Corporate tax shelters are a problem in the global economy. The tax code is complex, leading to aggressive tax management. Economist Daniel N. Shaviro explores the causes and costs of tax avoidance and provides a guide to designing effective tax reform. Shaviro identifies aspects of U.S. tax law that encourage tax minimization and discusses common tax arbitrages among U.S. multinationals. Policies can help soften the economic impact of tax avoidance. Fundamental tax reform needs rules to ensure taxpayers follow the intended incentives.