TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Sunday, April 30, 2017

Whittier Law School Died Many Years Ago, When It Strayed From Its Founding Mission To Prepare Students To Pass The Bar And Succeed As Lawyers

WhittierFollowing up on my previous posts on the closure of Whittier Law School (links below):  Jill Switzer (J.D. 1976, Whittier; Blogger, Old Lady Lawyer), Requiem For My Law School:

I will leave it to others to report, examine, and dissect the upcoming demise aka closing of Whittier Law School.

This is a very personal memorial to a school that had really died some years ago, although it didn’t know it then.

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April 30, 2017 in Legal Education | Permalink | Comments (21)

The 'Better Way' House Tax Plan: An Economic Analysis

CRS LogoJane G. Gravelle (Congressional Research Service), The “Better Way” House Tax Plan: An Economic Analysis (R44823) (Apr. 25, 2017):

On June 24, 2016, House Speaker Paul Ryan released the Better Way Tax Reform Task Force Blueprint, which provides a revision of federal income taxes. For the individual income tax, the plan would broaden the base, lower the rates (with a top rate of 33%), and alter some of the elements related to family size and structure by eliminating personal exemptions, allowing a larger standard deduction, and adding a dependent credit. For business income, the current income tax would be replaced by a cash-flow tax rebated on exports and imposed on imports, with a top rate of 20% for corporations and 25% for individuals. The cash-flow tax would be border-adjusted (imports taxed and exports excluded), making domestic consumption the tax base. The system would also move to a territorial tax in which foreign source income (except for easily abused income) would not be taxed. In addition, the proposal would repeal estate and gift taxes. Although the Affordable Care Act (ACA) taxes are not repealed in the Better Way tax reform proposal, ACA taxes are repealed in the Healthcare Task Force proposals.

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April 30, 2017 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [398 Downloads]  Background and Current Status of FATCA, by William Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  2. [359 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)
  3. [232 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  4. [203 Downloads]  The First McGee Annual Report on the Best and Worst States for Business, by Robert W. McGee (Fayetteville State University)
  5. [186 Downloads]  BEPS and the New International Tax Order, by Allison Christians (McGill)

April 30, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Lederman Presents Does Enforcement Crowd Out Voluntary Tax Compliance? At Indiana

LedermanLeandra Lederman (Indiana-Bloomington) presented To What Extent Does Enforcement Crowd Out Voluntary Tax Compliance? yesterday at the Indiana University School of Public and Environmental Affairs Conference on Applied Research in Public Finance

Tax collectors generally use enforcement methods, such as audits and the imposition of penalties, to deter noncompliance with tax laws. Although this approach is consistent with most economic modeling of tax compliance, some scholars caution that enforcement may backfire, “crowding out” taxpayers’ intrinsic motivations to pay taxes to such an extent that they reduce their tax payments. This article analyzes the existing evidence to determine if and when this occurs. Field studies suggest that enforcement tools, such as audits, are effective deterrents, generally greatly increasing tax collections.

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April 30, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Saturday, April 29, 2017

This Week's Ten Most Popular TaxProf Blog Posts

NY Times ('Laughable Stunt By Plutocrats To Enrich Themselves'), WSJ ('Ambitious Course Correction To Restore Broad-Based Prosperity') Debate Trump's Tax Plan

Trump Tax PlanNew York Times editorial, President Trump’s Laughable Plan to Cut His Own Taxes:

As a rule, Republican presidents like offering tax cuts, and President Trump is no different. But the skimpy one-page tax proposal his administration released on Wednesday is, by any historical standard, a laughable stunt by a gang of plutocrats looking to enrich themselves at the expense of the country’s future.

Two of Mr. Trump’s top lieutenants — Steven Mnuchin and Gary Cohn, both multimillionaires and former Goldman Sachs bankers — trotted out a plan that would slash taxes for businesses and wealthy families, including Mr. Trump’s, in the vague hope of propelling economic growth. So as to not seem completely venal, they served up a few goodies for the average wage-earning family, among them fewer and lower tax brackets and a higher standard deduction. ...

Mr. Trump’s plan aims to cut corporate tax rates from 35 percent to 15 percent. ... Mr. Trump would also apply that 15 percent tax rate to pass-through income that business owners get from limited liability companies, a change that would directly benefit real estate developers like him. This would also create a huge incentive for wealthy Americans to turn their earnings into pass-through income in order to avoid paying higher personal income tax rates. This is no idle threat. Many Kansas residents, including the men’s basketball coach of the University of Kansas, have sheltered income in L.L.C.s since that state exempted income generated through such legal structures from its income tax in 2012. ...

Mr. Trump has already sent a strong message about where his sympathies really lie. They lie not with the working people who elected him, but with the plutocracy that envelops him.

Wall Street Journal editorial, Trump’s Tax Principles:

The White House rolled out its tax principles on Tuesday, investing new energy in the first serious reform debate in 30 years. While the details are sparse and will have to be filled in by Congress, President Trump’s outline resembles the supply-side principles he campaigned on and is an ambitious and necessary economic course correction that would help restore broad-based U.S. prosperity.

