital Age (Mar. 25, 2026)
Ian Murray (Western Australia), Hang Wu Tang (Singapore Management U.), Masayuki Tamaruya (Tokyo), Strategic Philanthropy and Public Philanthropic Intermediaries: A Comparison of Institutional Responses in Singapore, Japan and Australia (Mar. 27, 2026)
Alexander Vassilev (Hamburg Sch. Bus. Admin.), Volatility Spillovers and Correlation Dynamics in Global Freight Markets (Mar. 26, 2026)
