TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, August 16, 2018

Shaviro: The New Non-Territorial U.S. International Tax System

Daniel N. Shaviro (NYU), The New Non-Territorial U.S. International Tax System, Part 1, 160 Tax Notes 57 (July 2, 2018):

This paper, published in Tax Notes on July 2, 2018, is the first half of a two-part paper examining and analyzing the three main international provisions in the 2017 tax act. Part 1, contained herein, discusses normative frameworks for international tax policy.

Daniel N. Shaviro (NYU), The New Non-Territorial U.S. International Tax System, Part 2, 160 Tax Notes 171 (July 9, 2018):

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August 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

More Angsting About Angsting

So ... I entered a piece in the law review submission free-for-all.  It has caused me to reflect further on this system that generally causes academic jaws to drop in every other discipline when you describe it. Being at this stage of my career (see Further Reflections on the End of Ambition) where placements tend to be a matter of bucket list check-off and pure ego, my heart really does go out to those whose angst is related to getting or retaining a job. I thought "ctr" (the Appointments Chair at a T50 school) offered some wise counsel in the comments, consistent with the data, about not getting too hung up on the relative rankings of the schools in which you place your pieces.

I do not discount the angst.  I recently went through the five stages of law review submission grief.

Denial:  [Imagine thought balloon if this were a cartoon] "Oh wow, I've been called now by the fourth different Very Highly Ranked Flagship Law Review that Has Never Published Anything Written by Anybody Who Has Ever Been on Our Faculty to do a peer review of a submission.  I must be thought of as having scholarly chops well above the station otherwise indicated by the faculty letterhead on which I am obliged to submit my own work."

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August 16, 2018 in Jeff Lipshaw, Legal Education | Permalink | Comments (0)

WSJ: Trump's Tax Wisdom

Wall Street Journal op-ed:  Trump's Tax Wisdom, by James Freeman:

Imagine how high the U.S. economy can soar if President Trump resolves the arguments he started with America’s trading partners. Already the conventional wisdom on the tax law he signed in December is moving in his direction. Whereas prior to the law critics suggested it would provide a modest temporary boost, there’s now an emerging consensus that the law may pull so much investment into the United States that it could impoverish governments across the globe.

Nothing says establishment consensus like the International Monetary Fund. The Journal [U.S. Corporate Tax Cuts Likely to Hit Other Countries’ Bottom Lines] on the findings of a new IMF working paper [Tax Spillovers from US Corporate Income Tax Reform] forecasting the results of the suddenly more competitive United States:

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August 16, 2018 in Tax | Permalink | Comments (0)

NY Times: The Tax Cuts Helped Rich People

New York Times editorial, You Know Who the Tax Cuts Helped? Rich People:

When Republicans were pitching a massive tax cut for corporations and wealthy families last year, they promised voters many benefits: increased investment, higher wages and a tax cut that pays for itself. The tax plan, congressional leaders said, would turbocharge the American economy and provide a much-needed helping hand to working-class families.

“Most people, half the people in this country, live paycheck to paycheck, so there’s a lot of economic anxiety,” the House speaker, Paul Ryan, told The Times in November. “And I think just one of the key solutions is faster economic growth, more jobs. And I think the best thing we could do to deliver that is tax reform.”

So, more than six months since President Trump signed the tax cut into law, is it delivering on the promises Mr. Ryan and other leaders made? ...

The most notable outcome of the tax law is one that few Republicans talked about: Companies are buying back their own stock — a lot of it. Stock buybacks are expected to reach a record $1 trillion this year. After Congress reduced the top federal corporate tax rate from 35 percent to 21 percent, businesses are flush with cash. Lawmakers also let companies repatriate foreign earnings that they have been amassing at a rate of 15.5 percent for cash and 8 percent for other assets.

NYT

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August 16, 2018 in Tax | Permalink | Comments (0)

Arizona State Increases 1L Class By 35%, Raises LSAT (163), GPA (3.76) Medians, Following 64% Increase In Applications

Arizona State Logo (2016)AzBigMedia, ASU Law Continues to Raise Bar With Incoming Class:

For the second year in a row, the Sandra Day O’Connor College of Law at Arizona State University welcomes a record-setting class of new students.

With a median grade-point average of 3.76 and a median LSAT score of 163, the 2018 fall JD class comes in even more highly credentialed than the 2017 class, which had set top marks for the law school. Hailing from more than 140 different undergraduate schools in more than 40 different states, the 291 new students admitted in fall 2018 and taking first-year JD classes are a testament to ASU Law’s status as a destination law school. ASU Law received over 3,300 JD applications, a 64 percent increase over last year.

Form Law School Transparency:

ASU

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August 16, 2018 in Legal Education | Permalink | Comments (0)

Supervising Law Student Research Papers On Trump's Impeachment

Gregory S. Crespi (SMU), A Law Professor’s Modest Response to Trumpism: Supervising Student Directed Research Papers on Impeachment:

This short essay discusses my motivation for and the reading materials and procedures I use when offering about a half-dozen law students each semester a Directed Research option to research and write papers on the topic of Presidential impeachment. I recommend that those faculty members who may have only a modest Constitutional Law background, but who feel as I do that greater understanding and more sustained discussion of the merits and drawbacks of removal of President Trump from office through impeachment is called for, and who wish to facilitate such understanding and discussion without compromising their professional and ethical obligations to their students, will consider trying this approach.

