TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, November 24, 2015

Hillary Clinton's Growing Tax Agenda

Hillary 2016Wall Street Journal, Clinton’s Proposed Tax Credits Expand: Latest Focus on Caregivers Is at Least the Ninth Tax Proposal Since This Summer:

If you’re caring for an aging parent, deciding whether to invest in rural America or struggling to pay medical bills, Hillary Clinton has a tax credit for you.

As the Democratic presidential front-runner rolls out her policy agenda, she has repeatedly turned to the tax code as one of her favorite policy tools. It offers a way to reward behavior she wants to see more of, punish actions that she sees as harmful, and directly aid families with particular challenges.

Compared with outright spending programs, tax cuts can be simpler to administer, carefully targeted and politically easier to enact.

But there are downsides: They have a mixed record of success and often reward businesses for doing things they were going to do anyway. It can be complicated to claim the benefits. And the Internal Revenue Service, already sagging under budget cuts and the complex task of administering the Affordable Care Act, would be given even more work.

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November 24, 2015 in Political News, Tax | Permalink | Comments (0)

Monday, November 16, 2015

NY Times: The Tax Code Can Be Simpler, But Not Three Pages

CarlyNew York Times:  The Tax Code Can Be Simpler. But Not Three Pages, by Josh Barro:

All the Republican presidential candidates say they want to make the tax code simpler. But no candidate has been more aggressive about simplicity than Carly Fiorina, who says “our tax code needs to go from 73,000 pages down to about three pages.”

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November 16, 2015 in Political News, Tax | Permalink | Comments (1)

Iowa Tax Prof Andy Grewal's Role In The Pivotal Moment Of Saturday's Democratic Presidential Debate

Hillary 2016Washington Post, A Defensive Hillary Clinton Lost Last Night’s Debate:

The Des Moines debate will ultimately be remembered for just one moment: Clinton playing both the gender card and invoking the Sept. 11 attacks to defend her coziness with and campaign cash from Wall Street. 

Here is the exchange that everyone is talking about:

  • Sanders attacks: “Let’s not be naive about it. Why, over her political career, has Wall Street been a major, THE major, campaign contributor to Hillary Clinton? You know, maybe they’re dumb and they don’t know what they’re going to get, but I don’t think so. … Why do they make millions of dollars of campaign contributions? They expect to get something! Everybody knows that!”
  • Clinton pulls out a rhetorical bazooka: “Wait a minute, he has basically used his answer to impugn my integrity. Let’s be frank here: … Not only do I have hundreds of thousands of donors, most of them small. And I’m very proud that for the first time a majority of my donors are women, 60 percent. So, I represented New York, and I represented New York on 9/11 when we were attacked. Where were we attacked? We were attacked in downtown Manhattan, where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy and it was a way to rebuke the terrorists who had attacked our country.” ...

Clinton tried to walk it back: Later in the debate, as Twitter exploded, CBS presented her with an emblematic viewer tweet. University of Iowa law professor Andy Grewal wrote:


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November 16, 2015 in Political News, Tax | Permalink | Comments (1)

Saturday, November 14, 2015

WSJ: Value-Added Tax Catches On In Republican Presidential Race

VATWall Street Journal, Value-Added Tax Catches On in Republican Presidential Race:

This year’s crop of Republican presidential candidates has pitched many ways to bust up the tax code, but one idea—converting to a value-added tax—has been anathema to both parties for decades despite being a staple worldwide.

Sens. Rand Paul of Kentucky and Ted Cruz of Texas want to replace the 78-year-old payroll tax, which is now dedicated to Social Security and Medicare, and the 106-year-old corporate income tax with a single levy. That new tax would be so big and broad-based that Mr. Cruz’s version would raise $25.4 trillion over the next decade and would become the federal government’s primary funding source, raising more than a reduced individual income tax.

Their proposals have drawn scant attention on the campaign trail, and are hardly revolutionary globally, as the U.S. is the only developed country without a value-added tax.

But some conservative critics are beginning to raise alarms. Adopting a broad tax on goods and services, they say, would make the sting of taxation less palpable and—eventually—let the U.S. adopt the revenue system that fuels the European social-welfare states.

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November 14, 2015 in Political News, Tax | Permalink | Comments (2)

Thursday, November 12, 2015

A Last Hurrah For Republican Tax Slashers

Financial Times op-ed:  A Last Hurrah for Republican Tax Slashers, by James Pethokoukis:

The Republican party’s raison d’être is cutting taxes. It may even be its divine commission. God put Republicans on earth to cut taxes, the conservative columnist, Robert Novak, once said, and failure to do that means “they have no useful function”.

Republicans should pray for a new purpose. Their standing with middle-class voters is little improved from 2012. If Hillary Clinton becomes the 45th US president, it would be the first time since 1948 that the Republicans have lost three consecutive elections. Their “supply-side” orthodoxy would merit much of the blame. Big tax cuts, particularly for the wealthiest, do not work in an age of high inequality and heavy debt. Republicans need an economic agenda that respects markets while also recognising the challenges facing America and its anxious middle class. ...

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November 12, 2015 in Political News, Tax | Permalink | Comments (1)

Wednesday, November 11, 2015

WSJ: Republican Candidates Push Bold Tax Plans

Tax Foundation 1

Following up on last week's post, NY Times, WSJ Editorialize On Republican Presidential Candidates' Tax Plans:  Wall Street Journal, Republican Candidates Push Bold Tax Plans:

Republican presidential candidates are competing to propose dramatic changes to tax policy that go well beyond the party’s previous platforms and all but ensure the issue will play a central role in the general election.

Driven by a desire to stand out in a crowded field and spark economic growth, the GOP contenders no longer just say they want to lower rates and expand the tax base. Their new ideas, once the province of right-leaning think tanks, make previous Republican plans look timid.

