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Monday, September 29, 2014

Barry Presents The Foreign Tax Credit and the Limits of Substance Today at Loyola-L.A.

BarryJordan Barry (San Diego) presents The Foreign Tax Credit and the Limits of Substance at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

The foreign income tax credit is a major component of U.S. economic policy and a key provision of the U.S. tax code. Accordingly, when the Supreme Court took up PPL v. Commissioner, which turned on whether a particular tax qualified for the foreign income tax credit, economists and tax experts nationwide paid close attention. Because the Supreme Court decides foreign income tax credit cases so rarely, the Court’s reasoning in PPL will likely influence courts’ thinking—and taxpayers’ pocketbooks—for many years to come. Unfortunately, the Court’s decision in PPL does little to clarify the law and guide taxpayers. Instead, it reveals the fundamentally arbitrary nature of the foreign income tax credit.

The Court justifies its ruling as a triumph of substance over form. But the Court’s opinion itself demonstrates how two taxes can be the same in substance, yet be treated quite differently for purposes of the foreign income tax credit. The Court describes a specific hypothetical tax that would not be creditable—yet there are multiple taxes that are substantively identical to the Court’s hypothetical tax, but qualify for significant foreign income tax credits.

This Article explores these conceptual problems with the foreign income tax credit, as demonstrated by PPL, and suggests several steps that Congress and the IRS might wish to take to ameliorate these problems.

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September 29, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Friday, September 26, 2014

Shay Presents Tax Inversions -- The Problem and Possible Solutions Today at San Diego

Shay (2014)Stephen E. Shay (Harvard) presents Mr. Secretary, Take the Tax Juice Out of Corporate Expatriations, 144 Tax Notes 473 (July 28, 2014), at San Diego today as part of its Tax Law Speaker Series:

This article describes the principal tax benefits companies seek from expatriating and outlines regulatory actions that can be taken without legislative action to materially reduce the tax incentive to expatriate. These proposals for regulations are supported by existing statutory authority. They would be good policy and consistent with, or easily integrated with, publicly proposed tax reform proposals.

Prior TaxProf Blog coverage:

September 26, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Blair-Stanek Presents Crisis-Proofing Tax Law Today at Michigan State

Blair-Stanek (2013)Andrew Blair-Stanek (Maryland) presents Crisis-Proofing Tax Law at Michigan State today as part of its Junior Faculty Workshop:

Tax law should borrow from tort law’s doctrine of necessity to respond better to future financial crises. Tort law gives dock owners a “property rule” right to exclude unwanted boats. But when storms arise, dock owners are protected by only a “liability rule”: they cannot exclude an unwanted boat, but the boat’s owner must compensate the dock owner. This rule creates optimal incentives to minimize storm damage, while also preventing windfalls to boat owners.

Tax law also has both property rules and liability rules. When a taxpayer violates a tax-law requirement, the result is either additional tax proportionate to the harm (a liability rule) or a draconian penalty such as losing a favorable tax status entirely (a property rule).

During the 2008-09 financial crisis, a number of financially-distressed taxpayers found themselves unable to meet tax-law requirements protected by property rules. Failing these requirements would have pushed the taxpayers into financial death spirals. Several of the IRS’s ad hoc responses to the crisis unwittingly borrowed from tort law’s doctrine of necessity, moving from a draconian property rule to a proportional liability rule to prevent tax law from worsening the taxpayer’s situation. But other IRS responses simply moved from property rules to non-enforcement, resulting in large windfalls to some taxpayers, to the Treasury’s detriment. Counterintuitively, because non-enforcement created such windfalls, the IRS kept such responses so narrowly tailored that many taxpayers got no relief at all.

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September 26, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, September 23, 2014

Schön Presents International Taxation of Risk Today at Columbia

SchoenWolfgang Schön (Max Planck Institute for Tax Law and Public Finance) presents International Taxation of Risk at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex Raskolnikov, David Schizer, and Wojciech Kopczuk:

The allocation of risk and of the income from risky investment and activities belongs to the central topics of international tax policy today. This fact is highlighted by the current BEPS initiative of G20 and OECD which casts doubt on the recognition of contractual risk allocation within multinational groups and its impact on profit allocation between separate entities within these groups. It is largely felt that “risk shifting” provides the basis for “profit shifting” by multinationals to the detriment of states and domestic competitors.

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September 23, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, September 22, 2014

Oei Presents Human Equity? Regulating the New Income Share Agreements Today at Loyola-L.A.

OeiShu-Yi Oei (Tulane) presents Human Equity? Regulating the New Income Share Agreements (with Diane M. Ring (Boston College)) at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

A controversial new financing phenomenon has recently emerged. New “income share agreements” (“ISAs”) enable an individual to raise funds by pledging a percentage of her future earnings to investors for a certain number of years. These contracts, which are offered by entities such as Fantex, Upstart, Pave, and Lumni, raise important questions for the legal system: Are they a form of modern-day indentured servitude or an innovative breakthrough in human financing? How should they be treated under the law?

This Article constitutes the first real attempt in the legal literature to comprehensively address the public policy and legal issues raised by ISAs and to articulate an analytical approach to evaluating and regulating them.

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September 22, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Zwick Presents The Effect of Temporary Tax Incentives on Equipment Investment Today at UC-Berkeley

ZwickEric Zwick (Chicago) presents Do Financial Frictions Amplify Fiscal Policy? Evidence from Business Investment Stimulus (with James Mahon (Harvard)) at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

We estimate the effect of temporary tax incentives on equipment investment using shifts in accelerated depreciation. Analyzing data for over 120,000 firms, we present three findings. First, bonus depreciation raised investment 17.3 percent on average between 2001 and 2004 and 29.5 percent between 2008 and 2010. Second, financially constrained firms respond more than unconstrained firms. Third, firms respond strongly when the policy generates immediate cash flows but not when benefits only come in the future. Implied discount rates are too high to match a frictionless model and cannot be explained entirely by costly finance, unless firms neglect future financial constraints.

September 22, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Johnson Presents Recent Developments Involving Circular 230 and Tax Practitioner Regulation Today at FBA Tax Section Monthly Roundtable

Johnson (Steve)Steve R. Johnson (Florida State) presents Recent Developments Involving Circular 230 and Tax Practitioner Regulation at the Federal Bar Association Tax Section's Federal Tax Practice & Procedure Monthly Roundtable:

The past six months have produced a flood of judicial and agency action involving regulation of tax practitioners by the Service. The courts have suggested substantial limitations upon the Service’s regulatory authority in two recent decisions, and several other cases are pending in which practitioners are challenging other aspects of the Service’s authority. At the same time, the Service has initiated several regulatory efforts to govern practitioners. Professor Johnson, a nationally recognized scholar on tax litigation and procedure, including legislative and administrative law topics in tax, will apprise us of all these developments.

