Slicing the Shadow: A Proposal for Updating U.S. International Taxation

In the article Avi-Yonah proposed that the United States tax multinational corporations using a formulary apportionment system based solely on income derived from sales. The background for the article was drawn principally from Robert Reich’s The Work of Nations (1991), and the analysis was inspired by Stanley I. Langbein’s work on transfer pricing, especially his seminal article The Unitary Method and the Myth of Arm’s Length, Tax Notes, Feb. 17, 1986, p. 625; see also Louis Kauder, Intercompany Pricing and Section 482: A Proposal to Shift From Uncontrolled Comparables to Formulary Apportionment Now, Tax Notes, Jan. 25, 1993, p. 485