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November 11, 2015 in Political News, Tax | Permalink | Comments (1)

Thursday, November 5, 2015

Clinton Foundation Spin-Off Reverses Position, Agrees To Refile Corrected Tax Returns After Republicans Call For Audit

Clinton FoundationFollowing up on Tuesday's post, Clinton Foundation Spin-Off Won’t Refile Tax Returns To Correct Mistakes, Despite Earlier Pledge:  Politico, Clinton Foundation Spinoff Reverses on Refiling Tax Forms:

An organization related to the Clinton Foundation has again reversed itself on fixing errors on its federal tax filings and now says it plans to submitted amended returns.

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November 5, 2015 in Political News, Tax | Permalink | Comments (2)

Tuesday, November 3, 2015

Vox: 100 Years Of Tax Brackets, In One Chart

Vox, 100 Years of Tax Brackets, in One Chart:

The US currently has seven tax brackets — and many presidential candidates think that's too many. ... Generally, politicians want to reduce the number of brackets because they believe it will simplify the tax code. That said, tax brackets are among the easiest parts of the tax code, thanks to modern software and, well, math.


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November 3, 2015 in Political News, Tax | Permalink | Comments (7)

Clinton Foundation Spin-Off Won’t Refile Tax Returns To Correct Mistakes, Despite Earlier Pledge

Clinton FoundationPolitico, Clinton Foundation Spin-Off Won’t Refile Tax Returns:

An organization spun off from the Clinton Foundation has no plans to refile its tax returns due to mistakes in prior years, an official said, contradicting a highly-publicized news report earlier this year.

A series of articles published as Hillary Clinton's presidential campaign kicked off this spring noted that the Clinton Health Access Initiative, set up in 2002 as the Clinton HIV/AIDS Initiative and spun off from the foundation in 2010, had not fully complied with aspects of a conflict-of-interest agreement negotiated before the former first lady and senator became secretary of state in 2009.

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November 3, 2015 in Political News, Tax | Permalink | Comments (2)

Monday, November 2, 2015

NY Times, WSJ Editorialize On Republican Presidential Candidates' Tax Plans

Tax Foundation 1

New York Times editorial, Why the Republican Tax Plans Won’t Work:

The Republican presidential candidates were full of tax talk at this week’s debate. But none has a tax plan coherent enough to be the basis of a substantive discussion, let alone one that could meet the nation’s challenges.

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November 2, 2015 in Political News, Tax | Permalink | Comments (0)

Thursday, October 29, 2015

Ted Cruz Releases Flat Tax Plan: 10% For Individuals, 16% For Businesses

Cruz 2Wall Street Journal op-ed:  A Simple Flat Tax for Economic Growth: A 10% Income Tax and a 16% Business Tax Would Put an End to the Eight Lean Years of Obama, by Ted Cruz:

Imagine 4.9 million new jobs. Imagine, instead of President Obama’s income stagnation, average wages rising 12.2% over the next decade. Capital investment rising 43.9%. And Americans at every level of the economy enjoying double-digit increases in after-tax income.

Imagine exports and manufacturing jobs booming. The trade deficit falling as the tax bias against American-made goods is eliminated. Imagine a 10% income tax. Every American filing his or her taxes on a postcard or an iPhone app. And abolishing the IRS as we know it.

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October 29, 2015 in Political News, Tax | Permalink | Comments (3)

Friday, October 16, 2015

The IRS Scandal, Day 890

IRS Logo 2Breitbart, Ben Carson’s Book Tour Threatens to End Civilization As We Know It:

Ben Carson is going to suspend his presidential campaign for two weeks to hawk his book! This is unprecedented! It shows he’s not serious about running for president! It proves he doesn’t understand anything about how politics works! It’s the end of the world as we know it, and nobody feels fine!

“Sen. John McCain suspended his presidential campaign for a financial crisis. Famed neurosurgeon Ben Carson is doing so for a book tour,” gasped the Huffington Post. The notion that Carson was “suspending” his campaign appeared in headlines and news stories across the Internet. ...

In the ABC report, Carson spokesman Doug Watts explained that leaving the campaign staff behind while Carson spends a few days focusing on his book tour alleviates concerns about “co-mingling from the corporate standpoint to the Federal Election Commission standpoint so it’s just better to avoid any bad appearance.”

Does anyone, post-IRS scandal, think it’s a bad idea for Republican candidates to be extra-careful about attracting the interest of Obama Administration regulatory agencies? Does everyone remember which agency IRS scandal kingpin Lois Lerner worked for, before she signed up with Internal Revenue?

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October 16, 2015 in IRS News, IRS Scandal, Political News, Tax | Permalink | Comments (1)

Saturday, October 10, 2015

Hillary Clinton Proposes Financial Transactions Tax

Hillary Clinton Supporters Endorse 'White Privilege Tax'

October 10, 2015 in Political News, Tax | Permalink | Comments (3)

Friday, October 9, 2015

The Jindal Tax Reform Plan: Everybody Has To Have Some Skin In The Game

The Jindal Tax Reform Plan: Everybody Has to Have Some Skin in the Game:

JindalMy tax plan lowers the tax bracket for every American, and it dramatically simplifies the tax code for every American. To grow the American economy we must reduce our tax burden and make taxes simpler. My plan has only three rates – 2 percent, 10 percent, and 25 percent. Most Americans will be in the 10 percent bracket.

Most Republican plans brag about the idea that they will allow about half of all Americans to pay zero federal taxes. I think that is a terrible mistake. Again, most Republican plans do not require the lowest wage earners to pay anything, and some basically require half of Americans to pay zero federal taxes.

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October 9, 2015 in Political News, Tax | Permalink | Comments (1)

Wednesday, September 30, 2015

Fleischer: Trump Tax Plan A Triumph Of Showmanship Over Common Sense

Trump 3

Following up on Monday's post, Trump's Tax Plan: 'Tax Reform That Will Make America Great Again':  New York Times Deal Book:  Trump Tax Plan a Triumph of Showmanship Over Common Sense, by Victor Fleischer (San Diego):

A mercurial candidate needs a mercurial tax plan. Donald J. Trump’s proposal to overhaul the tax code fits the bill. But it would hardly raise the revenue needed to pay the nation’s invoices.

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September 30, 2015 in Political News, Tax | Permalink | Comments (0)

Monday, September 28, 2015

Trump's Tax Plan: 'Tax Reform That Will Make America Great Again'

Thursday, September 24, 2015

A Tax Angle To The Iran Deal?

Politico, A Tax Angle to the Iran Deal?:

House Ways and Means Committee Chairman Paul Ryan is demanding to know whether President Barack Obama, as part of his recent Iran deal, plans to waive tax penalties on Americans doing business there. In a letter to Obama, Ryan noted that U.S. companies and individuals doing business in countries designated as sponsors of terrorism can lose foreign tax credits and face immediate taxation on their earnings there. Ryan, who opposes the Iran deal, wants to know whether Obama plans to use his statutory authority to waive those penalties.

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September 24, 2015 in Political News, Tax | Permalink | Comments (0)

Monday, September 21, 2015

Would The IRS Revoke The Catholic Church's Tax Exempt Status If Pope Francis Endorses Bernie Sanders?

Pope BernieForbes:  Presidential Race — Let's Talk Religion, Politics And The IRS, by Peter J. Reilly:

The IRS continues to make it clear that political campaign intervention by 501(c)(3) organizations including churches is absolutely prohibited. ... Of course when it comes to such a prohibition, the devil is in the details.  ”Certain activities may not be prohibited depending on the facts and circumstances”.  As we head into a new election season, it is worth looking at some of those devilish details.

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September 21, 2015 in Political News, Tax | Permalink | Comments (9)

Tuesday, September 15, 2015

NY Times: Jeb Bush Bites The Tax Hand That Feeds His Campaign

NY Times Dealbook (2013)New York Times Deal Book: The Surprising Target of Jeb Bush’s Tax Plan — Private Equity, by Andrew Ross Sorkin:

Earlier this year, Henry R. Kravis, the private equity investor, held a $100,000 a plate fund-raising dinner for Jeb Bush at his Park Avenue apartment in Manhattan. The guest list was a who’s who of private equity and real estate executives, including Jerry I. Speyer, the billionaire New York property owner.

The dinner raised more than $4 million.

That’s why Mr. Bush’s tax reform plan — unveiled last week and a likely topic of discussion at Wednesday night’s Republican debate — was such a surprise. Mr. Bush’s proposal seems to take a direct shot at the very people who filled the tables that night to support him.

In a departure from Republican orthodoxy, his new tax proposal calls for raising taxes — and closing a longtime loophole — on carried interest, which represents investment gains largely from private equity and hedge funds. (In this regard, Mr. Bush was following his Republican rival Donald Trump, who has been criticizing the carried-interest provision for weeks.)

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September 15, 2015 in Political News, Tax | Permalink | Comments (0)

Wednesday, September 9, 2015

Jeb Bush's Tax Plan To Unleash 4% Growth: 28% Top Individual Rate, 20% Top Corporate Rate

Tuesday, September 8, 2015

Economics Prof Works To Flesh Out Ben Carson's Biblically Inspired Flat Tax

Ben Carson 3Bloomberg:  Ben Carson's Economist Seeks Tax System Overhaul, by Richard Rubin:

Get Thomas Rustici talking about the current state of U.S. economic policymaking, and the adjectives start flowing: Corrupt, worst, wasteful, bloated, dangerous. 

And at least one important person is listening. Rustici, a professor at George Mason University in Virginia, is now the senior economic adviser to Ben Carson, the retired neurosurgeon and Republican presidential candidate who is surging in polls nationally and in Iowa. 

It's up to Rustici to figure out the details of Carson's big-picture policies—balance the budget, impose a Biblically inspired flat tax—and he's got plenty of ideas. In his first interview since joining the campaign, he outlined some of them.

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September 8, 2015 in Political News, Tax | Permalink | Comments (2)

Monday, August 31, 2015

Would President Trump Eliminate Section 1031 Like-Kind Exchanges?

TrumpBloomberg:  Donald Trump Wants to Raise His Own Taxes, and Here’s How He Could Do It, by Richard Rubin:

Billionaire Donald Trump, who built his fortune in real estate, told Bloomberg Politics this week that he wants to raise his own taxes. One way to do it is a bipartisan proposal that would blow up one of the real estate industry's favorite tax breaks. 

The break, known as the like-kind exchange or "1031" for the tax code section it comes from, lets real estate owners sell one piece of property and buy a new one soon afterward without paying any capital gains taxes on the profits from the sale. The result is an ever-increasing pile of deferred capital gains, taxed only whenever there is a final sale or, better yet, never taxed as income at all upon death. 

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August 31, 2015 in Political News, Tax | Permalink | Comments (1)

Monday, August 24, 2015

Trump Says Tax Code Is Letting Hedge Fund Managers 'Get Away With Murder'

TrumpNew York Times, Trump Says Tax Code Is Letting Hedge Funds 'Get Away With Murder':

Republican presidential front-runner Donald Trump blasted hedge fund managers on Sunday as mere "paper pushers" who he said were "getting away with murder" by not paying their fair share of taxes.

In a telephone interview on CBS's "Face the Nation," Trump vowed to reform the tax laws if elected and said the current system was harming middle class Americans who currently faced higher tax rates than traders on Wall Street.

"The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky," Trump said.

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August 24, 2015 in News, Political News, Tax | Permalink | Comments (0)

Friday, August 21, 2015

Trump Bashes $4 Billion In IRS Refunds To Illegals

TrumpForbes:  Trump Bashes $4 Billion In IRS Refunds To Illegals, by Robert W. Wood:

President Obama and Donald Trump see immigration differently. The President’s aggressive executive action on immigration is still being litigated, and Mr. Trump proposes action of a different kind. In the meantime, tax credits and refunds for illegal immigrants have become controversial. Mr. Trump says illegal immigrants get $4.2 billion in tax credits. He can point to a 2011 audit by the Treasury Inspector General for Tax Administration. It confirms that individuals who are not authorized to work in the United States were paid $4.2 billion in refundable credits.

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August 21, 2015 in Political News, Tax | Permalink | Comments (17)

Tuesday, August 11, 2015

Harvard Law Prof Larry Lessig Mulls Presidential Bid, Would Resign After Passage Of Campaign Finance Reform And Let VP Bernie Sanders Or Elizabeth Warren Take Over

LessigHuffington Post:  Why I Want to Run, by Larry Lessig (Harvard):

Today I announced the formation of a committee to explore my entering the Democratic Primary for President. By Labor Day, I will decide whether a run makes sense.

I want to run. But I want to run to be a different kind of president. "Different" not in the traditional political puffery sense of that term. "Different," quite literally. I want to run to build a mandate for the fundamental change that our democracy desperately needs. Once that is passed, I would resign, and the elected Vice President would become President.

Wall Street Journal Law Blog, Harvard’s Lawrence Lessig Weighs Campaign for One-Day Presidency:

The Harvard law professor, who says his top priority is to “unrig this rigged system,” is launching an unconventional bid to be what he calls a “referendum president.”

His idea is straightforward: If elected, Mr. Lessig would take action to overhaul campaign-finance laws and end what he describes as voter suppression and partisan gerrymandering. Then — perhaps even after a single day, though he acknowledges that’s “hopeful”—he would step aside and let his vice president lead. He says he would consider Democratic candidate Bernie Sanders or Massachusetts Sen. Elizabeth Warren—who has repeatedly said she does not plan to run—to join him on the ticket.

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August 11, 2015 in Legal Education, Political News | Permalink | Comments (5)

Hillary Clinton And Bernie Sanders Want To Use The Tax Code To Weaken Wall Street

Wall StreetVox:  Hillary Clinton and Bernie Sanders Want to Use the Tax Code to Weaken Wall Street, by Ezra Klein:

In 2008, candidate Barack Obama's tax policies sought to achieve the normal ends of Democratic tax policy: Fund the basic operations of the federal government, give more money to the poor and middle class, and take more money from the rich. That is, for the most part, what we expect Democratic tax plans to do.

But the tax plans Hillary Clinton and Bernie Sanders have unveiled are more radical than that. Yes, they raise money to fund government operations, and sure, they redistribute wealth a bit. But their real aim is far more ambitious: They want to change the way the economy actually works.

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August 11, 2015 in Political News, Tax | Permalink | Comments (2)

Saturday, August 1, 2015

Hillary Clinton Releases Her 2007-2014 Joint Tax Returns Reporting $139 Million Income; 99% Of Charitable Contributions Went To Clinton Family Foundation

Clinton 3Hillary Clinton late Friday afternoon released her 2007-2014 tax returns, showing that she and Bill reported $139.1 million in adjusted gross income, paid $43.9 million in taxes (a 31.6% tax rate), and made $15 million (10.8% of their AGI) of charitable contributions, $14.9 million of which went to the Clinton Family Foundation and the Clinton Global Initiative.

I previously blogged the Clintons' tax returns for prior years:

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August 1, 2015 in Political News, Tax | Permalink | Comments (6)

Friday, July 31, 2015

Clintons Reaped Millions From Foreign Bank After Hillary Intervened In UBS Tax Case To Reduce IRS's Requested Disclosures Of Americans' Offshore Accounts By 91%

Wall Street Journal, UBS Deal Shows Clinton’s Complicated Ties; Donations to Family Foundation Increased After Secretary of State’s Involvement in Tax Case:

FruitfulA few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts.

If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court.

Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS, an outcome that drew criticism from some lawmakers who wanted a more extensive crackdown.

From that point on, UBS’s engagement with the Clinton family’s charitable organization increased. Total donations by UBS to the Clinton Foundation grew from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014, according to the foundation and the bank.

The bank also joined the Clinton Foundation to launch entrepreneurship and inner-city loan programs, through which it lent $32 million. And it paid former president Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.

There is no evidence of any link between Mrs. Clinton’s involvement in the case and the bank’s donations to the Bill, Hillary and Chelsea Clinton Foundation, or its hiring of Mr. Clinton. But her involvement with UBS is a prime example of how the Clintons’ private and political activities overlap.

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July 31, 2015 in Political News, Tax | Permalink | Comments (2)

Tuesday, July 28, 2015

More On Hillary Clinton's Capital Gains Tax Plan

HillaryFollowing up on Sunday's post, Hillary Clinton's Capital Gains Tax Plan

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July 28, 2015 in Political News, Tax | Permalink | Comments (0)

Sunday, July 26, 2015

Hillary Clinton's Capital Gains Tax Plan

Wednesday, July 22, 2015

Rand Paul: How Would You Kill The Tax Code?

July 22, 2015 in Political News, Tax | Permalink | Comments (3)

Tuesday, July 14, 2015

Hillary Clinton's Tax Plan

Thursday, July 9, 2015

Brown: Jeb Bush Pays Too Much In Taxes. So Do The Rest Of Us.

JebFollowing up on my previous posts:

Washington Post op-ed:  Jeb Bush Paid Too Much in Taxes. So Did the Rest of Us., by Dorothy Brown (Vice Provost, Emory):

When we think of Jeb Bush—grandson of a U.S. Senator, son and brother of former presidents—it’s pretty easy to classify him right away as a political stand-in for the one percent; a wealthy and connected former two-term governor who few us would compare to an average Joe. And based on what he makes in a year, he is, indeed, a one-percenter. But when it comes to paying taxes, Bush isn’t like a lot of his one-percent compatriots—he’s actually not unlike the rest of us. Most of his income has, over time, come from his labor, and not capital gains. Pretty much the case for most Americans. ...

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July 9, 2015 in Political News, Tax | Permalink | Comments (2)

Sunday, July 5, 2015

Fleischer: Jeb Bush Tax Returns Recall Old Days Of Shelters

NY Times Dealbook (2013)New York Times Deal Book:  Jeb Bush Tax Returns Recall Old Days of Shelters, by Victor Fleischer (San Diego):

Jeb Bush’s tax returns take us back to the time when it was a point of pride for high-income earners to buy a piece of a Panamanian gold mine, a Hollywood movie, a Texas oil well or a California alpaca farm. The point was not to make money but to use the artificial tax losses from a partnership to shelter one’s true salary from tax.

Mr. Bush released 33 years of returns on Tuesday, and his effective tax rate of 40 percent in 2013 contrasts notably with that of the last Republican presidential nominee, Mitt Romney, who disclosed an effective rate of 13.9 percent in 2010. After releasing his returns, Mr. Bush joked that he “apparently didn’t take full advantage” of deductions.

Mr. Bush should be careful when throwing stones; he did not always pay tax at such a high rate. In the 1980s, before the Tax Reform Act of 1986 changed many of the rules related to tax shelters, Mr. Bush’s dealings in real estate allowed him to pay almost no income tax, even when he earned considerable wages and had little to no risk of economic loss on his investments.

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July 5, 2015 in Political News, Tax | Permalink | Comments (1)

Wednesday, July 1, 2015

Jeb Bush Releases 33 Years Of Tax Returns


Jeb Bush yesterday released 33 years of tax returns, more than any presidential candidate in history. 

Jeb 2
According to a letter from former IRS Chief Counsel Hap Shashy, the head of King & Spalding's Tax Practice Group, Governor Bush paid an effective tax rate of 36% over those years (summary).

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July 1, 2015 in Political News, Tax | Permalink | Comments (1)

Monday, March 24, 2014

Oklahoma For-Profit Corporation Not Subject to 501(c)(4) Rules Established to Support Republican Senate Candidate

Tulsa World, T.W. Shannon Supporters Set Up For-Profit Corporation to Pay for Political Ads:

T.W.Supporters of U.S. Senate candidate T.W. Shannon are using an unusual, potentially controversial and possibly revolutionary maneuver to pay for campaign advertising in support of Shannon.

Oklahomans for a Conservative Future, which has spent more than $300,000 for television and print advertising on Shannon's behalf, is a for-profit corporation set up Feb. 5. ...  

Theoretically, as a for-profit, private corporation, the company is not subject to the same federal disclosure laws as regular political committees —— meaning it can keep the source of its money secret.

It is also not subject to the same Internal Revenue Service restrictions as the 501(c)(4) "social welfare" organizations that have become popular with political operatives in recent years. The 501(c)(4) organizations do not have to disclose donors, but they do have to convince the IRS that political advocacy is not their primary activity.

Oklahomans for a Conservative Future does have to file expenditure reports with the Federal Election Commission, but otherwise it is free to spend as much as it wants on whomever it wants without having to justify its status to the IRS.

But there are potential drawbacks.

Two types of federal law —— income tax and campaign finance —— come into play, and the two do not always mesh.

Donald Tobin of the Moritz School of Law at Ohio State University said laws are ambiguous on whether for-profit companies engaged primarily in political activity are exempt from reporting requirements."It's an open question," said Tobin, an authority on campaign finance law who predicted in 2007 that private corporations could be used to hide the identity of political donors.

Also unclear, said Tobin, is whether political contributions to a for-profit corporation count as income. "Corporations are prohibited from deducting expenses for advocacy," said Tobin, meaning the money contributed to such corporations could be subject to the full 35 percent corporate income tax rate.

Tobin said political "corporations" like Oklahomans for a Conservative Future have not surfaced previously because 501(c)(4) organizations have been so successful."The social welfare organizations have been so good that they haven't had to form corporations," said Tobin.

For more, see Donald B. Tobin (Ohio State), The 2013 IRS Crisis: Where Do We Go From Here?, 142 Tax Notes 1120 (2014).

(Hat Tip: Jon Forman.)

March 24, 2014 in Political News, Tax | Permalink | Comments (2)

Wednesday, September 11, 2013

Historians Give President Obama a B- Grade

B-minusHistory News Network, Historians Give Barack Obama a B-:

HNN recently asked 203 American historians to grade Barack Obama's presidency on an A-F scale.

The results are in: President Barack Obama gets a B-. ...

We polled 679 American history professors via email beginning in April at 56 top colleges and universities (as ranked by the 2013 U.S. News and World Report), including small liberal arts colleges and service academies, to give Barack Obama a letter grade on 15 separate metrics, plus an overall grade (not a composite). We received responses from 203 historians. We then converted the letter grade to a 4.0 GPA scale (using the conversion guidelines laid out by the College Board), calculated the mean letter grade, and reconverted to a A-F scale.

September 11, 2013 in Legal Education, Political News | Permalink | Comments (10)

Friday, May 3, 2013

Obama's Commerce Secretary Nominee Draws Fire Over Use of Offshore Tax Shelters

ObamaForbes:  Pritzker Family Baggage: Tax Saving Offshore Trusts, by Janet Novack:

With President Barack Obams's nomination today of Chicago businesswoman and Forbes 400 member Penny Pritzker to be the Secretary of Commerce, her family’s legendary use of hundreds of offshore trusts to protect its wealth from taxes and the prying eyes of the IRS will  be in the spotlight.

Or at least it will if Iowa Republican Senator Chuck Grassley has anything to say about it. In a memo to reporters Thursday afternoon, Grassley wrote:  “Every nominee’s offshore tax avoidance activities should be examined as part of the nomination process.  If the Commerce Committee doesn’t explore these questions with the nominee, I plan to do so, but I hope the committee will give the tax history a serious look.”

May 3, 2013 in Political News, Tax | Permalink | Comments (0) | TrackBack (0)

Sunday, April 28, 2013

President Obama and Conan O'Brien at Last Night's White House Correspondents' Dinner

Wednesday, April 17, 2013

Brown: The IRS Should Report on Tax Returns Filed by Members of Congress

Forbes:  It's Time We Learned What Members of Congress Pay in Taxes, by Dorothy A. Brown (Emory):

On Friday President and Mrs. Obama released their most recent tax return for the entire world to see.  They continued a longstanding tradition of sitting presidents releasing their returns, even though no law requires that they do so. The tradition began under the late President Richard Nixon. ...

Itemized deductions often come with a hefty price tag. The Joint Committee on Taxation has estimated that for 2013 the amount of revenue lost because of the three deductions the Obamas took (which happen to be among the most popular deductions taken) will be: $90 billion for mortgage interest, $47 billion for charitable contributions, and $46 billion for state and local income taxes. ... One part of the minority that benefits from itemized deductions is members of Congress.

Although Presidents have voluntarily released their tax returns for the last several decades, nothing could be further from the truth when it comes to members of Congress. McClatchy newspapers reported last July that of the 535 members asked to release their most recent tax returns, just 17 did. ... I suspect that if we looked at the tax returns of eavery member of Congress we would see something close to a 100% itemization rate. Compare that to only a third of the American public, and the numbers would suggest that repeal is the best way forward.

Given that I do not expect members of Congress to change their ways, one way to move closer to reform would be for the IRS to issue a new kind of report, which I call the “535 Report.” It would provide in summary fashion the information from the tax returns of all members of Congress.  The 535 Report would be similar in concept to what the IRS currently produces for the tax returns of the 400 highest-income individuals.

No law is needed, because no privacy rights would be violated. All the IRS would have to do would be to crunch the numbers. Then we would know what percent of Congress itemized deductions and what the most popular deductions were. We could then compare the information with what the IRS already produces about the American taxpaying public in general, and hopefully encourage voters to demand change.

David Cay Johnston reported in The New York Times in June 2003 that the 400 report was begun in response to a professor asking for it.  Let’s see if lightening can strike twice.

For more, see Dorothy Brown, The 535 Report: A Pathway to Fundamental Tax Reform, 40 Pepp. L. Rev. ___ (2013).  For the video of Dorothy's presentation of the paper at the January 18, 2013 Pepperdine/Tax Analysts Symposium on Tax Advice for the Second Obama Administration, see iTunes and YouTube.

April 17, 2013 in Celebrity Tax Lore, Political News, Scholarship, Tax | Permalink | Comments (3) | TrackBack (0)

Monday, February 18, 2013

Professor Allows Students to Cite CNN, But Not Fox News

CNNInside Higher Ed:  A Professor vs. Fox News:

Students in a political science class at West Liberty University were given an assignment recently to keep a "politics journal" in which they would record their reactions to various articles they had selected.

The instructor at the West Virginia public institution included some possible news sources, such as The Economist, BBC, CNN and The Huffington Post. But the instructor also specified that two sources could not be used. One was The Onion, which the assignment notes "is not news" and "is literally a parody."

The other barred source is the one that got the instructor -- Stephanie Wolfe -- scrutiny this week. She banned articles from Fox News, writing: "The tagline 'Fox News' makes me cringe. Please do not subject me to this biased news station. I would almost rather you print off an article from the Onion."

February 18, 2013 in Legal Education, Political News, Tax | Permalink | Comments (2) | TrackBack (0)

Wednesday, November 28, 2012

96% of Political Donations From Ivy League Faculty & Staff Went to Obama  96% of Political Donations From Ivy League Faculty & Staff Went for Obama:

From the eight elite schools, $1,211,267 was contributed to the Obama campaign, compared to the $114,166 given to Romney.

The highest percentage of Obama donors came from Brown and Princeton, with 99% of donations from faculty and staff going towards his campaign.

Dartmouth and Pennsylvania’s faculty contributed to the President’s campaign in the lowest numbers, with only 94% percent donating to the Obama campaign.

  • Brown:  129 Obama donors gave $67,728, 1 Romney donor gave $500
  • Columbia:  652 Obama donors gave $361,754, 21 Romney donors gave $34,250
  • Cornell:  282 Obama donors gave $141,731, 11 Romney donors gave $8,610
  • Dartmouth:  90 Obama donors gave $51,018, 6 Romney donors gave $2,850
  • Harvard:  555 Obama donors gave $373,556, 30 Romney donors gave $34,500
  • Princeton:  277 Obama donors gave $155,008, 4 Romney donors gave $1,901
  • Pennsylvania:  376 Obama donors gave $209,839, 26 Romney donors gave $22,900
  • Yale:  399 Obama donors gave $186,834, 13 Romney donors gave $8,655

November 28, 2012 in Legal Education, Political News, Tax | Permalink | Comments (11) | TrackBack (0)

Wednesday, November 21, 2012

Estrich: I Did Not Vote for Obama to Raise My Taxes

Susan Estrich (USC; National Campaign Manager, Dukakis for President), The Mandate To Raise Taxes on the “Rich”:

Within days of winning the election, President Obama announced that his victory gave him a mandate to raise taxes on the "rich."

Come again? This was a two-and-a-half-point election. It reflected a painfully divided electorate. The only mandate I saw was to unite a divided country.

I voted for Obama. ... I did not vote for Obama because I think I am paying too little in taxes.

Like many people I know, I am "rich" by Obama's standards. I pay more taxes, percentage wise, than Mitt Romney and Warren Buffett, because I earn virtually every penny of my income.

I work. And yes, all those deductions that allow the truly rich to not work, or at least to not work all the jobs I do, make me angry.

I am all for closing loopholes. I am all for ending deductions for things I don't even understand. But I am not for putting a low cap on deductions that would make it all but impossible for the charities I support to raise funds. I am not for putting a limit on the mortgage deduction that would mean, as a practical matter, that "middle class" (not rich) people in California would be priced out of the housing market, and the charities I support would not be able to raise what they need to survive.

And frankly, I don't think I'm alone. As a matter of fact, on this one, I don't think 51% of all Americans are to my "left" — if that's how you define the higher tax constituency.

Obama needs to be very careful. Yes, he was re-elected. But so were all those folks who blocked the extension of the Bush tax cuts if they excluded individuals and small businesses who make enough money to qualify as rich — but not enough to send their kids to college, or help their aging parents, or buy a home in a decent neighborhood.

We need to avoid going over the fiscal cliff. But Obama must also avoid the political cliff.

November 21, 2012 in Political News, Tax | Permalink | Comments (7) | TrackBack (0)

Wednesday, November 7, 2012

American Democracy at its Best

Tuesday, November 6, 2012

Romney Haunted by Missing Tax Returns as Campaign Draws to Close

Huffington Post:  Mitt Romney Haunted by Missing Tax Returns as Campaign Draws to Close:

As the GOP presidential candidate faced pressure over the past year to release more financial information, it was widely presumed that at some point he would buckle and follow a tradition started by his father, who released 12 years of tax returns. People who knew him, however, warned that there was no chance he'd release the returns.

They were right. Mitt Romney made it. But the journey has left him broken and battered. ...

"Romney's refusal during his campaign to release his past tax returns betrayed a contempt for the electorate and for the democratic process, which relies on voters having the requisite information to make informed decisions," said University of Southern California law professor Ed Kleinbard. "The reason for the tradition of releasing past tax returns -- not returns prepared in the years an individual is running for the presidency -- is to demonstrate that the candidate fully and fairly complied with the tax laws when the spotlight of the election was not already on him." ...

Both Bain and Romney flirted with the edge of legality by using sham derivative transactions to mask investments in U.S. stocks, lowering their American tax burden. The IRS has been cracking down on this activity since 2010, as HuffPost reported in August. Thousands of pages of Bain documents released by Gawker also reveal that Bain gamed its management fees in order to help its investors avoid paying taxes –- a tactic that is straightforwardly illegal, according to Victor Fleisher, a tax expert and professor of law at the University of Colorado. ...

The sheer scope of Romney’s personal tax avoidance efforts also shed light on iniquities in the tax code. Very wealthy Americans have many perfectly legal options to reduce their tax burden -– tactics not available to poor and middle-class taxpayers. ... "The most interesting thing he disclosed was what we saw initially on the 2010 return -– the vast array of offshore investment vehicles that plainly reflected a lot of aggressive tax planning," said New York University Law School professor Daniel Shaviro. ...

"Governor Romney's limited disclosures revealed hints of troubling issues, and his stonewalling of the electorate therefore left many troubled by the unknown breadth of the gulf between the carefully cultivated image of the candidate, on the one hand, and the authentic man, on the other," Kleinbard said. ...

In the closing days of the campaign, University of Texas law professor Calvin Johnson penned an op-ed for Tax Notes suggesting that Romney illegally undervalued his investments in order to dodge taxes on two enormous trust funds. Bloomberg detailed Romney's use of a bogus charity to reduce his tax burden, a tactic which the IRS banned just months after Romney had set up his own, which he continues to profit from.


November 6, 2012 in Political News, Tax | Permalink | Comments (3) | TrackBack (0)

Friday, November 2, 2012

Economic Effects of the Obama and Romney Tax Plans

Tax Foundation:  A Comparison of the Long-Term Economic Effects of the Obama and Romney Tax Plans:

Over the past several weeks, Tax Foundation economists have published a series of studies that analyze the long-term economic and distributional effects of the tax plans outlined by President Barack Obama and Governor Mitt Romney. These comprehensive assessments were done using the Tax Foundation’s Tax Simulation and Macroeconomic Model which measures how changes in tax policies affect the economic levers that determine economic growth, workers’ incomes, and the distribution of the tax burden.

Tax Foundation

November 2, 2012 in Political News, Tax, Think Tank Reports | Permalink | Comments (2) | TrackBack (0)

Dems, GOP Trade Barbs After CRS Pulls Report on Tax Rates and Economic Growth

CRS LogoNew York Times:  Nonpartisan Tax Report Withdrawn After GOP Protest:

The Congressional Research Service has withdrawn an economic report [Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (R42729) (Sept. 14, 2012), by Thomas L. Hungerford] that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording....

The decision, made in late September against the advice of the agency’s economic team leadership, drew almost no notice at the time. ... But it could actually draw new attention to the report, which questions the premise that lowering the top marginal tax rate stimulates economic growth and job creation. ...

Senate Republican aides said they had protested both the tone of the report and its findings. Aides to Mr. McConnell presented a bill of particulars to the research service that included objections to the use of the term "Bush tax cuts” and the report’s reference to “tax cuts for the rich,” which Republicans contended was politically freighted.

They also protested on economic grounds, saying that the author, Thomas L. Hungerford, was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies. Further, they complained that his analysis had not taken into account other policies affecting growth, such as the Federal Reserve’s decisions on interest rates.

“There were a lot of problems with the report from a real, legitimate economic analysis perspective,” said Antonia Ferrier, a spokeswoman for the Senate Finance Committee’s Republicans. “We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”

The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical. ... “When their math doesn’t add up, Republicans claim that their vague version of economic growth will somehow magically make up the difference. And when that is refuted, they’re left with nothing more to lean on than charges of bias against nonpartisan experts,” said Representative Sander Levin of Michigan, ranking Democrat on the House Ways and Means Committee....

The report received wide notice from media outlets and liberal and conservative policy analysts when it was released on Sept. 14. It examined the historical fluctuations of the top income tax rates and the rates on capital gains since World War II, and concluded that those fluctuations did not appear to affect the nation’s economic growth. “The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie,” the report said. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.” ...

Mr. Hungerford, a specialist in public finance who earned his economics doctorate from the University of Michigan, has contributed at least $5,000 this election cycle to a combination of Mr. Obama’s campaign, the Democratic National Committee, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.

Wall Street Journal editorial:  Congressional Research Hit Job: Democrats Politicize a Supposedly Nonpartisan Think Tank:

The Congressional Research Service is supposed to be a nonpartisan research tool for the House and Senate, but like so many institutions in Washington it is now being hijacked for partisan ends. The dispute concerns a highly politicized CRS tax study that Democrats have been trying to use as a cudgel against Mitt Romney.

The tax study just happened to appear on the CRS website in September in the heat of the Presidential tax debate. Author Thomas Hungerford purported to show that 65 years of changes in "top tax rates have had little association with saving, investment or productivity growth." The timing couldn't have been better for President Obama, and the usual liberal media suspects picked it up. So did New York Senator Chuck Schumer, who used it in a speech to attack tax reform.

Mr. Hungerford tells us the study wasn't requested by a Member of Congress, so perhaps it was his idea. You won't be surprised to learn that Mr. Hungerford has donated to the Obama campaign and Senate Democrats and worked as an economist at the White House budget office under Bill Clinton.

Republicans understandably objected to this partisan exercise, especially because the study has statistical design flaws and ignores multiple peer-reviewed studies that have found a significant relationship between cuts in tax rates and the pace of capital formation, investment and economic growth.

CRS officials then pulled the report from its website. In a Sept. 28 email to a Republican Senate staffer, CRS deputy director Colleen Shogan wrote that "I decided to remove the Hungerford report from the CRS website for now." She added that she had given Mr. Hungerford's manager, Don Marples, "a list of concerns I would want addressed in a future version" and that "in particular, I want a better, more robust defense of the methodology in the paper."

Now Senate Democrats are trying to portray Mr. Hungerford as a victim of censorship due to GOP pressure, and Thursday they got an impressionable Jimmy Olson at the New York Times to buy the spin. The reality is that sometime after we called Mr. Hungerford, he or someone else at CRS talked to Senate Democrats, who decided to give the study one more propaganda run before Election Day. ...

This episode is nonetheless a significant blot on the CRS reputation for unbiased research. We're not sure why Congress needs a research operation when it already has a budget office, a tax committee and thousands of staff, but it surely doesn't need one that acts like an arm of the Democratic Party.

(Hat Tip: Ann Murphy, Mike Talbert.)


November 2, 2012 in Congressional News, Political News, Tax | Permalink | Comments (8) | TrackBack (0)

Wednesday, October 31, 2012

Law Profs: Obama 72%, Romney 19%

Romney ObamaLaw Profs back President Obama over Mitt Romney 72% to 19%, according to Brian Leiter's poll.

Update #1:  Brian Leiter closed the poll with 420 votes cast and a final tally of Obama 69%, Romney 22%.  See The Law Professors Have Spoken:

I'm impressed (or distressed) by the strong showing for the Republican, and surprised by the tepid support for both Johnson and Stein.  As further evidence that legal academics lean to the right, do contrast the results when I polled philosophers on the election!

Update #2:  Ann Althouse (Wisconsin) has followed up with her own poll:  the vote of her readers is currently Romney 88%, Obama 3% (the President is losing to Libertarian Gary Johnson (7%)).

October 31, 2012 in Political News, Tax | Permalink | Comments (14) | TrackBack (0)

Tuesday, October 30, 2012

Calvin Johnson 'Skeptical' of Mitt Romney's Taxes

Huffington Post:  Tax Expert Calvin Johnson 'Skeptical' Of Mitt Romney's Taxes:

A respected tax attorney and deficit hawk wrote a letter to the editor of Tax Notes on Monday saying that, "There is good reason to be skeptical" of Mitt Romney's claim to have paid all the taxes he legally owes.

The letter, by University of Texas Law School Professor Calvin Johnson, focuses on two trusts Romney has set up: one for his children, which is worth over $100 million, and an $87 million retirement trust. These trusts have grown at an enormous rate -- Johnson notes that they have been more than 10 times as profitable as Warren Buffett's investments over the same time frame. Johnson writes that Romney may have played fast and loose with the law by undervaluing Bain Capital assets that were contributed to the trusts. By undervaluing the assets, Romney could avoid paying gift taxes.

(Hat Tip: Marty McMahon.)

October 30, 2012 in Political News, Tax | Permalink | Comments (2) | TrackBack (0)