August 16, 2018 in Legal Education | Permalink | Comments (0)

Wednesday, August 15, 2018

The Most-Cited Tax Faculty At The 68 Most-Cited Law Schools

Following up on this morning's post, The 68 Most-Cited Law Faculties:  here are the 19 Tax Profs among the 10-most cited faculty at the Top 68 law schools:

2.   Harvard:  Louis Kaplow
12.  UC-Irvine:  Vic Fleischer
14.  Michigan:  Reuven Avi-Yonah 
21.  Minnesota:  Kristin Hickman
23.  USC:  Ed Kleinbard, Ed McCaffery, Mike Simkovic
29.  Florida State:  Jeff Kahn, Steve Johnson
29.  Cardozo:  Ed Zelinsky
36.  Indiana:  David Gamage, Leandra Lederman
49.  BYU:  Cliff Fleming
54.  Pittsburgh:  Tony Infanti
58.  Santa Clara:  Pat Cain; Boston College:  Diane Ring; Georgia:  Gregg Polsky

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August 15, 2018 in Law Review Rankings, Legal Education, Tax | Permalink | Comments (0)

A Key To Law Student Success: Sleep

New York Times, An Underappreciated Key to College Success: Sleep:

Attention all you happy high school graduates about to go off to college, as well as the many others returning for another year of higher education. Grandsons Stefan and Tomas, that includes you.

Whatever you may think can get in the way of a successful college experience, chances are you won’t think of one of the most important factors: how long and how well you sleep. And not just on weekends, but every day, Monday through Sunday.

Studies have shown that sleep quantity and sleep quality equal or outrank such popular campus concerns as alcohol and drug use in predicting student grades and a student’s chances of graduating.

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August 15, 2018 in Legal Education | Permalink | Comments (0)

IRS Guidance: Rulemaking And Deference To IRS Statutory Interpretation

John A. Townsend (Houston), IRS Guidance — Rulemaking and Deference to IRS Statutory Interpretation:

This article deals with one of the key intersections of federal tax law and administrative law: IRS rulemaking. The IRS makes rules that affect the public through regulations and subregulatory guidance. I first discuss the IRS process for issuing such guidance and the principal forms the IRS uses. I then discuss the administrative law concept of deference to agency statutory interpretations. In administrative law, the two key regimes for deference are Chevron deference and Skidmore deference. Chevron deference requires the court to defer to an agency interpretation in formal guidance when the statutory text being interpreted is ambiguous and the agency interpretation is a reasonable interpretation even though the court believes there is a more reasonable interpretation. In the IRS context, Chevron deference applies to Treasury Regulations. Skidmore deference requires the court to defer to an agency interpretation in subregulatory guidance to the extent that the interpretation is persuasive. (That Skidmore formulation may sound a bit odd, but I get into that in the article.)

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August 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

New Law Has Made The Tax System More Progressive

Goodman Institute for Public Policy Research, Study: Most of The Benefits of Tax Reform Are Not Going to The Wealthy:

Although widely reported in the national news media, the claim that most of the benefits of tax reform are going to the wealthy is wrong according to economists whose ideas were used in shaping the legislation that was enacted last year.

In a report for the Goodman Institute, Boston University economist Laurence Kotlikoff says that under the new tax regime, the top 1 percent of income earners will actually bear a larger share of the tax burden than they did under the previous system.

“There was no give-away to the rich,” he said. “If anything, the tax system has gotten slightly more progressive.”

The Tax Policy Center (sponsored by the Brookings Institution and the Urban Institute) says that 82.8% of the benefits of tax reform will accrue to the wealthiest taxpayers.  But according to FactCheck.org, that claim is more than misleading. The Center’s own numbers show that if the individual tax cuts are made permanent, the share going to the top 1 percent will receive 25.3% of the benefits. And most people in Washington think the tax cuts for individuals will be made permanent.

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August 15, 2018 in Tax, Think Tank Reports | Permalink | Comments (0)

The 68 Most-Cited Law Faculties

Gregory C. Sisk (St. Thomas) et al., Scholarly Impact of Law School Faculties in 2018: Updating the Leiter Score Ranking for the Top Third:

This updated 2018 study explores the scholarly impact of law faculties, ranking the top third of ABA-accredited law schools. Refined by Brian Leiter, the “Scholarly Impact Score” for a law faculty is calculated from the mean and the median of total law journal citations over the past five years to the work of tenured faculty members. In addition to a school-by-school ranking, we report the mean, median, and weighted score, along with a listing of the tenured law faculty members at each school with the ten highest individual citation counts.

1.   Yale 
2.   Harvard 
3.   Chicago
4.   NYU
5.   Columbia
6.   Stanford
7.   UC-Berkeley
8.   Duke
9.   Pennsylvania
10. Vanderbilt
11.  UCLA
12.  UC-Irvine
13.  Cornell
14.  Michigan, Northwestern
16.  George Washington, Virginia, Georgetown 
19.  Texas, George Mason
21.  Minnesota, Washington University
23.  UC-Davis, St. Thomas, USC
26.  Notre Dame
27.  Boston University
28.  William & Mary
29.  Colorado, Florida State, Fordham
32.  Cardozo, Emory, Case Western, Arizona
36.  Indiana, Illinois, North Carolina, San Diego, Arizona State
41.  Maryland, Utah, Ohio State
44.  Wake Forest, UC-Hastings, Chicago-Kent, Brooklyn
48.  Kansas
49.  Alabama, BYU, Hofstra
52.  Temple, UNLV
54.  San Francisco, Pittsburgh, Richmond, Missouri
58.  Florida, Iowa, Santa Clara, Boston College, Georgia, Houston
64.  Denver, Hawaii, American, Loyola-L.A., Washington & Lee

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August 15, 2018 in Law School Rankings, Legal Education | Permalink | Comments (0)

How Many Nonprofits Are There?

Nonprofit Quarterly:  How Many Nonprofits Are There?: What the IRS’s Nonprofit Automatic Revocation and 1023-EZ Processes Left Behind, by Michael Wyland:

From the middle of 2010 to the end of 2017, the IRS revoked the tax-exempt recognition of more than 760,000 nonprofit organizations for failing to file Form 990 returns. More recently, it has implemented the 1023-EZ process, which makes applying for federal tax-exempt status easier. What effect have these changes had on the numbers of nonprofits in our sector? Are there marked differences in trends vis-à-vis 501(c)(3)s and 501(c)(4)s?

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August 15, 2018 in IRS News, Tax | Permalink | Comments (0)

Arizona Summit Pulls Plug On Fall Classes, Works On Teach-Out Plan For 2Ls & 3Ls

Arizona Summit Logo (2015)Law.com, Law School Pulls Plug on Fall Classes Amid Accreditation Crisis:

The embattled Arizona Summit Law School won’t hold classes this fall as it fights for survival.