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April 29, 2017 in Tax | Permalink | Comments (9)

More Data On The Closure Of Whittier Law School

WhittierFollowing up on my previous posts on the closure of Whittier Law School (links below):  Derek Muller (Pepperdine), Examining Whittier:

[W]hile emotions are still raw and much remains uncertain, I thought I'd dig into a few publicly-accessible details to examine what's happened at Whittier in the last decade or so. I'll try to be mostly descriptive. Whether one believes the best decision is to close the school, or to address the school's challenges in a different way, is far beyond the scope of this blog (and beyond the available information we have).

Here is one of the six charts:

Muller

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April 29, 2017 in Legal Education | Permalink | Comments (1)

Kleinbard:  Trump's Candy Land School Of Tax Reform

CandylandLos Angeles Times op-ed: Trump's Candy Land School of Tax Reform, by Edward D. Kleinbard (USC):

The Republican Party is devoted to tax reform, by which it really means tax cuts, but underneath this apparent laser-like focus lie conflicting schools of thought. The one embraced by President Trump is the Candy Land School.

The Candy Land School argues that tax cuts are always good, and that resulting government deficits are inconsequential, ostensibly because those tax cuts will trigger unprecedented economic growth that in turn will yield even higher tax revenues. It promises gifts for all today, and assumes away tomorrow.

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April 29, 2017 in Tax | Permalink | Comments (4)

Friday, April 28, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a rare Tax Court victory for a taxpayer who succeeded in being treated as a real estate professional for purposes of the passive loss rules.

KristanA.M. real estate pro, P.M. stockbroker

The IRS wins most cases in Tax Court involving taxpayers whose real estate rental losses have been disallowed. The tax law, after all, is stacked against taxpayers wanting those losses. They are automatically passive unless the taxpayer passes two stern tests:

  • The taxpayer has to work at least 750 hours during the year in a “real estate trades or businesses,” and
  • The taxpayer has to work more in real estate than in anything else.

This “real estate professional” rule usually filters out taxpayers with day jobs outside of real estate.

Yesterday’s taxpayer victory in Tax Court on this issue is a notable exception. The taxpayer worked mornings on her rentals. Then she went to her other job. Judge Paris takes up the story:

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April 28, 2017 in New Cases, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews an article by Susanna Camic Tahk (Wisconsin), The New Welfare Rights, Brooklyn L. Rev. (forthcoming):  

Scharff (2017)Susannah Camic Tahk’s previous work has explored the “tax war on poverty,” as she calls it.  In her forthcoming article, Camic Tahk considers a potential upside of federal poverty policy’s shift from direct spending to refundable tax credits: the significant procedural protections afforded taxpayers.  Camic Talk’s article compares these taxpayer rights to the failure of War on Poverty lawyers to instantiate a “new property right” in welfare benefits and persuasively argues that these taxpayer rights rest on much more solid legal footing.  Camic Tahk’s article further suggests the ways that a taxpayer rights framework offers opportunities for improving the ways low income taxpayers interact with the IRS.

Camic Tahk’s paper begins by recounting the aspirations of the Great Society poverty law lawyers.  Drawing on accounts by historians and political scientists as well as legal academics, Camic Tahk explains how the hopes of these reformers were raised when Goldberg v. Kelly expanded due process rights, and how their hopes were dashed by the Eldridge v. Matthews balancing test.  Subsequent legislative changes, most prominently the passage of the Personal Responsibility and Work Opportunity Act (“PRWORA,” or, more commonly, welfare reform) further struck a blow to the idea that recipients might have due process claims when denied government benefits.  As Camic Tahk explains, post-welfare reform court decisions saw the PRWORA as explicitly attempting to avoid the entitlement language that would make benefits subject to Goldberg’s expansive endorsement of due process rights.

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April 28, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

UC-Hastings Hosts Northern California Tax Roundtable

NorCalUC-Hastings hosts the Spring 2017 Northern California Tax Roundtable today with these papers:

Joseph Bankman (Stanford), Collecting the Rent: The Global Battle to Capture MNE Profits (with Mitchell Kane (NYU) & Alan Sykes (Stanford))
Commentator: Manoj Viswanathan (UC Hastings)

Mark Gergen (UC-Berkeley), How to Tax Global Capital
Commentator:  Annette Nellan (San Jose State)

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April 28, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Fleming, Peroni & Shay Receive Tulane Law Review Award For Excellence in Legal Scholarship

Tulane (2015)J. Clifton Fleming Jr. (BYU), Robert J. Peroni (Texas), and Stephen E. Shay (Harvard) received the Tulane Law Review's John Minor Wisdom Award for Academic Excellence in Legal Scholarship, given annually to the authors of the best article in the current volume, for their article, Two Cheers for the Foreign Tax Credit, Even in the BEPS Era, 91 Tul. L. Rev. 1 (2016):

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April 28, 2017 in Legal Education, Scholarship, Tax | Permalink | Comments (1)

Thursday, April 27, 2017

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 70, No. 2 (Winter 2017):

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April 27, 2017 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Hemel:  Can New York Publish President Trump's State Tax Returns?

