Friday, March 1, 2013
Florida State hosts a two-day symposium on One-Hundred Years of the Federal Income Tax:
2013 is the centennial of the modern U.S. income tax. Florida State will host a distinguished array of experts who will offer perspectives on what we have learned in 100 years and where we should go in the future.
Steven Bank (UCLA), Corporate Tax and the Remants of 1935: "Two of the most anomalous structural features of the corporate income tax are the graduated marginal rate system and the dividends received deduction. One appears to target large corporations for higher rates of tax while the other appears to permit large corporations to avoid those high rates by dividing up into a series of smaller corporations. Moreover, as currently codified, both provisions are quite puzzling, with rates and exemptions that appear to lack any policy justification at all. Perhaps the most intriguing aspect of these seemingly inconsistent provisions is that they were both enacted at the same time as part of the Revenue Act of 1935. This paper will examine the common origins of these provisions, how they strayed from their original mission, and why it will make sense to revisit their continued existence in light of changed circumstances."
Joseph M. Dodge (Florida State), Simplification of the Income Tax: "Will propose moves for simplification of the individual income tax, with a view to making the income tax intelligible and capable of compliance by “ordinary” individuals without the aid of tax preparation software or outside assistance. Simplification will be offered as a “ good government” project. Some of the proposals involve tax reform, but many do not."
Commentator: Joseph Bankman (Stanford)
Douglas A. Kahn (Michigan), A Proposed Replacement of the Tax Expenditure Concept and a Different Perspective on Accelerated Deprecation: "Will argue that the tax expenditure concept is grounded on an erroneous vision of the structure of an income tax system. The tax expenditure concept adopts a binary view of income taxation. It posits that there is an ideal or pure income tax system whose provisions are elements of the normal structure of that system without any influence from non-tax policy considerations. Tax provisions are described either as falling within those core provisions or outside of them. There are no other categories. To the contrary, this article will contend that tax provisions lie on a continuum in which some are in the core and some are at different distances from the core. The article will contend that virtually all tax provisions, including those within the core, reflect policy considerations. The decision whether to adopt or retain a provision takes into account both its proximity to the core and also the economic and societal consequences (both positive and negative) that the provision will cause. There is no universal tax system for all times. Tax laws are (and should be) constructed to coordinate with the needs and values of society as they change over time. The article also will contend that there is not just one proper method of depreciation, and that accelerated depreciation is as consistent with neutral tax principles as is straight-line depreciation."
Gregg D. Polsky (North Carolina), Will Technology Save or Destroy the Federal Income Tax?: "Will discuss how future technological innovations may affect tax compliance, administration, and policy over the next hundred years, including whether innovations could make transition to a consumption tax more feasible, administratively and politically."
Daniel N. Shaviro (NYU), The Forgotten Henry Simons (PowerPoint Slides): "Will look at some of the classic literature from the early years of the federal income tax — including works of Simons, Fisher, and Adams — to examine what has changed and what remains the same in our understanding of the issues. Will consider contemporary literature on optimal income taxation, income versus consumption tax, and international tax."
Commentator: Chris William Sanchirico (Pennsylvania)
Lawrence A. Zelenak (Duke), Will the Fabulous Invalid Survive for a Second Century?: "Will speculate on the prospects of the income tax surviving for another hundred years. This entails having a sense of what makes the income tax an income tax and thus what features would have to have survived in order for the income tax to have survived. Will argue that, in the popular understanding, taxing income (rather than consumption) is only one of these defining features, and probably not the most important one. Other major features are mass direct taxation of individuals, progressive rates, and significant use of exclusion, deductions, and credits. Will predict that most of these features are likely to survive foreseeable future, even if the base of the tax is converted from income to consumption. Thus, the income tax as understood by the public is likely to survive even if the income tax as understood by tax specialists disappears."
Dinner Speaker: Clarissa Potter (Deputy Tax Director, AIG; Former Deputy Chief Counsel, IRS), Current Climate for Tax Reform