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taxpayer is adversely affected if the Court concludes that the
statute as a whole is designed to achieve the appropriate results
for taxpayers in general over the long term. But both parties
agree that this case does not turn on the validity of the policy
reasons underlying the adoption of section 842(b) (i.e., the
potentially abusive ability of foreign insurance companies to
hold excess liquid assets outside of the U.S. or to hold higher
yielding assets outside of the U.S.), and we agree with them.
Respondent retained Christian DesRochers of the Avon
Consulting Group18 to give his professional opinion as to the
economic impact of section 842(b). DesRochers analyzed section
842(b) and the hypothetical impact of applying the formula
therein to the U.S. branches of Canadian insurance companies.
DesRocher's analysis of the impact of section 842(b) on
taxpayers not before us is of little help. As a threshold
matter, respondent's argument raises an issue as to the proper
factual focus of our review. Respondent argues that the United
States, Canada, and petitioner all accepted that a domestic
attribution rule would be tested against Article VII on the basis
of the circumstances of all Canadian life insurance companies
rather than just on a particular taxpayer's facts. To support
18Mr. DesRochers holds an undergraduate degree in political
science from the University of Connecticut. He is a Fellow of
the Society of Actuaries and a member of the American Academy of
Actuaries.
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