Trump Tax ReturnsFollowing up on my previous post, The Quick And Easy Way To See Trump’s Tax Returns:  Daniel Hemel (Chicago), Can New York Publish President Trump's State Tax Returns?, 127 Yale L.J. Forum ___ (2017): 

Breaking from a decades-old norm of presidential tax transparency, Donald Trump has refused to make his federal income tax returns available for public inspection. Congressional leaders have blocked bipartisan legislation that would compel the President to disclose his returns. New York State, however, has a unique opportunity to ensure that the practice of presidential tax transparency endures. As a longtime New York resident, President Trump files state tax returns that contain most of the information found in his federal filings. A bill pending in the New York State Legislature would direct state tax authorities to release returns filed by the President and statewide elected officials. If the bill becomes state law, it will do much to protect the norm of presidential tax transparency from Trump’s attack.

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April 27, 2017 in Scholarship, Tax | Permalink | Comments (2)

Dimick:  Should The Law Do Anything About Economic Inequality?

Matthew Dimick (SUNY-Buffalo), Should the Law Do Anything About Economic Inequality?, 26 Cornell J.L. & Pub. Pol'y 1 (2016):

What should be done about rising income and wealth inequality? Should the design and adoption of legal rules take into account their effects on the distribution of income and wealth? Or should the tax-and-transfer system be the exclusive means to address concerns about inequality? A widely-held view argues for the latter: only the tax system, and not the legal system, should be used to redistribute income. While this argument comes in a variety of normative arguments and has support across the political spectrum, there is also a well-known law-and-economics version. This argument, known as the “double-distortion” argument, is simply stated. Legal rules that redistribute income only add to the economic distortions that are already present in the tax system. It would therefore be better for everyone, and especially the poor, to instead adopt an efficient, nonredistributive legal rule, and increase redistribution through the tax system.

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April 27, 2017 in Scholarship, Tax | Permalink | Comments (5)

Tahk:  The New Welfare Rights

Susannah Camic Tahk (Wisconsin), The New Welfare Rights, 82 Brook. L. Rev. ___ (2017):

Participating in the tax system gives rise to what could be enormously powerful rights for poor people. The tax system has become one of the main tools the U.S. uses to fight poverty. A thick bundle of tax rights accompanies the many tax antipoverty programs. This paper is the first to recognize the potentially substantial rights that poor people have through the tax code. For decades, poverty law advocates and scholars have lamented the decline of the “welfare rights” that poor people once had in their benefits. No one has yet recognized that in fact poor people still have substantial rights in the tax code. These “new welfare rights” are not rights that lawmakers are attempting to weaken but rights that they are strengthening. However, lawyers and lawmakers have yet to unlock the potential that tax rights have to improve the lives of poor people. This paper discusses two methods by which this can happen.

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April 27, 2017 in Scholarship, Tax | Permalink | Comments (0)

Teetering Charlotte Law School Seeks To Toss Class Actions

Charlotte Logo (2016)Following up on my previous posts (links below):  Law.com, Teetering Charlotte Law School Seeks to Toss Class Actions:

The Charlotte School of Law has fired back in court against students and recent graduates who allege they should have been informed sooner of the school’s shaky accreditation status that prompted the federal government to pull their access to student loans late last year.

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April 27, 2017 in Legal Education | Permalink | Comments (1)

Chodorow:  Bitcoin And The Definition Of Foreign Currency

Florida Tax Review  (2015)Adam Chodorow (Arizona State), Bitcoin and the Definition of Foreign Currency, 19 Fla. Tax Rev. 365 (2016):

The IRS recently dealt a blow to Bitcoin enthusiasts by ruling that Bitcoin and other similar currencies should be treated as property – and not foreign currency – for income tax purposes. As a result, those who use bitcoins to purchase goods or services must report gain or loss on each transaction if the bitcoins have changed value between the time they were acquired and spent. Treating Bitcoin as a foreign currency would have permitted individuals to take advantage of the personal use exemption, which could facilitate Bitcoin’s adoption, and required taxpayers to adopt a formulaic system for tracking the basis of commingled bitcoins. The IRS’s decision seems correct as a matter of positive law, but laws can always be changed.

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April 27, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 26, 2017

Harvard Law School, The GRE, And Moneyball

GRE Harvard MoneyballFollowing up on my previous posts:

Forbes, Harvard Law School's Moneyball Moment:

Starting with next year’s admissions cycle, Harvard Law school will launch a pilot program allowing applicants to apply with either the Law School Admissions Test (LSAT), the standardized test that nearly all law schools have used for decades, or the GRE General Test (GRE), used by many graduate programs outside of law or medical school. ... 

[M]uch of what makes Harvard Harvard is the quality of the talent it is able to attract. The lure of Wall Street or Silicon Valley, the availability of capital for everything from biotech to software to social media start-ups, and the increasingly tenuous ROI for students ready to invest time and money in an expensive law degree are all siphoning off their share of recent college graduates who might otherwise have chosen law school.