September 22, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, September 16, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at UC-Irvine

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at UC-Irvine today as part of its Faculty Workshop Series:

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy protections, should be publicly accessible. The ongoing global discussion of base erosion and profit shifting by multinational corporations has generated calls for greater “tax transparency.” Throughout this debate, participants have focused narrowly on potential reactions of a corporation’s managers, shareholders and consumers to a requirement that the corporation publish its own tax return information. There is, however, another perspective: how would the ability of a corporation’s stakeholders and agents to observe other corporations’ tax return information affect the corporation’s compliance with the tax law?

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September 16, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, September 15, 2014

Benzarti Presents How Taxing is Tax Filing? Today at UC-Berkeley

UC Berkeley Primary Logo Berkeley BlueYoussef Benzarti (UC-Berkeley, Department of Economics) presents How Taxing is Tax Filing? Leaving Money on the Table Because of Compliance Costs at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

I use a quasi-experimental design to estimate the burden of complying with the tax code. Employing a sample of US income tax returns, I observe the preferences of taxpayers over itemizing deductions or claiming the standard deduction. Treated taxpayers forgo $800 on average to avoid the cost of itemizing. A revealed preference argument implies that itemizing deductions is as painful as working more than 17 hours at one’s regular job. The amount of foregone benefits is larger for richer households, consistent with the fact that the value of time increases with income. I explore two explanations of the magnitude of the estimates. First, it could be due to an extreme aversion to filing taxes. Such aversion implies that itemizing deductions imposes an aggregate compliance cost of 0.24% of GDP and an extrapolation to filing federal taxes implies that the overall cost of compliance is 1.55% of GDP. Second, if taxpayers are time-inconsistent the revealed preference argument fails, introducing a wedge between foregone benefits and compliance costs. Being present-biased leads taxpayers to forego large benefits even when compliance costs are relatively small. I provide evidence of taxpayers being present-biased. Both explanations - whether driven by preferences or mistakes - suggest that the burden imposed on society by tax compliance is significantly larger than previously estimated. I discuss policy implications of the result.

September 15, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Shurtz Presents Long-Term Care and the Tax Code: A Feminist Perspective Today at Loyola-L.A.

ShurtzNancy Shurtz (Oregon) presents Long-Term Care and the Tax Code: A Feminist Perspective at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Long-term care is a feminist issue. Not only do women live longer but we suffer more from a multitude of degenerative physical and mental ailments that require supervised and concentrated care. We comprise 70% of the unpaid caregiver and over 90% of the paid caregiver. Because of low wages, interruptions in work for care of children and parents, lower pensions, women have fewer resources and thus may not adequately save or plan for expensive future long-term care expenses. Consequently, women are more likely to use social insurance (Medicare, Medicaid) and long term care insurance. From home care, adult care, continuing care to nursing home care, the tax code provides numerous but ineffective and inequitable subsidies. The tax system favors the purchase of long-term care insurance over savings, fails to value the unpaid caregiving services of family members, and inadequately supports the low-wage care worker. This paper suggests tax reform in addition to non tax reform. The Community Living Assistance Support and Services (CLASS) Act of the Affordable Care Act should be reinstated and funded and the Family Medical Leave Act should be modified and expanded. Eventually, the federal government will probably need to institute a Medicare tax on workers to fund the growing problem of financing and supporting elder care in America.

Vivian Wu (USC) is the commentator.

September 15, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Friday, September 12, 2014

Gamage Presents Analyzing the Optimal Choice of Tax Instruments Today at UCLA

Gamage (2014)David Gamage (UC-Berkeley) presents The Case for Levying (all of) Labor-Income Taxes, Value-Added Taxes, Capital-Income Taxes, and Wealth Taxes: Applying a Framework for Analyzing the Optimal Choice of Tax Instruments, 68 Tax L. Rev. ___ (2014), at UCLA today as part of its Faculty Workshop Series:

Economic analyses of taxation have largely focused on the problems of labor-to-leisure and saving-to-spending distortions. Based on these analyses, the prior literature has generally treated labor-income and consumption taxes as being essentially equivalent, and has also treated capital-income and wealth taxes as being essentially equivalent. Further, based on these analyses, the dominant view in the prior literature has been that neither capital income nor wealth should be taxed.

This Article expands on these prior analyses by incorporating a variety of tax-gaming responses and also administrative and compliance costs. By doing so, this Article argues that it is probably optimal for governments to levy some version of (all of) labor-income taxes, value-added taxes, capital-income taxes, and wealth taxes.

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September 12, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, September 10, 2014

Edwards Presents Does Earnings Lockout Make U.S. Multinationals Attractive to Acquirers? Today at Toronto

EdwardsAlex Edwards (University of Toronto, Rotman School of Management) presents Does Earnings Lockout Make U.S. Multinationals Attractive to Acquirers? at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The ability for deferral of home country taxation on multinationals’ foreign earnings within the U.S. tax code creates an incentive for firms to avoid or delay repatriation of earnings to the U.S. Consistent with this notion, prior research has documented a substantial lockout effect resulting from the current U.S. worldwide tax and financial reporting systems. We hypothesize and find that U.S. domiciled M&A target firms with more locked-out earnings are more attractive M&A targets for foreign bidders and are more likely to be acquired by foreign bidders, compared to domestic bidders. The effect is economically significant; a standard deviation increase in our proxy for locked-out earnings is associated with a 14% relative increase in the likelihood that an acquirer is foreign. We also examine the impact of the home country tax system of the foreign acquirers. Because multinationals facing territorial tax systems are able to shift income to save taxes to a greater extent than firms domiciled in worldwide countries, the advantages for a foreign firm acquiring a U.S. target with locked-out earnings are potentially greater when the foreign firm operates under a territorial tax system. We find that foreign acquirers of U.S. target firms with locked-out earnings are more likely to be residents of countries that use territorial tax systems.

September 10, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, September 9, 2014

Zelinsky Presents The Proposed Minnesota Snowbird Tax Today at Minnesota

ZelinskyEdward Zelinsky (Cardozo) presents Apportioning State Personal Income Taxes to Eliminate the Double Taxation of Dual Residents: Thoughts Provoked by the Proposed Minnesota Snowbird Tax, 15 Fla. Tax Rev. 533 (2014), at Minnesota today as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

In the last two budget cycles, Governor Mark Dayton has proposed what has become known as the “snowbird tax,” suggesting that Minnesota alter its rules governing state income taxation to allow the state to collect more taxes on income realized by individuals who divide their time between Minnesota and another state. Although the Minnesota legislature has not enacted Governor Dayton’s proposal, Professor Zelinsky will use the proposal as a springboard for arguing that states should revisit the laws governing state personal income tax apportionment. In doing so, Professor Zelinsky will contend that states should tax income with respect to which they have source jurisdiction irrespective of residence and income over which they have only residence-based jurisdiction proportionally, based on the part of the year a dual resident spends in each state.

September 9, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, September 8, 2014

Hauer Presents The Virtues of Dual Tier Capital Taxation Today at UC-Berkeley

UC Berkeley Primary Logo Berkeley BlueAndreas Hauer (University of Munich) presents Reforming an Asymmetric Union: On the Virtues of Dual Tier Capital Taxation at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

The tax competition for mobile capital, in particular the reluctance of small countries to agree on measures of tax coordination, has ongoing political and economic fallouts within Europe. We analyse the e ects of introducing a two tier structure of capital taxation, where the asymmetric member states of a union choose a common, federal tax rate in the rst stage, and then non-cooperatively set local tax rates in the second stage. We show that this mechanism e ectively reduces competition for mobile capital between the members of the union. Moreover, it distributes the gains across the heterogeneous states in a way that yields a strict Pareto improvement over a one tier system of purely local tax choices. Finally, we present simulation results, and show that a dual structure of capital taxation has advantages even when side payments are feasible.

September 8, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Saturday, September 6, 2014

Hayashi Presents Phantom Income and the Simple Economics of Paying In Kind at Florida

HayashiAndrew Hayashi (Virginia) presented Phantom Income and the Simple Economics of Paying In Kind at Florida yesterday as part of its Graduate Tax Program Colloquium Series:

Modern tax instruments impose cash taxes on non-cash bases. Property taxes, income taxes, gift taxes and estate taxes all must be paid in cash, even though income, gifts and estates only sometimes take the form of cash, and property never does. If it is costly to convert the tax base into cash, taxpayers may suffer from liquidity problems that require them to make painful adjustments to their savings or consumption. Although concern about taxpayer liquidity has shaped tax law and looms large in current debates about wealth taxation, tax accounting, and mark-to-market reforms, the economic factors that influence the welfare costs of cash tax collection have not been explored in a rigorous way. In this paper I present an economic analysis of the liquidity problem, identifying the factors that determine the welfare costs of cash tax collection. I apply this analysis to the property tax and to the taxation of income that accrues before it is received, sometimes called “phantom income.”

September 6, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, July 24, 2014

Washington & Lee Hosts Tax Roundtable

W&LWashington & Lee Law School hosted a roundtable discussion of works-in-progress by tax professors from mid-Atlantic law schools on July 22-23:

  • Eric Chason (William & Mary), Taxing Losers
  • Michael Doran (Virginia), Tax Legislation in the Contemporary U.S. Congress
  • Michelle Drumbl (Washington & Lee), Enhancing Taxpayer Compliance with the EITC
  • Brant Hellwig (Washington & Lee), The Constitutional Nature of the United States Tax Court
  • Ruth Mason (Virginia), Taxing Citizenship
  • Gregg Polsky (North Carolina), Taxing Partnership Allocations Among Related Parties
  • Ethan Yale (Virginia), Antibasis  

July 24, 2014 in Colloquia, Conferences, Scholarship, Tax | Permalink | Comments (0)

Wednesday, June 25, 2014

Osgood Presents Reform of [the Tax Treatment of] Nonprofit Institutions Today at Washington University

OsgoodRussell K. Osgood (Washington University) presents Reform of [the Tax Treatment of] Nonprofit Institutions at Washington University today as part of its Faculty Workshop Series:

The paper: 1) reviews the growth in many dimensions of the nonprofit sector, 2) discusses the history from 1969 onward of the 1969 Act and the subsequent lack of statutory reform due to Congressional inaction and the reasons for it, and 3) makes six significant proposals, including imposition of 1% excise tax on the endowments of all nonprofits, redrafting and narrowing the definitions of allowable 501(c)(3) purposes and regulating more heavily changes in purposes, expanding the taxation of quasi business income by taxing all income “not closely” related to the exempt purpose(s), eliminating much of the private foundation regime but requiring private foundations to liquidate after ten years and disqualifying them for any violation of core fiduciary duties, and revising the 170 deduction rules by limiting the deductibility (to the higher of adjusted basis or 50% of fair market value) of appreciated property, reducing the estate and gift tax charitable deduction limit to 50% (vs. 100%) of the gifted property, and reducing the regular contribution limits for all property and all taxpayers to a uniform 25% of adjusted gross income with only a one year carry forward.

June 25, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Saturday, June 14, 2014

Brauner Presents Prospects of U.S. Corporate Tax Reform in Switzerland

BraunerYariv Brauner (Florida) presented Prospects of Corporate Tax Reform in the United States yesterday at the Université de Lausanne (Switzerland):

At the time that the international tax community focuses on the BEPS initiative, the US is distancing itself from the project that it's MNEs behavior triggered and to which it heavily contributed at first. Instead a large number of corporate tax reform proposals have been promoted over the last few years with what seems to be zero chance of being passed. The political climate stifles progress despite a surprising consensus among the parties over the tax policy that they would be able to implement under current conditions. In any event, any feasible tax reform is unlikely to affect the prospects of any likely Swiss corporate tax reform.

June 14, 2014 in Colloquia, Tax | Permalink | Comments (0)

Wednesday, May 28, 2014

Blank & Mason Present U.S. National Report on Exchange of Information Today at Annual Congress of European Association of Tax Law Professors

EATLP Logo (2013)Joshua D. Blank (NYU) & Ruth Mason (Virginia) present United States National Report on Exchange of Information at the 2014 Annual Congress of the European Association of Tax Law Professors today in Istanbul, Turkey:

The United States recently has taken an aggressive stance towards non-reporting of offshore income and attendant offshore tax evasion. This National Report discusses administrative and legal mechanisms, including the Foreign Account Tax Compliance Act (FATCA), available to the United States to secure offshore tax information. It also discusses the legal regimes under which the United States shares tax information with partner jurisdictions.

See also Joshua D. Blank (NYU) & Ruth Mason (Virginia), Exporting FATCA, 142 Tax Notes 1245 (Mar. 17, 2014).

Update #1:  Tracy Kaye (Seton Hall), Leandra Lederman (Indiana), and Stephen Mazza (Kansas) at the conference:

Photo 2

Update #2:  Joshua Blank (NYU), Tracy Kaye (Seton Hall), Ruth Mason (Virginia), Leandra Lederman (Indiana), Tsilly Dagan (Bar-Ilan), and Steven Mazza (Kansas) at the conference:

EATP

May 28, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 27, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at Bocconi University

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Bocconi University today in Milan, Italy, hosted by Carlo Garbarino.

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy rules, should be made publicly accessible. Throughout this age-old debate, participants have speculated about how corporate managers and the IRS might behave differently if they knew that the public could observe corporations’ tax returns and how investors and the general public would respond if they had access to this information. There is, however, another, unexplored perspective: how could seeing other corporations’ tax returns affect how corporate managers engage in tax planning and tax return preparation for their own corporations?

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May 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Blank Presents In Defense of Individual Tax Privacy at the University of Milan

Blank Joshua D. Blank (NYU) presented In Defense of Individual Tax Privacy, 61 Emory L.J. 265 (2011), at the University of Milan’s Department of International, Legal, Historical and Politcal Studies yesterday in Milan, Italy, hosted by Giuseppe Marino:

The debate over whether tax privacy—a set of statutory rules that prohibits the federal government from publicly releasing any taxpayer’s tax return— promotes individual tax compliance is as old as the income tax itself. It dates back to the Civil War and resurfaces often, especially when the government seeks innovative ways to collect tax revenue more effectively. For over 150 years, the tax privacy debate has followed predictable patterns. Both sides have fixated on the question of how a taxpayer would comply with the tax system if he knew other taxpayers could see his personal tax return. Neither side, however, has addressed the converse question: How would seeing other taxpayers’ returns affect whether a taxpayer complies? This Article probes that unexplored question and, in doing so, offers a new defense of individual tax privacy: that tax privacy enables the government to influence individuals’ perceptions of its tax-enforcement capabilities by publicizing specific examples of its tax-enforcement strengths without exposing specific examples of its tax enforcement weaknesses. Because salient examples may implicate well-known cognitive biases, this strategic-publicity function of tax privacy can cause individuals to develop an inflated perception of the government’s ability to detect tax offenses, punish their perpetrators, and compel all but a few outliers to comply. Without the curtain of tax privacy, by contrast, individuals could see specific examples of the government’s tax-enforcement weaknesses that would contradict this perception. After considering this new defense of individual tax privacy in the context of deterrence and reciprocity models of taxpayer behavior, I argue that the strategic-publicity function of tax privacy likely encourages individuals to report their taxes properly and that it should be exploited to enhance voluntary compliance.

The commentators were Giuseppe Zizzo (Bocconi University) and Andrea Pedroli (Università della Svizzera italiana).

May 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 14, 2014

Blank Presents Collateral Compliance Today at Oxford

BlankJoshua D. Blank (NYU) presents Collateral Compliance, 162 U. Pa. L. Rev. 719 (2014), at the University of Oxford Faculty of Law today as part of its Centre for Business Taxation Research Seminar hosted by Judith Freedman:

As most of us are aware, the failure to comply with the tax law can lead to tax penalties, which almost always take the form of monetary sanctions. But tax noncompliance has other consequences as well. Collateral sanctions for tax noncompliance — which apply on top of traditional tax penalties and revoke or deny government-provided benefits — increasingly apply to individuals who have failed to obey the tax law. They range from denial of hunting permits to suspension of driver’s licenses to revocation of passports. Further, as the recent Supreme Court case Kawashima v. Holder demonstrates, some individuals who are subject to tax penalties for committing tax offenses involving “fraud or deceit” may even face deportation from the United States.

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May 14, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 6, 2014

Kane Presents Transfer Pricing, Integration and Novel Intangibles Today at NYU

Kane (2014)Mitchell Kane (NYU) presents Transfer Pricing, Integration and Novel Intangibles: A Consensus Approach to the Arm's Length Standard at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

This paper will be organized as follows. In the first part I undertake two basic framing problems, one related to the continuous versus discontinuous nature of arm's length versus formulary methods and the second related to a proposed categorization of intangible value arising from integration of assets. In the second part I describe how the perceived inability of the arm's length standard to handle gains from integration through a comparable analysis could be expected to produce the temptation to introduce novel intangibles into the analysis. In the third part I develop what I refer to as a consensus approach to the arm's length standard. The version of consensus developed here is not the typical one, which suggests that one of the key reasons to embrace the arm's length standard is the existing international consensus regarding its status as the preferred means of income allocation across countries. Rather, the vision of consensus I here is one that should read Article 9 of the OECD Model Convention as stating a preferred methodology for reaching a consensus non-overlapping allocation of a portion of the profit earned by associated enterprises, namely that portion which could have been earned at arm's length. I then use that interpretation to argue affirmatively against the introduction of novel intangibles.

May 6, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, April 29, 2014

Gamage Presents A Framework for Analyzing the Optimal Choice of Tax Instruments Today at NYU

Gamage (2014)David Gamage (UC-Berkeley) presents A Framework for Analyzing the Optimal Choice of Tax Instruments, 68 Tax L. Rev. ___ (2014), at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

What mix of policy instruments should governments employ to raise revenues or to promote distribution? The dominant answer to this question in the tax theory and public finance literatures is that (with limited exceptions) governments should rely exclusively on a progressive consumption tax. Thus, among other implications, the dominant view is that governments should not tax capital income or wealth, and that legal rules should not be designed to promote distribution.

In contrast, this Article argues that governments should make use of a number of tax and non-tax policy instruments to raise revenues and to promote distribution. Furthermore, this Article argues that governments may have much greater capacity to raise revenues and to promote distribution at lower efficiency costs than is generally recognized. Whereas the existing theoretical literature focuses on a small number of distortionary costs that result from taxation (in particular, on labor-to-leisure and saving-to-spending distortions), this Article analyzes the implications of taxpayers engaging in a diverse variety of tax-gaming responses. To the extent that taxpayers respond to different tax instruments through different forms of tax gaming, this Article demonstrates that governments can raise revenues and promote distribution more efficiently by employing a variety of different policy instruments.

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April 29, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, April 28, 2014

Shaviro, Sullivan Speak on Tax Reform at NYU Today

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Book Discussison (12:30 - 1:50 p.m.):  Daniel Shaviro (NYU), Fixing U.S. International Taxation (Oxford University Press, 2014):

FixingInternational tax rules, which determine how countries tax cross-border investment, are increasingly important with the rise of globalization, but the modern U.S. rules, even more than those in most other countries, are widely recognized as dysfunctional. The existing debate over how to reform the U.S. tax rules is stuck in a sterile dialectic, in which ostensibly the only permissible choices are worldwide or residence-based taxation of U.S. companies with the allowance of foreign tax credits, versus outright exemption of the companies’ foreign source income. In Fixing U.S. International Taxation, Daniel N. Shaviro explains why neither of these solutions addresses the fundamental problem at hand, and he proposes a new reformulation of the existing framework from first principles. He shows that existing international tax policy frameworks are misguided insofar as they treat “double taxation” and “double non-taxation” as the key issues, conflate the distinct questions of what tax rate to impose on foreign source income and how to treat foreign taxes, and use simplistic single-bullet global welfare norms in lieu of a comprehensive analysis. Drawing on tools that are familiar from public economics and trade policy, but that have been under-utilized in the international tax realm, Shaviro offers a better analysis that not only reshapes our understanding of the underlying issues, but might point the way to substantially improving the prevailing rules, both in the U.S. and around the world.”