The American Bar Association revoked the school’s accreditation in June—a decision Arizona Summit has appealed—and it informed its dwindling student body in an email late last week that it will not open as scheduled later this month. The school did not say it was closing outright, however, and maintained that it was working toward a formal “teach-out” plan that would allow existing students to complete their studies.

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August 15, 2018 in Legal Education | Permalink | Comments (0)

Camp: Equitable Principles And Jurisdictional Time Periods

Bryan Camp (Texas Tech), Equitable Principles and Jurisdictional Time Periods, Part 2, 159 Tax Notes 1581 (June 11, 2018):

This is the second of two articles looking at the relationship of equitable doctrines and time limits in the Tax Code. In the first article, I showed how courts apply a mythical rule that equitable principles cannot apply to jurisdictional time limits. I showed why this rule is in fact a myth and argued that both normatively and empirically, the question of whether equitable principles can be applied to a given time period is a different question than whether the time period is “jurisdictional.”

This article addresses a different aspect of how equitable doctrines affect a jurisdictional time period in tax law. When one studies the case law, one finds many instances where the Tax Court—often blessed by the Courts of Appeals—laments that it may not equitably “enlarge” or “extend” jurisdictional time periods, but then accomplishes the same result through its discretionary fact-finding power. In effect, it cheats. Less dramatically, it creates fictions to cover the gap between what is and what ought to be. While denying the power to use equitable principals to modify the legal bed, it instead uses equitable principles to stretch or lop off facts to fit a procrustean conception of the relevant limitation period.

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August 15, 2018 in Bryan Camp, Scholarship, Tax | Permalink | Comments (0)

Tuesday, August 14, 2018

The U.S. News Peer Reputation Rankings And The Availability Heuristic

Jeff Lipshaw (Suffolk), Submission Angsting and the Availability Heuristic:

Paul Caron over at Tax Prof Blog does us the community service every year of re-ranking the schools by their "peer assessment" number, which ranges from 1.1 at the low end to 4.8 at the top.  I am assuming for this exercise that the peer assessment is meaningful even though I have my doubts.

My doubts stem largely from the likelihood that so much of this is determined by the availability heuristic, the term coined by Tversky and Kahneman for a mental strategy in which people make judgments about probability, frequency, or extremity based on the ease with which and the amount of information that can be brought to mind.  Hence, we bias our judgments based on available information.

Having said that, here goes.  One of the most available pieces of information is the linear ranking in US News.  It's really available.  It's available to the people who send in their votes for peer ranking and it's available to authors trying to place their articles.  What is not so available (thank you Paul) because you have to pay to get it isn't just the re-ranking by peer assessment but the actual peer score.

The histogram above shows the peer assessment scores from the 2019 US News law school ranking by the number of schools at each peer score from 1.1 to 4.8.  You can draw your own conclusions, but I think trying to thin-slice differences between scores close to each other is kind of silly.

US News

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August 14, 2018 in Law School Rankings, Legal Education | Permalink | Comments (1)

Kamin: 'Reputation Or Skill' In The New Pass-Through Regulations

Following up on my previous post, NY Times: Who Gets a New 20% Tax Break? The Treasury Dept. Speaks:  David Kamin (NYU), “Reputation or Skill” in the New Pass-Through Regulations: Reading “Skill” (and “Principal Asset”) Out of the Law:

The proposed regulations governing the 20-percent pass-through deduction under Section 199A are rightly garnering attention, and there is already significant commentary focused on the fact that Treasury chose to interpret the “reputation and skill” catch-all narrowly. As I explained in my earlier post, I think that’s a mistake because of the wide-open door that leaves for many high-income service providers. Here, I discuss exactly how narrow the definition is — which seems to be extremely narrow, at least based on the examples given — and how the regulatory definition seems to conflict with the text and potentially purpose of the restriction.

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August 14, 2018 in Tax | Permalink | Comments (0)

Judge Finds Charlotte Law School Liable For Unpaid Rent, Rejects Argument That Accreditation Woes Excused Nonpayment

Charlotte Logo (2016)Law360, Defunct NC For-Profit Law School Must Still Honor Lease:

A North Carolina state judge on Friday found InfiniLaw Corp.'s Charlotte School of Law in breach of its office building lease, rejecting the for-profit institution’s argument that it should be forgiven the unpaid rent since last October because that’s when government agencies crippled its ability to function. ...

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August 14, 2018 in Legal Education | Permalink | Comments (0)

Mason: Implications Of Wayfair

Ruth Mason (Virginia), Implications of Wayfair:

This article describes Wayfair and provides some cautions about what it means for the U.S. states and the rest of the world, especially Europe. It concludes that the lesson is that we should be sure that we like our temporary solution to the digital tax problem, because temporary solutions have a way of sticking around long after everyone recognizes that they no longer work.

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August 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

BYU And Pepperdine Are The Most Ideologically Balanced Faculties Among The Top 50 Law Schools (2013)

Adam Bonica (Stanford), Adam S. Chilton (Chicago), Kyle Rozema (Northwestern) & Maya Sen (Harvard), The Legal Academy's Ideological Uniformity, 47  J. Legal Stud. 1 (2018):

Ideology 2

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August 14, 2018 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (7)

Auerbach & Devereux: Cash Flow Taxes In An International Setting

Alan J. Auerbach (UC-Berkeley) & Michael P. Devereux (Oxford), Cash Flow Taxes in an International Setting, 10 Am. Econ. J. 69 (Aug. 2018):

We model the effects of cash-flow taxes, differing according to the location of the tax, on the behavior of a multinational producing and selling in two countries with three sources of economic rent: a fixed basic-production factor (located with initial production), mobile managerial skill, and a fixed final production factor (located with consumption). In general, governments face trade-offs in choosing between alternative taxes.

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August 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Math: ESOPs Do Not Pay For Themselves

Andrew Stumpff Morrison (Michigan), Perpetual Motion Machines: ESOPS Don’t Pay for Themselves, 159 Tax Notes 1289 (May 28, 2018):

In this article, Stumpff addresses policy issues regarding employee stock ownership plans and demonstrates how some claims in support of ESOPS aren’t supported by the math.

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August 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1921: Federal Judge Approves $3.5 Million Payout From IRS To >100 Tea Party Groups To Settle Targeting Claims

IRS Logo 2Washington Times, Tea Party Groups Get Revenge Against IRS as Judge Approves $3.5 Million Payout:

A judge late Wednesday signed off on the settlement between the IRS and hundreds of tea party groups, closing out the last major legal battle over what all sides now agree was unwarranted and illegal targeting for political purposes.

The IRS agreed to pay $3.5 million to groups that were wronged by the intrusive inspections, and insists it’s made changes so that political targeting can’t occur in the future.

A few issues are still being fought over in the courts — including whether former IRS senior executive Lois G. Lerner will be allowed to forever shield her deposition explaining her behavior from public view, and whether the IRS should pay attorney fees — but this week’s decision closes out five years of litigation over the targeting itself. ...

The $3.5 million closely approximates the fines the IRS would have had to pay in damages for each intrusive scrutiny of tea party groups, had the agency been found in violation of the law. The money will be split with half going to the lawyers who argued the case and the other half to more than 100 tea party groups, which will get a cut of about $17,000 each.

Judge Michael R. Barrett called the settlement “fair, reasonable and adequate.”

The settlement doesn’t actually include an admission of wrongdoing by the IRS.

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August 14, 2018 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Monday, August 13, 2018

EY (With 2,200 Lawyers) Seeks To Disrupt BigLaw With Acquisition Of Alternative Legal Services Tech Company—Tax Law Practices Are Most At Risk

EYRAmerican Lawyer, The Big Four’s Recent Acquisition in the Legal Market is a Big Deal:

There has been much talk in the past year that the Big Four were sniffing around the alternative legal services (ALSP) market looking for an acquisition. Many legal market watchers, including your (humble) analyst, publicly stated that they expected at least one Big Four-led acquisition into the ALSP space in 2018. That wait is now over. EY announced on August 7th that they will acquire Riverview Law, a UK based provider of both managed legal services and technology. ...

EY’s acquisition of Riverview Law has the potential of shaking up the ALSP market in two important ways. First, it may help facilitate increased acquisitions within the space. ...

There is a second, potentially more important, reason why the Riverview acquisition is important in this space. Managers of existing ALSPs now face the daunting task of competing with a Big Four player. EY will be a fierce competitor for several reasons. Its size — at $31bn in revenue and 250,000 employees worldwide — is certainly important. Its client base and strong capabilities in process management will also be key. But most important is their brand. Trust is incredibly important in the legal services market — even in the lower value areas in which ALPS compete. Law departments, as the leading purchasers of legal services, are fundamentally in the business of risk mitigation. While the cost of service is important, so is the credibility of the vendor, and this is particularly true for ALSPs. By hiring an “alternative” provider law departments are taking two risks — first, that this new “alternative” approach can work and second, that the ALSP in question is the right vendor in the space. EY’s strong brand equity and familiarity, coupled with existing relationships with clients make them much better placed to make this argument to corporate leaders than Axiom, Elevate, UnitedLex or any of the other leading ALSPs. The Big Four have the unique benefit of being seen as a “safe pair of hands”. This will be a key competitive advantage.

EY

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August 13, 2018 in Legal Education, Tax | Permalink | Comments (1)

2018 Lawyer Satisfaction Survey

Law360, Satisfaction Survey By The Numbers:

When it comes to financial stability, stress and work-life balance, not all lawyer jobs are created equal. Here, Law360's 2018 Lawyer Satisfaction Survey provides a snapshot of who's feeling satisfied with their financial situation, advancement opportunities and work-life balance — and who's not.

While not a scientific study, Law360's survey collected more than 1,350 anonymous responses over a six-week period this spring, which offer a peek into how attorneys across the country — and across various industry roles — are feeling about their work life.

Law360

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August 13, 2018 in Legal Education | Permalink | Comments (0)

The Economist: Tax Overhaul For The 21st Century

EconomistThe Economist, Overhaul Tax for the 21st Century:

If you are a high earner in a rich country and you lack a good accountant, you probably spend about half the year working for the state. If you are an average earner, not even an accountant can spare you taxes on your payroll and spending.

Most of the fuss about taxation is over how much the government takes and how often it is wasted. Too little is about how taxes are raised. Today’s tax systems are not only marred by the bewildering complexity and loopholes that have always afflicted taxation; they are also outdated. That makes them less efficient, more unfair and more likely to conflict with a government’s priorities. The world needs to remake tax systems so that they are fit for the 21st century.

Jean-Baptiste Colbert, the finance minister of Louis XIV of France, famously compared the art of raising tax to “plucking the goose so as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”. Tax systems vary from one economy to another—Europe imposes value-added taxes, America does not. Yet in most countries three flaws show how the art of plucking has failed.

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August 13, 2018 in Tax | Permalink | Comments (0)

Shanske: White Paper On Eliminating The Water’s Edge Election And Moving To Mandatory Worldwide Combined Reporting

Darien Shanske (UC-Davis), White Paper on Eliminating the Water’s Edge Election and Moving to Mandatory Worldwide Combined Reporting:

All forty-four states with corporate income taxes must consider how to respond to changes that the Tax Cuts and Jobs Act made to the federal corporate tax treatment of multinational corporations. In particular, the states must consider how to respond to two new anti-base erosion provisions at the federal level: GILTI and the BEAT. Here are a few of the options: 1) The states can choose not to conform to these provisions. 2) The states can choose to piggy-back on these provisions with little change. 3) The states can choose to piggy-back on these provisions, but do so strategically. That is, a state could choose to institute superior versions of these taxes. There is a lot of room for improvement. 4) The states can also choose to go back to the future and require mandatory worldwide combined reporting.

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August 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

SEALS To Launch Law Faculty Recruitment Conference As Alternative To AALS Meat Market: Earlier, Cheaper, And More Inclusive

SEALs Logo (2013)Russell Weaver (Louisville), Executive Director of the Southeastern Association of Law Schools:

A year ago, SEALS appointed a committee to explore the possibility of creating a faculty recruitment conference under the SEALS umbrella. Because of the enormity of this action, we wanted to carefully consider all of the advantages and disadvantages before deciding how to proceed. The committee reported back at our recent meeting, and the Board has voted to move ahead with a pilot program. To that end, we will appoint an implementing committee in the very near future.

SEALS’ decision was based on a number of considerations. First, we believe that there is room for innovation in the faculty recruitment process. SEALS has definite ideas about how to do that, and we will be providing further information about our recruitment process in the coming months. Our ultimate goal is to create a much more vibrant and effective faculty recruitment process that serves our member schools much better than the current process.

Second, the present recruitment process is not functioning well for all schools. Many schools are “jumping the gun” in the sense that they are actively recruiting candidates well before the AALS recruitment conference. Indeed, some schools hold Skype interviews, invite candidates to campus, and even make offers, outside the AALS time frame. Indeed, some candidates receive multiple offers before the AALS conference. Some of these offers are “exploding offers” which require the applicant to make a decision in a relatively short period of time. There simply must be a better way to structure the process.

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August 13, 2018 in Legal Education | Permalink | Comments (4)

Classic Lesson From The Tax Court: When Hornung Won The 'Vette

PaulHornung1961ToppsCardI'm back from vacation, but busy preparing for the start of classes, so I offer another Classic Lesson that I have been saving.  I hope you enjoy it.  I will return next week with a new Lesson based on a recent case.

I find tax more interesting than football.  But I know I am not like most people.  So I enjoy using the classic case of Hornung v. Commissioner, 47 T.C. 428 (1967), because it not only teaches students a bit about football history, it also helps them understand a really important tax concept: the doctrine of constructive receipt. As a bonus, it is also one of those fun cases where the taxpayer and the IRS take the opposite of their normal positions, with amusing consequences.

Paul Hornung was an outstanding football player in the 1960’s, winning a bunch of very well known awards: the Heisman Trophy, the NFL MVP award, and induction into both the professional and college football halls of fame.  Here's a Sports Illustrated tribute to him.

Hornung also won a Corvette on December 31, 1961, when his team (the Green Bay Packers) beat the New York Giants for the National Football League Championship. Remember, at that time the NFL was the main football league so this was, basically, the Super Bowl. The AFL was only just starting and it was several years before the first designated “Super Bowl” game occurred between the leagues.

Hornung was selected by Sport Magazine as the game’s most valuable player. That selection came with an award: a brand-spanking new 1962 Corvette. The award was announced in Green Bay at the conclusion of the game in the late afternoon of Sunday, December 31, 1961. The car was in Manhattan. Hornung picked up the car the next week at a lunch given in his honor by the magazine. He sold the car a few months later for just over $3,000.  He did not report any income from receiving the Corvette, either in 1961 or in 1962.  When the IRS audited his 1962 return, he claimed that if receipt of the Corvette was income, it was income in 1961, not 1962, under the doctrine of constructive receipt.  To see how that worked out for him, you will need to dive below the fold.

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August 13, 2018 in Bryan Camp, Celebrity Tax Lore, Tax | Permalink | Comments (2)

Welcome, Pepperdine Law School Class Of 2021

Launch Week 4

Welcome to the members of the Pepperdine Law School Class of 2021 who begin their legal education today in a week-long introduction to law school and professional formation, as well as the over 300  students pursuing joint, LL.M., and masters degrees and certificates, including our new LL.M. and certificate programs in Entertainment, Media, and Sports and our new online masters in Legal Studies and Dispute Resolution.

This is my second year as Dean, and I am thrilled that you have decided to join our very special law school community. You will learn and study on our spectacularly beautiful campus in Malibu with easy access to Los Angeles, one of the world's most vibrant cities for young professionals. You will experience the faculty and staff's faith-fueled commitment to you and to your success that manifests itself in various ways, large and small, in daily life here. My fervent wish is that you will love your time at Pepperdine as I have since joining the faculty in 2013, and that you will leave here with a deep sense of your professional and personal calling in law and in life.

August 13, 2018 in Legal Education | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, August 12, 2018

In-Class Cellphone, Laptop Use Lowers Exam Performance

Inside Higher Ed, In-Class Cellphone And Laptop Use Lowers Exam Scores:

Yes, cellphones and laptops do affect students' grades, and no, students can't multitask as well as they say they can.

Arnold Glass, a psychology professor at Rutgers University at New Brunswick, and Mengxue Kang, a graduate student, recently published a study in Educational Psychology [Dividing Attention in the Classroom Reduces Exam Performance] that they say reveals a causal link between cellphone and laptop use during class and poorer exam scores.

Figure 1. The effect of allowing electronic devices in the classroom on percent correct on classroom quizzes and a subsequent unit exam and the final exam.
Exam

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August 12, 2018 in Legal Education | Permalink | Comments (2)

The Myth Of American Income Inequality

WSJWall Street Journal op-ed:  The Myth of American Inequality, by Phil Gramm & John F. Early:

America is the world’s most prosperous large country, but critics often attempt to tarnish that title by claiming income is distributed less equally in the U.S. than in other developed countries. These critics point to data from the Organization for Economic Cooperation and Development, which ranks the U.S. as the least equal of the seven largest developed countries. American progressives often weaponize statistics like these to urge greater redistribution. But the OECD income-distribution comparison is biased because the U.S. underreports its income transfers in comparison to other nations. When the data are adjusted to account for all government programs that transfer income, the U.S. is shown to have an income distribution that aligns closely with its peers.

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August 12, 2018 in Tax | Permalink | Comments (9)

ABA's Decision Continues LSAT's Dominance, Only 20 Additional Law Schools Are Likely To Accept GRE In Fall 2019 Admissions Season

GRELSATFollowing up on Tuesday's post, ABA Withdraws Proposal To Remove LSAT As Accreditation Requirement:  Law.com, LSAT's Dominance Remains Intact, But GRE Will Press On:

The American Bar Association’s decision Monday to table the elimination of its LSAT requirement might slow the tide of law schools using the GRE and other alternative tests in admissions, but it won’t stop it.

That’s the consensus from deans who backed the unsuccessful proposal to drop the LSAT requirement. The controversial proposed change to the law school accreditation standards was slated for consideration by the ABA’s House of Delegates at its annual meeting in Chicago, but the Council of the Section of Legal Education and Admission to the Bar, which oversees law school accreditation, withdrew the resolution at the last minute, citing opposition from some delegates. The council was divided on the matter when it voted in May to push forward and will now determine whether to try again.

Marc Miller, dean of the University of Arizona James E. Rogers College of Law, said Tuesday that he predicted 100 additional law schools would accept the GRE in the coming year had the ABA eliminated the current rule, which requires schools to use a “valid and reliable” test in admissions, with the LSAT being the only test to automatically fit the bill. In light of the ABA’s inaction, Miller said he now expects only about 20 law schools to join the 23 that are already accepting GRE scores alongside LSAT scores. ...

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August 12, 2018 in Legal Education | Permalink | Comments (0)

IRS Grants Tax-Exempt Status To Lesbian ‘Pussy Church Of Modern Witchcraft' That Excudes Men

Pussy ChurchForbes, Lesbians Want A Church Of Their Own And IRS Approves:

Pussy Church of Modern Witchcraft might strike you as something you would find in the Onion, rather than here on a Forbes tax blog, but it is a real deal.  You can find it on Charity Navigator and Guidestar.  The IRS recognized it as a 501(c)(3)  organization and went the extra step of recognizing PCMW as a church, the most enviable of all tax statuses. exempt not only from income tax but also from the transparency that filing Form 990 creates.  A church does not have to apply for exempt status, but it is a prudent step particularly for an innovative organization like PCMW.  My source indicated that the approval process was reasonably quick and there was no push-back from the IRS. ...

From the website we get:

Why the Pussy Church?
We come together to form a congregation of adherents to our female born, lesbian-feminist-based religions beliefs and traditions. We intend to serve our adherents through worship, service, and sistership with our congregants. We intend to accomplish the growth and continued strengthening of our congregation. The beneficiaries of our accomplishments are the adherents to our religious beliefs – Women and Girls. We will achieve our purpose through regular worship and service with our congregants and with other Women and Girls who may wish to become congregants.

Why is the Pussy Church for women and girls only?
Women are oppressed globally on the basis of our biological sex. Gender is a mechanism of Women’s oppression globally. At Pussy Church (PCMW), we serve Women and Girls and our emotional and spiritual needs. We cannot serve these needs in the presence of Men, as Men as a class are the cause of the harm that women experience globally. All groups have the right to associate freely as they see fit. As a religious organization, Pussy Church is also protected under the First Amendment of the U.S. Constitution permitting free exercise of religion as well as the Maryland Declaration of Rights, which provides that all persons are equally entitled to protection in their religious liberty.

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August 12, 2018 in Tax | Permalink | Comments (3)

Saturday, August 11, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Grewal: Can Montana Force The IRS To Break the Law?

Andy Grewal (Iowa), Can Montana Force the IRS to Break the Law?:

The IRS recently changed the rules on how some tax-exempt organizations must report information related to their “substantial contributors” (that is, those who donate $5,000 or more in a year). This change has sparked a political controversy, fueled by concerns over “dark money” in politics and the Citizens United decision. One state (Montana) has already filed an APA-based challenge to the IRS’s action, and its lawsuit raises a novel question over whether the IRS must enforce regulations that may have been promulgated unlawfully. ...

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August 11, 2018 in Scholarship, Tax | Permalink | Comments (2)

Why Every Good Economist Should Be A Feminist

ProMarket, Why Every Good Economist Should Be Feminist:

As every good economist knows, markets work best when they are competitive. Therefore, every good economist should also be a feminist, defending a level playing field for all genders.

[T]he academic world, and especially the economic and finance profession, can learn immensely from one sexual harassment case that did go to court: Ravina v. Columbia, decided last week in a federal court in New York. Enrichetta Ravina, then an assistant professor at Columbia Business School, alleged that Geert Bekaert, a full professor there, sexually propositioned her. Ravina stated that when she rejected him, Bekaert retaliated by badmouthing her in the academic community and stalling their joint research project, in which he had control of the data. The jury acquitted Bekaert for the sexual harassment charge, but found him liable of retaliation, forcing him and Columbia to pay $750,000 in compensatory damages, with Bekaert, alone, paying another $500,000 in punitive damages (for a more extensive coverage).

The first lesson to be learned from the trial is that sexual harassment cases are very hard to prove in a court of law, even when multiple women complain at the same time, as in this case. In the absence of corroborating evidence, sexual harassment cases often come down to her word against his and the relative credibility of each party. Litigation is too expensive (both monetarily and emotionally) and not enough. While we should encourage and support women to speak up, we also need to explore other ways to make academia an environment where women can thrive. We senior faculty (and we male senior faculty in particular) should make respectful behavior towards women an explicit factor in our promotion and hiring decisions, in the same way teaching and mentoring PhD students currently are. In addition we should require—as suggested by Paola Sapienza, a finance faculty at Northwestern and board member of the Academic Female Finance Committee—from outside hires, especially those who come with an offer of tenure, a self-declaration that they behaved according to the ethics codes of their previous institutions, making it more difficult for known harassers to recycle themselves.

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August 11, 2018 in Legal Education, Tax | Permalink | Comments (1)

The Hitchhiker’s Guide To Law School Learning Outcomes

HitchhikersDebra Moss Vollweiler (Nova), Don’t Panic! The Hitchhiker’s Guide to Learning Outcomes: Eight Ways to Make Them More Than (Mostly) Harmless:

Legal education, professors and administrators at law schools nationwide have finally been thrust fully into the world of educational and curriculum planning. Ever since ABA Standards started requiring law schools to “establish and publish learning outcomes” designed to achieve their objectives, and requiring how to assess them debuted, legal education has turned itself upside down in efforts to comply. However, in the initial stages of these requirements, many law schools viewed these requirements as “boxes to check” to meet the standard, rather than wholeheartedly embracing these reliable educational tools that have been around for decades. However, given that most faculty teaching in law schools have Juris Doctorate and not education degrees, the task of bringing thousands of law professors up to speed on the design, use and measurement of learning outcomes to improve education is a daunting one.

Unfortunately, as the motivation to adopt them for many schools was merely meeting the standards, many law schools have opted for technical compliance — naming a committee to manage learning outcomes and assessment planning to ensure the school gets through their accreditation process, rather than for the purpose of truly enhancing the educational experience for students. For those law schools reluctantly trailing along on the learning outcome and assessment train, the best advice to schools thrown into this world comes from The Hitchhiker’s Guide to the Galaxy comedy science fiction series, in which the electronic guide of the same name tells those along for the ride “Don’t Panic!” (in large friendly letters) while describing our home planet as a whole, at least for part of the series, as “mostly harmless.” While schools should not be panicking at implementing and measuring learning outcomes, neither should they consign the tool to being a “mostly harmless” — one that misses out on the opportunity to improve their program of legal education through proper leveraging. Understanding that outcomes design and appropriate assessment design is itself a scholarly, intellectual function that requires judgment, knowledge and skill by faculty can dictate a path of adoption that is thoughtful and productive.

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August 11, 2018 in Legal Education | Permalink | Comments (0)

Friday, August 10, 2018

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Weisbord's Postmortem Austerity And Entitlement Reform

This week, Ariel Jurow Kleiman (San Diego) reviews a new essay by Reid K. Weisbord (Rutgers), Postmortem Austerity and Entitlement Reform, 71 Stan. L. Rev. Online 132 (2018).

StevensonAs readers know well, Social Security and Medicare are on a path to eventual insolvency, and entitlement reform is inevitable. For the most part, reform proposals tend to exist within the familiar bounds of tax hikes or benefit cuts. In his new essay on the topic, Reid K. Weisbord offers a bold reform proposal that includes elements of both, but is somehow not exactly either.  

Weisbord starts by dismissing the possibility of a broad-based tax increase to fund entitlements. A tax increase is unlikely in the near future, he argues, because history has witnessed a long-term trend of steadily declining tax rates in the United States. In addition, he notes, U.S. citizens are tax averse, often failing to recognize the connection between tax payments and valued public services. Under such conditions, cutting benefits may be politically more palatable than raising taxes. However, cutting benefits harms individuals who relied on Social Security and Medicare in planning for old age. To solve this dilemma, Weisbord proposes a novel policy of “postmortem austerity.” 

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August 10, 2018 in Ariel Stevenson, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Ray Madoff Named To 2018 Non Profit Times Power & Influence Top 50

Top 50Ray Madoff (Boston College) has been named to The 2018 Non Profit Times Power & Influence Top 50:

Madoff has become the go-to person for the counter-point argument when it comes to donor-advised funds. Her ideas are starting to influence lawmakers who see a big pot of unreachable, often stagnant dollars. The tax benefit is instant for money that can sit untouched. Madoff wants the money put to work faster. She’s right.

August 10, 2018 in Legal Education, Tax, Tax Profs | Permalink | Comments (0)

Tax Panels Today At SEALS

SEALs Logo (2013)Tax panels today at the 2018 SEALS Annual Conference in Ft. Lauderdale:

Tax Reform in the Trump Era
Congress and the Trump administration are working hard to institute a series of tax reforms focused in a variety of different areas, ranging from changing the individual rate structure to altering the international tax regime. This discussion group considers a variety of issues raised in the tax reform arena. Members of the discussion group consider both reforms already enacted by Congress and alternative proposals that either may still be enacted or that should have been enacted.

  • Alice Abreu (Temple)
  • Jennifer Bird-Pollan (Kentucky ) (moderator)
  • Neil Buchanan (George Washington)
  • William Byrnes (Texas A&M)
  • Cliff Fleming (BYU)
  • David Gamage (Indiana)
  • Rebecca Morrow (Wake Forest)
  • Shu-Yi Oei (Boston College)
  • Bret Wells (Houston)

Tax Law and Statutory Interpretation
Participants in this panel consider a variety of issues related to the design of particular tax law provisions, and the way that the drafting of tax legislation affects how that law will be interpreted. Topics considered include the taxation of employment non-compete arrangements, state level wealth transfer tax provisions, tax-exemption provisions, and social justice as it applies to particular taxpayers affected by the system.

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August 10, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Kleinbard: The Law And Policy Of Donor-Advised Funds

Kleinbard (2015)Following up on my previous posts:

TaxProf Blog op-ed:  The Law and Policy of Donor-Advised Funds, by Edward Kleinbard (USC):

Daniel Hemel’s analysis of Donor-Advised Funds is erroneous on both law and policy grounds.

As to law: you must begin with the self-evidently true factual proposition that the independence of the DAF from the donor is a sham. The DAF charity does what it is told to do by the donor, and not one whit more, or less. The DAF is the donor’s agent, not an independent actor that happens to get along with the donor. Were I in better health today I would litigate this for the government on a contingent fee basis. Moreover, the DAF itself does not put a single dollar to work in eleemosynary activity. It’s a personal financial asset that compounds at tax-free rates, a point that I think didn’t get developed in Dan’s piece.

What follows from this is that the DAF result is inconsistent with our annual system of accounting, in which expenses must relate to the period incurred. A firm that irrevocably prepays five years of TV advertising cannot deduct all five years’ worth today – yet that is the result that the DAF achieves. It is a simple end run around either cash or accrual accounting methods.

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August 10, 2018 in Tax | Permalink | Comments (4)

Pepperdine Wins ABA Law Student Division Public Interest Award

PABAABA Press Release, Pepperdine Wins ABA Law Student Division Public Interest Award:

The American Bar Association Law Student Division presented the Judy M. Weightman Memorial Public Interest Award to Pepperdine University School of Law at its Assembly during the ABA’s Annual Meeting in Chicago this past weekend.

“When the need arises, the legal community springs into action,” said Sarah Correll, incoming Director of Legal Education for the Law Student Division’s Council and a student at Indiana University Robert H. McKinney School of Law. “Pepperdine was no exception this year. Seeing a need following the hurricanes that devastated Texas, the Virgin Islands, Puerto Rico and Florida and the wildfires in California, the school created a Disaster Relief Legal Aid Clinic. Students worked on FEMA housing aid appeals for clients and coordinated a network of volunteer attorneys and legal aid groups. The students also ran three field clinics in Ventura and Santa Barbara. Pepperdine reminded these lawyers why they joined the profession, and we commend their efforts.”

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August 10, 2018 in Legal Education | Permalink | Comments (1)

ABA Tax Section Publishes New Issue Of Tax Times

ABA Tax Times (2016)The ABA Tax Section has published 37 Tax Times No. 4 (August 2018):

FROM THE CHAIR
A Time to Reflect
By Karen L. Hawkins (Hawkins Law, Yachats, OR)
A year serving as Chair of this Section seemed like a long time in August of 2017. Now as I approach August of 2018, I feel there is so much I won’t have time to finish (or start). That’s why succession is so important. Building on the positive legacies of those who came before you ensures those coming behind you will do the same.

FROM THE CHAIR-ELECT
The Coming Year
By Eric Solomon (Ernst & Young, Washington, D.C.)
It is an honor for me to be the next Chair of the Tax Section, and a privilege to have the opportunity to serve our members, the tax community, and the public.

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August 10, 2018 in ABA Tax Section, Tax | Permalink | Comments (0)

Thursday, August 9, 2018

NY Times: Who Gets a New 20% Tax Break? The Treasury Dept. Speaks

New York Times, Who Gets a New 20% Tax Break? The Treasury Dept. Speaks, and Trump May Save:

A new 20 percent tax break included in last year’s $1.5 trillion tax overhaul could wind up benefiting President Trump’s real estate empire given how the Treasury Department plans to implement the provision, several tax experts said.

On Wednesday, the Treasury Department issued a sprawling regulationoutlining the types of companies and professionals eligible to qualify as “pass-through” entities and get the 20 percent tax deduction. The widely anticipated rule has huge implications for law firms, real estate trusts, family farms and other companies that are structured so their profits are taxed as individual income for their owners.

The 184-page rule probably means a windfall for authors and small banks, who appear eligible for the 20 percent deduction, but a disappointment for dentists, who are not. It takes some steps meant to stop individuals and companies, such as law firms, from gaming the loophole to reduce their tax bills.

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August 9, 2018 in Tax | Permalink | Comments (0)

 The IRS Has Rehired Hundreds of Fired Employees. Congress Should Step In.

Daily Signal, The IRS Has Rehired Hundreds of Fired Employees. Congress Should Step In.:

For one of the most punitive agencies in the federal government, the IRS sure is forgiving with its own employees.

Rep. Kristi Noem, R-S.D., has proposed a bill that would prevent the IRS from rehiring employees fired for misconduct or poor performance. The bill, titled the Ensuring Integrity in the IRS Workforce Act, follows a recent Treasury inspector general report that shows the IRS rehired more than 200 fired workers in a little over a year. A previous inspector general report proves this problem dates back to at least 2009.

According to the Treasury Department’s inspector general, the IRS did not provide officials responsible for hiring decisions with information about employment history, though that information is readily available.  ...

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August 9, 2018 in IRS News, Tax | Permalink | Comments (1)

Want That 'A' In Law School? It Helps If Your Professor Looks Like You.

Following up on Tuesday's post, Stereotype Threat, Role Models, And Demographic Mismatch At A Top 100 Law School:  Law.com, Want that 'A' in Law School? It Helps If Your Professor Looks Like You.:

Fresh-faced law students will be showing up on campus later this month, gunning for top grades.
And their chances of landing a coveted A or A- in those all-important first-year courses are slightly better if their professors are the same race and sex as they are, according to recent research on the so-called “demographic mismatch” in law schools.

A trio of public administration professors examined demographics and grade data from an anonymous private law school ranked in the top 100 by U.S. News & World Report and found that first-year students were 3 percent less likely to get an A or A- when the class was taught by a professor of the opposite sex. Students were 10 percent less likely to receive those high grades when the professor was a different race. And the demographic mismatch effect was most pronounced among nonwhite female students, the researchers found.

The new paper throws cold water on the assumption that law students are immune to what’s known as the role model effect as well as stereotype threat—the phenomenon in which individuals feel anxiety or pressure to defy perceived stereotypes about their social group.

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August 9, 2018 in Legal Education | Permalink | Comments (2)

Dharmapala: The Consequences Of The TCJA's International Provisions — Lessons From Existing Research

Dhammika Dharmapala (Chicago), The Consequences of the TCJA's International Provisions: Lessons from Existing Research:

This paper discusses the potential consequences of the international tax provisions of the recent Tax Cut and Jobs Act (TCJA), drawing on existing research. The TCJA’s dividend exemption provision is expected to eliminate distortions to the amount and timing of dividend repatriations. However, the efficiency gains from increased repatriations — which are primarily expected to increase shareholder payout – are likely to be modest. The paper uses the observed behavior of firms during the repatriation tax holiday implemented in 2005 to infer the relative magnitudes of the burdens created by the repatriation tax under the old (pre-TCJA) regime and by the TCJA’s new “Global Intangible Low-Taxed Income” (GILTI). It concludes that the TCJA increases the tax burden on US residence for many, and perhaps most, US MNCs. The paper also argues that the GILTI and “Foreign-Derived Intangible Income” (FDII) provisions are likely to create substantial distortions to the ownership of assets, both in the US and around the world.

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August 9, 2018 in Scholarship, Tax | Permalink | Comments (0)