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Tuesday, February 3, 2015

The Structure of American Income Tax Policy Preferences

Cameron Ballard-Rosa (North Carolina), Lucy Martin (Yale) & Kenneth F. Scheve (Stanford), The Structure of American Income Tax Policy Preferences:

Modern income tax systems are multidimensional in that different rates can be applied to different income levels. Few contemporary studies of public preferences over the income tax or redistribution more generally measure policy preferences across the income distribution and none base those estimates on experimental evidence that accounts for revenue constraints. This paper implements an experimental conjoint survey design to measure income tax preferences across the income distribution. We find that policy opinions are generally progressive but that there is an important asymmetry in the elasticity of these preferences. Support for income tax plans is elastic with respect to policies for low income citizens with support decreasing significantly with higher rates on low incomes. In contrast, support for income tax plans increase -- although relatively inelastically -- with respect to higher taxes for high income citizens. Although individuals support tax plans with rates on high incomes that are higher than the low rates preferred for the poor, they are indifferent across a wide range of these high rates which yield very different degrees of progressivity. We also evaluate the correlates of these preferences to determine whether examining the multi-dimensionality of redistributive policy instruments provides new insights about political conflict over redistribution. We present evidence that income tax preferences are correlated with measures of self-interest, beliefs about the efficiency costs of taxes and the determinants of income, religiosity, and racial attitudes and find that political conflict over taxation is primarily over taxing high incomes.

February 3, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tax Provisions in President Obama's FY2016 Budget

Green BookPresident Obama yesterday released his Fiscal Year 2016 Budget. The Treasury Department released the 312-page Green Book (General Explanations of the Administration’s Fiscal Year 2016 Revenue Proposals) (revenue tables here).

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February 3, 2015 in IRS News, Tax | Permalink | Comments (0)

University Of Missouri-Kansas City Joins Rankings Hall Of Shame; Dean Ordered Staff To Raise Ranking "By All Means Necessary"

UMKCInside Higher Education, Fibbing for Rankings:

The University of Missouri at Kansas City gave the Princeton Review false information designed to inflate the rankings of its business school, which was under pressure from its major donor to keep the ratings up, according to an outside audit released Friday.

The audit -- by PricewaterhouseCoopers -- described the process by which business school officials came up with creative reasons to provide data that many at the school believed to be false, and that the audit found to be false. ...

UMKC issued a news release Friday that reads: "Independent review upholds No. 1 research ranking."

But the audit also confirmed many of the findings of an August article in The Kansas City Star that found "a pattern of exaggerations and misstatements" by the business school. At the time, the university disputed the Star's report, but Missouri governor Jay Nixon requested an investigation, and that request led to the report issued Friday. ...

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February 3, 2015 in Law School Rankings, Legal Education | Permalink | Comments (2)

ABA Tax Section Midyear Meeting

ABA Tax Section Logo (2012)Tax Prof speakers at last week's ABA Tax Section Midyear Meeting in Houston (full program here):

  • Linda Beale (Wayne State), Standards of Tax Practice
  • Brad Borden (Brooklyn), Danshera Cords (Albany), Elaine Gagliardi (Montana), Michael Lang (Chapman), Charlene Luke (Florida), Roberta Mann (Oregon), Bruce McGovern (South Texas), Marty McMahon (Florida), Teaching Taxation 

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February 3, 2015 in ABA Tax Section, Conferences, Tax | Permalink | Comments (0)

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February 3, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

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February 3, 2015 in About This Blog, Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 635

IRS Logo 2The Source, IRS Ignores Politicking Nonprofits:

Reporting by the Center for Public Integrity has shown that despite spending hundreds of millions of dollars on elections, nonprofits--many considered "social welfare" groups--are regularly getting away with breaking election law and aren't being audited or investigated by the Internal Revenue Service.

Since the Citizens United v. Federal Election Commission decision in 2010, a deluge of campaign spending has been poured in by dark money groups. 

Slashed IRS resources, scandal, and unprecedented monies are all contributing to the problem.

What can be done to make sure nonprofits follow the law? Is it feasible to expect the IRS to handle the political football of campaign spending?

Guests:

  • Philip Hackney, associate professor of law at Louisiana State University. Former official in the chief counsel's office at the IRS
  • Marcus Owens, lawyer at Caplin & Davis law firm, former director for the IRS' exempt organization division

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February 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, February 2, 2015

Graetz Presents The Tax Reform Road Not Taken -- Yet Today at Pepperdine

Graetz (2015)Michael J. Graetz (Columbia) presents The Tax Reform Road Not Taken -- Yet, 67 Nat'l Tax J. 419 (2014), at Pepperdine today as part of our Tax Policy Colloquium Series:

The United States has traveled a unique tax policy path, avoiding value added taxes (VATs), which have now been adopted by every OECD country and 160 countries worldwide. Moreover, many U.S. consumption tax advocates have insisted on direct personalized taxes that are unlike taxes used anywhere in the world. This article details a tax reform plan that uses revenues from a VAT to substantially reduce and reform our nation’s tax system. The plan would (1) enact a destination-based VAT; (2) use the revenue produced by this VAT to finance an income tax exemption of $100,000 of family income and to lower income tax rates on income above that amount; (3) lower the corporate income tax rate to 15 percent; and (4) protect low and-moderate-income workers from a tax increase through payroll tax credits and expanded refundable child tax credits. This revenue and distributionally neutral plan would stimulate economic growth, free more than 150 million Americans from having to file income tax returns, solve the difficult problems of international income taxation, and remove the temptation for Congress to use tax benefits as if they are solutions to the nation’s pressing social and economic problems.

Update:  Post-presentation lunch:

IMG_1191

February 2, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

President Obama Proposes Highest Estate Tax Rate in the World

Investor's Business Daily op-ed:  Obama Proposes Highest Estate Tax Rate in the World, by Stephen Moore (Heritage Foundation):

Moore 2President Obama's proposed changes to inheritance and capital gains taxes could raise the estate tax rate in the U.S. to the highest in the industrialized world.

The plan, announced during the State of the Union address, would eliminate what is called "step-up basis at death" on capital gains taxation. And the top capital gains rate would jump to 28% from 20%.

Under current law, when a parent or grandparent dies, the increase in the valuation of his or her asset from when it was originally purchased is not taxed.

This is to offset the effects of the estate tax.

Obama's plan would tax estates and impose the regular capital gains tax on inherited assets — a business, property or stocks. This could bring the effective death tax rate to 57%, according to Dick Patten, chairman of the American Business Defense Council. Including state inheritance taxes, the rate would average 65% but could go as high as 68%.

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February 2, 2015 in Tax | Permalink | Comments (1)

Applying to Top Law Schools Disserved Many in 2014

American Lawyer LogoThe American Lawyer:  Applying to Top Law Schools Disserved Many in 2014, by Matt Leichter:

[A]lthough the number of full-time applications predictably declined again at most law schools (7.6 percent), they conspicuously rose at many law schools at the top of U.S. News and World Report's annual rankings. Specifically, of the schools that were ranked in the top 20 on average in the last two years, 14 received more applications than in 2013.

In other words, potential applicants seem to have heard a message telling them that top law schools were safe while the same couldn't be said of the less prestigious ones. The extent of the application bounce these 14 schools received is arguably quite substantial: nearly 8 percent among all of them taken together over last year.

U.S. NEWS RANK   (13-14)

LAW SCHOOL

 APPLICATIONS 2013

 APPLICATIONS 2014

CHANGE

1

Yale

2,637

2,859

8.4%

2

Harvard

5,485

5,943

8.4%

2.5

Stanford

3,795

4,482

18.1%

4

Chicago

4,271

4,430

3.7%

4

Columbia

5,797

6,188

6.7%

6

NYU

5,730

6,193

8.1%

7

Pennsylvania

5,283

5,828

10.3%

10.5

Duke

5,014

5,358

6.9%

12

Northwestern

3,952

4,036

2.1%

13.5

Georgetown

7,257

7,793

7.4%

15

Texas

4,188

4,387

4.8%

15.5

Vanderbilt

3,296

3,673

11.4%

18.5

Washington

4,251

4,649

9.4%

19

USC

4,338

4,578

5.5%

TOTAL

65,294

70,397

7.8%

MEAN

4,664

5,028

7.9%

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February 2, 2015 in Legal Education | Permalink | Comments (0)

Death of Robert Anthoine

RobertNew York Times Obituary:

Robert Anthoine --  renowned tax and arts law expert and enthusiastic supporter of the arts, died on January 23, 2015 after a brief illness.  ... He graduated from Columbia Law School in 1949 and returned there to teach in 1952. In 1963, he joined Winthrop, Stimson, Putnam & Roberts as the head of its tax department. He continued to teach as an adjunct at Columbia for another three decades, and as a visiting professor at law schools around the world through his seventies. ... A memorial celebrating his life will be held in March in NYC on a date to be announced. In lieu of flowers, contributions in his memory may be made to the Aperture Foundation.

Bob was married to Tax Prof Rebecca Rudnick at the time of her tragic death in a boating accident in Papua New Guinea in 2001. (Hat Tip: Myron Grauer, Bill Streng.)

February 2, 2015 in Obituaries, Tax, Tax Profs | Permalink | Comments (3)

Diamond: The Continuing Disconnect Between Law School Critics and Market Reality

Stephen F. Diamond (Santa Clara), The Continuing Disconnect Between Law School Critics and Market Reality:

S&MI just happened to notice that the law school critics continue to distort the findings of the Simkovic and McIntyre paper on the economic value of earning a JD. This paper sends a chill down the spines of the critics because it lays waste to their argument with straightforward data. This requires them to engage not just in mental gymnastics that lead to the kinds of absurd confusions about valuation found here and here but now to outright falsehoods posted to one of the most important law school blogs in the country.

One egregious example is found in the comments section at Paul Caron’s blog, TaxProf. There one finds another anonymous (and ubiquitous blog) commenter named “Unemployed Northeastern” (UNE) who thinks that he has a better grasp on the economics of legal education than that provided by the exhaustive research of S&M. ...

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February 2, 2015 in Legal Education, Scholarship | Permalink | Comments (28)

Caron: Thomas Piketty and Inequality -- Legal Causes and Tax Solutions

Paul L. Caron (Pepperdine), Thomas Piketty and Inequality: Legal Causes and Tax Solutions, 64 Emory L.J. Online 2073 (2015):

PikettyThomas Piketty's Capital in the Twenty-first Century has acted as an accelerant fueling the fiery public debate over increasing inequality in America and around the world. Piketty makes the provocative empirical claim that the rate of return to private capital inevitably exceeds the rate of economic growth (r > g) and thus leads to growing concentrations of wealth among the richest members of society. Piketty has spawned heated debates in newspapers, magazines, and blogs, which soon will continue in academic journals and law reviews. Shi-Ling Hsu is one of the first out of the gate with The Rise and Rise of the One Percent: Considering Legal Causes of Wealth Inequality, 64 Emory L.J. Online 2043 (2015).

Hsu focuses on the interesting question of how law and legal institutions foster inflated returns on capital (Piketty's r). He also makes the important point that lawmakers often conflate Piketty's r with g (public economic growth), resulting in laws that boost the former with little discernible impact on the latter. The bulk of Hsu's argument is devoted to explaining how four areas of American law contribute to "the legal enrichment of the one percent": financial regulation, oil and gas subsidies, transition relief, and electric utility regulation. He concludes with a plea for greater federal funding of education to spur greater economic growth and bridge the deepening inequality chasm in America.

Hsu's essay is a significant contribution to what is certain to be an energetic debate over the implications of Piketty's work. The need to examine the impact of legal rules and institutions on both private capital returns and public economic growth will be an enduring contribution to future scholarship on the extent, consequences, and reduction of income and wealth inequality. I offer here two modest reactions to Hsu's essay: (1) recent inequality research has shifted the focus of high-end wealth concentration from the Top 1% to the Top 0.1% (and even the Top 0.01%), with important implications for the work of both Piketty and Hsu, including (2) the inquiry into whether policymakers should intervene before the fact to re-shape the distribution of the benefits and burdens of economic activity (Hsu's approach) or instead redistribute wealth after the fact (Piketty's approach).

In a recent essay, Joseph Bankman and I argued that tax scholars need to focus more of our work on how policymakers should address the federal government's unprecedented (and growing) fiscal imbalance. California Dreamin’: Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014). In Piketty terms, s (spending) > r (revenues). We proposed that California's recent tax increases on the wealthy should provide a template for the nation to bring r more into alignment with s.

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February 2, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

President Obama Proposes 19% Global Minimum Corporate Tax, 14% Tax on Offshore Profits

Bloomberg, Obama Said to Seek 19% Global Minimum Tax to Aid Road Fund:

President Barack Obama will propose that U.S.-based companies pay a minimum 19 percent tax on their future foreign earnings, capturing profits that are now often beyond the government’s reach.

Obama will also seek a 14 percent mandatory tax on about $2 trillion in stockpiled offshore profits, said two people familiar with his budget proposals, declining to be named because the document won’t be made public until Feb. 2. Companies would pay that tax regardless of whether they bring the money back to the U.S., the two said, creating a revenue stream the president would use to pay for roads, bridges and other infrastructure projects. ...

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February 2, 2015 in Tax | Permalink | Comments (0)

Former SMU Law School Dean Arrested on Prostitution Charge

AttanasioDallas Morning News, Former SMU Law Dean Arrested on Prostitution Charge:

The former dean of the Southern Methodist Law school was arrested early Sunday on a prostitution charge, jail records show.

John Attanasio, 60, was booked into the Collin County jail Sunday. He was released later that day after posting $500 bond on the Class B misdemeanor. ...

Sgt. Lonny Haschel, a Texas DPS spokesman, said the arrest was part of an ongoing investigation. No further information was released.

Attanasio served as dean of the SMU Law School from 1988 until 2013, when officials declined to renew his contract with the university. The announcement produced significant backlash at the time from faculty, financial supporters, and the school’s executive committee.

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February 2, 2015 in Legal Education | Permalink | Comments (2)

The IRS Scandal, Day 634

IRS Logo 2New York Post, ABCs of IRS Mess: Justice Department Is Tainted, Too:

At her confirmation hearings Wednesday, Loretta Lynch said she’s only “generally aware” of the Justice Department’s investigation of IRS targeting of conservative groups.

As a service for our likely new attorney general, here’s a primer on why so many in Congress want a special counsel in the IRS case.

Under federal rules, the attorney general appoints a special counsel “when he or she determines that criminal investigation of a person or matter . . . would present a conflict of interest for the Department or other extraordinary circumstances.”

In this case, there’s both. ...

[W]e still don’t know how far up the political food chain the malfeasance goes. Among other things, investigators are still pouring through tens of thousands of e-mails uncovered months after the IRS had insisted they were lost.

But we do know the Justice Department investigation has been compromised, not least by the president announcing its conclusions before the probe is complete.

Lynch should move fast to restore an aura of independence and impartiality to the investigation by turning it over to a special counsel.

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February 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, February 1, 2015

The Super Bowl and Tax

Super BowlForbes, Super Bowl XLIX Tax Tale Of The Tape: Who Ya' Got?, by Tony Nitti:

Do me a favor. Put down the Form 1040 you’re working on, take a good look in the mirror, and be brutally honest with yourself: are you a typical tax accountant?

Do you find yourself noticing the time of day, or the exit number on the highway, and thinking, “that’s a great Code section!”

Is your sense of humor limited to giggling uncontrollably at tax-themed double entendres like “hot assets” and “dynamic scoring?”

Did you name your sibling labradors Bitker and Eustice?

If so, that’s OK. You are what you are. ... [F]or 4-6 hours this weekend, you’re going to have to pretend that you’re not the introverted, odd person you clearly are. And that isn’t going to be easy.

But I can help.

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February 1, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

The Super Bowl and Law School

Super BowlWall Street Journal, Calling the Super Bowl Like Cris Collinsworth:

In the two weeks before the Super Bowl, the New England Patriots and Seattle Seahawks are combing through endless amounts of tape. They are memorizing until they have instant recall to make split-second decisions and they are highlighting the mismatches between the two teams. Cris Collinsworth is doing the same thing. 

The NBC analyst will be calling his third Super Bowl Sunday, along with Al Michaels, who will be calling his ninth. But it isn’t getting any easier. It’s Collinsworth’s job to explain football to the 110 million or so watching Sunday. ...

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February 1, 2015 in Legal Education | Permalink | Comments (0)

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [248 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  2. [152 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)
  3. [127 Downloads]  Return on Political Investment in the American Jobs Creation Act of 2004, by Hui Chen (Zurich), Katherine Gunny (Colorado) & Karthik Ramanna (Harvard)
  4. [119 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  5. [114 Downloads]  The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area, by George K. Yin (Virginia)

February 1, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 633

IRS Logo 2Washington Times, Senate GOP Demands Obama Turn Over All Communications with IRS:

Senate Republicans on Thursday asked President Obama to turn over all communications he and his aides have had with the IRS since 2010, hoping to find out whether the tax collection agency shared private taxpayer information with political operatives at the White House.

The request, made in a letter obtained by The Washington Times, is signed by Senate Finance Chairman Orrin G. Hatch and all 13 other Republicans on the committee, and is addressed specifically to Mr. Obama, saying they want to see if his employees broke the law by acquiring or sharing private information.

“We have an obligation to conduct oversight of the federal government’s administration of our tax laws,” the lawmakers wrote. “As part of this oversight, we are seeking to determine the degree to and manner in which the Internal Revenue Service shares taxpayer information with the Executive Office of the President.”

The Republicans said they tried to get the information from the IRS, but it has been “unable to provide a full accounting of its employees’ communications with the White House.” The GOP senators gave the president a Feb. 20 deadline.

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February 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, January 31, 2015

The Betrayal of Socrates in Legal Education

SocraticDavid Barnhizer (Cleveland State), The Betrayal of Socrates:

My argument here is that there is a stark disjunction between the Socratic ideal and the reality found in the First Year of law school at nearly all institutions. The underlying assumption is simple—the initial foundational phase of an activity is the most important. It provides the basis for all that follows. As such, the most intense and sophisticated methods should be applied at the foundational level so that the more “advanced” learning rests on a deep intellectual base. ...

[I]n the midst of all the talk about producing “practice ready” law graduates I argue that the single most important “core”, “foundational” or “meta” skill we teach in law school is the heightened ability to think with analytical precision and integrative strategic skill aimed at problem solving and avoidance along with innovative opportunity creation. I would even go so far as to conclude that law teachers of several generations ago who stated that the goal was to teach law students to “think like lawyers” were absolutely correct in concept even if they (and we) didn’t know exactly what the concept meant, how to do it properly or what “substances” ought to make up the material on which the processes of thought were exercised to produce the desired results. ...

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January 31, 2015 in Legal Education | Permalink | Comments (0)

Nine California Law Schools Bucked National Trend, Increased 1L Enrollment in 2014

National JuristNational Jurist, Enrollment Up at 9 California Law Schools:

Law school enrollment dropped by 7.2 percent this year, but 33 law schools bucked the trend and increased enrollment. Nine of those law schools hail from California — more than any other state.

“We aren’t in an arctic vortex,” joked Edward Tom, Dean of Admissions at University of California, Berkeley School of Law when asked why California schools fared better this year.  “Honestly, I have no idea.”

While the nine schools saw improvement this year, they are still down 13 percent from 2010. ... While nine California law schools were up, nine were also down. Total enrollment in the state was down 5.1 percent this year, and is more than 18 percent off from 2010. ...

California law schools that increased enrollment this year:

  1. Chapman 21.37%
  2. UC-Berkeley 4.2%
  3. La Verne 3.47%
  4. UC-Davis 2.81%
  5. UCLA 1.74%
  6. California Western 0.91%
  7. USC 0.66%
  8. Stanford 0.52%
  9. Pepperdine 0.5%

Of these nine schools, one increased the median LSAT of their larger entering class (Stanford +1, to 172); six maintained their median LSAT (UC-Berkeley & UCLA, 167; USC, 166; UC-Davis, 162; Pepperdine, 160; La Verne, 147); and two decreased their median LSAT (Chapman -2, to 156; California Western -1, to 150).

Nationally, six law schools increased enrollment by 5% or more:

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January 31, 2015 in Legal Education | Permalink | Comments (3)

Simkovic: The Knowledge Tax

Michael Simkovic (Seton Hall), The Knowledge Tax:

Labor economists struggle to explain why the rates of return to higher education have remained much higher than the rates of return to other investments. This article proposes a novel explanation: distortionary taxation.

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January 31, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 632

IRS Logo 2New American, Surveillance of the Right Is Not New: The IRS Scandal in Historical Perspective:

The Obama administration’s ongoing coverup of the IRS scandal about targeting the Tea Party is not the first instance of the federal government persecuting the political Right with IRS audits. In fact, the current IRS scandal — where Lois Lerner’s Blackberry and her desktop computer have apparently been wiped clean to destroy evidence — are actually following a more than 50-year script for government to destroy the political Right in the form of the “Reuther Memorandum.” “The flow of big money to the radical right should be dammed to the extent possible,” the “Reuther Memorandum” informed the Kennedy administration, asking for political assistance in stemming that flow. ...

Several lessons can be learned from the 1960s. The first is that the perseverance of The John Birch Society in the wake of such government persecution and surveillance over the past 55 years should be a source of hope for modern Tea Party organizations. The Obama administration has tried to delay and deny tax-exempt status designations from the IRS in order to starve the Tea Party for funds because they know most corporations and foundations won’t donate to an organization without a 501(c)(3) or 501(c)(4) tax-exempt designation from the IRS. Despite the intimidation, IRS harassment, and media ridicule, the JBS remains a major fixture on the political Right today.

Secondly, the experience of The John Birch Society teaches the lesson that government can’t be trusted — even the administration of the allegedly sainted and martyred John F. Kennedy — and its secrets need to be revealed through dogged congressional investigations and strong public information laws. Public information laws needed include a strengthened Freedom of Information Act, as well as stronger whistleblower laws so that public informants such as Edward Snowden can come to Congress with information about blatant government violations of the U.S. Constitution without fear of prosecution. Most of what we know about the FBI and IRS persecution of political groups — both in the 1960s and under the Obama administration — came from the congressional investigations and whistleblowers who testified before them.

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January 31, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, January 30, 2015

Weekly Tax Roundup

Corporate Profits Soar, Average Incomes Plummet

Al Jazeera, Economy Grows, Incomes Shrink: Americans Continue to Lose Money While Corporate Profits Soar, by David Cay Johnston (Syracuse):

The first data on 2013 incomes show continuing bad news for Americans, my analysis of a new Internal Revenue Service report shows. Average income fell 2.6 percent in 2013, even though the economy grew 3.2 percent in real terms over 2012. Average inflation-adjusted income in 2013 was 8 percent lower than in 2007, the last peak economic year, and 6.9 percent less than in 2000, the year President George W. Bush set as the standard to evaluate the effect of his tax cuts and regulatory policies.

This is the latest sign of a disturbing trend. An ever-shrinking share of national income flows to individuals while corporate profits expand. In fact, profits hit a record high in 2013 both in absolute terms and as a share of the economy. By both measures, profits have continued rising. By contrast, labor’s share of national income has been trending downward since 1980, except for a spike during the second term of President Bill Clinton. The decline accelerated after the Bush tax cuts took effect, retroactively, to the first day of 2001.

Johnston

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January 30, 2015 in IRS News, Tax | Permalink | Comments (8)

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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January 30, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

January 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

UCLA & Tax Policy Center Host Conference Today on International Tax Reform

UCLAUCLA and the Tax Policy Center host a conference today on International Tax Reform from 9:00 a.m. - 4:00 p.m. PST (webcast here):

Panel #1:  Political Economy of International Tax Reform

Presenters:  Alan Auerbach (UC-Berkeley), Jon Talisman (Capitol Tax Partners)
Commentator:  Jason Oh (UCLA)

Panel #2:  Inversions: Where Do We Go From Here?

Presenters:  Mihir Desai (Harvard), Victor Fleischer (San Diego)
Commentator:  Larry Stein (Latham & Watkins)

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January 30, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Retired Professor Gives $1 Million to Emory Law School

CarneyPress Release,  Retired Professor Gives $1 Million to Emory Law:

Emory Law Professor William J. Carney and his wife, Jane [left and right in photo, along with Dean Robert Schapiro and Sue Payne, Professor of Practice and Executive Director of the Center for Transactional Law and Practice], have created a challenge grant of $1 million to benefit the law school's Center for Transactional Law and Practice.

The Carneys' gift will allow the center to hire an assistant director and to enhance both its experiential programs and academic offerings. When the law school has raised $1 million in matching funds, it will establish the William and Jane Carney Chair of Transactional Law and Practice, to be held by the center's executive director.

The gift is one of the largest named gifts from a professor ever given to Emory University. ...

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January 30, 2015 in Law School | Permalink | Comments (2)

IRS Low Income Taxpayer Clinic Program Releases Annual Report

LITC CoverIR-2015-13, Low Income Taxpayer Clinic Program Reports on Activities (Jan. 29, 2015):

The Internal Revenue Service’s Low Income Taxpayer Clinic (LITC) Program Office has issued its annual program report, which describes how LITCs have assisted thousands of low income taxpayers nationwide with free or low-cost representation, education and advocacy services.

LITCs provide free or low-cost assistance to low income individuals who have tax disputes with the IRS, such as an audit, appeals hearing, collection matter or litigation. LITCs also conduct education and outreach to taxpayers who speak English as a second language (ESL). In addition, they advocate for low income taxpayers and highlight the need to change administrative practices and procedures that cause their clients hardship. 

The report explains how LITCs help low income and ESL individuals understand and exercise their rights as U.S. taxpayers. The report also provides an overview and history of the LITC program, discusses the type of cases that LITCs work, and reports the results that LITCs achieve on behalf of their clients.

LITC

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January 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Stephen Carter: My Son Was Stopped by Police For Being Black at Yale

Yale University LogoNew Haven Register op-ed:  Another Son Stopped for Being Black at Yale, by Stephen Carter (Yale):

The columnist Charles M. Blow of the New York Times has sparked debate this week by his disclosure that his son, a student at Yale College, was stopped at gunpoint by a Yale police officer who said he resembled a robbery suspect.

I’d like to take a moment to add my small coda of personal outrage, as the father of an African-American son ... who was also harassed by the Yale police while a student at Yale College. What happened to our son wasn’t as serious as what happened to Blow’s — no gun was pointed his way — but the echoes are painful nevertheless. ...

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January 30, 2015 in Legal Education | Permalink | Comments (3)

The IRS Scandal, Day 631

IRS Logo 2Judicial Watch, Obama Administration Refuses to Release Time Records of Key Attorney in IRS Scandal Investigation:

Judicial Watch announced today that the Obama Department of Justice (DOJ) is going to extreme lengths to keep from the public the number of hours DOJ Attorney Barbara Bosserman expended on the investigation of the Internal Revenue Service’s targeting of conservative organizations.  The DOJ has claimed no less than four separate privileges in federal court to keep secret Bosserman’s hours. In doing so, the DOJ has confirmed that the criminal investigation into the IRS’ abuses is ongoing and that Bosserman, a major donor to Obama’s political campaigns and Democratic National Committee, continues to be part of the team of lawyers criminally investigating the issue.  The developments come in a lawsuit filed by Judicial Watch against the Justice Department to obtain the information about Bosserman’s activities. ...

“All Judicial Watch wants is the number of hours that the Obama donor/Justice Department lawyer has spent investigating the worst IRS abuse in American history,” said Judicial Watch President Tom Fitton. “That the Justice Department has violated the law to keep this information secret is further confirmation that President Obama’s Justice Department is hopelessly conflicted in the IRS scandal.  Thanks to Judicial Watch, the public knows that the Justice Department and the FBI are co-conspirators with the IRS – and planned to prosecute citizens on Obama’s political hit list.  Obama’s IRS abuse is far worse than Nixon’s.  And as with Watergate, the public interest and basic legal ethics principles require that the U.S. Attorney General appoint special counsel to investigate the IRS scandal.  The U.S. Senate should ask Loretta Lynch, the president’s nominee to replace the disgraced Eric Holder as U.S. Attorney General, about this issue.”

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January 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, January 29, 2015

College Endowment Rankings

Chronicle of Higher Education, College Endowments See Another Year of Growth:

The improving economy contributed to a second strong year in a row for colleges’ endowment returns, according to an annual study released on Thursday. Colleges’ endowments returned an average of 15.5 percent in the 2014 fiscal year, up from 11.7 percent in 2013.

The ranking of 851 colleges is here.  The Top 25 (figures in thousands):

Top 25

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January 29, 2015 in Law School Rankings, Legal Education | Permalink | Comments (1)

Three Cheers for the Death Tax!

The Daily Beast, Three Cheers for the Death Tax!, by Michael Tomasky:

Of all the Obama proposals unveiled in the State of the Union address, the one that’s probably drawn the most right-wing fire is the one that would close an inheritance capital-gains tax loophole. ... Undertaxing inherited wealth is ... immoral. ...

[T]he estate tax doesn’t start until $5.43 million per person or $10.86 million per couple. That’s high enough that only the wealthiest .15 percent of Americans pay any estate tax. Among the 3,780 U.S. households that owed any estate tax in 2013, their average tax rate was 16.6 percent.

Center for American Progress, Report of the Commission on Inclusive Prosperity (Jan. 15, 2015):

Combined with the United States’ generous estate tax structure, the step-up in basis rule creates very low effective tax rates on inherited wealth. The Congressional Budget Office estimates that the step-up in basis rule will reduce federal revenues by $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent of income earners.

Basis

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January 29, 2015 in Tax, Think Tank Reports | Permalink | Comments (2)

Borden: Rethinking the Tax-Revenue Effect of REIT Taxation

Florida Tax ReviewBradley Borden (Brooklyn), Rethinking the Tax-Revenue Effect of REIT Taxation, 16 Fla. Tax Rev. ___ (2015):

Real estate investment trusts (REITs) have recently made headlines in major media outlets and have caught the attention of lawmakers and analysts because they erode the corporate tax base. REITs are not subject to the entity-level tax that typically applies to corporations. To avoid being taxed on real-estate income, some corporations spin off real estate into REITs. After a REIT spinoff, such corporations rent the real estate from the REIT and continue to use it in their operations. Thus, a mere change in corporate form removes taxable income from the corporation (i.e., erodes the corporate tax base) and eliminates the entity-level tax on income from the spun-off real estate. This erosion of the corporate tax base concerns lawmakers (who have proposed prohibiting tax-free REIT spinoffs), some economists, and the media. Another concern is that the IRS has extended REIT classification to entities that hold non-traditional real estate, such as telecommunications infrastructure, billboards, oil and gas pipeline systems, timber, casinos, prisons, and data centers. The extension of REIT taxation to nontraditional real estate may not erode the corporate tax base because the assets may come from non-corporate entities. Thus, the tax-revenue effect of REIT taxation extends beyond REIT spinoffs and the erosion of the corporate tax base. Nonetheless, intuition suggests that more REIT spinoffs, the expansion of REIT taxation, and the growth of the REIT industry must erode the corporate tax base and significantly reduce government tax revenue. This Article challenges that intuition and presents two counterintuitive findings. First, it shows that REIT spinoffs can actually increase tax revenue even though they erode the corporate tax base. Second, it reveals that loss of tax revenue from REIT taxation primarily results from REITs forming from partnerships, not from REIT spinoffs. The Article concludes by recommending how these findings should influence discussions of REIT reform.

January 29, 2015 in Scholarship, Tax | Permalink | Comments (0)

Occupy the Syllabus

UC-Berkeley (University)The Daily Californian op-ed, Occupy the Syllabus:

We are calling for an occupation of syllabi in the social sciences and humanities. This call to action was instigated by our experience last semester as students in an upper-division course on classical social theory. Grades were based primarily on multiple-choice quizzes on assigned readings. The course syllabus employed a standardized canon of theory that began with Plato and Aristotle, then jumped to modern philosophers: Hobbes, Locke, Hegel, Marx, Weber and Foucault, all of whom are white men. The syllabus did not include a single woman or person of color.

We have major concerns about social theory courses in which white men are the only authors assigned. These courses pretend that a minuscule fraction of humanity — economically privileged white males from five imperial countries (England, France, Germany, Italy and the United States) — are the only people to produce valid knowledge about the world. This is absurd. The white male syllabus excludes all knowledge produced outside this standardized canon, silencing the perspectives of the other 99 percent of humanity. ...

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January 29, 2015 in Legal Education | Permalink | Comments (1)

Murphy: Pragmatic Administrative Law and Tax Exceptionalism

Richard Murphy, Pragmatic Administrative Law and Tax Exceptionalism, 64 Duke L.J. Online 21 (2014):

This Essay responds to the 2014 Duke Law Journal Administrative Law Symposium. Its principal contention is that courts and other commentators should give due weight to the history and virtues of the evolution of administrative law in the United States—and consider embracing the pragmatism and flexibility that it enables—in applying general principles of administrative law in the tax context.

January 29, 2015 in Scholarship, Tax | Permalink | Comments (0)

Hill: The Associate Dean for Research in the Age of the Internet

B. Jessie Hill (Case Western), The Associate Dean for Research in the Age of the Internet, 31 Touro L. Rev. ___ (2015):

In this brief essay, written for a Touro Law Review symposium issue on the role of the associate dean for research and scholarship, I reflect on how the increasing centrality of the Internet to research and scholarship affects the way the Associate Dean for Research might do her job, and I describe some of the measures that seem to be effective in light of this new state of affairs.

January 29, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Going Clear, Scientology, and the IRS

Slate, What Sundance Favorite Going Clear Tells Us About Scientology:

Going Clear [review here] ends by noting that the church has fewer than 50,000 members but still possesses more than $3 billion in assets. Most of this wealth can be attributed to Scientology’s long, tortured, and ultimately triumphant battle with the IRS to be deemed a non-profit, tax-exempt organization. That victory is perhaps Miscavige’s keystone achievement: as the film details, and as the New York Times reported in 1997, Miscavige used a combination of lawsuits, backroom negotiations, and private investigators digging up dirt on IRS officials to secure Scientology’s status as a religion.

January 29, 2015 in Book Club, IRS News, Tax | Permalink | Comments (0)

Female, Minority Professors Are Paid Less Than White Male Professors at UC-Berkeley

UCBUC-Berkeley Press Release, Campus Poised to Act on Salary Gaps for Women, Minority Faculty:

The gaps aren’t large, nor are the causes clear. But the campus is already planning to act on new findings that average salaries for women and minority-group faculty at UC Berkeley lag behind those for white men in similar fields, and with comparable professional experience.

A just-released study shows that average salaries for underrepresented minority faculty members trail those of their white male counterparts by 1 to 1.8 percent. Gaps between women and white males were slightly larger, with a range between 1.8 and 4.3 percent.

The report calls for further research to investigate reasons for the differences — which it notes could result from a mix of factors — and lays out measures to make salaries more equitable for all Berkeley ladder faculty.

A key recommendation is to create a new “targeted decoupling initiative” to provide salary increases for faculty beyond what ordinary advancement in rank and step allows. The findings of the study would provide important data to help build the new salary program.

Report of the UC Berkeley Faculty Salary Equity Study (Jan. 2015):

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January 29, 2015 in Legal Education | Permalink | Comments (4)

Pierce: Which Institution Should Determine Whether an Agency’s Explanation of a Tax Decision is Adequate?

Richard J. Pierce, Jr. (George Washington), Which Institution Should Determine Whether an Agency’s Explanation of a Tax Decision is Adequate?: A Response to Steve Johnson, 64 Duke L.J. Online 1 (2014):

This Essay responds to Professor Steve Johnson’s Article for the 2014 Duke Law Journal Administrative Law Symposium, Reasoned Explanation and IRS Adjudication [63 Duke L.J. 1771 (2014)]. I first describe the ways in which courts have added burdensome procedures that are not required by the APA for the notice and comment process. Next, I explain why the Office of Information and Regulatory Affairs (OIRA) is better than courts at reviewing the adequacy of agency reasons for issuing a rule. Finally, I explain how courts can eliminate judicial review for the adequacy of the reasons IRS gives for issuing a rule by applying the traditional broad interpretations of the Anti-Injunction Act and the tax exception to the Declaratory Judgment Act.

January 29, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 630

IRS Logo 2Bloomberg, Ted Cruz Leads the New Conservative Crusade Against the IRS:

Though the first day of Loretta Lynch's AG hearings went as well as Democrats might have wanted, Senator Ted Cruz managed to steal the spotlight on an issue near and dear to the hearts of many conservatives: reforming the Internal Revenue Service. ...

Cruz asked Lynch if she'd appoint an attorney to independently investigate whether the IRS had targeted Americans over their political beliefs.

"Is it consistent with fairly and impartially enforcing the law to have an investigation into abuse of power at the IRS headed by a major Democratic donor?" asked Cruz.

"My view is that the department has career prosecutors who are devoted to the Constitution," said Lynch, otherwise ignoring the implication of the question.

"Would you commit to this committee to appoint a special prosecutor to investigate the IRS abuse of power, who at the very least is not a major Obama donor?" asked Cruz.

Lynch, who according to biographical material submitted to the committee was not born yesterday, declined to take the bait. "My understanding is that the matter has been considered and the matter has been resolved," she said.

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January 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, January 28, 2015

Slack Presents The Political Economy of Property Tax Reform Today at Toronto

Enid SlackEnid Slack (Toronto) presents The Political Economy of Property Tax Reform at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Property taxes are generally considered by economists to be good taxes, and many countries are being advised to increase and improve their property taxes. In practice, however, property tax reforms have often proved to be difficult to carry out successfully. This paper discusses why property taxes are particularly challenging to reform and suggests several ways in which efforts to reform this tax may become more successful in the future. After a brief introductory section on the ‘disconnect’ between the economics and the politics of property tax reform, Section 2 summarizes recent experiences in five OECD countries with property tax reform. Against this background, Section 3 sets out the key elements of a good property tax reform and Section 4 discusses several aspects of property tax reform that seem to have derailed or distorted reforms in practice. Unfortunately, some of the solutions countries have adopted to deal with such problems are themselves problematic, either because they do not really solve the problem or because they hamper rather than work towards the establishment of a good property tax. Fortunately, as Section 5 outlines, it is possible to devise strategies for property tax reform that incorporate more acceptable solutions to most problems. As Section 6 concludes, good property tax reform is not easy. But it can definitely be achieved if an appropriately designed reform package is properly introduced and implemented.

January 28, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Charitable Donations to Colleges Reached All-Time High in 2014 ($38 Billion)

Top 10Wall Street Journal, Harvard, Stanford Lead Record Year for College Gifts; $37.5 Billion Is 10.8% Jump; Top 10 Schools Bring in 18% of Donations:

Colleges and universities received a record $37.5 billion in donations last year, led by massive gifts to Harvard University, Stanford University and other already-wealthy schools.

The new high, a 10.8% jump from the prior year, was due in part to stock-market increases that boosted capital gifts, as well as a jump in donations of art, according to an annual survey being released Wednesday by the nonprofit Council for Aid to Education. ...

The top 10 recipients brought in nearly 18% of all gifts last year, up from 15% a decade earlier, according to Ann E. Kaplan, who directs the survey.

Inside Higher Ed, Deep-Pocket Donors:

Top Fund-Raisers in 2014

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January 28, 2015 in Legal Education | Permalink | Comments (3)

New Emmanuel Saez Data: Gains From Economic Recovery Still Limited to the Top 1%

New York Times:  Gains From Economic Recovery Still Limited to Top One Percent, by Justin Wolters:

Emmanuel Saez, the economics professor who crunches these numbers based on data provided by the Internal Revenue Service, has just released preliminary estimates for 2013. The share of total income (excluding capital gains) going to the top 1 percent remains above one-sixth, at 17.5 percent. By this measure, the concentration of income among the richest Americans remains at levels last seen nearly a century ago.

It is tempting to note that the latest reading is somewhat below the 18.9 percent share that was recorded in 2012. But Professor Saez warns against reading too much into this year-to-year change. The problem is that his estimates rely on tax data, and tax rates on the rich rose sharply in 2013, leading many to shift taxable income out of 2013, and into 2012. Thus, the latest estimate is probably too low, just as the previous year’s number was probably too high.

Saez Table 1

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January 28, 2015 in Tax | Permalink | Comments (2)

How Student Debt Harms the Economy

Student LoansWall Street Journal op-ed:  How Student Debt Harms the Economy, by Mitch Daniels (President, Purdue University):

To the growing catalog of damage caused by the decades-long run-up in the cost of higher education, we may have to add another casualty. On top of the harm high tuition and other charges are inflicting on young people, and the way their struggles are holding back today’s economy, we must add the worry that tomorrow’s economy will suffer, too.

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January 28, 2015 in Legal Education | Permalink | Comments (0)

Fleming, Peroni & Shay: Formulary Apportionment in the U.S.

J. Clifton Fleming (BYU), Robert J. Peroni (Texas) & Stephen E. Shay (Harvard), Formulary Apportionment in the U.S. International Income Tax System: Putting Lipstick on a Pig?, 36 Mich. J. Int'l L. ___ (2015):

Perhaps surprisingly, this Article has shown that the debate over formulary apportionment is little more than an alternative path to the larger debate over worldwide taxation versus territorial taxation. The present U.S. international income tax regime for U.S. MNEs is an implicit, overly-generous, and incoherent quasi-territorial system that relies on residence rules, source rules, and the arm’s-length approach to apportion international business profits between domestic income that is currently taxable by the United States and foreign income that is effectively exempt, or nearly so, from U.S. taxation because of deferral and cross-crediting. This version of territoriality is quite ugly because it is highly complex and it imposes only modest restraints on the ability of U.S. MNEs to shift income out of the U.S. tax base to low-tax foreign countries.

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January 28, 2015 in Scholarship, Tax | Permalink | Comments (0)