TaxProf Blog

WSJ: More Than 50% of Law Graduates Aren’t Making a Living

Wall Street Journal:  More than 50% of Graduates Aren’t Making a Living -- Study:

More than 50% of law school graduates from the 2011 class aren’t earning enough to buy a house, according to a new study [Jerry Organ (St. Thomas), Reflections on the Decreasing Affordability of Legal Education, 41 Wash. U. J.L. & Pol'y ___ (2013)]. ...

Mr. Organ took a formula for measuring a law school graduate’s economic viability developed by University of Louisville Law Professor Jim Chen [A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduates’ Economic Viability, 38 Wm. Mitchell L. Rev. 1185 (2012)] and applied it to employment outcome data published on a per school basis by the ABA for the class of 2011.

Graduates need to be earning an annual income that’s at least two times their annual tuition — or an income that’s at least two-thirds of their law school debt — to reach “marginal financial viability,” according to the formula. Those below the threshold can’t afford to buy a $100,000 house and struggle to retire their debt. ...

He concludes:  Across all law schools and after accounting for scholarships in the manner described above, the estimated percentage of graduates from the Class of 2011 who have marginal financial viability increased from roughly 33% to roughly 46.5%, while the estimated percentage of such graduates who have less than marginal financial viability declined from roughly 67% to roughly 53.5%.

Those facing the bleakest prospects are graduates with lower LSAT scores and grade point averages who are more likely to pay full tutition, and those who went to school in places where legal education is more expensive, like California, Illinois, Massachusetts, and New York.

“Law schools are going to find themselves with fewer students to fill their seats unless costs come down or the job market improves significantly,” Mr. Organ told Law Blog by email.

See also Above the Law, If You Want to Own a Home, Don’t Borrow Money to Go to Law School

From Jim's article:

To offer good financial viability, defined as a ratio of education debt to annual income no greater than 0.5, post-law school salary must exceed annual tuition by a factor of 6 to 1. Adequate financial viability is realized when annual salary matches or exceeds three years of law school tuition. A marginal, arguably minimally acceptable level of financial viability requires a salary that is equal to two years’ tuition. The following table compares some tuition benchmarks with the salary needed to ensure the good, adequate, and marginal levels of financial viability identified in this article:

Obama Won't Take Charitable Deduction for Contribution of $20,000 of His Salary to Feds

Wall Street Journal:  Obama Won’t Deduct Returned Pay, by Laura Saunders:

President Barack Obama’s gesture of solidarity with furloughed federal workers will cost him about $8,000 out of pocket, according to tax specialists.

On Wednesday, the White House announced that the president plans to return 5%, or about $20,000, of his $400,000 salary this year to the Treasury in sympathy with federal workers facing reduced pay because of the automatic spending cuts known as the “sequester.” A White House aide said the president plans to write a check to the Treasury every month for a portion of his pay. He will write the first check this month. ...

In January, Congress raised the top tax rate on ordinary income to 39.6%, and a new payroll tax of 0.9% also took effect for high earners. The Obamas are expected to be subject to both, giving them a total tax rate of at least 40.5% on the $20,000 they donate, or about $8,100. ...

Of course, the president could treat the $20,000 as a charitable gift to Uncle Sam. Such contributions are typically deductible, according to IRS Publication 526. If he did, says [Jay] Starkman, “his net out-of-pocket would only be about $11,900.”

On Thursday a White House aide said the president will not take a charitable deduction for the $20,000.

Obama Budget to Limit IRAs to $3 Million

• Bloomberg, Obama’s Budget Would Cap Romney-Sized Retirement Accounts
• Business Insider, Barack Obama's Budget Will Contain a Massive 'Screw You' to Mitt Romney
• The Hill, Obama Budget to Take Aim at Wealthy IRAs
• Greg Mankiw (Harvard), The President's Latest Bad Idea

Prior TaxProf Blog ocoverage:

• The Tax Pros and Cons of Mitt Romney's $100 Million IRA (Jan. 19, 2012)
• WSJ: The Story Behind Mitt Romney's $100 Million IRA (Mar. 29, 2012)
• WaPo: Mitt Romney Exited Bain Capital With Rare Tax Benefits in Retirement (Sept. 3, 2012)
• The Atlantic: What's Really Going on With Mitt Romney's $102 Million IRA (Sept. 12, 2012)

Dartmouth Grad: Find a Man Today, Graduate Tomorrow

Followiing up on Tuesday's post, Advice for the Women of Princeton: Wall Street Journal op-ed:  Find a Man Today, Graduate Tomorrow, by Emily Esfahani Smith:

In 2008, when I was a college junior, I went home to New Jersey one weekend to visit my family—and almost immediately regretted it. My mother seemed more interested in my romantic life than my academic life: "Have you found a boyfriend yet?"

I rolled my eyes and said no. With a healthy dose of young-adult arrogance, I explained that I was too busy studying, working on the college review, and helping out at my sorority. No time for men. My mother nodded, acknowledging that there was a lot going on.

Then she said calmly but forcefully: "You're in college. You're at Dartmouth. There will never be a better time to meet someone. I'm sure there are many interesting boys around. If you don't find one before you graduate, you might not find one at all—so start looking."

Fast forward to today. A woman named Susan Patton is being pilloried online and elsewhere for giving young women the same advice that my mother gave to me. Late last week, she wrote a letter to the Daily Princetonian newspaper advising the school's female students: "You will never again have this concentration of men who are worthy of you. . . . Find a husband on campus before you graduate."

Feminist attacks on Ms. Patton began immediately—the paper's website was swamped with complaints, the Twitter crowd was livid, and writers lit into her at Slate, New York magazine and beyond. ...

[M]y mother's advice five years ago stopped me in my tracks. If she, a strong, career-oriented feminist—who, with my dad, sacrificed a great deal for me to go to college—was telling me to pay more attention to my romantic life, then what did she know that I didn't?

A lot. She knew what few, if any, feminists would tell young women today: There is far more to happiness than career success. ... In a boardroom somewhere, Sheryl "Lean In" Sandberg's heart is sinking.

Career success and relationships are both undoubtedly important to women's happiness, but many young and ambitious women value their personal lives more than their career aspirations. And that feeling intensifies over time.

In a 2009 study in the Journal of Personality and Social Psychology, David Lubinski and his team at Vanderbilt found that in a sample of academically gifted young adults, women became less career-oriented than men over time. As they approached middle age, women also placed more value than men on spending time with family, community and friends. These differences became more pronounced with parenthood.

My mother's advice—Susan Patton's advice—may not be right for every woman, but it was right for me. In the fall of my senior year, I started dating a brilliant man and we're still together. If I were unattached today, I'm not sure what I would do. The post-college dating scene can be rough: Getting to know someone often means shouting across a noisy bar or scrolling through Internet dating profiles. Finding a partner in college is easier.

Mom was right.

Reports Detail Tax Avoidance Through Offshore Bank Accounts

Two reports released yesterday detail the explosion of tax avoidance through offshore bank accounts:

• International Consortium of Investigative Journalists, Secrecy for Sale: Inside the Global Offshore Money Maze
• U.S. Public Interest Research Group, Picking up the Tab: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens

Press and blogosphere coverage:

• New York Times, Data Leak Shakes Notion of Secret Offshore Havens and, Possibly, Nerves
• Slate, The Secret World of Tax Havens Just Got a Whole Lot Less Secret
• Tax Justice Network, Offshore Secrets: Time Is Ripe for a European FATCA
• Washington Post, 2.5 Million Leaked Files Reveal Stunning Extent of Global Tax Havens
• Washington Post, Piercing the Secrecy of Offshore Tax Havens
• Washington Post, Tax Haven Data Leak Names Names, Raises Questions About Future of Offshore Bank Accounts

Wesley Snipes Released From Prison

TMZ reports that Wesley Snipes was released from prison on Tuesday after serving two years and four months of his three-year sentence on three counts of willful failure to file tax returns under § 7203. He is is subject to home confinement until July 19.

• CBS News
• CNN
• Death and Taxes
• Fox News
• Huffington Post
• USA Today

9th Circuit: Taxpayer Cannot Rely on CPA's Advice on Due Date of Tax Return

Knappe v. Commissioner, No. 10-56904 (9th Cir. Apr. 4, 2013):

When can you trust your accountant’s advice about when your taxes are due? That is the question we face today. Appellant Peter Knappe, acting as the executor of an estate, asked his accountant to apply for an extension of the deadline to file the estate-tax return from the IRS. The accountant told Knappe that the deadline had been extended one year, when in fact it had been extended only six months. Acting on the bad advice, Knappe filed the tax return several months late, and the IRS assessed significant penalties against the estate. Knappe initiated this action in the Central District of California, seeking a refund of the penalty. The district court granted summary judgment to the Government on the ground that Knappe had not shown “reasonable cause” to excuse the penalty, as that term is used in § 6651(a)(1). We affirm. ...

Given the vagaries of our famously labyrinthine tax laws, one might assume that hiring a tax expert is the quintessence of “ordinary business care and prudence.” On this view, a taxpayer who has solicited the services of a qualified professional and supplied him with the necessary information would be insulated from penalties stemming from the agent’s mistakes. After all, one hires a tax expert precisely to avoid having to read even the most straightforward IRS prose.

Taxpayers, however, are not exempt from penalty liability for their agents’ mistakes in all cases. In Boyle, the [Supreme] Court drew a sharp distinction between substantive advice on tax law, on which executors may reasonably rely, and nonsubstantive advice, on which executors may not rely. ... The Court also explained that determining the filing date of a tax return is a nonsubstantive matter: “[O]ne does not have to be a tax expert to know that tax returns have fixed filing dates and that taxes must be paid when they are due. . . . It requires no special training or effort to ascertain a deadline and make sure that it is met.”

We conclude that the question of when a return is due—even when an executor has sought an extension—is nonsubstantive. The deadlines here brook no debate. It was clear from the face of Form 4768, from the corresponding instructions, and from the governing statute that the maximum available extension of the filing deadline was six months. ... We reaffirm that an executor may only reasonably rely on an agent’s advice about substantive tax matters. Ascertaining a deadline is within the ambit of the executor’s nondelegable duties, because a deadline is a nonsubstantive matter. So too is confirming that a needed extension has been sought or obtained. It follows that ascertaining the length of any extension so obtained is equally nondelegable, because ascertaining an extended deadline is no more a substantive matter than ascertaining a default deadline.

As to deadlines, a responsible executor will not allow himself to be misled. When an attorney or accountant tells an executor, “This is the deadline,” the executor bears the risk that the advice is wrong. The rule is the same regardless of whether the payment deadline or the filing deadline is at issue, and regardless of whether the agent’s erroneous advice results from his misunderstanding of the relevant rules or his negligence in seeking the appropriate extension. Reliance on erroneous advice about nonsubstantive tax law issues cannot constitute reasonable cause for an executor’s failure to file a timely return.

We acknowledge that the result today imposes a heavy burden on executors, who will affirmatively have to ensure that their agents’ interpretations of filing and payment deadlines are accurate if they want to avoid penalties. This burden is justified by the government’s substantial interest in ensuring that returns are timely filed.

Moreover, any other result would reward collusion between culpable executors and their agents. In cases like this one, lawyers and accountants would be incentivized to claim that they gave erroneous advice to the executor whether or not they did in fact. The agent who fell on his sword would risk nothing, because the waiver of the penalty would leave the executor without damages. Even in cases in which executors and their agents did not actively collude to propound a contrived misrepresentation defense, negligent agents would be unilaterally incentivized to persist in giving erroneous advice to their clients, even if they realized their error.

It was Knappe’s duty to ascertain the correct extended filing deadline. By relying on his accountant’s advice about that nonsubstantive matter, he failed to exercise ordinary business care and prudence, and he cannot show reasonable cause to excuse the penalty. We therefore affirm the judgment of the district court.

(Hat Tip: Bob Kamman.)

Anderson: State Bar Exam Difficulty Rankings

My Pepperdine colleague Rob Anderson blogs The Most Difficult Bar Exams:

Law students and lawyers evaluate the relative difficulty of bar exams all the time. The most intuitive measure involves simply comparing bar passage rates among the states. That gives some indication of the bar exam's difficulty, but of course the composition of bar takers may vary significantly across states, making such a comparison potentially misleading.

To develop a slightly more accurate assessment of relative bar difficulty, I ran a regression of the bar passage rate for each ABA-accredited school for 2010 and 2011 on the school's median undergraduate GPA and LSAT, with an indicator variable for each state, weighted by the number of takers at each school. I collected this information from the LSAC Official Guide to ABA-Approved Law Schools (Alaska, Delaware, and the DC bars were omitted because of too few observations).

The table below sets out the resulting ranking of state bar exams in order from most difficult to least difficult. For each state, the weighted average LSAT score and the calculated (in the data) and overall (reported by the state) bar passage rates for 2010-2011 is set forth, along with the "bonus percent" relative to the California bar. The "bonus percent" is, roughly speaking, the percentage point bonus for a school's bar passage rate relative to the California bar (with predictors held at their averages).

Here are the 10 most difficult state bars under Rob's analysis:

	State Bar Examination	Bonus Percent	Calculated Average LSAT	Calculated Passage Rate	Overall Passage Rate
1	California	0.00	160.92	75.69	72.22
2	Arkansas	1.43	155.21	72.75	73.35
3	Washington	3.29	158.45	76.52	72.82
4	Louisiana	3.78	154.86	73.09	70.00
5	Nevada	4.72	158.41	77.85	72.86
6	Virginia	5.10	163.10	83.43	77.61
7	Oregon	5.19	159.21	78.67	76.04
8	West Virginia	6.47	153.43	76.78	78.80
9	Vermont	7.87	155.04	77.78	81.18
10	Maryland	7.99	160.40	82.82	79.08

• Above the Law, Which State Has the Most Difficult Bar Exam?

The Death and Resurrection of Sitemeter

Sitemeter, the ubiquitous traffic tracking service used by many blogs (including TaxProf Blog and the Law Professor Blogs Network), went down yesterday.  Disenchanted Tech and Frog Blog reported yesterday that Sitemeter may have neglected to reregister the sitemeter.com domain:

Normally when domains expire they go into a holding pattern for a while before they’re finally released and available to be registered again however it looks like someone swooped in and snapped it up straight away. This could get messy.

Disenchanted Tech reports today that Sitemeter.com Is Back (Nearly):

As of this morning, sitemeter’s whois information is back to what it should be. So it looks like they were lucky and got their domain name back quickly.

Pepperdine Symposium: The New Normal in College Sports

The Pepperdine Law Review is live webcasting its Sports Law Symposium at 8:30 a.m. to 5:15 p.m. PST (11:30 a.m. to 8:15 p.m. EST),  The New Normal in College Sports: Realigned and Reckoning (schedule here). Among the speakers are:

• Ken Starr (President, Baylor University; Former Dean, Pepperdine)
• Deanell Tacha (Dean, Pepperdine)
• Babette Boliek (Professor, Pepperdine)
• Andrew Brandt (ESPN NFL Business Analyst and Professor, Villanova (Moorad Center for Sports Law))
• Roger Cossack (ESPN Legal Analyst and Professor, Pepperdine)
• Mark Fainaru-Wada (ESPN Investigative Reporter)
• Gabe Feldman (Professor, Tulane (Tulane Sports Law Program))
• Daniel Lazaroff (Professor, Loyola-L.A. (Loyola Sports Law Institute))
• Michael McCann (Legal Analyst, Sports Illustrated and Professor, New Hampshire (Sports and Entertainment Law Institute))
• Matthew Mitten (Professor, Marquette (National Sports Law Institute))
• Jeff Moorad (Founder, Moorad Sports Management)
• Rodney Smith (Professor, Thomas Jefferson (Center for Sports Law and Policy))
• Jeffrey Standen (Associate Dean, Willamette)
• Katherine Sulentic (Assistant Director of Enforcement, NCAA)
• Maureen Weston (Professor, Pepperdine)

Arizona Cuts Law School Tuition by 11%

National Law Journal:  Arizona Cuts Law School Tuition, Marking a First, by Karen Sloan:

Is the era of law school tuition decreases upon us?

The Arizona Board of Regents on Thursday unanimously approved an 11% tuition cut for in-state residents at the University of Arizona James E. Rogers College of Law and an 8% reduction for nonresidents.

The move would appear to be the first significant law school tuition reduction since nationwide application totals began to decline in 2011. It offers evidence that the list prices for a law school education, which have far outpaced inflation for more than a decade, are beginning to reflect supply and demand. ...

The decrease is intended in part to make the school more appealing and accessible, said interim law dean Marc Miller. Applications are down by about 10% compared to one year ago, although the law school intends to accept applications past the formal February 15 deadline. Nationwide, the number of law school applicants is down by about 17%, according to the Law School Admission Council.

Annual tuition for Arizona residents will be $24,381, a cut of about $3,000 per year. Non-resident tuition will be $38,841, about $3,500 less per year. ...

The law school plans to make up for the lost revenue by expanding existing master of laws and doctor of juridical science programs and introducing a new LL.M. for non-lawyers. It also plans to reduce its pool of scholarship money.

The university regents voted to maintain existing tuition rates at Arizona State University Sandra Day O'Connor College of the Law at $26,267 for resident students and $40,815 for nonresidents.

Arizona's tuition decrease doesn't go far enough, said Brian Tamanaha, a professor at Washington University in St. Louis School of Law and the author of Failing Law Schools.
"Although I applaud it, this strikes me as mostly symbolic," he said. "Their tuition is too high for the types of jobs available in Arizona, so an 11% reduction is not enough. Tuition must go below $20,000 for to better align cost and economic return for the majority of students." ... Tamanaha was unsure whether the lower tuition would make the school more competitive with in-state rival ASU but was skeptical that other law schools would voluntarily follow Arizona's lead. He thought tuition declines of 25% or more would be needed to fill the seats as some law schools....

[A]dministrators plan to market their lower rates to potential students, particularly in California, where resident tuition at public law schools is equal or higher to Arizona's nonresident tuition.

• ABA Journal, Attention Law School Shoppers: It’s Now Cheaper to Get a JD from the University of Arizona
• Arizona Daily Star, University of Arizona Law School Cutting Tuition as Enrollment Drops
• Comedians at Law, Law School Tuition Going Down
• Greedy Associates, Univ. of AZ Lowers Law School Tuition; Market Correction?
• Matt Leichter, More on the (In)elasticity of Demand for Law School: Tuition Cuts Edition
• Wall Street Journal, University of Arizona Fires First Salvo in Law School Tuition War

Kahng & Fellows: Undertaxed Business Owners and Overtaxed Workers

Lily Kahng (Seattle) & Mary Louise Fellows (Minnesota), Costly Mistakes: Undertaxed Business Owners and Overtaxed Workers, 81 Geo. Wash. L. Rev. 329 (2012):

This article advocates for fundamental changes in the federal income tax base by systematically challenging conventional understandings of consumption and investment. As signaled by our title, “Costly Mistakes,” our thesis has to do exclusively with the deductibility of expenditures by business owners and workers. Where the current tax law treats a business owner’s expenditure as investment, we sometimes find consumption and question why the law should allow the expenditure to be deducted. Where the tax law treats a worker’s expenditure as consumption, we sometimes find investment and question why the law does not allow at least a partial deduction. Through an historical analysis of the development of the modern tax law with special attention to Justice Cardozo’s 1933 U.S. Supreme Court opinion in Welch v. Helvering and a review of Welch’s judicial and legislative progeny, the article demonstrates that the deference the tax law traditionally has accorded business owners results in their being undertaxed.

Through an analysis of the tax law’s treatment of workers, it further shows how its structural and substantive rules treat workers primarily as consumers, rather than as producers, and why that results in their being overtaxed. The article then investigates the economic inefficiencies produced by the tax law’s generous treatment of business owners’ outlays and its unduly restrictive treatment of workers’ outlays. It goes on to suggest an analytical framework for scrutinizing and reforming the tax treatment of workers and how that same framework could be extended to business owners with far-reaching implications. Finally, the article relates the undertaxation of business owners and the overtaxation of workers to the broader social policy discussions concerning the high rate of unemployment in the private sector and the escalating deficits in the public sector. It concludes that the success of the U.S. economy in the twenty-first century requires the tax law to treat both business owners and workers as producers. It further concludes that the tax law’s continuing failure to acknowledge that business owners and workers are both consumers and producers undermines the goals of efficiency and fairness.

Blank: U.S. National Report on Tax Privacy

Joshua D. Blank (NYU), United States National Report on Tax Privacy:

This National Report was prepared for a conference titled Tax Secrecy and Tax Transparency - The Relevance of Confidentiality in Tax Law, which took place in July 2012 in Rust, Austria and was co-hosted by the Institute for Austrian and International Tax Law at the Vienna University of Economics and Business and by Örebro University, Sweden. The Report describes the current tax privacy protections that apply to taxpayers in the United States and provides an overview of the policy considerations that have contributed to their enactment. Portions of this Report were originally published, in part, in Joshua D. Blank, In Defense of Individual Tax Privacy, 61 Emory L.J. 61 265 (2011).

Parental Receipt of the EITC and Children’s High School Dropout Status

Galen Savidge-Wilkins (MPH 2012, Georgetown), The Relationship between Parental Receipt of The Earned Income Tax Credit and Children’s High School Dropout Status, 18 Geo. Pub. Pol'y Rev. 97 (2013):

The Earned Income Tax Credit was established to provide low-income families with relief from the payroll tax, but it has grown over time to become the largest means-tested cash transfer program in the United States and one of the most substantial federal supports for the working poor. Although the EITC has been studied extensively, the literature has largely focused on its ability to encourage work, particularly among mothers (Eissa and Liebman 1996; Eissa and Hoynes 1998; Meyer and Rosenbaum 2001). There is a growing research literature on other effects of the EITC, including its impact on child cognitive ability and maternal health (Dahl and Lochner 2011; Evans and Garthwaite 2011). However, there is little research into how this component of the safety net impacts a key outcome for children: high school graduation. Using data from the National Longitudinal Survey of Youth on mothers and their children to construct a rich personal history for each child, this study examines the relationship between parental receipt of the Earned Income Tax Credit and children’s likelihood of graduating from high school on time. Within this study’s sample, EITC receipt is found to be most strongly associated with on-time graduation when these benefits are received during two life stages: before the children enter school and when children are in middle school. The results indicate that a $1,000 increase in average yearly real EITC receipt before the children enter school is associated with a 6.80 percentage point increase in the likelihood of finishing high school on time, and with a 1.56 percentage point improvement when that same increase in average real EITC receipt occurs during middle school. Analyses of specific disadvantaged subgroups yield statistically significant results during the same life stages and a stronger positive relationship between EITC receipt and high school graduation. 

Taxing and Tuition: A Legislative Solution to Rising Endowments and College Costs

Matt Willie (J.D. 2012, BYU), Comment, Taxing and Tuition: A Legislative Solution to Growing Endowments and the Rising Costs of a College Degree, 2012 BYU L. Rev. 1665:

Part II begins by discussing the rising costs of college tuition and the growing concern over educational access. It then offers a brief introduction to university endowments and discusses the most commonly recognized justification for their existence and growth: intergenerational equity. This justification and its outgrowths have been the subjects of significant academic criticism, and scholars have suggested new theories for endowment accumulation that cut against normative arguments for awarding universities tax-exempt status. Part III discusses the advantages and criticisms of the most commonly debated policy proposals related to university endowments. Unfortunately, all of these proposals suffer from the same defect: they are unlikely to significantly impact the affordability of higher education.

Thus, in Part IV, this Comment argues that tying an endowment tax directly to tuition increases represents a unique solution. Unlike other endowment-related measures, such a tax would discourage tuition hikes without encouraging wasteful spending. Perhaps more important, it would not necessarily discourage endowment growth or require cuts to current levels of funding for other important academic pursuits, such as research. This would leave room for universities to pursue traditional goals of intergenerational equity while still being closely tethered to their tax-exempt purposes.  

UConn Hosts Conference Today on The Challenge of Retirement in a Defined Contribution World

The University of Connecticut School of Law and the Insurance Law Center are hosting a conference today on The Challenge of Retirement in a Defined Contribution World:

The last forty years have witnessed a shift from defined benefit to defined contribution plans, during which employers have transferred market risk onto workers. This change has created new and difficult issues, including the ability of middle- and lower-income households to bear that risk, the increased volatility of financial markets, the danger of outliving one’s savings, and senior citizens’ ability to continue managing their portfolios when physical or cognitive problems strike. In this symposium, economists, legal scholars, and government officials will come together to discuss how to better understand the defined contribution paradigm and to manage and regulate its risks.

Panel #1:  Perspectives on Challenges in Lifecycle Planning for Retirement

• Richard L. Kaplan (Illinois)
• Russell K. Osgood (Washington U.)
• Moderator:  James Kwak (Connecticut)

Panel #2:  Employer and Employee Perspectives on Pensions:

• Kevin Lembo (State Comptroller, Connecticut)
• Dana M. Muir (Michigan)
• Brishen Rogers (Temple)
• Edward A. Zelinsky (Cardozo)
• Moderator:  Michael Fischl (Connecticut)

Luncheon Keynote Address:  Alicia H. Munnell (Boston College)

Panel #3:  Problems With Defined Contribution Plans:

• Zvi Bodie (Boston University)
• Lawrence A. Frolik (Pittsburgh)
• David Laibson (Harvard)
• Amy Monahan (Minnesota)
• Moderator:  Patricia A. McCoy (Connecticut)

Panel #4:  Going Forward: Solutions and Challenges:

• Mercer E. Bullard, (Mississippi)
• Megan Thibos (Consumer Financial Protection Bureau)
• Moderator:  Dalié Jiménez (Connecticut)

NYU Hosts Ask the Expert (Witness) and Recent Developments in Tax Controversy

The NYU Graduate Tax Program is hosting two events today:

• Ask the Expert (Witness): A Conversation With Professor Dan Shaviro:  "What happens when a law professor becomes an expert witness?  What sorts of challenges and issues does he or she face, what’s it like, and how does it relate to teaching and research activities?  Professor Daniel Shaviro, Wayne Perry Professor of Taxation (NYU), will address these questions and more, based generally on his recent experiences."
• Recent Developments in Tax Controversy, sponsored by New York Region of the Federal Bar Association Tax Section:  "The presentation will include a discussion on recent court opinions on economic substance, debt-versus-equity, expert witness testimony, and discovery. The primary speakers will be Brian Power (Mayer Brown) and Elizabeth McGee (Shearman & Sterling)."

Kaplan: Reforming the Taxation of Retirement Income

Richard L. Kaplan (Illinois), Reforming the Taxation of Retirement Income, 32 Va. Tax Rev. 327 (2012):

Legal and financial analyses abound about various means of saving for retirement and the tax advantages that they present, but very little attention has been paid to how retirement income is generated and the tax consequences that pertain to its generation. This article fills that void by examining the three major sources of retirement income: Social Security, employment-based retirement plans, and personal savings. For each of these sources, this article considers how retirement income is generated, sets forth the applicable federal income tax treatment, and proposes reforms to make the pertinent tax rules more sensible. Among its recommendations are simplifying how Social Security retirement benefits are taxed, bifurcating defined contribution plan withdrawals into capital gains and ordinary income components, repealing certain exceptions to the early distribution penalty, reducing the delayed distribution penalty and adjusting the age at which it is triggered, and changing the residential gain exclusion to avoid unanticipated problems with reverse mortgages.  

Lang: Territoriality and a Common Consolidated Corporate Tax Base

Michael Lang (WU Vienna University of Economics and Business), The Principle of Territoriality and its Implementation In the Proposal for a Council Directive on a Common Consolidated Corporate Tax Base, 13 Fla. Tax Rev. 305 (2012):

The EU Commission put forward its proposal for a Directive for a "Common Consolidated Corporate Tax Base" with some delay after long preliminary work. That proposal provides for a uniform corporate tax base which may be relied upon in all EU Member States. Its underlying objective is to reduce the administrative burden for companies. This paper focuses on some provisions of the proposal, which are relevant for companies which are tax resident outside the EU or for commercial activities carried out there, and for EU resident companies that operate in third countries. The territoriality principle, on which the CCCTB concept is based, and its legal technical structure, are primarily discussed.

Call for Papers: Global Conference on Environmental Taxation

The 14th Global Conference on Environmental Taxation: Environmental Taxation and Green Fiscal Reform for a Sustainable Future to be held at Kyoto University in Kyoto City, Japan, on October 17-19, 2013 has issued a Call for Papers:

Environmental taxation (or environmental tax reform) includes not only the reform of carbon and energy taxes but also reform of the taxation on environmental pollutants and resource use that are not related to energy. ... Papers which focus on the conference issues and provide innovative policies and solutions will be given priority consideration. Selected papers from the conference will be eligible for publication in Critical Issues in Environmental Taxation published by Edward Elgar Publishing Ltd. ... Abstracts of papers should be submitted by 15 May 2013. Notification of abstract acceptance will be by 15 June 2013.

LexisNexis Publishes Estate and Gift Taxation

On behalf of LexisNexis and the Graduate Tax Series Board of Editors (Ellen Aprill (Loyola-L.A.), Joshua Blank (NYU), Michael Friel (Florida), Philip Postlewaite (Northwestern), and Scott Schumaker (U. Washington)) I am delighted to announce the publication of Estate and Gift Taxation (2d ed. 2013), by Robert Danforth (Washington & Lee) & Brant Hellwig (Washington & Lee).

The Graduate Tax Series is the first and only series of course materials designed for use in tax LL.M. programs. Like all books in the Series, Estate and Gift Taxation was designed from the ground-up with the needs of graduate tax faculty and students in mind:

• More focus on Internal Revenue Code and regulations, less on case law
• Analysis of complex, practice-oriented problems of increasing sophistication
• Teacher’s manual with solutions to problems and other guidance
• On-line access to the comprehensive and current Code and regulations, designed to complement the book

This new edition of Estate and Gift Taxation transitions from the temporary estate and gift tax regime that prevailed for the last decade by incorporating the provisions of the American Taxpayer Relief Act of 2012 that places the federal wealth transfer tax regime on a permanent footing. In addition to noting these fundamental legislative changes, the book devotes additional coverage to a number of recent estate and gift taxation hot topics, including:

• Defined value transfers and the increasing acceptance of this technique by courts;
• Portability of the unified credit from a predeceasing spouse to a surviving spouse;
• Availability of the gift tax annual exclusion for transfers of restricted beneficial interests in closely held entities; and
• Recent cases examining challenges to the use of family limited partnerships as estate planning vehicles.

Like the first edition of Estate and Gift Taxation published in 2011, the second edition consists of discrete chapters addressing the estate and gift tax regime in a context specific manner (i.e., jointly held property; life insurance; powers of appointment; retained-interest transfers, etc.). Each chapter contains a narrative explanation of the material, with important cases typically summarized rather than reproduced in full. Each chapter closes with a problem set requiring students to apply the relevant doctrine in the context of realistic hypothetical examples. A common technique in the problems is to present students sample trust language and then to ask students to identify tax pitfalls and to suggest drafting solutions around them. The authors provide their suggested answers to the problems in the comprehensive Teacher's Manual for the second edition, which also will be available in July.

Ten other books in the Graduate Tax Series also are available for adoption:

• Civil Tax Procedure (2d ed. 2008) & 2011 Supp.), by David Richardson (Florida), Jerome Borison (Denver) & Steve Johnson (Florida State)
• Corporate Taxation (2012), by Charlotte Crane (Northwestern) & Linda Beale (Wayne State)
• Employee Benefits Law: Qualification Rules and ERISA Requirements (2d ed. 2012), by Kathryn Kennedy (John Marshall) & Paul Shultz (Former Director, IRS Employee Plans Rulings & Agreement)
• Federal Tax Accounting (2d ed. 2011), by Michael Lang (Chapman), Elliott Manning (Miami) & Mona Hymel (Arizona)
• Federal Taxation of Property Transactions (2012), by Elliott Manning (Miami) & David Cameron (Northwestern)
• Partnership Taxation (3d ed. 2012), by Richard Lipton (Baker & McKenzie, Chicago), Paul Carman (Chapman & Cutler, Chicago), Charles Fassler (Greenebaum, Doll & McDonald, Louisville) & Walter Schwidetzky (Baltimore)
• Regulation of Tax Practice (2010), by Linda Galler (Hofstra) & Michael Lang (Chapman)
• Tax Crimes (2008), by Steve Johnson (Florida State), Scott Schumacher (Washington), Larry Campagna (Adjunct Professor, Houston) & John Townsend (Adjunct Professor, Houston)
• Taxation and Business Planning for Real Estate Transactions (2012), by Bradley Borden (Brooklyn)
• United States International Taxation (2d ed. 2011), by Allison Christians (Wisconsin), Samuel Donaldson (Washington) &  Philip Postlewaite (Northwestern)

Other information:

• For more details about the Graduate Tax Series, see here.
• Click on these links to purchase a copy of Civil Tax Procedure, Corporate Taxation, Employee Benefits Law, Estate and Gift Taxation, Federal Tax Accounting, Federal Taxation of Property Transactions, Partnership Taxation, Regulation of Tax Practice, Tax Crimes, Taxation and Business Planning for Real Estate Transactions, and United States International Taxation.  Faculty can request a complimentary review copy by emailing here (in the body of your email, note the title of the book you are requesting and your contact information).
• Email me if you would like more information about the Graduate Tax Series or if you would like to submit a book proposal.

Osofsky: Frictions, Screening, and Tax Law Design

Leigh Osofsky (Miami), Who's Naughty and Who's Nice? Frictions, Screening, and Tax Law Design, 61 Buff. L. Rev. ___ (2013):

This Article sets forth a new dimension for designing and evaluating the tax law. Scholars have examined how many provisions throughout the tax code serve as “frictions” on tax planning, by imposing costs as a means to deter such planning. In this Article, I argue that, by imposing costs that will necessarily be borne differently by different taxpayers, frictions also inherently screen between different taxpayers. Recognizing how frictions screen upends conventional wisdom regarding the design of tax law. By focusing on the deterrence aspect of frictions, and not recognizing their additional screening role, scholars have concluded that: (1) frictions are successful if they deter tax planning rather than cause it to continue in a more wasteful fashion, and (2) that frictions should not impose costs on regular, business transactions. However, in coming to these conclusions, scholars have missed the key inquiry regarding frictions. As I flesh out in this Article, the key inquiry should be whether frictions impose differential, and greater, costs on tax planners, relative to non-planners, and thereby reduce the overall social cost attributable to tax planning. This inquiry not only reveals that frictions that successfully deter tax planning may nonetheless fail as a result of poor screening, but also that imposing costs on regular, business transactions is not always a flaw of a friction. More broadly, this inquiry suggests a new, more robust framework for optimal tax law design, which incorporates screening as a central part of the analysis. Many times frictions impose higher costs on taxpayers based on characteristics other than tax planning motivation. At times, these unintended screening results are undesirable, but not overly problematic, and they may even be remedied by careful attention to screening. Other times, however, these screening results are perverse, and counsel reform or elimination of the friction altogether. In any event, understanding how frictions screen is essential to ensure that the right taxpayers are bearing the right costs throughout the tax code, or, alternatively, that important deterrence objectives justify any undesirable screening outcomes.

Faulhaber: Lean in? What About the Tax Treatment of Child Care?

New York Times op-ed:  Lean In? What About Child Care?, by Lilian V. Faulhaber (Boston University):

Lost in the debate between Anne-Marie Slaughter's chronicle of the obstacles confronting career-oriented mothers and Sheryl Sandberg's call to "lean in" is a crucial reality: taxes. Women -- no less than other humans, it turns out -- can be rational economic actors.

The tax code starts with a bias in favor of couples in which one partner works and one stays home. Couples with very different incomes (think banker husband, novelist wife) owe less in taxes when they marry, while couples with similar incomes often owe more when they marry.

This bias, however, does not directly discourage one partner from working. What does is the tax code's treatment of child care.

Most working mothers who pay for child care do so out of their after-tax income. This is not an issue for very well-paid women. Nor is it that relevant for women in poor households, since they most likely don't pay federal income taxes anyway and are eligible for the earned-income tax credit, the government's most effective antipoverty program.

It's women in the middle class who are hit hardest by this treatment of child care. For these couples, increases in the earnings of the better-paid spouse -- usually, still, the husband -- directly discourage work by the lower-paid spouse. There are several reasons for this: the federal child and dependent-care credit, which is supposed to help with these expenses, decreases as household income increases; the lower-paid spouse's earnings are taxed at a higher marginal rate because of the other spouse's earnings; and child care is paid out of after-tax income....

What can be done? We could decrease tax rates over all, but that wouldn't target the obstacles facing second-earners. There are three better possibilities.

We could directly address the high cost of child care by providing or subsidizing such care, as France and Sweden do. ... A different approach would be to focus on the tax treatment of child care. We could increase the child and dependent care credit to include the full cost (or at least a higher portion of the cost) of child care, which would increase parents' after-tax income. Or we could treat child care as a business deduction. This would let parents pay for it out of their pretax income, and would have the added symbolic benefit of acknowledging that child care costs are ordinary and necessary business expenses.

It is unlikely that any of these proposals would pass in the face of sequestration. Nonetheless, we need to acknowledge that women (and other second-earners) are not opting out of the workplace without encouragement. If we truly want them to lean in to the work force, we need to have a tax system that does not push them out.

(Hat Tip: Steven Dean.)

Multinational Corporations and the Profit-Sharing Lure of Tax Havens

Christian Aid, Multinational Corporations and the Profit-Sharing Lure of Tax Havens:

According to the OECD, the present situation calls for a review of the fundamentals of the international tax system. Changes to the current international tax rules should reflect how MNCs operate today, and seek to redress the unjust distribution of the global tax base. MNCs should report their profits and pay their taxes where their economic activities and investment are actually located, rather than in jurisdictions where the presence of the MNC is sometimes fictitious and explained by the adoption of tax-avoidance strategies.

Given the relevance of the analysis provided by the OECD in its report, which is supported by the findings of our own research, we suggest that the OECD and the United Nations Tax Committee jointly explore to what extent would an evolution towards unitary taxation with profit apportionment be more appropriate for the taxation of MNCs and lead to a fairer international tax system.

(Hat Tip: Mike McIntyre.)

Politico: Corporations Getting Cold Feet on Tax Reform

Politico:  Corporations Getting Cold Feet on Tax Reform:

Washington is finally starting to get serious about corporate tax reform — and now businesses are getting cold feet.

At first, it seemed like an idea the White House, Congress and corporate America could all agree on. Every company would play by the same tax rules: They would give up their special tax breaks in exchange for lowering the basic tax rate from 35 percent to as little as 25 percent.

But with Congress starting to dig into the details, many captains of industry are backpedaling — and fast.

The corporations aren’t keen on giving up the special tax breaks that have let many of them pay Uncle Sam less than advertised for years.

And they’ve gone on the offense to protect their favorite loopholes.

Raskolnikov Presents Irredeemably Inefficient Acts: A Threat to Markets, Firms, and the Fisc Today at Toronto

Alex Raskolnikov (Columbia) presents Irredeemably Inefficient Acts: A Threat to Markets, Firms, and the Fisc, 101 Geo. L.J. ___ (2013), at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

This article defines and explores irredeemably inefficient acts — a conceptually distinct and empirically important category of socially undesirable conduct. While inefficient behavior is, no doubt, pervasive, the standard view holds that inefficient conduct may be converted into efficient one by forcing actors to internalize the external harms of their decisions. For some acts, however, such conversion is impossible. These acts are not just inefficient forms of otherwise socially beneficial activities — they are not just contingently inefficient. Rather, they are inefficient at their core; they reduce social welfare no matter what the regulator does. These irredeemably inefficient (or just irredeemable) acts are private, intentional, non-consensual transfers of money. While this definition certainly describes theft, it also covers churning and price fixing, market manipulation and option backdating, insider trading and tax shelters, to name just some examples. All these acts are socially undesirable in any form and at any level, yet all may be overdeterred if enforcement is imperfect. Overdeterrence is possible for two reasons. First, enforcement increases the costs of irredeemable acts that remain undeterred. Second, enforcement burdens efficient conduct that yields outcomes indistinguishable from those produced by irredeemable acts. These considerations (along with no need for the standard cost-benefits comparison) underlie the unique optimal deterrence analysis of irredeemable acts. Antitrust law, corporate law, and criminal law largely reflect the divide between contingently and irredeemably inefficient acts, as well as some of the more specific prescriptions following from this article’s inquiry. Securities and commodities regulation fails to recognize the same distinction despite a wide variety of irredeemable acts among securities and commodities law violations. While the tax policy implications of the proposed framework are limited, this framework helps to resolve a long-standing debate about tax shelter regulation.

Jones: The U.S. News Law School Academic Reputation Scores, 1998-2013

Robert L. Jones (Northern Illinois) agreed to discuss his forthcoming article, A Longitudinal Analysis of the U.S. News Law School Academic Reputation Scores between 1998 and 2013, 40 Fla. St. L. Rev. ___ (2013):

Longitudinal Analysis summarizes the results of an empirical study of the U.S. News academic reputation scores (“peer assessment scores”) for the 172 law schools that received scores for each year between 1998 and 2013. The year 1998 was chosen as the start of the study because U.S. News adopted its current 1-5 scale for the scores in that year. All of the scores are catalogued in the appendices that appear at the end of the article.

When I began the study, I expected to find that the academic reputation scores had not moved appreciably over the last sixteen years. For the most part, the data confirmed this hypothesis. The average standard deviation for the 172 schools in the data set was only .074. The average range of movement for the schools was .248. On average, in other words, the law schools moved less than .3 (both up and down) for the entire sixteen year period. Approximately half of the law schools finished the sixteen year period with scores that were within .1 of the scores they originally possessed in 1998. The chart below helps to illustrate the stability of the scores.

In several important respects, however, the results of the study were quite surprising. While the overall lack of volatility for the scores was anticipated, the direction of the aggregate movement for the scores was not expected. Large amounts of resources have been expended over the last sixteen years in efforts to improve the scores. The academic enterprise itself, furthermore, would seem stronger today at law schools than it was two decades ago. Many faculties have grown in size as new academics with strong qualifications have been hired. Schools have devoted additional resources to facilitating scholarship and the exchange of ideas between individuals and institutions. Blogs such as these, and the SSRN network they often reference, are important examples of the ways in which scholarship is more widely distributed and discussed today than when the period began.

Continue reading "Jones: The U.S. News Law School Academic Reputation Scores, 1998-2013"

The Onion: Blogger Expects IRS Audit

The Onion:  'That Seems About Right,' Says Soon-To-Be-Audited Man:

While filling out a 1040 form and other documents Tuesday in preparation for filing his 2012 federal tax returns, local man Robert Moran, a blog writer who will shortly be audited by the IRS, announced that his calculations seem to all add up fine. “Well, I’m self-employed and work mostly from the kitchen, which takes up about a third of my apartment, so that means I can deduct about $6,000 for rent plus all the repairs to the sink and refrigerator, and, yeah, that seems more or less right,” reported the man who will soon be audited by the IRS on suspicion of tax fraud and found to owe the federal government over $14,000 in unpaid taxes in addition to interest and a 20% penalty for disallowed deductions. “Plus I had to buy a TV and a DVD player to watch all the shows I blog about, which is another $1,500, and an iPhone that runs about $60 per month. Good thing you’re allowed to write off these business expenses.” At press time, Moran was telling himself that the IRS doesn’t look closely at people like him.

(Hat Tip: Greg McNeal.)

Corporate Tax Reform and U.S. MNCs: Ensuring a Competitive Economy

Peterson Institute for International Economics, Corporate Taxation and U.S. MNCs: Ensuring a Competitive Economy (April 2013):

The debate about “tax reform,” a focus of the 2012 presidential race and the congressional budget battles this year, has centered on closing loopholes, creating new incentives for growth, and of course raising revenue through higher personal taxation of well-off Americans. This emphasis is understandable in light of the need to close the federal deficit and the fact that a majority of federal revenue comes from personal taxes. But the debate overlooks an important priority for future U.S. economic growth: the urgent need to reform the corporate tax. Without reform, U.S.-based multinational corporations (MNCs) will continue to be hobbled by an outmoded tax structure as they compete in the age of globalization. Reform would not only make American MNCs stronger competitors in markets abroad but also enable them to expand and invest more at home.

This policy brief proposes that tax rates should be lowered, both on profits earned in the United States and profits earned abroad. These reforms will encourage greater, not less, investment at home, as well as expanded foreign direct investment abroad by American MNCs. This is the best path toward more employment, investment, exports and R&D in the United States. Yes, this proposal might seem counterintuitive to some. Indeed the Obama administration has suggested that taxes should be used to discourage outward FDI by American MNCs, on the ground that such investment hinders U.S. prosperity. We present evidence that the administration’s concern is the wrong starting point for launching corporate tax reforms. This policy brief first summarizes research that shows a complementary relationship between outward foreign direct investment by U.S. MNCs and positive effects in the U.S. economy, and then proceeds to suggest constructive corporate tax reforms. The policy brief argues that fears of lost revenues from lowering taxes on corporate profits earned at home and abroad are exaggerated, and that MNCs which engage in FDI are in the best position to create jobs and promote prosperity at home.

(Hat Tip: Bruce Bartlett.)

Viard Presents Progressive Consumption Taxation: The Choice of Tax Design Today at NYU

Alan D. Viard (American Enterprise Institute) presents Progressive Consumption Taxation: The Choice of Tax Design at NYU today as part of its Pathways to Tax Reform Series:

Progressive consumption taxation offers a way to raise revenue in a progressive manner without harming economic growth. This paper provides a comparative evaluation of the two leading proposed progressive consumption taxes, the personal expenditure tax (PET) and the Bradford X tax. One politically appealing and economically reasonable option that has been embraced by a number of previous proposals combines a PET and a business cash flow tax.

Video: Pepperdine/Tax Analysts Symposium, Tax Advice for the Second Obama Administration

The Pepperdine IT folks have divided the full 8-hour video of our January 18, 2013 symposium on Tax Advice for the Second Obama Administration into separate files on iTunes and YouTube.

Introduction and Welcome (iTunes; YouTube)

• Deanell Tacha (Dean, Pepperdine)
• Chris Bergin (President, Tax Analysts)

Keynote Address:  Michael Graetz (Columbia), Tax Advice for the Second Obama Administration, 138 Tax Notes 631 (Feb. 4, 2013) (iTunes; YouTube)

Occupy the Tax Code:  The Buffett Rule, the 1%, and the Fairness/Growth Divide (iTunes; YouTube)

Moderator:      David Brunori (Tax Analysts)

Papers:           Dorothy Brown (Emory), The 535 Report: A Pathway to Fundamental Tax Reform
                         Francine Lipman (UNLV), Access to Tax InJustice
                         Kirk Stark (UCLA) (with Eric Zolt (UCLA)), Tax Reform and the American Middle Class

Commentary:  Bruce Bartlett (New York Times), David Miller (Cadwalader, New York)

Estate and Gift Tax (iTunes; YouTube)

Moderator:      Paul Caron (Cincinnati/Pepperdine)

Papers:           Ed McCaffery (USC), Distracted from Distraction by Distraction: Reimagining Estate Tax Reform
                         Grayson McCouch (San Diego), Who Killed the Rule Against Perpetuities?
                         Jim Repetti (BC) (with Paul Caron), Occupy the Tax Code: Using the Estate Tax to Reduce Inequality and Spur Economic Growth

Commentary:  Joe Thorndike (Tax Analysts)

Luncheon Address:   David Cay Johnston (author/journalist) (iTunes; YouTube)

Business/International Tax #1 (iTunes; YouTube)

Moderator:     Tom Bost (Pepperdine)

Papers:          Steve Bank (UCLA), The Globalization of Corporate Tax Reform
                         Karen Burke (San Diego), Passthrough Entities: The Missing Link in Business Tax Reform
                         Martin Sullivan (Tax Analysts)

Commentary:  Michael Schler (Cravath, New York)

Business/International Tax #2 (iTunes; YouTube)

Moderator:     Khrista McCarden (Pepperdine)

Papers:          Reuven Avi-Yonah (Michigan), Corporate and International Tax Reform: Proposals for the Second Obama Administration
                        Allison Christians (McGill), Putting the Reign Back in Sovereign: Advice for the Second Obama Administration
                        Susan Morse (UC-Hastings), The Transfer Pricing Regs Need a Good Edit

Commentary:  Robert Goulder (Tax Analysts)

Closing Remarks:  What Have We Learned Today?:   David Cay Johnston (author/journalist) (iTunes; YouTube)

Fleischer: Camp's Pass-Through Tax Proposal My Be Too Timid

New York Times DealBook:  A Plan to Simplify the Tax Code That May Be Too Simple, by Victor Fleischer (Colorado; moving to San Diego):

Last month, Dave Camp, the chairman of the House Ways and Means Committee, released a draft proposal to change how we tax certain types of businesses known as pass-throughs. ... Mr. Camp’s proposal includes two options.

The first option addresses what we might think of as deferred maintenance — cleaning up some corners of the tax code that have been neglected. For example, it would relax the anachronistic eligibility restrictions for subchapter S corporations. For partnerships, the proposal would repeal the confusing rules related to “guaranteed payments.” It would also make some useful changes to the partnership tax rules related to basis adjustments and revise some outdated definitions.

The second option, a more radical one, appears to be a stalking horse. This would replace our existing system with a unified set of rules for pass-throughs. This sounds simple and appealing. Many of the ideas in Option 2 are promising, but they are largely untested and not fully explained in the proposal....

In my view, there’s an additional problem with Mr. Camp’s proposal: its failure to address how the partnership tax rules are now being used, and abused, by large businesses. The partnership tax rules were originally created for small business, so a small number of individuals could work in a business together and mix together labor and capital without having to pay an extra layer of tax. The rules are now used in ways that Congress never intended. Two examples are the erosion of the corporate tax base and the tax treatment of carried interest. ...

Of course, Mr. Camp has pitched the proposal as being about simplification of the tax rules for small business. Avoiding the topic of carried interest is consistent with that message. But if Mr. Camp wants to raise some revenue to pay for tax changes elsewhere, like a reduction in the corporate tax or a shift to a territorial tax system, he will have to follow the money to where it disappears — through loopholes like carried interest and the abuse of the publicly traded partnership rules.

ESPN: Athletes' Charities Fall Short of IRS, Nonprofit Standards

ESPN Outside the Lines, Athlete Charities Often Lack Standards:

An "Outside the Lines" investigation of 115 charities founded by high-profile, top-earning male and female athletes has found that most of their charities don't measure up to what charity experts would say is an efficient, effective use of money.

Using guidelines set by nonprofit watchdogs Charity Navigator, the Better Business Bureau and the National Committee for Responsive Philanthropy, "Outside the Lines" found that 74% of the nonprofits fell short of one or more acceptable nonprofit operating standards. The standards cover all sorts of aspects, such as how much money a nonprofit actually spends on charitable work as opposed to administrative expenses and whether there are enough board members overseeing the organization.

Among the "Outside the Lines" findings:

• Many athlete charities fail the effectiveness test for a variety of reasons, ranging from the deceptive and unethical -- if not illegal -- to the simply neglectful and ignorant. Some athletes set up foundations as tax-planning vehicles. Others dispute the nonprofit standards overall, saying as long as they spend at least some money on actual charity they should not be criticized.

• In many cases, OTL had a hard time measuring a charity's actual effectiveness because it was behind on filing its IRS tax returns or the returns were filled with errors and omissions. Problems can go unnoticed for years as the main agencies that oversee charities -- the IRS and states' attorney general offices -- don't audit every return.

• Even though the athlete charities often are named in honor of wealthy sports icons, only about a third of them had total assets of $500,000 or more. Multimillion-dollar charities that actually run programs, such as those founded by Tiger Woods, Lance Armstrong, Andre Agassi and Richard and Kyle Petty, are rare.

(Hat Tip: Charles Perin.)

Curbing FLP Abuse With a Trade or Business Limitation in § 2036

Lorenz Haselberger (J.D. 2012, Harvard), Note, Importing a Trade or Business Limitation Into § 2036: Toward a Regulatory Solution to FLP-Driven Transfer Tax Avoidance, 126 Harv. L. Rev. 1326 (2013):

This Note argues that the Department of the Treasury has the authority to curb FLP abuse by imposing a “trade or business” limitation on valuation discounts for business interests — a limitation modeled on the “trade or business” eligibility requirement for § 6166 estate tax deferral on business interests. Specifically, this Note proposes that Treasury amend its regulations under § 2036 to replace the Tax Court’s “nontax purpose” motive inquiry with an objective economic test: a person who transfers property to a business entity may only discount the value of transferred assets that the entity actually “use[s] in carrying on a trade or business.”

The Note proceeds in five Parts. Part I briefly summarizes the mechanics of the gift and estate taxes and explains how FLPs permit wealthy taxpayers to avoid those taxes. Part II describes the evolution of the “nontax purpose” test that the Tax Court currently applies to scrutinize FLP transactions. Part III explains why § 6166’s “trade or business” limitation provides the basis for an elegant and administrable solution to FLP abuse, a solution Treasury has authority to implement under § 2036. Part IV addresses possible concerns with this Note’s reform proposal, and Part V concludes.

CNN: Top Income Tax Rates: How the U.S. Really Compares

CNN, Top Income Tax Rate: How U.S. Really Compares:

It's a common complaint among some wealthy Americans: My taxes are too damn high.

But they might feel a little better if they considered Denmark.

Or the United Kingdom.

Or Austria.

Or many other economies where the top income tax rate -- factoring in both the national and local tax bite -- is higher than the highest combined rate in the United States and also hits people lower down the income scale.

At 60.2%, Denmark last year had the highest top personal income tax rate among the 34 countries in the OECD, an organization of developed and emerging countries. And that 60.2% applied to income over roughly $55,000. That's a bigger bite than wealthy Californians face on their paychecks and other earned income.

When top rate kicks in

Business Week: The Case Against Law School

Business Week:  The Case Against Law School, by Paul M. Barrett:

The legal education industry has hit a wall. The U.S. has an oversupply of attorneys. Law schools keep pumping out more. Graduates have huge debts and sparse job prospects.

“Law schools need to take immediate action to confront today’s crisis,” Paul Caron, a thoughtful and prolific professor at the University of Cincinnati, recently explained [The Law School Crisis: What Would Jimmy McMillan Do?]:

“The current model—convincing 45,000 people each year to assume six-figure debt loads to chase 20,000 legal jobs (most of which do not pay enough to service the debt)—is simply unsustainable. Market and political forces are gathering steam.”

Caron, who specializes in tax law and knows his figures, suggests that the legal professoriate look to Jimmy McMillan for guidance. When he ran for governor of New York in 2010, the eccentric McMillan drove around my Brooklyn neighborhood in a car with a loudspeaker on its roof, shouting his memorable campaign slogan: “The rent is TOO damn high.”

At more than $50,000 a year, “law school tuition is simply too damn high,” Caron argues. “Administrators and faculty need to ruthlessly examine law school budgets and cut areas that are not essential to the school’s mission. Law school is twice as expensive as it was 20 years ago [in inflation-adjusted dollars], yet no one would argue that legal education is twice as good today.”

Viard Presents Progressive Consumption Taxation: The Choice of Tax Design Today ay NYU

Alan D. Viard (American Enterprise Institute) presents Progressive Consumption Taxation: The Choice of Tax Design at NYU today as part of its Colloquium Series on Tax Policy and Public Finance convened by Daniel Shaviro (NYU) and William Gale (Tax Policy Center; visiting at NYU):

Progressive consumption taxation offers a way to raise revenue in a progressive manner without harming economic growth. This paper provides a comparative evaluation of the two leading proposed progressive consumption taxes, the personal expenditure tax (PET) and the Bradford X tax. One politically appealing and economically reasonable option that has been embraced by a number of previous proposals combines a PET and a business cash flow tax.

CTJ: Who Pays Taxes in America in 2013?

Citizens for Tax Justice, Who Pays Taxes in America in 2013?:

It is sometimes claimed that many low- and middle-income Americans don’t pay taxes while the richest Americans pay a hugely disproportionate share of taxes, especially after enactment of the “fiscal cliff” deal that allowed some taxes to go up.

As the table ... illustrates, America’s tax system is just barely progressive even after the fiscal cliff deal’s effects. Claims that the rich pay a disproportionate share of taxes often focus only on the federal personal income tax and ignore the other taxes that people pay, like federal payroll taxes, federal excise taxes, and state and local taxes. Many of these other taxes are regres­sive, meaning they take a larger share of income from poor and middle-income families than they take from  the rich.

The table shows the share of total taxes (all federal, state and local taxes) that will be paid by Americans in different income.

• Citizens for Tax Justice, New Tax Laws in Effect in 2013 Have Modest Progressive Impact

Advice for the Women of Princeton

The Daily Princetonian: Advice for the Young Women of Princeton: The Daughters I Never Had, by Susan A. Patton (President of the Class of 1977):

Forget about having it all, or not having it all, leaning in or leaning out — here’s what you really need to know that nobody is telling you. ...

For most of you, the cornerstone of your future and happiness will be inextricably linked to the man you marry, and you will never again have this concentration of men who are worthy of you.

Here’s what nobody is telling you: Find a husband on campus before you graduate. Yes, I went there. ...

Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.

Of course, once you graduate, you will meet men who are your intellectual equal — just not that many of them. And, you could choose to marry a man who has other things to recommend him besides a soaring intellect. But ultimately, it will frustrate you to be with a man who just isn’t as smart as you. ...

If I had daughters, this is what I would be telling them.

• Susan Patton, Why I Told Female Princeton Students to Find a Husband (Huffington Post)
• Music Video, The Ivy league Hustle (I Went to Princeton, B****) (language warning)
• Above the Law, Read This or Die Alone: Advice for the Young Women of Law School 
• American Lawyer, Don't Leave School Without a Husband!
• Megan McCardle, You Should Get Married As Early as Possible, But No Earlier (The Daily Beast)
• New York Magazine, Princeton Mom to All Female Students: ‘Find a Husband’
• Eugene Volokh (UCLA), When to Marry? (The Volokh Conspiracy)
• Wall Street Journal, Susan Patton Told the Truth

4th Circuit: CPA's Failure to File Personal Tax Returns Can't be Used in Prosecution for Tax Shelter Advice

The Fourth Circuit last Friday overturned more than $2.5 million in civil penalties imposed by a jury for a CPA's role in advising a tax shelter operator on the ground that the CPA's failure to file his personal tax returns was inadmissible character evidence. Nagy v. United States, No. 10-2072 (4th Cir. Mar. 29, 2013):

The government presented no evidence linking Nagy's failure to file or pay certain personal taxes to his work for Derivium. Nothing in the record connects Nagy's failure to timely file or pay his personal taxes to any knowing act of fraud or fraudulent intent in giving tax advice to Derivium. There simply is no record evidence linking the two. ... In short, we are at a loss to see any relevance for Rule 404(b) purposes for the admission of Nagy's personal tax information other than "to prove [Nagy]'s character in order to show that on a particular occasion [Nagy] acted in accordance with the character." See Fed. R. Evid. 404(b). ...

Moreover, for Rule 403 purposes, the admission of Nagy's personal tax information was highly prejudicial and quite likely to influence the jury against him. Had the personal tax information had some semblance of relevance (which proper evidence in some other case may well show), a different balancing for prejudice purposes would be required. But in the absence of relevance, we conclude that the district court abused its discretion to admit Nagy's personal tax information into evidence, particularly as it bears all the indicia of garden-variety "bad acts" evidence with no other purpose than to emotionally inflame the jury against the defendant.

Further, we conclude that the admission of Nagy's personal tax information was not a harmless error. ... Nagy presented a cognizable defense as to his state of mind for the knowledge purposes of § 6700 that would have permitted a reasonable jury to have rendered a verdict in his favor. The prejudicial effect on the jury of the personal tax information about Nagy, however, and the possibility that it swayed their judgment in their consideration of this case, cannot be ignored. As the error was not harmless, the liability verdict must be vacated.

William Shakespeare, Tax Cheat

The Independent:  Shakespeare the 'Hard-Headed Businessman' Uncovered:

Hoarder, moneylender, tax dodger — it's not how we usually think of William Shakespeare.

But we should, according to a group of academics who say the Bard was a ruthless businessman who grew wealthy dealing in grain during a time of famine.Researchers from Aberystwyth University in Wales argue that we can't fully understand Shakespeare unless we study his often-overlooked business savvy.

"Shakespeare the grain-hoarder has been redacted from history so that Shakespeare the creative genius could be born," the researchers say in a paper due to be delivered at the Hay literary festival in Wales in May....

He was pursued by the authorities for tax evasion, and in 1598 was prosecuted for hoarding grain during a time of shortage.

• Christian Science Monitor, William Shakespeare: Tax Dodger, Shady Businessman?
• Daily Mail, Was Shakespeare a Tax Dodger? Bard Was 'Ruthless Businessman Who Exploited Famine and Faced Jail for Cheating Revenue'
• Los Angeles Times, Shakespeare Was Ruthless Profiteer and Tax Dodger, Study Says
• New York Daily News, Shakespeare Called Grain Hoarder, Tax Dodger, Money Lender and Ruthless Businessman
• Sunday Times, Bad Bard: A Tax Dodger and Famine Profiteer
• Telegraph, Shakespeare Was a Tax-Evading Food hoarder, Study Claims
• Wonkette, Titus Andronicus Shrugged: Will Tax-Dodging Shakespeare Become the New Ayn Rand?

(Hat Tip: Jack Chin.)

The Most Underrated and Overrated Law Schools

J. Haskell Murray (Regent) passed along this spreadsheet which compares median LSAT and peer reputation in the 2014 U.S. News rankings:

The 20 Most Underrated Law Schools (Median LSAT > Peer Reputation):

Law School	Median LSAT Rank	Median LSAT	Peer Rep. Rank	Peer Rep. (1-5)	LSAT Rank - Peer Rank
Chapman	73	158	142	1.8	-69
Florida Int'l	97	156	158	1.6	-61
Regent	128	153	186	1.2	-58
Campbell	122	154	173	1.4	-51
Baylor	40	162	90	2.3	-50
Richmond	40	162	90	2.3	-50
Elon	113	155	151	1.7	-38
Texas Tech	97	156	130	1.9	-33
New Hampshire	97	156	130	1.9	-33
Drexel	88	157	118	2.0	-30
South Texas	128	153	158	1.6	-30
Western State	156	151	186	1.2	-30
Northeastern	51	161	80	2.4	-29
St. John's	73	158	102	2.2	-29
Whittier	156	151	181	1.3	-25
Penn State	66	159	90	2.3	-24
Samford	128	153	151	1.7	-23
Pepperdine	40	162	62	2.6	-22
Quinnipiac	97	156	118	2.0	-21
St. Louis	97	156	118	2.0	-21
McGeorge	97	156	118	2.0	-21
Tulsa	97	156	118	2.0	-21
Liberty	165	150	186	1.2	-21

The 20 Most Overrated Law Schools (Median LSAT < Peer Reputation)::

Law School	Median LSAT Rank	Median LSAT	Peer Rep. Rank	Peer Rep. (1-5)	LSAT Rank - Peer Rank
Miami	97	156	51	2.8	46
Howard	141	152	102	2.2	39
Arkansas-Little Rock	141	152	102	2.2	39
UMKC	141	152	102	2.2	39
Syracuse	128	153	90	2.3	38
Vermont	128	153	90	2.3	38
North Dakota	165	150	130	1.9	35
Marquette	113	155	80	2.4	33
Dayton	174	149	142	1.8	32
South Dakota	174	149	142	1.8	32
Valparaiso	174	149	142	1.8	32
Loyola-NO	141	152	110	2.1	31
Indiana-Ind.	97	156	68	2.5	29
New Mexico	97	156	68	2.5	29
Kansas	88	157	62	2.6	26
American	66	159	42	3.0	24
Albany	141	152	118	2.0	23
Creighton	141	152	118	2.0	23
Suffolk	141	152	118	2.0	23
Baltimore	141	152	118	2.0	23
Widener	165	150	142	1.8	23
Touro	181	148	158	1.6	23

Harvey: Schedule UTP -- Why So Few Disclosures?

J. Richard (Dick) Harvey (Villanova), Schedule UTP: Why So Few Disclosures?, 139 Tax Notes 69 (Apr. 1, 2013):

The IRS has published statistics indicating the average corporate taxpayer disclosed 2 to 3 uncertain tax positions per Schedule UTP. As one of the architects of Schedule UTP, I was expecting more UTP disclosures per return. This article explores potential explanations for this “expectation gap” ranging from those that are positive, to those that are relatively benign, to those that should clearly result in IRS action.

Positive explanations include corporate taxpayers no longer taking aggressive tax positions because of the Schedule UTP disclosure requirement. Benign explanations include taxpayers no longer recording truly immaterial reserves. Explanations that should result in IRS action include corporations:

• Recording a tax reserve but arguing no disclosure is necessary because the reserve is not “required”;
• Failing to record a relatively material tax reserve that is then posted to an auditor's net effects schedule; and
• Failing to record a tax reserve by constructing a FIN 48 probability distribution table with only a 50 percent probability of litigation.

Finally, the IRS should consider imposing a penalty for not adequately filing Schedule UTP. Although a penalty could be obtained through legislation, the IRS could also effectively institute a penalty based on one of the carrot and stick approaches described in this article.

All Tax Analysts content is available through the LexisNexis® services.

WSJ: The Senate Embraces Dynamic Scoring

Wall Street Journal editorial:  The Senate Gets Dynamic: A 51-48 Vote to Consider the Growth Effects of Tax Changes:

Congress has a dreadful record predicting the economic impact of its policies, in part because it relies on computer models that are as reliable as tarot cards. So it's a good sign that before going on recess a majority of the Senate endorsed "dynamic scoring" of changes in tax law.

For decades the official forecasters at the Congressional Budget Office and Joint Committee on Taxation have assumed that changes in tax rates have little impact on how businesses and households behave or on the competitiveness of the U.S. economy. In this alternative universe, people work nearly as much at a 60% income tax rate as they do with a 30% rate, and investors don't care all that much if the tax on capital gains is 15% or 30%.

This often leads to crazy results. In January 2003, for example, the modelers predicted that capital gains revenues would be $68 billion in 2006 and $73 billion in 2007. In May 2003 Congress cut the capital gains tax rate to 15% from 20%, and in its revised budget forecast in August 2003 CBO estimated that the rate cut would reduce revenues to $65 billion in 2006 and $69 billion in 2007.

CBO wasn't even close. Actual capital gains revenue rose despite the lower tax rate to $109 billion in 2006 and $126 billion in 2007, thanks to faster economic growth and a greater incentive for investors to cash in their gains at the lower rate.

So it's notable that during its recent budget debate the Senate voted 51-48 for a nonbinding resolution that would require CBO to produce a dynamic score for tax changes. ...CBO would still do its official "static score," assuming only minor behavior changes, but Congress would in the future have a second set of more realistic projections to consider. This is more than a faculty-lounge argument. By always scoring tax rate reductions as losing huge amounts of revenues and tax increases as automatically lowering the deficit, the Beltway rules are stacked against sound tax policy. The issue is especially timely now, because enacting pro-growth tax reform depends on better real-world scoring.

New York Times:  Dynamic Scoring Once Again, by Bruce Bartlett:

Generally speaking, supporters of dynamic scoring don’t offer any kind of serious economic analysis; they simply assert, as if it were self-evident, that the nation is always on the high side of the Laffer curve and that any tax cut will therefore pay for itself.

Pressed for evidence supporting this contention, supporters of dynamic scoring will point to the impact of cuts in the capital gains tax. But this is a very poor example because capital gains are a very special form of income. ...

Another problem with dynamic scoring is that proponents often assert that if nominal federal revenue ever rises to the level before a tax cut, this proves that it paid for itself. Supporters of the tax cuts during the George W. Bush administration often state that since the aggregate dollar amount of federal revenue was higher in 2006 than it was in 2000, this is proof that the Bush tax cuts paid for themselves. (Revenue was well below its 2000 level from 2001 to 2005.)

This assertion is so ridiculous it hardly needs rebuttal, but since one still hears it, let me say that inflation raises nominal revenue and the economy generally grows over time whether taxes are cut or not. To observe that the nominal dollar amount of revenue is higher many years after a tax cut occurred tells us absolutely nothing about the revenue effects of that tax cut. ...

In practice, dynamic scoring is just another way for Republicans to enact tax cuts and block tax increases. It is not about honest revenue-estimating; it’s about using smoke and mirrors to institutionalize Republican ideology into the budget process. Why six Democrats joined the Senate Republicans in this move remains to be seen.

(Hat Tip: Mike Talbert, Bill Turnier.)

Pozen: Corporate Tax Reform Without Tears

Wall Street Journal op-ed:  Corporate-Tax Reform Without Tears, by Robert C. Pozen (Harvard Business School & Brookings Institution):

Economists have long recognized the damaging effects of the high U.S. corporate tax—at 35%, the rate is the highest in the industrialized world. Over the past few years, politicians in both parties have come to understand that the corporate tax system itself is dysfunctional, causing resources to be misallocated and encouraging corporations to invest overseas....

Given the importance of reducing the corporate rate—and the infeasability of the other options for paying for it—Rep. Kenny Marchant (R., Texas) and Rep. Jim McDermott (D., Wash.) are floating a proposal to modestly restrict the deductibility of gross interest expense for corporations. This change would meet two crucial criteria: It would raise a significant amount of revenue and significantly reduce economic distortions caused by the tax code.

Based on IRS data from 2000 to 2009 (the most recent available), I estimate that disallowing roughly 30% of interest deductions (that is, allowing for a 70% deduction for gross interest expense) would have fully paid for a reduction in the corporate tax rate to 25% from 35%.

Limiting interest deductions for corporations would also correct, to a degree, a serious imbalance. When a corporation finances an investment by issuing debt, the interest payments generate a stream of tax deductions. When a corporation finances an investment by using its cash on hand or by issuing new shares of stock, there are no analogous tax deductions....

[T]here's a particularly strong case in favor of restricting interest deductions: It could raise significant amounts of revenue while at the same time reducing economic distortions. This proposed change should be the core of any revenue-neutral legislation to reduce the corporate tax rate to 25% from 35%.

Washington U. Hosts Colloquium Today on A New Framework for International Taxation

Washington University hosts a mini-colloquium today on Conceptualizing a New Institutional Framework for International Taxation:

• Allison Christians (McGill)
• Itai Grinberg (Georgetown)
• Michael Lennard (UN Financing for Development Office)
• Diane Ring (Boston College)
• Adam Rosenzweig (Washington University)
• Lee Sheppard (Tax Analysts)

Wolff: The Asset Price Meltdown and the Wealth of the Middle Class

Edward N. Wolff (NYU, Department of Economics), The Asset Price Meltdown and the Wealth of the Middle Class:

I find that median wealth plummeted over the years 2007 to 2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of little movement, was up sharply from 2007 to 2010. Relative indebtedness continued to expand from 2007 to 2010, particularly for the middle class, though the proximate causes were declining net worth and income rather than an increase in absolute indebtedness. In fact, the average debt of the middle class actually fell in real terms by 25 percent. The sharp fall in median wealth and the rise in inequality in the late 2000s are traceable to the high leverage of middle class families in 2007 and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 also got pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.

See NBER Digest.

Kleinbard: Corporate Capital and Labor Stuffing in the New Tax Rate Environment

Edward D. Kleinbard (USC), Corporate Capital and Labor Stuffing in the New Tax Rate Environment:

Federal tax legislation enacted on January 2, 2013 to resolve the “fiscal cliff” policy controversy has reintroduced substantially higher maximum individual income tax rates on ordinary income, but has retained the 2003-2012 innovation of taxing dividend income at the same relatively low rate as long-term capital gains. At the same time, corporate tax reform is likely to lead to a substantially lower statutory corporate tax rate than current law’s 35 percent. The combination of these three factors will in the near future usher in the return, for the first time in a generation, of the taxable corporation as a personal tax shelter for owners of closely-held businesses.

This paper assumes that corporate headline rates in fact are lowered, and analyzes an individual’s incentives in that new tax rate environment to retain corporate earnings not strictly needed to support business operations (or to inject new investment capital into the corporation), rather than to extract that capital and earn the same income through direct investment (“capital stuffing”), and to understate the labor income of corporate owner-managers, so as to treat a disproportionate amount of their income as capital income, in the form of corporate retained earnings (“labor stuffing”). To aid in that analysis, the paper offers a new mode of conceptualizing the time value of deferring a tax liability. Finally, the paper analyzes current law’s tools to combat capital and labor income stuffing, and finds them wholly inadequate to the task.

Christians: Drawing the Boundaries of Tax Justice

Allison Christians (McGill), Drawing the Boundaries of Tax Justice:

The story of our time may be the awakening of society to an epidemic of global tax dodging by the world’s elites. Citizens, watchdog groups, and even government officials are puzzled, frustrated, and sometimes outraged by the phenomenon, wondering where the nation-state lost its way in regulating its people and its resources, and why it is standing by, apparently helplessly, as its tax base erodes while austerity measures undermine the welfare state. This paper demonstrates that the sequence of tax base erosion-austerity-welfare state erosion is a story about a crisis of tax justice. It does so by revisiting how Canada's historic Royal Commission on Taxation, in its search for guiding principles for tax reform, turned to tax justice as the central component for any tax system. It shows why nations have consistently failed to meet these guiding principles, instead taxing the easy-to-tax more or less comprehensively, the hard-to-tax more or less randomly, and the impossible-to-tax not at all. It demonstrates that the result is that no state today imposes taxation justly: instead, taxation as exercised around the world today is overwhelmingly characterized by arbitrariness and injustice. The paper concludes that if governments cannot or will not pursue justice in taxation, they have at minimum a duty to explain to society why this goal is no longer worthy of pursuit.

Baseball Can Be Taxing

Michael Vinson (Golden Gate), Baseball Can Be Taxing: