TaxProf Blog

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

Thursday, May 18, 2017

Roin:  Retroactive Taxation, Unfunded Pensions, And Shadow Bankruptcies

Julie Roin (Chicago), Retroactive Taxation, Unfunded Pensions, and Shadow Bankruptcies, 102 U. Chi. L. Rev. 559 (2017):

Academics and journalists criticize politicians for the dismal financial situations of many state and local jurisdictions. And certainly, politicians routinely make inaccurate fiscal claims. However, the voting public bears some of the blame for continuing to vote for politicians peddling what amounts to fiscal “magic.” This Article suggests a mechanism for holding them at least partially accountable for their carelessness: retroactive taxation triggered by objective measures of fiscal distress.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (1)

Trump Proposes To Dramatically Cut Law Student Loans

Washington Post, Trump and DeVos Plan to Reshape Higher Education Finance:

Budget documents obtained by The Washington Post show President Trump’s administration is proposing a raft of changes that could have significant impact on college students and graduates.

One of the most striking higher education proposals calls for replacing the five income-driven student loan repayment plans with a single plan to the benefit of undergraduate borrowers. As Trump promised last year on the campaign trail, the new plan would cap repayment to 12.5 percent of the borrower’s income and forgive the balance of the loan after 15 years. That would apply if the loans were taken out for an undergraduate degree. Anyone with graduate loans would expect to pay the same percentage of their income, but would only receive forgiveness after 30 years.

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May 18, 2017 in Legal Education | Permalink | Comments (5)

Barry & Pollman:  Regulatory Entrepreneurship

Jordan M. Barry (San Diego) & Elizabeth Pollman (Loyola-L.A.), Regulatory Entrepreneurship, 90 S. Cal. L. Rev. 383 (2017):

This Article examines what we term “regulatory entrepreneurship”—pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Grinberg:  The House GOP Blueprint Can Be Drafted To Comply With WTO Rules

Itai Grinberg (Georgetown), The House GOP Blueprint Can Be Drafted to Comply with WTO Rules:

The House GOP Blueprint can be drafted into legislation in a manner that would comply with the United States’ international trade obligations. This paper presents two alternative approaches that avoid the key WTO discrimination and subsidy issues often raised in discussions of destination-based cash flow tax proposals.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

NTA 47th Annual Spring Symposium On Taxation In The Trump Era


The NTA 47th Annual Spring Sympoisum on Taxation in the Trump Era: Reforms, Revenues and Repercussions kicks off today in Washington, D.C.  Tax Prof speakers include:

Exploring the Destination-Based Cash Flow Tax

Organizer: Itai Grinberg, Georgetown University Law Center
Moderator: Lily Faulhaber, Georgetown University Law Center

Destination-Based Cash Flow Taxation
Alan Auerbach, University of California, Berkeley, Michael P. Devereux, Oxford University Centre for Business Taxation, Michael Keen, International Monetary Fund, and John Vella, Oxford University Centre for Business Taxation

Problems with Destination-Based Corporate Taxes and the Ryan Blueprint
Kimberly Clausing, Reed College and Reuven Avi-Yonah, University of Michigan Law School

Can a Destination-Based Cash Flow Tax be Compatible with the WTO Commitments of the United States?
Itai Grinberg, Georgetown University Law Center

Is the Destination-Based Cash Flow Tax Easily Gamed?
John Vella, Oxford University Centre for Business Taxation

Using the Tax Code to Support Families: Past, Current and Future Policy


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May 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (2)

Debby Merritt Criticizes Doug Kahn’s 'Ignorance Of Clinical Education'

ClinicalFollowing up on Monday's post, The Downside of Requiring Additional Experiential Courses in Law School:  Deborah Jones Merritt (Ohio State), What Do Students Do in Clinics?:

Douglas Kahn has posted an article criticizing the “proliferation of clinical and other experiential courses” in legal education. These courses, he argues, reduce the number of “doctrinal” courses that students take, leaving them “ill-prepared to practice law as soon after graduation as law firms would like.” The TaxProf Blog posted a summary of the article, and a baker’s dozen of readers have offered pro and con comments.

It’s an old debate, one that has bristled for more than 50 years. The discussion doesn’t surprise me, but Professor Kahn’s ignorance of clinical education does. His bold assertions about clinics reveal little familiarity with the actual operation of those courses. Let’s examine some of Kahn’s claims. ...

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May 18, 2017 in Legal Education | Permalink | Comments (5)

Hurt:  The Private Ordering Of Publicly Traded Partnerships

Christine Hurt (BYU), The Private Ordering of Publicly Traded Partnerships:

Publicly traded partnerships, or master limited partnerships as they are sometimes called, are hybrid entities. Attempting to achieve the perfect structure for organizing economic activity, new statutes added limited liability to entities that enjoy flow-through taxation. However, because of parallel refinements by federal regulators involving taxation and amendments by state legislatures involving fiduciary duties, a strange genetic mutation flourished: the publicly traded partnership (PTP). The PTP organized as a Delaware limited partnership combines limited liability and tax advantages with elimination of fiduciary duties and free transferability of shares. In what might be the pinnacle of separation of ownership and control, unitholders purchase limited partnership units on a public exchange representing equity interests in an entity whose managers have no fiduciary duties toward the purchasers or their investment. Furthermore, new proposals seek to expand the universe of firms that may choose this structure, creating interesting, or alarming, questions about the future of this once tiny but now growing population of firms.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 17, 2017

Law School Rankings By Federal Judicial Clerkships

Derek Muller (Pepperdine), Visualizing Law School Federal Judicial Clerkship Placement, 2014-2016:

The release of the latest ABA employment data offers an opportunity to update the three-year federal judicial clerkship placement rates. Here is the clerkship placement rate for the Classes of 2014, 2015, and 2016. Methodology and observations below the interactive visualization. The "placement" is the three-year total placement; the "percentage" is the three-year placement divided by the three-year graduating class total.

Here are the California Law School rankings:

California Ranking

Here are the Top 10 law schools nationally:

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May 17, 2017 in Law School Rankings, Legal Education | Permalink | Comments (2)

Watson:  Rethinking The Pell Program And Federal Tax Incentives For Education

Camilla E. Watson (Georgia), The Future of Lower-Income Students in Higher Education: Rethinking the Pell Program and Federal Tax Incentives:

As the costs of higher education have soared, the value of Pell grants has declined, making it more difficult for lower-income students to obtain an education without being hopelessly mired in debt. This article traces the evolution of the Pell program and discusses the diametrically opposed proposals of Presidents Obama and Trump to reform federal funding for higher education. The article proposes an alternative plan that would require a redirection of a portion of the funds from the Pell program and a reshuffling of the current tax incentives for higher education.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Law Students' Character, Rather Than LSATs/UGPAs, Is Best Predictor For Success As Lawyer

Indiana Lawyer, Character Better Predictor of Lawyering Success, Panel Says:

Although Rebecca Love Kourlis sees more collaboration than in the past, she said the gap between the skills the legal profession needs in today’s market and the attorneys law schools are producing is not only widening but will be difficult for legal education to overcome.

Kourlis, retired Colorado Supreme Court justice and executive director of the Institute for the Advancement of the American Legal System, was one of three panelists who participated in a discussion about legal education during the 7th Circuit Bar Association annual meeting and judicial conference April 30-May 2 in Indianapolis.

Joining in the panel discussion, “The Future of Law School,” were Randall Shepard, retired chief justice of the Indiana Supreme Court; and William Henderson, Indiana University Maurer School of Law professor and co-founder of Lawyer Metrics.

The trio highlighted research that has been showing grade point averages and LSAT scores are not the best indicators for future success in the legal profession. Rather, students with character traits like a strong work ethic and emotional stability will be likelier to excel.

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May 17, 2017 | Permalink | Comments (10)

Sanchirico:  Pass-Through, Public Trading, And The Dubious Obstacle Of Inside Basis Adjustments

Chris Sanchirico (Pennsylvania), Pass-Through, Public Trading, and the Dubious Obstacle of Inside Basis Adjustments (web appendix):

Elective “inside basis adjustments” are a central feature of partnership taxation, and their prospective infeasibility for publicly traded companies has played an important role in shaping leading corporate integration proposals.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Private College Tuition Discounts Hit All-Time High Of 49%

49%National Association of College and University Business Officers, Private College Tuition Discounts Hit Historic Highs Again:

Private colleges and universities are discounting their tuition revenue at the highest rates yet, a new report from the National Association of College and University Business Officers (NACUBO) shows.

By offering grants, scholarships, and fellowships, the 411 private nonprofit institutions that participated in the 2016 NACUBO Tuition Discounting Study averaged an estimated 49.1 percent institutional tuition discount rate for first-time, full-time students in 2016-17—the highest in the history of the survey. This means that for every dollar in gross tuition revenue from those freshmen, institutions used nearly half for grant-based financial aid. Among all undergraduates, the estimated institutional tuition discount rate was similarly record-setting at 44.2 percent.


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May 17, 2017 in Legal Education | Permalink | Comments (5)

Taylor:  The U.S. Rules For Taxing Business Entities

Florida Tax Review  (2015)Willard Taylor (NYU), Can We Clean This Up? A Brief Journey Through the U.S. Rules for Taxing Business Entities, 19 Fla. Tax Rev. 323 (2016):

This article summarizes the 80-plus year history of the U.S. Federal income tax rules for classifying business entities, concluding that they result largely from administrative and/or legislative reactions to specific problems or legislative accommodations to industry lobbying efforts and do not reflect an effort to develop a comprehensive and coherent system for taxing (or not taxing) business income.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 16, 2017

Non-Elite B-Schools Urge 'Just Say No' Approach To Rankings

US NewsWall Street Journal, Business Schools Take a Stand Against Academic Rankings:

Business-school deans and research faculty at more than 20 universities are taking a stand against the academic rankings published by media outlets such as Bloomberg Businessweek, Nikkei Inc.’s Financial Times and the Economist Group.

Rather than “acquiesce to methods of comparison we know to be fundamentally misleading,” the administrators are urging their peers at other schools to stop participating in a process they say rates programs on an overly narrow set of criteria.

The plea, issued by deans and faculty from institutions including University of Southern California’s Marshall School of Business, University of Iowa’s Tippie College of Business and the University of North Carolina’s Kenan-Flagler Business School, comes in the form of a research paper to be published in the May edition of the Decision Sciences Journal [On Academic Rankings, Unacceptable Methods, and the Social Obligations of Business Schools].

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May 16, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

Alice Abreu Receives Temple University's Great Teacher Award

Abreu (2017)Temple Law Professor Alice Abreu Honored with Great Teacher Award:

From the volume of letters offered in support of her nomination, it is clear that Temple Law Professor Alice Abreu has been a Great Teacher for a very long time. On April 25th, Temple University made that official by honoring her with the Great Teacher Award, the highest honor bestowed by Temple upon its faculty.

Temple Law Dean Gregory Mandel took the opportunity to heap praise upon Professor Abreu, tempered with light-hearted teasing for her “boundless and infectious passion for tax law.” “Yes, you heard me correctly,” he confirmed to laughter from the faculty in attendance. “I realize that phrase has never before been uttered.” Mandel went on to describe the “universal admiration of all who know Professor Abreu,” not only for her “zeal for tax law,” but also for her “passion for teaching… and her excitement for drawing colleagues into the intersection of tax law and their practice areas.”

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May 16, 2017 in Legal Education, Tax, Teaching | Permalink | Comments (1)

Chang:  Inequality, Trusts And Estates, And Tax

Felix B. Chang (Cincinnati), Asymmetries in the Generation and Transmission of Wealth,  78 Ohio St. L.J. ___ (2017):

This Article assigns a redistributive role to the legal rules of trusts and estates. Unlike business law, trusts and estates has lagged in articulating a comprehensive theory on inequality. Consequently, income inequality is compounded intergenerationally as wealth inequality, with dire consequences for economic productivity and social stability. To move the discourse on wealth inequality, this Article explores the divergent approaches toward inequality in business law and trusts and estates.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (2)

Chair Of Legal Ed Section Weighs In On ABA President's Attempt To Strip Non-Accreditation Activities From Section, 'Urban Legend' That Shift To MBE Has Caused Slippage In Bar Exam

ABA Section On Legal Education (2016)Following up on my previous posts (links below):

Greg Murphy (Chair, ABA Section of Legal Education and Admissions to the Bar), The Section Lives, and a Few Words on Bar Admissions and Examiners:

To accomplish the proposed changes in our Section described above, amendments to the ABA Bylaws would have been required. However, the deadline for the submissions of proposals for changes to the ABA Bylaws in advance of the August 2017 annual meeting was March 10, 2017. I am informed that no proposals for amendments relating to our Section were submitted.  Therefore, the first section of the ABA, the Section of Legal Education and Admissions to the Bar, lives on.

Speaking of bar admissions, and since “Admissions to the Bar” is in our Section’s name, many of the readers of Syllabus are already aware that the House of Delegates adopted a resolution urging the bar admitting jurisdictions to adopt expeditiously the Uniform Bar Examination (UBE). The resolution enjoyed the enthusiastic support of the ABA’s Young Lawyers Division and Law Student Division, and passed the House overwhelmingly. Support of the UBE is now official ABA policy. ...

It bears noting that an urban legend seems to persist that recent disappointing bar passage results in some jurisdictions are somehow tied to jurisdictions adopting the UBE.  That is both a legend, and a myth.

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May 16, 2017 in Legal Education | Permalink | Comments (0)

Kleinbard:  Capital Taxation In An Age Of Inequality

Edward Kleinbard (USC), Capital Taxation In An Age Of Inequality, 90 S. Cal. L. Rev. 593 (2017):

The standard view in the U.S. tax law academy remains that capital income taxation is both a poor idea in theory and completely infeasible in practice. But this ignores the first-order importance of political economy issues in the design of tax instruments. The pervasive presence of gifts and bequests renders moot the claim that the results obtained by Atkinson and Stiglitz in 1976 counsel against taxing capital income in practice.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (1)

Manolakas:  The Mortgage Interest Deduction And Unmarried Co-Owners

Christine Manolakas (McGeorge), Qualified Residence Interest Deduction: A Win for Unmarried Co-Owners, 17 Nev. L.J. 199 (2016):

Despite the seemingly simple language of the statute, the interpretation of the home mortgage interest deduction has recently garnered much attention as the Internal Revenue Service and the courts grappled with its application to unmarried co-owners of a residence.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (1)

Monday, May 15, 2017

Is The House GOP's Border Adjustment Tax Unconstitutional?

Washington Post op-ed:  If Retail Politics Doesn’t Kill This $1 Trillion Tax, the Supreme Court Should, by Theodore Olson:

“[B]order adjustment” is in serious constitutional jeopardy. As currently described, the tax would be imposed on taxpayers themselves, rather than on a transaction or activity. That makes it a direct tax that should be subject to the long-dormant requirement of apportionment, which the “border adjustment” plan cannot possibly satisfy. If retail politics does not sink “border adjustment,” the Supreme Court should. How pointless to pass an experimental and unfair tax only to have it struck down after all that political capital is spent getting it passed.

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May 15, 2017 | Permalink | Comments (0)

The Downside of Requiring Additional Experiential Courses in Law School

Douglas A. Kahn (Michigan), The Downside of Requiring Additional Experiential Courses in Law School:

In recent years, the bar has expressed dissatisfaction with what is considered by some to be inadequate preparation of law students to begin practicing law immediately after graduation. There are several reasons why this has become a matter of concern for the legal profession. The ABA, state bars and law schools have responded by adopting graduation requirements that force students to take a certain number of experiential courses.

The contention of this article is that the imposition of additional, required experiential courses will have a negative effect on the adequacy of a student's preparation to practice law because it contributes to a reduction in the student's exposure to a range of doctrinal courses (especially core courses) and to the skills that those courses develop.

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May 15, 2017 in Legal Education | Permalink | Comments (21)

Grewal:  Congress Handcuffs The IRS

Andy Grewal (Iowa), The IRS Gets Handcuffed by the Congress, Yale J. on Reg.: Notice & Comment (May 3, 2017):

The House and Senate recently reached agreement on a comprehensive spending bill and expect to pass it soon. Regarding the IRS, the bill freezes the agency’s budget at $11.2 billion and thus does not, as some feared, make substantial cuts to its funding. Nonetheless, the IRS may face hardships, because its funding remains significantly below its 2010 level ($13.6 billion) while its responsibilities have greatly expanded in recent years, especially because of the Affordable Care Act.

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May 15, 2017 in Congressional News, IRS News, Tax | Permalink | Comments (2)

Denver Law School Faces Federal Equal Pay Lawsuit From Eight Female Professors

Denver Logo (2015)Following up on my earlier posts:

Rocky Mountain PBS News, University of Denver Faces Federal Equal Pay Suit from Female Law Professors:

It was a memo from the Dean of the University of Denver law school that Professor Lucy Marsh will never forget. The University said it was paying all female full law professors thousands of dollars less than their male counterparts for doing the same work. “Something had to be done about that,” she said. “That's against the law.”

But when she went to the Dean to protest, asking what he was going to do about the pay disparity?  “He said ‘nothing”, and I thought man I'm not going to take that.”

Marsh and seven of her female colleagues are now cited as examples of violation of the Equal Pay act in an Equal Employment Opportunity Commission suit against the University.  Administration officials say the law professors’ compensation is based on a fair and unbiased evaluation of faculty and that every female full professor in the law school is entitled to less.  The university hired an outside consultant to examine their compensation system.

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May 15, 2017 in Legal Education | Permalink | Comments (3)

Muller:  The Incredible Shrinking Law School

Derek Muller (Pepperdine) has a typically thoughtful post on The Incredible Shrinking Law School, including this chart showing the 27% reduction in the median graduation class size from 2013 (206) to 2016 (161):

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May 15, 2017 in Legal Education | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, May 14, 2017

Higher Taxes Lead To Consistently Worse Results In MLB, NBA, NFL, And NHL


New York Times op-ed: Another Terrible Thing About Taxes, by Erik Hembre (University of Illinois at Chicago):

I gathered data on the outcomes of every professional sports game over the past 40 years as well as data on state and local tax rates each team member faces. I then computed how much taxes predict winning for each league in every year while controlling for other factors such as population, income, franchise age and local amenities (i.e., weather).

Results of the analysis [Income Taxes and Team Performance: Do They Matter?] show that higher taxes consistently predict worse performance in every league — not just the N.B.A. but also Major League Baseball, the N.H.L., and the N.F.L. over the past 20 years. The findings do not change if I use championships or finals appearances instead of regular season wins, and no single city, team or year drives the results.

Figure 4

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May 14, 2017 in Tax | Permalink | Comments (6)

Vermont Law School Receives $17m Loan From U.S. Department Of Agriculture To Fund Online Education Program, Restructure Debt

Vermont Law School Logo (2017)ABA Journal, Vermont Law Receives $17 Million Loan From US Department of Agriculture:

Vermont Law School has received a $17 million loan from the United States Department of Agriculture. The loan will be used to restructure debt and further develop an online education program and year-round classes that offer greater flexibility for students. ...

The law school laid off staff in 2013 following a [39%] enrollment decline and in 2014, Moody’s Investors Service downgraded revenue bonds [to junk status] that led to the law school “technically” defaulting on a loan agreement with TD Bank. ...

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May 14, 2017 in Legal Education | Permalink | Comments (7)

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 #4:

  1. [430 Downloads]  Background and Current Status of FATCA, by William Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  2. [380 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. [298 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  4. [225 Downloads]  Should Robots Pay Taxes? Tax Policy in the Age of Automation, by Ryan Abbott (University of Surrey) & Bret N. Bogenschneider (University of Surrey)
  5. [215 Downloads]  BEPS and the New International Tax Order, by Allison Christians (McGill)

May 14, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Religiously Affiliated Law Schools, Olympianism, And Christophobia

Michael V. Hernandez (Dean, Regent), In Defense of Pluralism: Religiously Affiliated Law Schools, Olympianism, and Christophobia, 48 U. Tol. L. Rev. 283 (2017):

Daniel Webster observed that “Christianity, general, tolerant, Christianity, Christianity independent of sects and parties” was the foundation of our liberties and legal system. In the spirit of this tradition, I have explained in my scholarship that the law must zealously guard religious liberty for all, while the substance of law should be based on principles of truth knowable by and accessible to all and not on principles unique to one faith. In other words, a Christian-based jurisprudence does not inherently involve the imposition of uniquely Christian principles and, thus, is not theocratic.

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May 14, 2017 in Legal Education, Scholarship | Permalink | Comments (1)

Saturday, May 13, 2017

Law School Rankings By Full-Time, Long-Term Bar-Passage Required (Excluding School-Funded) Jobs (CORRECTED)

This Week's Ten Most Popular TaxProf Blog Posts

Department Of Education Throws Student Loan Lifeline To Teetering Charlotte Law School

Charlotte Logo (2016)Politico, Devos Reinstates Some Funding to Troubled For-Profit Law School:

The Trump administration has indicated that it plans to greenlight the flow of some federal student loans to the embattled for-profit law school whose funding the Obama administration cut off last year. Education Department officials last week told the Charlotte School of Law that they're "prepared" to disburse loans to students for the current semester, according to an email to students from school president Chidi J. Ogene that was obtained by POLITICO. Only students who previously received a federal loan in the fall will be eligible for the late spring disbursement, which Ogene said he expects by this Thursday.

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May 13, 2017 in Legal Education | Permalink | Comments (5)

President Trump Nominates David Kautter To Be Assistant Secretary For Tax Policy

KautterFollowing up on my April 3 post, David Kautter To Be Named Assistant Secretary For Tax Policy: White House Press Release, President Donald J. Trump Announces Key Additions to his Administration:

David J. Kautter of Virginia to be an Assistant Secretary of the Treasury, Tax Policy. If confirmed, Mr. Kautter will serve as Assistant Secretary of the Treasury for Tax Policy.  Mr. Kautter currently serves as Partner-in-Charge of the Washington National Tax practice for RSM, an audit, tax, and consulting services firm. He was also previously the Managing Director of the Kogod Tax Center and Executive-in-Residence at the Kogod School of Business at American University (AU).

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May 13, 2017 in IRS News, Tax | Permalink | Comments (0)

Friday, May 12, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses another in a long line of bizarre Eighth Circuit ESOP decisions.

KristanAnother 8th Circuit ESOP debacle.

The Eighth Circuit Court of Appeals has seen more than its share of cases involving Employee Stock Ownership Plans. That’s because Iowa is in the Eight Circuit, and Iowa was the home of practitioners whose creative use of ESOPs often led to unfortunate tax results.

The Eighth Circuit yesterday upheld another bad ESOP, in a case involving a Kansas orthopedic surgeon. The ESOP had an Iowa address, so we can add it to the roster of bad Iowa ESOPs.

The Tax Court had disallowed the ESOP on the grounds that it allocated shares to an owner with no compensation — a violation of the plan document — and that it failed to get the required annual appraisals. Either item standing alone is enough to disqualify the ESOP.

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May 12, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new paper by Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina), and Edward Maydew (North Carolina), Shareholder Wealth Effects of Border Adjustment Taxation.

HemelWho wins and who loses from a border-adjusted cash flow tax like the one proposed by House Republicans? Fabio Gaertner, Jeffrey Hoopes, and Edward Maydew seek to shed light on that question by examining stock market reactions to news about the House Republicans’ plan. Their topline result is that on days when news events make a border-adjusted cash flow tax look more likely, share prices of firms in high-import industries perform worse than the rest of the market.

Gaertner, Hoopes, and Maydew contribute to a fast-growing literature on the trade balance effects of border-adjusted cash flow taxation. I imagine that most readers of this blog have been following that debate, but for those who haven’t, a brief primer: A pure cash flow tax would tax businesses on revenues minus expenses. A border-adjusted cash flow tax allows an exemption for revenues from exports but denies a deduction for the cost of imports. 

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May 12, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Comparing Class Of 2016 Employment Outcomes With Class Of 2015 And Class of 2014

Following up on yesterday's post, ABA Releases Class of 2016 Employment Data: 7% Drop In Law Grads Lead To Placement Rate Increase, Numerical Decrease In Long-Term J.D.-Required/Advantage Jobs:

The ABA Section of Legal Education and Admissions to the Bar posted the Class of 2016 Employment Summary spreadsheet yesterday.

In this initial post, I provide a brief summary of the Class of 2016’s employment outcomes compared with the Class of 2015 and the Class of 2014.

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May 12, 2017 in Legal Education | Permalink | Comments (1)

Tax Policy In The Trump Administration

Alum Donates $1.5m To University Of Florida To Fuel Law School's Rise In U.S. News Rankings From 48 To 35

UFUSNFollowing up on my previous posts:

Daily Business Review, Hugh Culverhouse Jr. Pledges $1.5M to UF Levin College of Law:

University of Florida Levin College of Law alumnus Hugh Culverhouse Jr. has pledged $1.5 million to be used by the school for incoming student scholarships if the law school's community raises an additional $1.5 million by Aug. 14, the first day of classes.

Culverhouse, a Coral Gables-based lawyer who graduated from the law school in 1974, said he was inspired to create the Culverhouse Challenge by the school's leap from 48 to 41 in the most recent U.S. News national rankings of law schools. It was the highest ranked law school in Florida, followed by the law schools at Florida State University (48), University of Miami (77), Stetson (96) and Florida International University (100). Six more Florida law schools were not ranked.

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May 12, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

Thursday, May 11, 2017

ABA Releases Class of 2016 Employment Data: 7% Drop In Law Grads Lead To Placement Rate Increase, Numerical Decrease In Long-Term J.D.-Required/Advantage Jobs

Press Release, ABA Legal Education Section Releases Employment Data for Graduating Law Class of 2016:

Employment data for the graduating law class of 2016 as reported by American Bar Association-approved law schools to the ABA Section on Legal Education and Admissions to the Bar is now publicly available.

The ABA Section of Legal Education and Admissions to the Bar has released aggregate national data on law graduate employment outcomes for the class of 2016. An online table provides select national outcomes and side-by-side comparisons between the classes of 2016 and 2015. Individual law school outcomes are available online.

ABA Table 2

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May 11, 2017 in Legal Education | Permalink | Comments (2)

Why Are Law Professors So Unhappy?

PublishLaw Prof Blawg, Why Do Law Professors Write Law Review Articles?:

Publish or perish, but is there a point to it?

Why do I write law review articles?  Other professors are starting to ask the same question of themselves.  Or more precisely, others are trying to measure who is making a “scholarly impact.”  ...

This whole quest started with another bad idea.  Publish or perish.  The whole game of academia is to publish articles so that one can get tenure, get promoted, and be on top of the world.  This means publication in student-run law reviews, preferably at the highest U.S. News and World Report ranks. ...

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May 11, 2017 in Legal Education, Scholarship | Permalink | Comments (8)

Herzig:  The Distributive Effects Of The House GOP's Destination Based Cash Flow Tax

David Herzig (Valparaiso), The Potential Distributive Effects of the Proposed Destination Based Cash Flow Tax (DBCFT):

The House GOP Blueprint for tax reform is the most ambitious corporate tax reform since the 1930s. It cuts business tax rates and allows immediate expensing of capital outlays. It accomplishes these goals by replacing the current corporate income tax which taxes profits to a destination based cash flow tax that taxes cash flow. The tax is a move from origin or production based to destination or consumption based. As Alan Auerbach said rather than figuring out “how do you measure income ... with cash flow you just follow the money.” The cash flow tax is designed to accomplish a couple big goals. First, stop the gaming done by companies like Facebook to reduce their corporate tax burden. Second, encourage equity investment over borrowing. Finally, encourage exports while increasing the tax burden on imports. To put it mildly, the plan has caused quite a reaction.

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May 11, 2017 in Scholarship, Tax | Permalink | Comments (1)

ABA Tax Section May Meeting

ABAThe ABA Tax Section May Meeting kicks off today in Washington, D.C. The full program is here. Tax Profs with speaking roles include:

  • Diversity: Anthony Infanti (Pittsburgh),  Jacqueline Lainez (UDC), Francine Lipman (UNLV)
  • Employee Benefits:  Jon Forman (Oklahoma), Kathryn Kennedy (John Marshall)
  • Fiduciary Income Tax:  Jerome Hesch (Miami)
  • Financial Transactions:  Itai Grinberg (Georgetown)

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May 11, 2017 in ABA Tax Section, Legal Education, Tax | Permalink | Comments (0)

Tax Presentations At The Mid-Atlantic Junior Faculty Forum

MAJFFMid-Atlantic Junior Faculty Forum:

  • Jonathan Grossberg (American), A Proposal for a Residency Dividend
  • Hayes Holderness (Richmond), Questioning Quill
  • James Puckett (Penn State), Temporary Treasury Regulations: A Tax Exceptionalist Perspective

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May 11, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Tax Prof Beau Baez Launches Learn Law Better

BaezH. Beau Baez, a Georgetown Law and Tax LL.M. graduate, was a Tax Prof for seventeen years at three law schools before being fired by Charlotte Law School in its January purge of faculty.  Beau has dusted himself off and launched Learn Law Better, LLC, with a website and YouTube channel dedicated  to helping students thrive in law school and pass the bar exam:

Law school is difficult. Professors don’t tell you what they expect on an exam and when you get your grades back you don’t really know why you received that grade, let alone understand how to improve. But we can help you on your journey.

Most law schools do a poor job at providing students with the detailed help they need to get good grades and pass the bar exam.  Learn Law Better is here to be your guide so that you can follow the right path. It is hard work–as anything worth having is — but now you have someone to show you how to work smarter so that you can achieve your life goals.

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May 11, 2017 in Legal Education, Tax | Permalink | Comments (2)

Wednesday, May 10, 2017

Sanchirico:  Optimal Redistributional Instruments In Tax Policy And Law & Economics

Chris William Sanchirico (Pennsylvania), Optimal Redistributional Instruments in Tax Policy and Law & Economics: Survey and Assessment:

The literature on optimal redistributional instruments begins with the assumption that society has some preference for equality, leaving the precise degree unspecified. It then asks: How should society pursue that preference? More specifically, what kinds of policy instruments — whether categorized as “taxes,” “transfers,” “public goods,” “government programs,” “regulations,” or “legal rules” — should be informed by society’s distributional objectives? This paper reviews and assesses three strands of the literature on optimal redistributional instruments.

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May 10, 2017 in Scholarship, Tax | Permalink | Comments (1)

Merritt:  The Bar Exam Is Broken

AALSAALS Faculty Perspectives: Validity, Competence, and the Bar Exam, by Deborah Jones Merritt (Ohio State):

The bar exam is broken: it tests too much and too little. On the one hand, the exam forces applicants to memorize hundreds of black-letter rules that they will never use in practice. On the other hand, the exam licenses lawyers who don’t know how to interview a client, compose an engagement letter, or negotiate with an adversary.

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May 10, 2017 in Legal Education | Permalink | Comments (8)

Hemel:  How The States Can Make President Trump’s Taxes Public

Trump Tax ReturnsVox:  How the States Can Make President Trump’s Taxes Public, by Daniel Hemel (Chicago):

The Trump administration’s release of a tax plan — or, at least, a one page summary of its goals for tax policy — has drawn renewed attention to the president’s refusal to release his own tax returns. How much would the president personally benefit from his proposal to abolish the Alternative Minimum Tax? How much does he stand to gain from a reduced 15 percent rate on certain business income?

House Democrats have proposed a number of measures that would make the president’s tax returns public, but the Republican majority has blocked these efforts (despite defections by two of their members). With the president unlikely to release his returns and Congress unlikely to force him to, state lawmakers are looking for creative ways to compel disclosure of the president’s tax filings.

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May 10, 2017 in Tax | Permalink | Comments (4)

David Hasen Leaves Colorado For Florida

HasenDavid Hasen, Professor of Law at Colorado, has accepted a tenured lateral offer from Florida, beginning in Fall 2017.  Here are David's recent publications:

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May 10, 2017 in Legal Education, Tax, Tax Prof Jobs, Tax Prof Moves | Permalink | Comments (1)

What Law Schools Can Learn About Assessment From Medical Schools

Law MedicineNeil W. Hamilton (St. Thomas), Professional-Identity/Professional-Formation/Professionalism Learning Outcomes: What Can We Learn About Assessment From Medical Education?, 13 U. St. Thomas L.J. ___ (2017):

The accreditation changes requiring competency-based education are an exceptional opportunity for each law school to differentiate its education so that its students better meet the needs of clients, legal employers, and the legal system. While ultimately competency-based education will lead to a change in the model of how law faculty and staff, students, and legal employers understand legal education, this process of change is going to take a number of years. However, the law schools that most effectively lead this change are going to experience substantial differentiating gains in terms of both meaningful employment for graduates and legal employer and client appreciation for graduates’ competencies in meeting employer/client needs. This will be particularly true for those law schools that emphasize the foundational principle of competency-based learning that each student must grow toward later stages of self-directed learning — taking full responsibility as the active agent for the student’s experiences and assessment activities to achieve the faculty’s learning outcomes and the student’s ultimate goal of bar passage and meaningful employment.

Medical education has had fifteen more years of experience with competency-based education from which legal educators can learn. This article has focused on medical education’s “lessons learned” applicable to legal education regarding effective assessment of professional-identity learning outcomes. The principal lessons learned in Part III with respect to assessment are:

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May 10, 2017 in Legal Education | Permalink | Comments (0)