TaxProf Blog

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

Friday, October 13, 2017

Kahng: Who Owns Human Capital?

Lily Kahng (Seattle), Who Owns Human Capital?, 94 Wash. U. L. Rev. 607 (2017):

This Article analyzes the tax law’s capital income preference through the lens of intellectual capital, an increasingly important driver of economic productivity whose value derives primarily from workers’ knowledge, experience and skills. The Article discusses how business owners increasingly are able to “propertize” labor into intellectual capital — to control their workers and appropriate the returns on their labor through the expansive use of intellectual property laws, contract and employment laws, and other legal mechanisms. The Article then shows how the tax law provides significant subsidies to the process of propertization and thereby contributes to the inequitable distribution of returns between business owners and workers.

The Article’s analysis further reveals the tax law’s fundamental capital-labor distinction to be questionable, perhaps even illusory, an insight which has profound implications for the tax law.

http://taxprof.typepad.com/taxprof_blog/2017/10/kahng-who-owns-human-capital.html

Scholarship, Tax | Permalink

Comments

I admit I did not read the entire 43 pages of this paper. "Of making many books there is no end, and much study wearies the body" Ecclesiastes 12:12 I believe.

The language of the synopsis is clearly Marxist.. ,,,the lens of intellectual capital, an increasingly important driver of economic productivity whose value derives primarily from workers’ knowledge, experience and skills...owners increasingly are able to “propertize” labor... to control their workers and appropriate [steal] the returns on their labor".

I have represented Pharma where bringing a drug to market will cost $1 billion or more. Much of the work is done by employees who do not end up owning the intellectual property. They are however paid for their services and do not assume the risk that the drug will not reach Stage 4 or garner FDA approval. The "workers" retain what they have been paid regardless of the fact that the drug has failed.

The authors analysis reveals :"...the tax law’s fundamental capital-labor distinction to be questionable, perhaps even illusory..." 'Nuff said.

Posted by: aircav65 | Oct 13, 2017 5:41:54 AM

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