It is to Harvard’s advantage to increase access to top talent and to be able to cast a wider net. As Jessica Soban, Harvard Law School’s Associate Dean for Strategic Initiatives and Admissions, put it, “Harvard Law School works to eliminate barriers to legal education for top talent. We seek that talent from a variety of backgrounds: across different academic disciplines, different countries, and different socio-economic backgrounds.”

Enter the GRE. By accepting the GRE, in one fell swoop, Harvard gets access to 600,000 test takers in 160 different countries and a test that applicants can schedule 360 days a year. The LSAT, by comparison, is administered four times a year in 20 different countries, to about 85,000 students. If you are looking for talent, the GRE pool is far wider and far deeper, in part because the test is far more accessible. ... The wonder is not that they broke with tradition by accepting the GRE, the wonder is that they didn’t do it sooner.

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April 26, 2017 in Legal Education | Permalink | Comments (5)

Bird-Pollan Presents Philosophy And Wealth Transfer Taxation At Georgetown

Bird-Pollan (2017)Jennifer Bird-Pollan (Kentucky) presented Philosophy and Wealth Transfer Taxation at Georgetown yesterday as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

Tax policy discussions are dominated by economic theories, and often do not involve philosophical analysis. Because tax is applied distributive justice, it makes sense to bring the insights of philosophy to bear on the work of creating and implementing tax laws. As one model of how philosophy can inform discussions of tax policy, this project looks in particular at the taxation of wealth transfers from different philosophical perspectives. Because wealth transfer taxes, more than most income or consumption taxes, are enacted primarily to redistribute wealth and to increase equality of opportunity, focusing on these taxes, rather than on the more widely used income tax, allows the analysis to focus on how the tax does or does not comply with the philosophical goals of the society that enacted the rule.

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April 26, 2017 in Scholarship, Tax | Permalink | Comments (1)

Schizer:  Taxing Corporations Or Shareholders (or Both)

David M. Schizer (Columbia), Between Scylla and Charybdis: Taxing Corporations or Shareholders (or Both), 116 Colum. L. Rev. 1849 (2016):

The US taxes both corporations and shareholders on corporate profits. In principle, the U.S. could rely on only one of these taxes, as many commentators have suggested. Although choosing to tax the corporation or its owners may seem like taking money from one pocket or the other, this Essay emphasizes a key difference: corporate and shareholder taxes prompt different tax planning. Relying on one or the other mitigates some distortions and leaks, while exacerbating others. As a result, choosing which tax to impose is like navigating between Scylla and Charybdis.

In response to these dualing distortions, this Essay recommends using both taxes. Some tax should be collected from corporations, and some from investors. The two rates should be coordinated, so they aggregate to the combined rate Congress wants, which ideally would be the rate for pass-through businesses. The main goal of this Essay is to defend the use of both taxes, and to analyze what the balance should be between them. Using both taxes has three advantages. First, if one of these partially overlapping instruments is avoided, the other still raises some revenue. Second, if the goal is to deter a planning strategy, cutting the rate to zero is an overreaction. If the rate is low enough, paying a tax is cheaper than avoiding it, since tax planning is not free. Third, if one tax is cut instead of repealed, the other can be correspondingly lower, and thus induces less planning.

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April 26, 2017 in Scholarship, Tax | Permalink | Comments (0)

Muller:  Visualizing Law School Employment Outcomes In California, Illinois, New York, And Texas

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through April 1, 2017) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

67,467

Reuven Avi-Yonah (Mich.)

12,371

2

Michael Simkovic (S. Hall)

35,950

Lily Batchelder (NYU)

8820

3

Paul Caron (Pepperdine)

32,954

Michael Simkovic (S. Hall)

4437

4

D. Dharmapala (Chicago)

30,412

D. Dharmapala (Chicago)

4183

5

Louis Kaplow (Harvard)

27,954

Michael Graetz (Columbia)

3355

6

Vic Fleischer (San Diego)

23,603

Richard Ainsworth (BU)

2873

7

James Hines (Michigan)

22,752

Ed Kleinbard (USC)

2782

8

Ed Kleinbard (USC)

22,399

David Weisbach (Chicago)

2410

9

Richard Kaplan (Illinois)

21,890

Dan Shaviro (NYU)

2389

10

Ted Seto (Loyola-L.A.)

21,870

Louis Kaplow (Harvard)

2315

11

Richard Ainsworth (BU)

20,390

Paul Caron (Pepperdine)

2275

12

Katie Pratt (Loyola-L.A.)

20,061

William Byrnes (Texas A&M)

2207

13

David Weisbach (Chicago)

19,086

David Gamage (Indiana)

1990

14

Robert Sitkoff (Harvard)

18,751

Robert Sitkoff (Harvard)

1979

15

Brad Borden (Brooklyn)

18,113

Jeff Kwall (Loyola-Chicago)

1815

16

Carter Bishop (Suffolk)

17,985

Omri Marian (UC-Irvine)

1748

17

Chris Sanchirico (Penn)

17,443

Francine Lipman (UNLV)

1685

18

Francine Lipman (UNLV)

17,405

Brian Galle (Georgetown)

1631

19

Jen Kowal (Loyola-L.A.)

