TaxProf Blog

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

Saturday, March 29, 2014

Crane Presents When Is a Tax on Value (Not) a Tax on Income? at Washington University

CraneCharlotte Crane (Northwestern) presented When Is a Tax on Value (Not) a Tax on Income? An Exploration of the Puzzles in PPL v. Commissioner at Washington University yesterday as part of its International Tax Speakers Series hosted by Adam H. Rosenzweig:

This paper uses the issues raised by PPL v. United States (569 U.S. ___ (2013)) to explore whether an income tax can be distinguished from a wealth tax (or other tax on a single value) in a way that could be implemented, either for the purpose of defining those taxes for which the foreign tax credit was originally designed, or for the purpose of distinguishing income taxes from those tax instruments that remain beyond the reach of Congress even with the 16th amendment. It identifies two possible interrelated distinctions, that is, that an “income tax” must contain within its terms the criteria for ensuring that, should it be reimposed, proper allowance would be given for the initial imposition, and, if values are taxed without realization, later impositions must allow adjustment if those values will never be realized. (In simpler terms, unless a tax uses “basis” in a meaningful way, it is not an income tax.)

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