  • Daniel Shaviro (NYU)
  • Itai Grinberg (Georegtown)
  • Martin Sullivan (Tax Analysts)

Public Lecture (6:00 - 7:30 p.m.):  Martin Sullivan (Tax Analysts), Tax Reform 2017: Incremental or Fundamental?:

Sullivan (2014)Martin Sullivan is the chief economist of Tax Analysts (publisher of Tax Notes) and is a leading expert on federal tax reform. He is a contributing editor for Tax Analysts’ daily and weekly publications. Sullivan has written over 500 economic analyses for Tax Analysts and is the author of two books on tax reform, including the recent Corporate Tax Reform: Taxing Profits in the 21st Century. He is also a regular contributor to Tax Analysts’ blog and Forbes.com. He has testified before Congress on numerous occasions. Previously, Sullivan taught economics at Rutgers University and served as a staff economist at the U.S. Department of the Treasury and later at the congressional Joint Committee on Taxation. Sullivan graduated magna cum laude from Harvard College and received a PhD in economics from Northwestern University. 

April 28, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, April 24, 2014

Maynard Presents Reimagining Wealth Taxation as a Tool for Building Wealth at Washington University

MaynardGoldburn P. Maynard, Jr. (Washington University) presented Addressing Wealth Disparities: Reimagining Wealth Taxation as a Tool for Building Wealth, 92 Denv. U. L. Rev. ___ (2014), at Washington University yesterday as part of its Faculty Workshop Series:

In the past three decades, research has indicated that the building of assets can have a sustainable impact on well-being. Yet to the extent that the tax system has incorporated this insight, it has been done in a piecemeal, ad hoc fashion, disproportionately benefiting those with wealth and further reinforcing wealth inequality. This paper argues that while reducing wealth concentrations is im-portant, there should be an increased emphasis on how our tax system can build wealth or, put differently, level up. While the problem of wealth disparities may be too large for any one part of the federal policy toolkit to solve, I argue that the tax system can and should play a vital role.

April 24, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 23, 2014

Shackelford Presents The Impact of Foreign Withholding Taxes on REIT Investors and Managers Today at Pennsylvania

ShacklefordDouglas Shackelford (University of North Carolina, Kenan-Flagler Business School) presents The Impact of Foreign Withholding Taxes on REIT Investors and Managers at Pennsylvania today as part of its Center for Tax Law & Policy Seminar Series hosted by Michael KnollChris Sanchirico, and Reed Shuldiner:

Exploiting a 2004 reduction in a unique capital gains withholding tax for foreign investors in U.S. REITs, this paper explores both the sensitivity of real estate investors to changes in their own taxes and the reaction of real estate managers to changes in their investors’ taxes. We find that both foreign investors and REIT managers responded to the tax change. This is consistent with taxes both restricting the flow of foreign capital into U.S. REITs and affecting the management of their real estate properties. To our knowledge, this is the first paper documenting that U.S. managers change their U.S. operations in response to the tax positions of foreign investors. This work should spur further study of the interplay between real estate and income taxes, the role of taxes on foreign portfolio investment, and the role of taxes on real managerial choices. It also should aid policymakers who are considering further relaxing the discriminatory tax treatment for foreign investors in U.S. real estate.

April 23, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Tuesday, April 22, 2014

Clausing Presents Lessons for International Tax Reform from Formulary Apportionment Today at NYU

ClausingKimberly Clausing (Reed College) presents Lessons for International Tax Reform from the U.S. State Experience under Formulary Apportionment at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

This work undertakes a comprehensive analysis of the US state experience under formulary apportionment of corporate income. While formulary apportionment eliminates the possibility of shifting income across states through accounting strategies that manipulate where income is booked, it may heighten the tax responsiveness of formula factors. The present analysis uses the substantial variation in corporate tax policy decisions of US states over the period 1986 to 2012 to understand the consequences of formulary apportionment better. It examines the effects of policy choices regarding tax rates, formula weights, and other parameters on economic activity, estimating the tax sensitivity of employment, investment, and sales. With the inclusion of adequate control variables, results indicate that economic activity has not been particularly sensitive to US state corporate tax policy choices, especially in recent years. Still, tax policy choices have important effects on corporate tax revenues. These results suggest important lessons regarding possible international adoption of formulary apportionment.

April 22, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, April 21, 2014

Barry Presents PPL and the Arbitrary Foreign Income Tax Credit Today at Pepperdine

BarryJordan M. Barry (San Diego) presents PPL and the Arbitrary Foreign Income Tax Credit at Pepperdine today as part of its Tax Policy Colloquium Series hosted by Paul Caron:

Last year, the Supreme Court decided PPL v. Commissioner, ruling that the United Kingdom’s windfall tax qualifies for a U.S. foreign income tax credit. Even though the windfall tax only applies to a handful of taxpayers, economists and tax experts nationwide closely followed the PPL litigation: The foreign income tax credit a key provision of the U.S. tax code and a major component of U.S. economic policy. The rules surrounding the foreign income tax credit are quite intricate, and there is relatively little authoritative guidance to help taxpayers navigate them. And since the Supreme Court decides foreign income tax credit cases so rarely, the Court’s reasoning in PPL will likely influence courts’ thinking—and taxpayers’ pocketbooks—for many years to come.

Unfortunately, the Court’s decision in PPL does little to clarify the law and guide taxpayers. Instead, it reveals the fundamentally arbitrary nature of the foreign income tax credit.

The Court justifies its ruling as a triumph of substance over form. But the Court’s opinion itself demonstrates how two taxes can be the same in substance, yet be treated quite differently for purposes of the foreign income tax credit. The Court describes a specific hypothetical tax that would not be creditable—yet there are multiple taxes that are substantively identical to the Court’s hypothetical tax, but qualify for significant foreign income tax credits.

This Article explores these conceptual problems with the foreign income tax credit, as demonstrated by PPL, and suggests several ways in which Congress and the IRS might wish to ameliorate them.

Update: Post-presentation lunch:

Lunch

April 21, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, April 17, 2014

Gamage Presents A Framework for Analyzing the Optimal Choice of Tax Instruments Today at Indiana

Gamage (2014)David Gamage (UC-Berkeley) presents A Framework for Analyzing the Optimal Choice of Tax Instruments, 68 Tax L. Rev. ___ (2014), at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

What mix of policy instruments should governments employ to raise revenues or to promote distribution? The dominant answer to this question in the tax theory and public finance literatures is that (with limited exceptions) governments should rely exclusively on a progressive consumption tax. Thus, among other implications, the dominant view is that governments should not tax capital income or wealth, and that legal rules should not be designed to promote distribution.

In contrast, this Article argues that governments should make use of a number of tax and non-tax policy instruments to raise revenues and to promote distribution. Furthermore, this Article argues that governments may have much greater capacity to raise revenues and to promote distribution at lower efficiency costs than is generally recognized. Whereas the existing theoretical literature focuses on a small number of distortionary costs that result from taxation (in particular, on labor-to-leisure and saving-to-spending distortions), this Article analyzes the implications of taxpayers engaging in a diverse variety of tax-gaming responses. To the extent that taxpayers respond to different tax instruments through different forms of tax gaming, this Article demonstrates that governments can raise revenues and promote distribution more efficiently by employing a variety of different policy instruments.

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April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Fleischer Presents The Inferiority of Pigouvian Taxes Today at Washington

Fleischer Vic (2013)Victor Fleischer (San Diego) presents The Inferiority of Pigouvian Taxes at the University of Washington today as part of its Graduate Tax Program Colloquium Series:

Pigouvian (or "corrective") taxes have become the favored policy instrument to address activities that cause negative externalities. There is considerable academic support for Pigouvian taxes on a wide range of products and activities, including carbon, gasoline, fat, high fructose corn syrup, financial transactions, executive pay, excessive zoning, and SUVs. Economists of all political stripes are therefore mystified by our politicians’ collective inability to see the merits of using Pigouvian taxes more frequently to address serious social harms.

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April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Solomon Presents Tax Policymaking in the United States Today at Temple

SolomonEric Solomon (Director of National Tax Practice, Ernst & Young, Washington, D.C.) presents The Process for Making Tax Policy in the United States: A System Full of Friction, 67 Tax Law. ___ (2014), at Temple today as part of its Tax Policy & Administration Colloquium Series hosted by Alice Abreu and Andrea Monroe:

The paper, first presented to the Canadian Tax Foundation Roundtable ..., acknowledges the roles of multiple participants in the formation of tax policy, including the Treasury, IRS, and courts, but focuses on the legislative process and describes both the roles of the various players in it. It emphasizes the operation of the checks and balances in the system and the ways in which they influence tax legislation and tax policy. The Colloquium will also include a discussion of the tax gap drawn from testimony presented to the Senate Finance Committee on April 18, 2007 by Eric Solomon and Henry Paulsen.

April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mazur Presents Tax Policy and the Economy Today at Florida

Mazur 2Mark Mazur (Assistant Secretary for Tax Policy, U.S. Treasury Department) presents Tax Policy and the Economy at Florida today as the Fourth Annual Ellen Bellet Gelberg Tax Policy Lecture in the Graduate Tax Program.  Prior lectures:

April 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 16, 2014

Roin Presents Planning Past Pensions Today at Duke

RoinJulie Roin (Chicago) presents Planning Past Pensions at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

Evidence of state and local government dysfunction surfaces in many areas. One is the operation of their employee pension plans. Free from the strictures of ERISA, some governments failed to fund their pension promises and with the imminent retirement of the baby boom generation, are facing what appear to be insurmountable pension debts. The state of Illinois is one of the worst-hit states, with grossly underfunded pension plans, a state constitutional prohibition on reducing pension benefits, and a sizeable non-pension related budget deficit. Recently passed pension “reforms” likely will be struck down by its courts. There are no easy solutions to its pension woes, but this article seeks to lay out a few steps that Illinois can take now, under current law, and suggests more long-term policy and legal changes that it should consider for the future. Ultimately, though, the same dysfunctions that led to the current crisis might make these suggestions impractical.

April 16, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Peroni Presents Formulary Apportionment in the U.S. at UNLV

PeroniRobert J. Peroni (Texas) presented Formulary Apportionment in the U.S. International Income Tax System: Putting Lipstick on a Pig? (with J. Clifton Fleming (BYU) & Stephen E. Shay (Harvard)) at UNLV yesterday as part of its Faculty Enrichment Series:

[T]he authors argue that formulary apportionment and the current standard, arm's length transfer pricing, are just two shades of lipstick on the pig that is the US international tax system, with its twin features of deferral and cross-crediting. They conclude that formulary apportionment might be the less offensive shade, but in effect the whole discussion is a diversion from a broad reform that is sorely needed on the pig itself.

April 16, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, April 15, 2014

Rao Presents The Tax Policy Implications of State Facilitated Collusion in the Alcohol Market Today at NYU

RaoNirupama Rao (NYU) presents The Price of Liquor is Too Damn High: State Facilitated Collusion and the Implications for Taxes (with Christopher T. Conlon (Columbia) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

Alcohol markets are subject to both heavy regulation as well as excise taxes at the federal and state level. We examine the impact of particular state regulations on the structure of the alcohol market and the consequences for tax eciency. We show that post and hold and meet but not beat pricing regulations at the wholesale level facilitate non-competitive pricing by wholesalers. Wholesalers will tend to mark up premium brands relative to call or well products. The distortion of premium brands generally exceeds the distortions resulting from optimally set taxes, particularly when states attempt to address any negative externality of alcohol consumption. Regression results and tabulations indicate that that states featuring post and hold regulations consume 4% to 10% less alcohol than other states, that premium products comprise a smaller share of consumption and that wholesaler pricing is consistent with non-competitive behavior. We use new monthly data describing prices and quantity for hundreds of products to estimate alcoholic beverage demand and use these estimates to assess the impact of replacing these regulations with higher taxes. Our ndings suggest that the state of Connecticut could raise three to six times their current alcohol tax revenue by eliminating these regulations and increasing taxes such that total alcohol consumption was unchanged. In addition to redirecting surplus from wholesalers to the taxing authority, these alternative policies increase consumer surplus by reducing distortions in consumer product choices. The state can e ectively raise much more revenue and improve consumer welfare by replacing alcohol regulations with taxation

April 15, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Kahng Presents The Taxation of Intellectual Capital Today at Washington

KahngLily Kahng (Seattle) presents The Taxation of Intellectual Capital, 66 Fla. L. Rev. ___ (2014), at The University of Washington today as part of its Graduate Tax Program Colloquium Series:

Intellectual capital — broadly defined to include nonphysical sources of value such as patents and copyrights, computer software, organizational processes and know-how — has a long history of being undervalued and excluded from measures of economic productivity and wealth. In recent years, however, intellectual capital has finally gained wide recognition as a central driver of economic productivity and growth. Scholars in fields such as knowledge management, financial accounting and national accounting have produced a wealth of research that significantly advances our conceptual understanding of intellectual capital and introduces new methodologies for identifying and measuring its economic value.

This Article is the first to analyze and assess the taxation of intellectual capital within this broader interdisciplinary landscape. Informed by the recent research and reform efforts in knowledge management, financial accounting and national accounting, the Article finds that the tax law, which allows most investments in intellectual capital to be deducted, is fundamentally flawed. This results in the loss of hundreds of billions of dollars in tax revenues, costly misallocations of resources and a grave deviation from the accurate measure of income. The Article argues that, consistent with the prevailing view in other fields, investments in intellectual capital ought to be capitalized under the tax law. Drawing upon the work of reform proponents in other fields as well as their critics, the Article considers whether and to what extent the advances in other disciplines can be adapted to the tax system. Based on this analysis, it proposes the tax law be reformed to require businesses to capitalize and amortize over five years a broad array of intellectual capital investments including research and development, advertising, worker training and strategic planning.

April 15, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, April 10, 2014

Blank Presents Reconsidering Corporate Tax Privacy at Harvard

BlankJoshua D. Blank (NYU) presented Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Harvard yesterday as part of its Current Issues in Tax Law, Policy, and Practice Seminar hosted by Daniel Halperin and Stephen Shay:

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy rules, should be made publicly accessible. Throughout this age-old debate, participants have speculated about how corporate managers and the IRS might behave differently if they knew that the public could observe corporations’ tax returns and how investors and the general public would respond if they had access to this information. There is, however, another, unexplored perspective: how could seeing other corporations’ tax returns affect how corporate managers engage in tax planning and tax return preparation for their own corporations?

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April 10, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 9, 2014

Rostain Presents Lawyers, Accountants, and the Tax Shelter Crisis Today at Duke

Tanina Rostain (Georgetown) presents Confidence Games: Lawyers, Accountants, and the Tax Shelter Crisis (MIT Press, 2014) (with Milton C. Regan, Jr. (Georgetown)) at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

ConfidenceFor ten boom-powered years at the turn of the twenty-first century, some of America’s most prominent law and accounting firms created and marketed products that enabled the very rich—including newly minted dot-com millionaires—to avoid paying their fair share of taxes by claiming benefits not recognized by law. These abusive domestic tax shelters bore such exotic names as BOSS, BLIPS, and COBRA and were developed by such prestigious firms as KPMG and Ernst & Young. They brought in hundreds of millions of dollars in fees from clients and bilked the U.S. Treasury of billions in revenues before the IRS and Justice Department stepped in with civil penalties and criminal prosecutions. In Confidence Games, Tanina Rostain and Milton Regan describe the rise and fall of the tax shelter industry during this period, offering a riveting account of the most serious episode of professional misconduct in the history of the American bar.

Rostain and Regan describe a beleaguered IRS preoccupied by attacks from antitax and antigovernment politicians; heightened competition for professional services; the relaxation of tax practitioner norms against aggressive advice; and the creation of complex financial instruments that made abusive shelters harder to detect. By 2004, the tax shelter boom was over, leaving failed firms, disgraced professionals, and prison sentences in its wake. Rostain and Regan’s cautionary tale remains highly relevant today, as lawyers and accountants continue to face intense competitive pressure and regulators still struggle to keep pace with accelerating financial risk and innovation.

April 9, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wells Presents Tax Base Erosion and Section 482 at Northwestern

WellsBret Wells (Houston) presented Tax Base Erosion: Reformation of Section 482's Arm’s Length Standard, 15 Fla. Tax Rev. ___ (2014), at Northwestern last week as part of its Tax Colloquium Series hosted by by Herbert Beller, Charlotte CraneDavid Cameron, Philip Postlewaite, Jeffrey Sheffield, and Robert Wootton:

The United States has repeatedly attempted to stop tax base erosion for almost the entire post-World War I era, and yet the same problems exist today. The need for fundamental tax reform is front-page material in the major newspapers with the US transfer pricing rules and US multinationals portrayed as public enemy #1. This year, the OECD issued a report entitled “Addressing Base Erosion and Profit Shifting” and last month it issued a “Action Plan” for how it plans to proceed to address base erosion and profit-shifting. In a competing fashion, several important developing countries have initiated their own pact to develop cooperative strategies on these issues outside of the framework of the OECD and UN. It is fair to say that a solution to the base erosion and profit-shifting practices of multinational corporations is the “holy grail” of international tax policy.

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April 9, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Harvey Presents FATCA and the Taxation of U.S. Citizens Living Abroad Today at Penn

HarveyJ. Richard "Dick" Harvey, Jr. (Villanova) presents Offshore Accounts: Insider's Summary of FATCA and Its Potential Future, 57 Vill. L. Rev. 472 (2012), and Worldwide Taxation of U.S. Citizens Living Abroad: Impact of FATCA and Two Proposals, 5 Geo. Mason J. Int'l Comm. L. ___ (2013), at Pennsylvania today as part of its Center for Tax Law & Policy Seminar Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

When FATCA was unilaterally enacted in March 2010 it was far from clear whether it would ultimately be successful. The major issue was whether the US would need multilateral action in order for FATCA to be a success. Currently the US has signed 25 intergovernmental agreements with many more in the final stages of negotiation. When coupled with the OECD's recent issuance of a Common Reporting Standard, it appears that FATCA or some version is here to stay. However, there will be growing pains, and some of those pains could be significant.

April 9, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, April 8, 2014

Tahk Presents The Tax War on Poverty Today at NYU

TahkSusannah Camic Tahk (Wisconsin) presents The Tax War on Poverty at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Auerbach:

In recent years, the war on poverty has moved in large part into the tax code. Scholarship has started to note that the tax laws, which once exacerbated the problem of poverty, have become increasingly powerful tools that the federal government uses to fight against it. Yet questions remain about how this new tax war on poverty works, how it is different from the decades of non-tax anti-poverty policy and how it could improve. To answer these questions, this Article looks comprehensively at the provisions that make up the new tax war on poverty. First, this Article examines each major piece of the tax war on poverty. The Article looks at its mechanics of each, its political history and its effectiveness at addressing poverty. Second, this Article analyzes the tax war on poverty as a whole, identifying commonalities across its different provisions and highlighting its distinctive features. Third, this Article proposes ways that the tax war on poverty could be more effective. In particular, this Article examines how tax lawmakers and tax lawyers could approach this task. In so doing, this Article conceptualizes tax law as the new poverty law and proposes a growing role for public-interest tax lawyers.

April 8, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Monday, April 7, 2014

Fleischer Presents Innovation, Equity Compensation, and the New Inequality Today at Pepperdine

Fleischer Vic (2013)Victor Fleischer (San Diego) presents Sweat Equity: Innovation, Equity Compensation, and the New Inequality at Pepperdine today as part of its Tax Policy Colloquium Series hosted by Paul Caron:

How people get paid—not just how much—explains the rising income inequality in the United States. Company founders, corporate executives, real estate developers, venture capitalists, and private equity fund managers often get paid in “sweat equity.” In exchange for labor, they receive equity in a venture largely financed with other people’s money. Globalization, technological change, and other factors have created economic conditions such that when companies are successful, those with sweat equity can receive unprecedented increases in income and wealth, and these gains are increasingly concentrated among a select few. For the rest of us, wages have stagnated.

The culture of equity-based pay has proven highly successful as a solution to the fundamental problem of entrepreneurial economics: how to get people with financial capital to share it with those who have the talent, motivation, and ideas. From the oil fields of Texas to the garages of Silicon Valley and the trading desks and boardrooms of Wall Street, sweat equity aligns the incentives of managers and investors. It is the engine of American innovation and economic growth.

But sweat equity is also rocket fuel for economic inequality. Economic gains increasingly flow to a lucky and talented elite, the one percent of the one percent, leaving everyone else behind. Our tax code aggravates the inequality problem, leaving sweat equity lightly taxed while taxes on wages have increased dramatically. The common recommendation of the political left—raise taxes on the rich—misses the target by focusing on ordinary income rather than sweat equity.

Addressing the problem of inequality will require finding fair methods of redistribution that do not disrupt the complex economic, legal, institutional and cultural infrastructure that forms the foundation for American innovation and entrepreneurship. Possibilities include redesigning the capital gains tax, adopting a progressive consumption tax, redesigning the estate tax, and increasing incentives for charitable giving. We must achieve enough redistribution to ensure some social mobility and some equality of opportunity, but not so much that the next generation of founders finds the risk and reward of entrepreneurship unattractive.

Update:  Post-presentation lunch:

Photo

April 7, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Gamage Presents Should Risk Adjustment Become the Heart of Obamacare? Today at Harvard

Gamage (2014)David Gamage (UC-Berkeley) presents The Evolution of Health Care Reform: Should Risk Adjustment Become the Heart of Obamacare? at Harvard today as part of its Health Law Policy, Biotechnology, and Bioethics Workshop Series:

This Essay explores how the regulatory framework of Obamacare might evolve over the coming years. The Essay analyzes the ways in which Obamacare’s risk-adjustment-related provisions are becoming increasingly central. This Essay further ponders whether an expanded approach to risk adjustment might be a better model for guiding further reforms to Obamacare’s framework, especially in light of political constraints. In particular, this Essay explains how an expanded approach to risk adjustment might replace the tax penalty of the individual mandate.

April 7, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Olson Presents Tax Politics v. Tax Policy Today at Minnesota

OlsonPamela F. Olson (PricewaterhouseCoopers LLP) presents Politics versus Policy at Minnesota today as part of its Perspectives in Taxation Lecture Series:

In the tax area, good policy and political reality are often at odds with one another. Such certainly seems to be the case today. Can the conflict between politics and policy be reconciled? What are the implications of the conflict between politics and policy for the enactment of sound tax and budget policy?

April 7, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thursday, April 3, 2014

Galle Presents How Do Nonprofit Firms Respond to Tax Policy? Today at San Diego

GalleBrian D. Galle (Boston College) presents How Do Nonprofit Firms Respond to Tax Policy? at San Diego today as part of its Tax Law Speaker Series:

We examine for the first time the elasticity of fundraising effort by nonprofit firms to changes in the tax-price of giving faced by their donors. Prior efforts to examine the effects of tax policy on charitable giving have focused on donor behavior, overlooking the possibility that fundraising efforts by firms may partially confound the observed effects. We employ data from a large panel of Form 990 tax returns filed by charitable organizations to study jointly the effect of tax changes on fundraising, donations, and other outcomes. Overall, we find an average elasticity of fundraising to the tax-price of giving of about -1.8, and an elasticity of charitable output to tax price of about -.73. We also find some evidence that charities facing lower subsidy rates substitute towards other sources of revenue. We argue that these results may imply that the charitable contribution deduction is effective for different reasons than prior research has suggested. For example, the negative elasticity of fundraising implies that a significant portion of each dollar in increased donations is used to pay for fundraising, not charity. The modest elasticity of real charitable output to tax price implies that tax subsidies may simply crowd out other revenue sources, such that the efficacy of the subsidy depends on the relative efficiency of these alternative sources.

April 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Olson Presents Lessons From the Tax Reform Act of 1986 Today at Temple

OlsonPamela F. Olson (PricewaterhouseCoopers LLP) presents And Then Cnut Told Reagan . . . Lessons from the Tax Reform Act of 1896, 38 Ohio N.U. L. Rev. 1 (2011) (Woodworth Memorial Lecture), at Temple today as part of its Tax Policy & Administration Colloquium Series hosted by Alice Abreu and Andrea Monroe:

The fiscal challenge ahead will require education and a willingness to look beyond the next election. None of this will be popular with voters, to be sure, but our nation's fiscal situation is such that partisan politics must be put aside for the sake of the greater good and of future generations. It's time to go out there with all we've got and win one for the Gipper!

April 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Bird-Pollan Presents Rawls, Equality of Opportunity, and Wealth Transfer Taxation Today at Indiana

Bird-PollanJennifer Bird-Pollan (Kentucky) presents Unseating Privilege: Rawls, Equality of Opportunity, and Wealth Transfer Taxation, 59 Wayne L. Rev. ___ (2014), at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

This Article is the second in a series that examines the estate tax from a particular philosophical position in order to demonstrate the relevance and importance of the wealth transfer taxes to that position. In this Article, I explore Rawlsian equality of opportunity, a philosophical position that is at the heart of much American thought. Equality of opportunity requires not only ensuring that sufficient opportunities are available to the least well-off members of society but also that opportunities are not available to other members merely because of their wealth or other arbitrary advantages. Therefore, an income tax alone, even one with high rates on the wealthy, would be insufficient to achieve these goals. While revenue raised via the income tax should be used to provide additional opportunities to low-income members of society, wealth transfer taxes provide the additional safeguard of preventing the heirs of wealthy individuals from inheriting wealth that would provide them with additional, unwarranted and unjust, opportunities. Given the importance of the wealth transfer taxes, this Article also examines the question of what form of tax is most consistent with Rawls’ position, ultimately determining that an inheritance or accessions tax best fits the role.

Update:  Post-colloquium get together:

Leandra 2

Margaret Ryznar (Indiana-Indianapolis), Leandra Lederman (Indiana-Bloomington), Stephanie McMahon (CIncinnati), and Jennifer Bird-Pollan (Kentucky)

April 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Wednesday, April 2, 2014

Grubert Presents Alternative International Tax Reform Proposals Today at Pennsylvania

GrubertHarry Grubert (Office of Tax Analysis, U.S. Treasury Department) presents Fixing the System: An Analysis of Alternative Proposals for the Reform of International Tax, 66 Nat'l Tax J. 671 (2013) (with Rosanne Altshuler (Rutgers)), at Pennsylvania today as part of its Center for Tax Law & Policy Seminar Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

We evaluate proposals for U.S. international tax reform including dividend exemption, full current inclusion, dividend exemption with an effective tax rate test and active business exception, dividend exemption with a per-country or overall minimum tax, and repeal of check-the-box. As alternatives to active business tests, we consider minimum taxes that allow expensing for real investment abroad. We evaluate reforms along many dimensions including the lockout effect, income shifting, the choice of location, and complexity. Wefind a per-country minimum tax with expensing has many advantages with respect to these margins. The simpler overall minimum tax is a serious alternative.

April 2, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thomas Presents The Psychic Cost of Tax Evasion Today at Duke

ThomasKathleen Delaney Thomas (North Carolina) presents The Psychic Cost of Tax Evasion at Duke today as part of its Tax Policy Seminar hosted by Lawrence Zelenak:

Tax evasion presents the government with a formidable task. We are losing hundreds of billions of dollars in tax revenue each year due to underreporting by individual taxpayers. According to deterrence theory, policymakers should be able to reduce evasion by making it more costly for taxpayers. This could be accomplished by raising the audit rate, increasing tax penalties, or some combination of both. However, budgetary limitations and political hurdles have made these strategies difficult for the government to employ.

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April 2, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)