17,366

Christopher Hoyt (UMKC)

1506

20

Dan Shaviro (NYU)

16,957

Jordan Barry (San Diego)

1497

21

Bridget Crawford (Pace)

16,870

Steven Bank (UCLA)

1482

22

Dennis Ventry (UC-Davis)

16,428

Yariv Brauner (Florida)

1481

23

David Walker (Boston Univ.)

15,610

Bridget Crawford (Pace)

1471

24

Steven Bank (UCLA)

14,676

Katie Pratt (Loyola-L.A.)

1432

25

Gregg Polsky (Georgia)

13,780

Brad Borden (Brooklyn)

1425

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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April 26, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Reports Of Extreme Income Inequality Are Exaggerated Due To Shift In S-Corporation Income Among The Very Wealthiest

Fatih Guvenen (Minnesota) & Greg Kaplan (Chicago), Top Income Inequality in the 21st Century: Some Cautionary Notes:

Since 2000, different measures of top income inequality have exhibited very different trends. Top income shares based on measures of total income show a continued rise, whereas top income shares based on wage and salary income show no increase in inequality post-2000. The most important difference between these two measures of income is the income that accrues to S-corporations. Moreover, the majority of the recent increase in top income shares is due to an increase in average earnings at very high income levels, much higher than that assumed in typical discussions of top income inequality. Once incomes above the 99.99th percentile are excluded (around $7 million in 2012), we see that little continued growth in top income shares has taken place in the last 20 years. Put simply, so far in the 21st century, all the action in top income shares has been S-corporation income at very, very high income levels. ...

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April 26, 2017 in Scholarship, Tax | Permalink | Comments (3)

Tuesday, April 25, 2017

Slemrod Presents Taxing Hidden Wealth: The Consequences Of U.S. Enforcement Initiatives On Evasive Foreign Accounts At NYU

Slemrod (2017)Joel Slemrod (Michigan) presented Taxing Hidden Wealth: The Consequences of U.S. Enforcement Initiatives on Evasive Foreign Accounts (with Niels Johannesen (Copenhagen), Patrick Langetieg (IRS), Daniel Reck (UC-Berkeley) & Max Risch (Michigan)) at NYU yesterday as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

Beginning in 2009, the IRS initiated a series of enforcement efforts to curb the use of offshore accounts to facilitate tax evasion, along with a voluntary disclosure program to encourage individuals with foreign accounts to become compliant with tax law. This paper examines the impact of increased enforcement activity on U.S. taxpayers’ statements of foreign accounts and reported income on tax returns. We find that enforcement initiatives increased the number of individuals reporting foreign accounts to the IRS by at least 19 percent, and they increased total wealth disclosed by at least $75 billion.

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April 25, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Organ:  The 2016 Law School Transfer Market

ArtJerry Organ (St. Thomas) has a detailed blog post on the 2016 law school transfer market.  The transfer market is essentially flat, with Arizona State, Emory, George Washington, and Georgetown the dominant players (and Loyola-L.A., UCLA, and USC the dominant players in California):

Organ 1A

[I]n the. two charts [below], the “repeat players” are bolded — those schools in the top 15 for all three years are in black, those schools in the top 15 for two of the three years are in blue.

Organ 3

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April 25, 2017 in Legal Education | Permalink | Comments (2)

Bank, Cheffins & Wells:  Executive Pay—What Worked?

Steven A. Bank (UCLA), Brian R. Cheffins (Cambridge) & Harwell Wells (Temple), Executive Pay: What Worked?,  42 J. Corp. L. 59 (2016):

CEO pay is a controversial issue in America but there was a time, often overlooked today, when chief executives were not paid nearly as much as they are now. From 1940 to the mid-1970s executive pay was modest by today’s standards even though U.S. business was generally thriving. What worked to keep executive pay in check? Economist Thomas Piketty and others credit high marginal income tax rates, leading to calls for a return to a similar tax regime. This paper casts doubt on the impact tax had and also shows that neither the configuration of boards nor shareholder activism played a significant role in constraining executive pay. It emphasizes instead the roles played by strong unions, a different and more circumscribed market for managerial talent, and social norms, explanations that do not easily lend themselves to generating modern policy prescriptions.

Bank

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April 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

Temperature Rises In Debate Over Closure Of Whittier Law School; Are 5-25 Law Schools In A 'Death Spiral' Leading To Closure Over The Next Five Years?

WhittierFollowing up on my previous posts:

Dan Rodriguez (Dean, Northwestern), The Hubris of the Unknowing:

I would not presume to know nearly enough to opine about this issue in any public fashion. But this does not appear to deter various pundits — Prof. Stephen Diamond most recently.

Stephen Diamond (Santa Clara), From the Shores of Lake Michigan Came a Howl …:

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April 25, 2017 in Legal Education | Permalink | Comments (17)

Pittsburgh Tax Review Issues Call For Papers

Pittsburgh Tax Review (2017)With some room still remaining in its coming fall issue, the peer-reviewed Pittsburgh Tax Review invites the submission of articles and essays for publication in the journal’s Fall 2017 issue. Submissions can be sent directly to Anthony Infanti, preferably prior to June 1, 2017.

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April 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

North Carolina AG Opens Investigation Of Charlotte Law School

Charlotte Logo (2016)Following up on my previous posts (links below):  Politico, North Carolina Opens Investigation Into For-Profit Law School:

North Carolina Attorney General Josh Stein has opened an investigation into Charlotte School of Law, the for-profit institution that the Obama administration cut off from federal funding last December. Laura Brewer, a spokeswoman for Stein, confirmed in an email to Morning Education that the office “is investigating the school under the state’s civil consumer protection laws and is very concerned about the current situation at the school.”

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April 25, 2017 in Legal Education | Permalink | Comments (0)

Monday, April 24, 2017

Hemel Presents The Federalist Safeguards of Progressive Taxation Today At Pepperdine

HemelDaniel Hemel (Chicago) presents The Federalist Safeguards of Progressive Taxation, 93 NYU L. Rev. ___ (2017), at Pepperdine today as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine:

This essay considers the distributional consequences of the Supreme Court’s federalism jurisprudence over the past quarter century, focusing specifically on the anticommandeering, anti-coercion, and state sovereign immunity doctrines. The first of these doctrines prevents Congress from compelling the states to administer federal programs; the second prevents Congress from achieving the same result through offers that for practical purposes the states cannot refuse; the third prohibits Congress from abrogating state sovereign immunity outside a limited class of cases. These doctrines vest the states with valuable entitlements and allow the states to sell those entitlements back to Congress for a price. In this respect, the doctrines have an intergovernmental distributional effect, shifting wealth from the federal government to the states.

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April 24, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Trump Signs Executive Order Rolling Back Obama Tax Regulations

Trump SigningExecutive Order, Identifying and Reducing Tax Regulatory Burdens (Aug. 21, 2017):

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1.  Policy.  The Federal tax system should be simple, fair, efficient, and pro-growth.  The purposes of tax regulations should be to bring clarity to the already complex Internal Revenue Code (title 26, United States Code) and to provide useful guidance to taxpayers.  Contrary to these purposes, numerous tax regulations issued over the last several years have effectively increased tax burdens, impeded economic growth, and saddled American businesses with onerous fines, complicated forms, and frustration.  Immediate action is necessary to reduce the burden existing tax regulations impose on American taxpayers and thereby to provide tax relief and useful, simplified tax guidance.

Sec. 2.  Addressing Tax Regulatory Burdens.  (a)  In furtherance of the policy described in section 1 of this order, the Secretary of the Treasury (Secretary) shall immediately review all significant tax regulations issued by the Department of the Treasury on or after January 1, 2016, and, in consultation with the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, identify in an interim report to the President all such regulations that:

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April 24, 2017 in Tax | Permalink | Comments (1)

Jennifer Bard Sues University Of Cincinnati In Federal Court, Seeks Reinstatement As Law School Dean

UC BardFollowing up on my previous posts (links below):  Press Release:

Jennifer Bard, the first female Dean of the College of Law at the University of Cincinnati (UC), late this past Friday filed a lawsuit against the University and its interim provost Peter F. Landgren in the U.S. District Court, Southern District of Ohio, Western Division. 

The complaint asserts Landgren and the institution illegally placed Bard on administrative leave in March immediately following her response to local media reports about financial deficits at the College and faculty members’ responses to her efforts to reduce those deficits.

Marjorie Berman, of Krantz & Berman LLP in New York City and R. Gary Winters, of McCaslin, Imbus & McCaslin in Cincinnati, are representing Bard in the matter.

“The University of Cincinnati has deprived Dean Bard of her rights under the U.S. Constitution,” said Berman. “She has been wrongfully placed on administrative leave by an Interim Provost in violation of her constitutional rights and the explicit policies of the institution. Landgren retaliated against her for providing factual information to the media about substantive financial difficulties at the UC College of Law and the response of a small group of faculty to these difficulties.

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April 24, 2017 in Legal Education | Permalink | Comments (6)

Anderson:  Whittier Law School Closing Is Another Sad Story Of Generational Wealth Shifting, With Millennial Students Incurring Huge Debts To Subsidize Baby Boomer Faculty Sinecures

WhittierFollowing up on my previous posts (links below):  Robert Anderson (Pepperdine), Generational Wealth Shifting and the Unnecessary Whittier Law School Story:

[G]iven the performance of Whittier's grads on the bar exam in recent years as well as the drop in applications, closing Whittier is probably the right decision.

The unfortunate truth of this story is that none of this needed to happen. ... When the contraction began, law schools should have reduced class sizes to maintain their traditional standards for admission. ... Of course, reducing class size would entail a decrease in revenues that would require a reduction in expenses. Normally, such a reduction would be hard to find.

But law schools had a unique opportunity during this contraction, which many of them squandered. The number of retirement-age faculty was (and is) enormous, likely larger than it has ever been. If faculties had looked beyond their own personal financial self interest they could have easily contracted to meet the market demand and avoided the disastrous effects that have afflicted law students and now law schools.

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April 24, 2017 in Legal Education | Permalink | Comments (17)

Trump Promises To Unveil 'Massive' Tax Cut On Wednesday, Leaving Treasury Department Officials 'Speechless'

Trump

New York Times, Trump Vows to Unveil Tax-Cut Plan Next Week, Surprising Staff:

President Trump promised on Friday that he would unveil a “massive” tax cut for Americans next week, vowing a “big announcement on Wednesday,” but he revealed no details about what is certain to be an enormously complicated effort to overhaul the nation’s tax code.

Mr. Trump offered his tax tease in an interview and again during remarks at the Treasury Department on Friday afternoon as he raced to stack up legislative accomplishments before his 100th day in office at the end of next week.

His announcement surprised Capitol Hill and left Mr. Trump’s own Treasury officials speechless as he arrived at the Treasury offices to sign directives to roll back Obama-era tax rules and financial regulations. Earlier in the day, when reporters asked Steven Mnuchin, the Treasury secretary, how far away a tax overhaul proposal was, he said he could not give an answer. “Tax reform is way too complicated,” he said.

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April 24, 2017 in Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, April 23, 2017

Diamond:  Whittier's Decision To Close Its Law School Violates AAUP Tenure Protections, Harms Diversity, And Ignores The Rebounding Legal Employment Market

WhittierFollowing up on my previous posts (links below):  TaxProf Blog op-ed: Whittier’s Big Mistake, by Stephen Diamond (Santa Clara):

Inevitably law school critics are crowing over the recently announced closure by Whittier College of its 50 year old ABA accredited law school. The news shocked and angered students who appeared to have no advance notice. Faculty immediately filed for a TRO (represented by a recent star graduate of their own law school, by the way) which was denied but they no doubt intend to respond with a full lawsuit.

And they should.

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April 23, 2017 in Legal Education | Permalink | Comments (7)

Today Is Tax Freedom Day — Earlier In MS, TN & SD, Later In CT, NJ & NY

Tax Foundation logoTax Foundation, Tax Freedom Day 2017 is April 23rd:

  • This year, Tax Freedom Day falls on April 23rd, 113 days into the year.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
  • Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of more than $5.1 trillion, or 31 percent of the nation’s income.
  • Americans will collectively spend more on taxes in 2017 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later, on May 7.

Tax Freedom Day

Center on Budget and Policy Priorities, Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens: Figures May Mislead Policymakers, Journalists, and the Public:

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April 23, 2017 in Tax, Think Tank Reports | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper:

  1. [355 Downloads]  Background and Current Status of FATCA, by William Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  2. [346 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)
  3. [328 Downloads]  Destination-Based Cash Flow Taxation, by Alan Auerbach (UC-Berkeley), Michael P. Devereux (Oxford), Michael Keen (IMF) & John Vella (Oxford)
  4. [216 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  5. [200 Downloads]  The First McGee Annual Report on the Best and Worst States for Business, by Robert W. McGee (Fayetteville State University)

April 23, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 1445:  'True The Vote v. IRS' Lawyer: 'The Deep State Is Still Operating'

IRS Logo 2PJ Media, 'True the Vote v. IRS' Lawyer: 'The Deep State Is Still Operating':

A prominent constitutional attorney is sounding the alarm over Obama administration-style behavior by attorneys in President Trump's new administration. Jim Bopp, Jr., the attorney for the plaintiff in the landmark Citizens United suit, told PJ Media that he has seen no change in the attitude of government attorneys since Trump's inauguration:

The Deep State is still operating, no question. ...

I see no evidence the attitude of the IRS has changed. We have a new attorney general, and the Department of Justice is providing the lawyers to defend the IRS in this case. We've seen no change.

Bopp is currently involved with two similarly high-profile suits against the federal government and he says the Trump administration's defense attorneys are presenting arguments indistinguishable from those he faced during Obama's tenure.

In True the Vote v. IRS, election integrity watchdog True the Vote sued the federal government in 2013 over its targeting of pro-liberty non-profit groups for extra scrutiny. This case has wide implications for all non-profits that claimed their tax status was denied or delayed by Lois Lerner and a rogue IRS. ...

It boggles the mind that the IRS in a Trump administration would still be defending the actions of Lois Lerner and the notorious branch in Cincinnati. They had burdened groups with "Tea Party," "Liberty," "Constitution," and other related words in their title with mountains of extra paperwork to affirm their non-profit tax status. Yet, according to Bopp, that is indeed the case. ...

Bopp's observations come amid a renewed push by House Republicans to reopen the case against Lerner for possible prosecution. On April 9, House Ways and Means Committee Chairman Kevin Brady and Tax Policy Subcommittee Chairman Peter Roskam sent a letter to Attorney General Jeff Sessions requesting he reopen the probe.

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April 23, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, April 22, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Harvard Seeks To Hire A Clinical Tax Prof

Harvard Law School (2016)Job Announcement:  Clinical Fellow, Harvard Law Sc hool Federal Tax Clinic:

Duties & Responsibilities:  The Legal Services Center of Harvard Law School (LSC) seeks to hire a Clinical Fellow in the Federal Tax Clinic [launched in Fall 2015]. The Clinic — through which Harvard Law students receive hands-on lawyering opportunities — provides direct legal representation in tax controversies to low-income taxpayers.

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April 22, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

100 Students Protest Closure Of Whittier Law School

WhittierFollowing up on my previous posts (links below):  Orange County Register, Dozens of Angry Whittier Law School Students Protest After College Announces Closure:

About 100 law students angry over the announced closure of Whittier College’s law school in Costa Mesa this week demonstrated at the college’s main campus on Friday, April 21.

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April 22, 2017 in Legal Education | Permalink | Comments (7)

The IRS Scandal, Day 1444:  Judicial Watch Sues IRS Over Email Preservation

IRS Logo 2Press Release, Judicial Watch Sues IRS Over Email Preservation:

Judicial Watch today announced that it filed a Freedom of Information Act (FOIA) lawsuit against the Internal Revenue Service (IRS) to obtain records relating to the agency’s “preservation and/or retention” of the email records of officials who have left the agency since January 2010. (Judicial Watch v. Internal Revenue Service (No.1:17-cv-00596)). The suit was filed as part of Judicial Watch’s continuing efforts to gain information about the IRS’ targeting of conservative groups and citizens during the Obama administration.

Judicial Watch filed the complaint after the IRS failed to respond to a November 15, 2016, FOIA request seeking:

  • All records concerning the preservation and/or retention of email records generated by IRS officials and employees upon their departure from the IRS; and
  • All records related to any changes, updates, or modifications to IRS policies and procedures for the retention of email records generated by IRS officials and employees.

The timeframe for the request is for records from January 1, 2010, to the present.

“Judicial Watch doesn’t trust the IRS, especially given its dishonesty about Lois Lerner’s emails,” said Judicial Watch President Tom Fitton. “The IRS was used by Obama and his allies to suppress his political opposition in a way that helped guarantee his re-election. Now we need to make certain that the IRS is not continuing to try to cover its tracks by destroying records.”

Judicial Watch’s litigation forced the IRS first to say that emails belonging to Lois Lerner, former director of the Exempt Organizations Unit of the IRS, were supposedly missing and later declare to the court that the emails were on IRS back-up systems.  Lerner was one of the top officials responsible for the IRS’ targeting of President Obama’s political opponents.

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April 22, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, April 21, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new article by Richard Schmalbeck (Duke), Jay Soled (Rutgers), and Kathleen DeLaney Thomas (North Carolina), Advocating A Carryover Tax Basis Regime, 93 Notre Dame L. Rev. (forthcoming 2017).

HemelCandidate Donald Trump’s campaign platform contained a cryptic line regarding the tax treatment of assets transferred at death: “The Trump Plan will repeal the death tax, but capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms.” Some read that to mean Trump would treat death as a realization event; others interpreted it to mean that Trump would allow inheritors to defer capital gains tax until they sold the inherited asset, but with carryover rather than stepped-up basis. No one was quite sure how the $10 million exemption would work. Would it apply to the first $10 million in transferred assets or the first $10 million in capital gains? (Unless the decedent’s basis is zero, those two things aren’t the same.)

To help us sort through these alternatives, Richard Schmalbeck, Jay Soled, and Kathleen DeLaney Thomas have produced an excellent article arguing for a carryover basis regime and against any exemption. Soled, Thomas, and James Alm of Tulane have published two shorter pieces in Tax Notes advocating a carryover basis regime limited to marketable securities. (See Soled, Alm & Thomas, A New Carryover Tax Basis Regime for Marketable Securities, 154 Tax Notes 835 (Feb. 13, 2017); Soled, Alm & Thomas, Trump and a Populist Agenda?, 154 Tax Notes 1131 (Feb. 27, 2017).) Soled, Thomas, and Alm also have condensed their argument into an op-ed for The Hill, distilling a complicated issue of tax law into clear language comprehensible to nonlawyers.

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April 21, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (1)

Weekly Tax Roundup

Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog):

Monday, April 17, 2017

Diane Ring, Panama Papers: The One-Year Anniversary (Surly Subgroup). "At its core, the leak revealed the true ownership of over 200,000 offshore entities, thereby raising a host of tax and political questions regarding many of the entities’ owners."

Jack Townsend, Court Denies Motion to Dismiss Counts Against Tax Shelter Lawyer. “I will cut and paste Judge Rakoff’s discussion about § 7212(a) which I think offers good review for tax crimes lawyers.”

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April 21, 2017 in IRS News, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration