TaxProf Blog

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

Monday, May 21, 2018

Manns & Todd: Section 529 Plans Are Not The Ideal College Savings Vehicle For Most Families

F. Philip Manns (Liberty) & Timothy M. Todd (Liberty), Higher Education Savings and Planning: Tax and Nontax Considerations, 5 Texas A&M L. Rev. 343 (2018):

Funding higher education is among the critical financial decisions made by individuals and families. There are myriad options. Yet, the conventional wisdom — namely using Section 529 Plans — may not be the optimal vehicle to effectuate this goal. Therefore, this Article discusses various strategies to plan, save, and pay for higher education. It compares various savings methods including gifts, UTMA accounts, Section 529 Plans, trusts, and other vehicles. The analysis explores both tax and non-tax considerations, including the effect of different strategies on financial aid, transaction costs, investor control, income taxes, gift and estate taxes, flexibility, and creditor protection.

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May 21, 2018 in Scholarship, Tax | Permalink | Comments (0)

Sunday, May 20, 2018

University of Luxembourg Hosts Conference On New Tax Challenges: US And EU Perspectives

LuxThe University of Luxembourg hosted a conference on Friday on New Tax Challenges: US and EU Perspectives:

US Tax Reform and its Impact on the EU
Stephen Shay (Harvard)
Edoardo Traversa (Louvain)

Tax Leaks and Transparency
Diane Ring (Boston College), Leak-Driven Law, 65 UCLA L. Rev. __ (2018) (with Shu-Yi Oei (Boston College))
Katerina Pantazatou (Luxembourg)

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May 20, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The Top Five New Tax Papers

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

  1. [957 Downloads]  Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [415 Downloads]  Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and the Brazilian Approach, by Flavio Rubinstein (Fundação Getúlio Vargas) & Gustavo Gonçalves Vettori (University of São Paulo)
  3. [237 Downloads]  The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy, by Michael Graetz (Columbia)
  4. [156 Downloads]  IRC Section 678 and the Beneficiary Deemed Owner Trust (BDOT), by Edwin Morrow
  5. [151 Downloads]  How to Drive an RV Through a Loophole: The Ethics and Legality of LLC Formation for Sales Tax Avoidance, by Chase Edwards (Louisiana-Lafayette), Justin Ward (Jones Walker, Baton Rouge) & Casey Carder (Arkansas-Little Rock )

May 20, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, May 18, 2018

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Cauble's Superficial Proxies For Simplicity In Tax Law

This week, Mirit Eyal-Cohen (Alabama) reviews a new article by Emily Cauble (DePaul), Superficial Proxies for Simplicity in Tax Law:

Mirit-Cohen (2018)In her article, Cauble reminds us that tax laws are always a popular target for political rhetoric. She aims in this Article to derail the public discourse about the concept of tax simplification by highlighting the dangers of focusing solely on numeric metrics relating to volume in order to describe complexity. We often hear unsophisticated, superficial proxies of tax complexity such as word counts, page counts, number of regulations, and other metrics. For example, there is much commentary that points to the length of IRS publications or tax forms instructions as evidence of the intricate nature of tax law. According to Cauble, these often leave the public susceptible to policies under the appearance of simplification while their real purpose is much more than that. They enable politicians to advance provisions under the guise of achieving simplicity – a prospect with broad appeal - when the true effect of the proposal is something that would be much less popular. She exemplifies with the latest tax legislation that while the rhetoric around the proposal to remove some tax brackets may have portrayed it as a simplification move, in her opinion its real goal was to reduce progressivity. 

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May 18, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

Oei & Ring: Tax Issues In The Sharing Economy

SharingShu-Yi Oei (Boston College) & Diane Ring (Boston College), Tax Issues in the Sharing Economy: Implications for Workers, in The Cambridge Handbook of the Law of the Sharing Economy (Nestor Davidson (Fordham), John Infranca (Suffolk) & Michèle Finck (Oxford), eds. Cambridge University Press 2018):

A growing number of individuals now perform work in the sector known as the “sharing economy,” and their participation raises important tax and regulatory questions. In this chapter, we survey some of the key tax issues confronting individuals operating in the sharing economy in the United States. Many of the tax implications that arise in sharing economy work stem from the threshold decision by many platforms to classify such individuals as independent contractors rather than employees. Therefore, we first discuss how the threshold classification decision affects the substantive and compliance-related tax issues faced by individuals operating in the sharing economy.

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May 18, 2018 in Scholarship, Tax | Permalink | Comments (0)

Horwitz: Candor And Integrity In Legal Scholarship

Paul Horwitz (Alabama), Institutional Pluralism and the (Hoped-For) Effects of Candor and Integrity in Legal Scholarship, 101 Marq. L. Rev. ___ (2018):

This Article is a contribution to a symposium on the ethics of legal scholarship, held at Marquette Law School in September 2017. It has two goals: 1) to consider whether it is possible to contribute to debates on the ethics of legal scholarship while favoring an institutional pluralism in which different forms of legal scholarship are possible and legitimate; and 2) if one concludes (as I do) that it is possible to for an institutional pluralist to hold and advocate views on the ethics of legal scholarship, to explore the implications of the core values of ethical legal scholarship that I focus on here — candor and integrity — for different models or visions of legal scholarship.

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May 18, 2018 in Legal Education, Scholarship | Permalink | Comments (1)

Call For Papers: NTA 111th Annual Conference On Taxation

National Tax Association (2016)The National Tax Association has issued a Call for Papers for its 111th Annual Conference on Taxation to be held Nov. 15-17, 2018 in New Orleans:

The 111th Annual Conference on Taxation will cover a broad range of topics including, but not limited to, taxation and tax policies; expenditure policies; government budgeting; intergovernmental fiscal relations; and subnational, national, and international public finance. The conference will focus, as always, on policy-relevant research bearing on taxation and government spending.

You are invited to submit the following: individual papers to be integrated into sessions, proposals for complete sessions of papers, and proposals for panel discussions. The submission deadline is June 1, 2018.  Decisions concerning the inclusion of papers and sessions will be announced in July 2018.  All presenters, including members of panel discussions, must then register and pay a conference registration fee.

You are also invited to volunteer to be a discussant or a session chair.  Decisions concerning discussants and session chairs will be made at a later date.  All discussants and session chairs must then register and pay a conference registration fee.

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May 18, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, May 17, 2018

Shaviro Presents Gilded Age Literature And Inequality Today At Stanford

ShaviroDaniel N. Shaviro (NYU) presents Gilded Age Literature and Inequality today at Stanford:

We are an intensely social species, and often a rivalrous one, prone to measuring ourselves in terms of others, and often directly against others.  Accordingly, relative position matters to our sense of wellbeing, although excluded from standard economic models that look only at the utility derived from own consumption of commodities plus leisure.  For example, people can have deep-seated psychological responses to inequality and social hierarchy, creating the potential for extreme wealth differences to invoked feelings of superiority and inferiority, or dominance and subordination, that may powerfully affect how we relate to each other.

The tools that one needs to understand how and why this matters include the sociological and the qualitative.  In my book-in-progress, Dangerous Grandiosity: Literary Perspectives on High-End Inequality Through the First Gilded Age, I use the particular tool of in-depth studies of particular classic works of literature (from Jane Austen’s Pride and Prejudice  through Theodore Dreiser’s The Financier and The Titan) that offer suggestive insights regarding the felt experiences around high-end inequality at different times and from different perspectives. A successor volume will carry this account through the twentieth century and up to the present.

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May 17, 2018 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (1)

Hayashi Reviews Shobe's Tax Receivable Agreements In IPOs

Jotwell (Tax) (2016)Andrew Hayashi (Virginia), Understanding Tax Provisions in M&A Agreements (JOTWELL) (reviewing Gladriel Shobe (BYU), Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, 71 Vand. L. Rev. ___ (2017)):

In Private Benefits in Public Offerings, Prof. Shobe describes the emergence and evolution of a fascinating term in initial public offerings: tax receivable agreements (TRAs). These agreements reserve for the pre-IPO owners of the business the economic value of certain tax attributes that are either created in the course of the IPO or which were created over a course of years before the IPO. TRAs are contracts between the post-IPO corporation and the pre-IPO owners, pursuant to which the corporation makes distributions to those pre-IPO owners as tax assets are used. In one variation, pre-IPO owners receive the economic benefit of basis step ups that arise in certain “turbocharged” IPOs, and in other variations the pre-IPO owners receive the economic benefit of net operating losses and historical basis in the corporation’s assets.

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May 17, 2018 in Scholarship, Tax | Permalink | Comments (0)

How To Improve Pennsylvania's Tax System

Pavel A. Yakovlev (Mercatus Center, George Mason), How to Improve Pennsylvania's Tax System:

Pennsylvania ranks near the top in tax burden and near the bottom in business friendliness in the nation. While much good can be said about the state’s at personal income tax rate and relatively low sales tax rate, Pennsylvania’s business taxes are in serious need of reform. The state government took a step in the right direction by phasing out its archaic capital stock and foreign franchise tax, but Pennsylvania’s economy is still being held back by its high corporate income and unemployment insurance taxes. Pennsylvania’s 9.99 percent corporate income tax rate, the second highest in the nation, puts the state at a significant competitive disadvantage while generating less than 7 percent of total tax revenue. A combination of business tax cuts and tax base broadening could make Pennsylvania’s economy grow faster without jeopardizing its public finances.

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May 17, 2018 in Scholarship, Tax | Permalink | Comments (1)

Malavet: The Accidental Crit III — Law Faculty Hiring, Promotion, And Tenure In The Age Of Trump

Pedro A. Malavet (Florida), The Accidental Crit III: The Unbearable Lightness of Being ... Pedro?:

This article is a narrative about law faculty hiring, promotion and tenure. It is part of my process of coming to terms with the promotion and tenure process that I endured through a type of scholarly catharsis; in this essay I review my continued presence in the legal academy from the safety of post-tenure academic life, but while immersed in the openly racist climate of the presidency of Donald Trump.

May 17, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

Tax Presentations At Today's Mid-Atlantic Junior Faculty Forum

Richmond (2018)Tax presentations at today's Mid-Atlantic Junior Faculty Forum at Richmond:

  • Hayes Holderness (Richmond), Wither Transactional Nexus?
  • Danny Schaffa (Richmond), Can a Consumption Tax Undo Deficit Spending?

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May 17, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 16, 2018

Colinvaux: State Tax Benefits And The Federal Charitable Deduction

Roger Colinvaux (Catholic), Failed Charity: Taking State Tax Benefits into Account for Purposes of the Charitable Deduction,  66 Buff. L. Rev. ___ (2018):

The Tax Cuts and Jobs Act (TCJA) substantially limited the ability of individuals to deduct state and local taxes (SALT) on their federal income tax returns. Some states are advancing schemes (CILOTs) to allow taxpayers a state tax credit for contributions to a 501(c)(3) organization controlled by the state. The issue is whether CILOTs are deductible as charitable contributions on federal returns. Under a general rule of prior law — the full deduction rule — state tax benefits were ignored for purposes of the charitable deduction. If the full deduction rule is applied to CILOTs, then the SALT limitation can successfully be avoided. This article explains that after the TCJA, state tax benefits are more valuable and it no longer makes sense to ignore them for purposes of determining whether a taxpayer has made a charitable contribution.

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May 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Elephant Curve Of Global Inequality And Growth

Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez & Gabriel Zucman (Paris School of Economics), The Elephant Curve of Global Inequality and Growth:

We present new evidence on global inequality and growth since 1980 using the World and Wealth Income Database. We plot the curve of cumulated growth from 1980 to 2016 by percentile of the global distribution of income per adult. This curve has an elephant shape due to high growth rates at the median (fast growth in China and India), modest growth rates above the median, and explosive growth rates at the top. We project the evolution of global inequality between now and 2050 combining projected macro growth rates and within country inequality evolution based on past trends.

Figure 2

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May 16, 2018 in Scholarship, Tax | Permalink | Comments (1)

Tuesday, May 15, 2018

For Your Own Good: Taxes, Paternalism, And Fiscal Discrimination

For Your Own GoodFor Your Own Good: Taxes, Paternalism, and Fiscal Discrimination in the Twenty-First Century (Adam J. Hoffer (Wisconsin) & Todd Nesbit (Ball State), eds., 2018):

An Introduction to Selective Taxation, p. 1
Adam J. Hoffer (Wisconsin) & Todd Nesbit (Ball State)

Part I: Public Finance and Public Choice: Establishing the Foundation
Ch. 1: Selective Consumption Taxes in Historical Perspective, p. 19
William F. Shughart II (Utah State)
Ch. 2: Welfare Effects of Selective Taxation: Economic Efficiency as a Normative Principle, p. 41
Justin M. Ross (Indiana)
Ch. 3: The Theory and Practice of Selective Consumption Taxation, p. 59
Adam J. Hoffer (Wisconsin) & William F. Shughart II (Utah State)
Ch. 4: The Language of Taxation: Ideology Masquerading as Science, p. 77
Richard E. Wagner (George Mason)

Part II: The Political Economy of Public Budgeting

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May 15, 2018 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Citations Are Not A Good Proxy For The Quality Of A Law Review Article

Jeff Schmitt (Dayton), Citations are not a Good Proxy for Article Quality:

Most people seem to agree that article placement is not a good proxy for the quality of a law review article. ... [Barry Friedman (NYU), Fixing Law Reviews, 67 Duke L.J. 1297 (2018),] assumes that citations are a better proxy for article quality. I think many people share this assumption. As I explain after the fold, however, I am very skeptical about this being true. As someone who has been on a very active appointments committee for the past two years, I wish that a better proxy existed. However, I think that the only way to judge the quality of an article is to actually read it.

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May 15, 2018 in Legal Education, Scholarship | Permalink | Comments (1)

Sunday, May 13, 2018

The Top Five New Tax Papers

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

  1. [931 Downloads]  Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [390 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  3. [389 Downloads]  Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and the Brazilian Approach, by Flavio Rubinstein (Fundação Getúlio Vargas) & Gustavo Gonçalves Vettori (University of São Paulo)
  4. [221 Downloads]   The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy, by Michael Graetz (Columbia)
  5. [173 Downloads]   Taxing & Zapping Marijuana: Blockchain Compliance in the Trump Administration, by Richard Ainsworth (Boston University) & Brendan Magauran

May 13, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, May 11, 2018

Weekly SSRN Tax Article Review And Roundup: Glogower Reviews Wallace's Centralized Review of Tax Regulations

This week, Ari Glogower (Ohio State) reviews a new work by Clint Wallace (South Carolina), Centralized Review of Tax Regulations, 70 Ala. L. Rev. __ (2018).

Glogower (2016)When and how should tax regulations be subject to centralized review by the White House Office of Management and Budget (OMB)? Clint Wallace’s new work considers these timely questions. 

The work begins by describing the somewhat unique role of tax regulations among agency actions. Executive Order 12,866 generally requires that “significant” regulatory actions by agencies must be reviewed by the OMB’s Office of Information and Regulatory Affairs (OIRA). This process generally includes, among other considerations, a cost-benefit analysis by OIRA, interagency review, and in some cases analysis of a rule’s distributional effects.

Tax regulations, however, which are developed by the IRS Chief Counsel’s Office and the Treasury Office of Tax Policy, have generally not been subject to substantive OIRA review. Until recently, tax regulations have historically been characterized as “interpretative” rules that merely effectuate congressional policy, but do not independently have the force and effect of law, and are consequently not subject to EO 12866.  

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May 11, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Thursday, May 10, 2018

Efforts To Curb Tax Avoidance Offshore Paid Off, To A Degree

Efforts to Curb Tax Avoidance Offshore Paid Off, to a Degree:

In 2008, the United States government launched a number of enforcement initiatives to rein in its residents' use of secret offshore accounts to avoid their tax liabilities. Through several high-profile lawsuits, the U.S. forced a number of Swiss banks, including UBS, the largest Swiss banking institution, to share account information about U.S. customers. By threatening sanctions, the U.S. also compelled widely recognized tax haven countries — including Switzerland, Luxembourg, Liechtenstein, Malta, Monaco, and Panama — to accept information exchange agreements that allow the Internal Revenue Service (IRS) to request and receive account information about persons suspected of tax evasion. Finally, the IRS established several "voluntary disclosure" programs offering account holders a temporary window during which they could disclose their offshore accounts without risking criminal penalties.

Niels JohannesenPatrick LangetiegDaniel ReckMax Risch, and Joel Slemrod explore the effects of these enforcement initiatives in Taxing Hidden Wealth: The Consequences of U.S. Enforcement Initiatives on Evasive Foreign Accounts (NBER Working Paper No. 24366).

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May 10, 2018 in Scholarship, Tax | Permalink | Comments (0)

Baseball (Final Offer) Arbitration To Resolve International Law Disputes

Florida Tax Review (2018)Joost Pauwelyn (Georgetown), Baseball Arbitration to Resolve International Law Disputes: Hit or Miss?, 22 Fla. Tax Rev. ___ (2018):

States and international tribunals are in a love-hate relationship. States routinely agree to third-party adjudication. But when international tribunals make decisions they often upset the losing party or are blamed for over-reach (“making law”). The existence of compulsory dispute settlement may also have a chilling effect on states positively settling their differences, or updating or negotiating new rules.

Fixes to this tension traditionally involve proposals to either (i) exit from international tribunals altogether or increase state control over tribunals (with the risk of undermining tribunal independence), or (ii) make international tribunals more like domestic courts with public law type guarantees in respect of appointment, transparency and consistency (with the risk of making tribunals even more powerful).

This paper assesses a concrete proposal that goes in a different direction. It preserves a crucial role for neutral, third-party adjudication but puts more responsibility on states to work out positive solutions themselves: baseball or final offer arbitration (FOA) where disputing parties each offer an answer to the dispute (their “final offer”) and the adjudicator’s task is strictly limited to picking one or the other answer (“hit or miss”).

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May 10, 2018 in Scholarship, Tax | Permalink | Comments (0)

Kornhauser: The 'Invisible Government' And Conservative Tax Lobbying

Marjorie E. Kornhauser (Tulane), The 'Invisible Government' and Conservative Tax Lobbying 1935 - 1936, 81 Law & Contemp. Probs. ___ (2018):

By the 1920s lobbying in the United States was so pervasive that many congressman and commentators feared that it was an “invisible government” unduly influencing legislation and distorting democracy. Of particular concern was a new style of lobbying that used recent psychological research and mass media to shape public opinion and motivate voters to pressure legislators to act in their favor. Many viewed “patriotic” societies as the most common — and most invidious — practitioners of these techniques. These groups, generally formed by small numbers of wealthy people, vociferously advocated for the American form of government which they defined as one with a very limited central government and strong states’ rights. Consistent with this view, they claimed that many federal programs and policies were unconstitutional and opposed the high taxes that funded them.

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May 10, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 9, 2018

Cauble: Superficial Proxies For Simplicity In Tax Law

Emily Cauble (DePaul), Superficial Proxies for Simplicity in Tax Law:

Simplification of tax law is complicated. Yet, political rhetoric surrounding tax simplification often focuses on simplistic, superficial indicators of complexity in tax law such as word counts, page counts, number of regulations, and similar quantitative metrics. This preoccupation with the volume of enacted law often results in law that is more complex in a real sense. Achieving genuine simplification — a reduction in costs faced by taxpayers at various stages in the tax planning, tax compliance, and tax enforcement process — often requires enacting more law not less. In addition, conceptualizing simplicity in simplistic terms can leave the public vulnerable to policies advanced under the guise of simplification that have real aims that are less innocuous. A perennial example involves lawmakers proposing a reduction in the number of tax brackets under the heading of simplifying tax law. In reality, this change does very little, if anything, to simplify law in a meaningful sense, and its truer aim is to reduce progressivity in the tax code.

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May 9, 2018 in Scholarship, Tax | Permalink | Comments (2)

Ryznar: Tax Reform On Homeownership

Margaret Ryznar (Indiana-Indianapolis), Tax Reform on Homeownership, 72 U. Miami L. Rev. ___ (2018):

Homeownership is more than just an American dream. In reality, homeownership is a savings vehicle. However, the 2017 tax legislation reduced the tax support for homeownership. The tax reform targeting housing, such as curtailing the deductions for mortgage interest and state and local taxes, frustrates the American public policy of encouraging homeownership.

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May 9, 2018 in Scholarship, Tax | Permalink | Comments (1)

Rosenberg: Codification Of The Economic Substance Doctrine — Substantive Impact And Unintended Consequences

Rebecca Rosenberg (Ohio Northern), Codification of the Economic Substance Doctrine: Substantive Impact and Unintended Consequences, 14 Hastings Bus. L.J. ___ (2018):

Section 7701(o) of the Internal Revenue Code of 1986 (the “Code”) imports the judicial doctrine of economic substance into statutory language (i.e., it “codifies” the doctrine). The economic substance doctrine provides that certain tax benefits can be denied if they go beyond congressional intent, even if all of the literal requirements of the Code and its regulations are met. The doctrine is perpetually controversial and has been the subject of recent litigation.

This article argues that codification changed the economic substance doctrine (rather than just copying it into statutory form) and produced unintended consequences, many of which have gone unnoticed. The article analyzes the language and structure of Section 7701(o) in order to explain its actual legal consequences and its substantive differences from previous case law.

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May 9, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 8, 2018

Sanchirico: The New U.S. Tax Preference For 'Foreign-Derived Intangible Income'

Chris William Sanchirico (Pennsylvania), The New US Tax Preference for 'Foreign-Derived Intangible Income':

The new US income tax deduction for “foreign-derived intangible income” effectively lowers the corporate tax rate — from 21% to around 13% — on export-generated income attributable to intangible assets. This paper considers the new provision both in relation to international trade and tax agreements and as a matter of national policy.

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May 8, 2018 in Scholarship, Tax | Permalink | Comments (0)

Monday, May 7, 2018

Ring Presents Leak-Driven Law Today In Vienna

Ring (2017)Diane Ring (Boston College) presents Leak-Driven Law, 65 UCLA L. Rev. __ (2018) (with Shu-Yi Oei (Boston College)), at the Institute for Austrian and International Tax Law at Vienna University today as part of its PwC-WU-Seminar Series:

Over the past decade, a number of well-publicized data leaks have revealed the secret offshore holdings of high-net-worth individuals and multinational taxpayers, leading to a sea change in cross-border tax enforcement. Spurred by leaked data, tax authorities have prosecuted offshore tax cheats, attempted to recoup lost revenues, enacted new laws, and signed international agreements that promote “sunshine” and exchange of financial information between countries.

The conventional wisdom is that data leaks enable tax authorities to detect and punish offshore tax evasion more effectively, and that leaks are therefore socially beneficial from an economic welfare perspective. This Article argues, however, that the conventional wisdom is too simplistic.

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May 7, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, May 6, 2018

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some reshuffling of the order of the papers within the Top 5:

  1. [900 Downloads]  Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [377 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  3. [367 Downloads]  Taxing Income Where Value Is Created, by Allison Christians (McGill) & Laurens van Apeldoorn (Leiden)
  4. [366 Downloads]  Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and the Brazilian Approach, by Flavio Rubinstein (Fundação Getúlio Vargas) & Gustavo Gonçalves Vettori (University of São Paulo)
  5. [326 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)

May 6, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 5, 2018

Li: Protecting The Tax Base In A Digital Economy

Jinyan Li (Osgoode Hall), Protecting the Tax Base in a Digital Economy:

This paper provides an overview of the main features of digital economy and why it poses challenges to existing framework and principles of international taxation. It explains the fiscal impact of these challenges in developing countries. Among the challenges is the “cyberization” of tax base because the existing jurisdictional nexus (such as permanent establishment) and profit attribution rules assume physical presence and actual activities, neither is particularly relevant in a digital business.

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May 5, 2018 in Scholarship, Tax | Permalink | Comments (0)

Friday, May 4, 2018

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Luke's Captivating Deductions

This week, Sloan Speck (Colorado) reviews a new work by Charlene D. Luke (Florida), Captivating Deductions, 46 Hofstra L. Rev. __ (forthcoming 2018).

Speck (2017)Charlene Luke’s excellent article, Captivating Deductions, analyzes the tax treatment of captive insurance arrangements under current law and proposes reforms that would better align the treatment of such insurance arrangements with a normative Haig-Simons income tax base. Luke focuses on the treatment of insurance premiums from the insured’s perspective, rather than the special treatment afforded to insurance companies under the Code. For these insureds, captive insurance arrangements can convert non-deductible savings into deductible business expenses, with an added tax benefit if the insurance company can avoid current taxation on returns to any investments made with premiums received. Luke casts such (abusive) arrangements as “in substance, designer investment contracts,” and Luke’s reading of judicial and administrative guidance in this area as fundamentally misguided is undeniably correct.

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May 4, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Third International Conference On Taxpayer Rights Concludes Today In The Netherlands

ThirdThe National Taxpayer Advocate hosts the Third International Conference on Taxpayer Rights today and tomorrow in The Netherlands hosted by the International Bureau of Fiscal Documentation. For a list of the panels and participants, see here.

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May 4, 2018 in Conferences, IRS News, Scholarship, Tax | Permalink | Comments (0)

Thursday, May 3, 2018

The Unconstitutionality Of The Tampon Tax

Victoria Hartman (J.D. 2018, Northwestern), Note, End the Bloody Taxation: Seeing Red on the Unconstitutional Tax on Tampons, 112 Nw. U. L. Rev. 313 (2017):

Why was there so much activism in the United States, and across the world, to end the tampon tax in 2016? This Note situates the movement to end the tampon tax within a broader history of feminist activism related to tampons and menstruation. It also analyzes the constitutional dimensions of the tax on feminine hygiene products and serves as a litigation guide for plaintiffs claiming that a state, city, or county sales tax on feminine hygiene products violates the Equal Protection Clause.

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May 3, 2018 in Scholarship, Tax | Permalink | Comments (2)

Call for Papers: New Voices In Tax Policy And Public Finance (2019 AALS Annual Meeting)

The AALS Tax Section committee is pleased to announce the following Call for Papers:

CALL FOR PAPERS:
AALS SECTION ON TAXATION WORKS-IN-PROGRESS SESSION
2019 ANNUAL MEETING, JANUARY 2-6, 2019, NEW ORLEANS, LA
NEW VOICES IN TAX POLICY AND PUBLIC FINANCE
(co-sponsored by the Section on Nonprofit and Philanthropy Law and Section on Employee Benefits and Executive Compensation)

The AALS Section on Taxation is pleased to announce the following Call for Papers. Selected papers will be presented at a works-in-progress session at the 2019 AALS Annual Meeting in New Orleans, LA from January 2-6, 2019. The works-in-progress session is tentatively scheduled for Saturday, January 5.

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May 3, 2018 in Conferences, Legal Education, Scholarship, Shuyi Oei, Tax, Tax Profs, Teaching | Permalink | Comments (0)

Measuring Law School Clinics

ClinicColleen Shanahan (Temple), Jeffrey Selbin (UC-Berkeley), Alyx Mark (George Washington) & Anna Carpenter (Tulsa), Measuring Law School Clinics, 92 Tul. L. Rev. 547 (2018):

Legal education reformers have long argued that law school clinics address two related needs: first, clinics teach students to be lawyers; and second, clinics serve low-income clients. In clinics, so the argument goes, law students working under the close supervision of faculty members learn the requisite skills to be good practitioners and professionals. In turn, clinical law students serve clients with civil and criminal justice needs that would otherwise go unmet.

Though we have these laudable teaching and service goals — and a vast literature describing the role of clinics in both the teaching and service dimensions — we have scant empirical evidence about whether and how clinics achieve these goals. We know from studies that law students value clinics, but do clinics prepare them to be lawyers? We also know from surveys that clinics provide hundreds of thousands of hours of free legal aid in low-income communities, but how well do clinic students serve clients?

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May 3, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

Rosenberg: Application Of The Economic Substance Doctrine To Foreign Tax Credits

Rebecca Rosenberg (Ohio Northern), Stars Wars: Application of the Economic Substance Doctrine to Foreign Tax Credits, and What the Future Holds, 42 U. Dayton L. Rev. 165 (2018):

The recent, controversial STARS (Structured Trust Advantaged Repackaged Securities) cases provide a backdrop for analyzing how the economic substance doctrine ideally should be applied to foreign tax credit cases. The economic substance doctrine is a judicial doctrine that allows courts to disregard the tax consequences of a transaction that violates the intent of the relevant statute. Its application to foreign tax credits has a long and contentious history, and the STARS cases have given new life to the government’s arguments.

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May 3, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 2, 2018

Watson: Reforming Tax Incentives For Higher Education

Camilla E. Watson (Georgia), Reforming Tax Incentives for Higher Education, 36 Va. Tax Rev. 83 (2017):

Federal spending on higher education has long been controversial, primarily because it has grown exponentially since the 1950s but it has produced a system which many regard as too expensive and grossly inefficient. The soaring costs are placing higher education beyond the reach of many Americans, and of those who enter college, less than half complete their degrees. Particular criticism has been directed toward the education tax incentives, enacted mostly in the late 1990s, which shifted federal funding for higher education from direct benefits to students in the form of grants, loans and work-study programs to indirect benefits through the tax system. The crux of this criticism is that the tax incentives, in addition to being costly and highly complex, have had virtually no effect on college enrollment and retention. Congress has studied this problem for the past few years and has several bills currently on the table to reform these incentives. There are other proposals pending as well, such as those of President Obama and the Education Consortium from the private sector. This article critiques these various proposals and explains why they are not likely to achieve the desired result of increasing college enrollment and retention, particularly among lower-income individuals.

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May 2, 2018 in Scholarship, Tax | Permalink | Comments (0)

Are Law Review Articles A Waste Of Time?

LawProfBlawg (Anonymous Professor, Top 100 Law School), Are Law Review Articles A Waste Of Time?:

Recently, Professors Carrissa Hessick, Eric Segall, and others continued the debate that started out at LawProfBlawg’s Loyola University Chicago Symposium on the Future of Legal Scholarship.  ...

Professor Hessick lobbed the first volley on Profsblawg.  Hessick rejected the notion that law review articles are too long or that the investment in writing them could better be placed in alternative formats like blog posts.

Segall responded on Dorf on Law.  He criticized the notion that longer law review articles communicate more information than shorter ones given the obscene amount of footnoting.  He also called into question the hierarchical nature of law review placements.

On Twitter, Hessick responded to some of my own concerns by suggesting that professors are better able to position themselves as experts if they have written law review articles on the topic, or if they have serious practice experience.  ...

I think that there are some serious problems with law reviews, and they do not have to do with the size of the articles.  The problems with law reviews have to do with how articles are selected, the hierarchy’s meaning for people’s careers, and the true value of the scholarship endeavor.  So let me add a few ideas to this Scholarly Debate on Non-Scholarly Fora about the meaning of Scholarship.

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May 2, 2018 in Scholarship, Tax | Permalink | Comments (2)

Tuesday, May 1, 2018

Friedman: Fixing Law Reviews

Harvard Law ReviewBarry Friedman (NYU), Fixing Law Reviews, 67 Duke L.J. 1297 (2018):

Very few people are happy at present with the law review publishing process, from article submission and selection to editing. Complaints are longstanding, and similar ones emerge from faculty and students alike. Yet, heretofore, change has not occurred. Instead, we are locked in our ugly world of submit and expedite, stepping on the toes of numerous student editors in the process. And the editing process falls far short of ideal.

This Article recommends wholesale change to the submission and editing process.

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May 1, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

Monday, April 30, 2018

Oh: Are Progressive Tax Rates Progressive Policy?

Jason Oh (UCLA), Are Progressive Tax Rates Progressive Policy?, 92 NYU L. Rev. 1909 (2017):

Why do income tax systems across the world consistently feature progressive marginal rates? The existing literature tells a political story focusing on the top of the rate schedule and the preferences of the poor and middle class. According to this standard view, higher rates at the top result from the poor and middle class using the political process to “soak the rich.” However, this explanation is inconsistent with research showing that public policy is generally more responsive to the preferences of the rich. Explaining marginal rate progressivity as a universal (and exceptional) triumph of the poor and middle class rings hollow.

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April 30, 2018 in Scholarship, Tax | Permalink | Comments (0)

Thomas: What Do Audits Teach Us About Tax Compliance?

Jotwell (Tax) (2016)Kathleen DeLaney Thomas (North Carolina), What Do Audits Teach Us About Tax Compliance? (JOTWELL) (reviewing Taxpayer Advocate Service Research Report, Audits, Identity Theft Investigations, and Taxpayer Attitudes: Evidence from a National Survey (2017)):

For those interested in understanding taxpayer compliance—including what motivates taxpayers to report honestly and how to reduce tax evasion – there is a robust body of empirical and legal literature. A number of economists and lawyers have examined the effect of traditional deterrence mechanisms like audits and penalties, as well as non-economic factors like social normsguilttaxpayer attitudes about how their tax money is spent, and other psychological factors. While this growing body of literature provides a rich description of the myriad of factors that influence tax compliance decisions, our understanding of taxpayer behavior is far from complete, and further study continues to be necessary. In expanding our understanding of taxpayer motivations, one revealing but possibly overlooked resource is the IRS Taxpayer Advocate Service(“TAS”), which each year publishes a number of empirical studies and other reports relevant to tax compliance. The authors of TAS studies are uniquely situated in that they have access to IRS tax return data, which should provide the best evidence of how taxpayers make decisions in the real world.

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April 30, 2018 in Scholarship, Tax | Permalink | Comments (0)

Sunday, April 29, 2018

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some reshuffling of the order of the papers within the Top 5:

  1. [858 Downloads]  Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [358 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  3. [346 Downloads]  Taxing Income Where Value Is Created, by Allison Christians (McGill) & Laurens van Apeldoorn (Leiden)
  4. [326 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  5. [323 Downloads]  Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and the Brazilian Approach, by Flavio Rubinstein (Fundação Getúlio Vargas) & Gustavo Gonçalves Vettori (University of São Paulo)

April 29, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 28, 2018

The Estate Tax After the 2017 Tax Act

Baker InstituteRice University Baker Institute for Public Policy, The Estate Tax After the 2017 Tax Act:

Although Benjamin Franklin once stated that death and taxes are the only certainties in life, the timing of death and the amount of taxes owed are certainly not. The Tax Cuts and Jobs Act of 2017 (TCJA, Pub. L. 115–97) leaves the federal wealth transfer tax system in place, but temporarily doubles the exclusion amount for estate and gift taxes to $11.18 million per individual or $22.36 million per married couple until the end of 2025. In 2026, absent congressional action, the base exclusion amount will revert to $5 million, indexed for inflation. This issue brief examines the implications of this change for taxpayers as well as its impact on federal and state governments.

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April 28, 2018 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Friday, April 27, 2018

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Cauble's Accessible Reliable Tax Advice

This week, Erin Scharff (Arizona State) reviews a new article by Emily Cauble (DePaul), Accessible Reliable Tax Advice, 51 U. Mich. J. L. Ref. 589 (2018):

Scharff (2017)The U.S. legal system requires all parties, both sophisticated and unsophisticated, to navigate its shoals.  Sometimes the results are tragic, as preschoolers must represent themselves in immigration court. (John Oliver was quick to find some humor in this absurdity.)  But even in less extreme examples, non-experts can find themselves thwarted, confused, and frustrated in their attempts to comply with the law or assert their legal rights.  For example, victims of sexual harassment and discrimination in the workforce report difficulties navigating complex reporting processes.    Lawyers and other specialists provide guidance to a small subset of this population, but those without access to experts are quite obviously disadvantaged.

Tax law, of course, is a quintessential example of a complicated system of legal rules enforced against both sophisticated and unsophisticated parties.  Emily Cauble’s latest article, Accessible Reliable Tax Advice, explores the challenges confronting unsophisticated taxpayers as they prepare their returns and seek tax advice and offers some suggestions to improve the situation.

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April 27, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Thursday, April 26, 2018

Barker: Tax, Facts, And State Law

William B. Barker (Penn State), The Disconnect Between Tax Concepts and the World of Fact: State Law as the Gatekeeper, 57 Washburn L.J. 129 (2018):

Because private law establishes a system that makes economic enterprise possible, one ordinarily can presume that taxpayers chose a particular legal form in order to achieve fairly well-understood economic effects. Where legislatures decide to impose different tax consequences on the basis of different economic consequences, it is logical that the legislature would often use a shorthand reference to private law categories due to their usual economic consequences. Sometimes, however, private law can be out of sync with important aspects of economic and social conditions that may be critical to the goals of taxation. After all, private law assessment is only one perspective on human activity. On its own, private law can hardly provide comprehensive knowledge of the full richness of human activity which may be necessary for fair and equitable taxation. Tax interpretation has other non-legal sources of knowledge available which can complete the picture more in accord with policies and goals of tax incidence. In part, these differences in private and tax law’s objectives can be seen by observing how the interpretation and application of tax concepts to the facts of the taxpayer’s situation demonstrates that tax law shifts between accurate and inaccurate depictions of economic conditions.

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April 26, 2018 in Scholarship, Tax | Permalink | Comments (1)

Oh & Zolt: Wealth Tax Add-Ons — An Alternative To Comprehensive Wealth Taxes

Jason Oh (UCLA) & Eric M. Zolt (UCLA), Wealth Tax Add-Ons: An Alternative to Comprehensive Wealth Taxes, 158 Tax Notes 1613 (Mar. 19, 2018):

Comprehensive wealth taxes offer the possibility of reducing inequality while raising revenue. However, implementing comprehensive wealth taxes can be difficult, especially in emerging economies where administrative and political limitations are often substantial. This Article offers an alternative set of instruments — wealth tax add-ons — that countries can use to achieve many of the goals of a comprehensive wealth tax. Rather than trying to tax all wealth with a new tax instrument, add-ons would target and tax particular forms of wealth and be attached to existing tax systems. This Article focuses on three different types of add-ons: (1) a surtax on real property for the property tax system, (2) a minimum tax for closely-held businesses for the corporate tax system, and (3) a Netherlands-style presumptive tax for financial assets for the personal income tax system. Add-ons can improve the taxation of disparate forms of wealth in ways that are difficult to incorporate into a single instrument. For example, we argue that wealth in the form of closely-held businesses is best taxed at the entity level to avoid the problems of attribution and valuing minority interests — challenges that would face any comprehensive wealth tax applied at the individual level.

This Article presents an analytical framework for how particular countries might pick and tailor these wealth tax add-ons.

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April 26, 2018 in Scholarship, Tax | Permalink | Comments (0)

Liscow: Distributional Impacts From School Finance Litigation

Zachary D. Liscow (Yale), Are Court Orders Sticky? Evidence on Distributional Impacts from School Finance Litigation, 15 J. Empirical Legal Stud. 4 (2018):

Whether welfare analysis of legal rule changes should evaluate distributional outcomes as well as efficiency depends crucially on how much their distributional impacts stick. That is, do court mandates ultimately affect the distribution of taxes and spending or do legislatures offset the distributional consequences of those court orders with other changes? Little is known about this question. To offer insight into it, I use an event study methodology to show how state revenues and expenditures respond to court orders to increase funding for schools.

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April 26, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 25, 2018

Brooks Reviews Tillotson's The Citizen-Taxpayer And The Rise Of Canadian Democracy

Jotwell (Tax) (2016)Kim Brooks (Schulich School of Law), Canadians Can Be Unruly, See For Yourself (JOTWELL) (reviewing Shirley Tillotson (Dalhousie University), Give and Take: The Citizen-Taxpayer and the Rise of Canadian Democracy (2017)):

Some of my favourite tax scholarship steps outside technical detail and speaks to how tax systems promote or are informed by higher-order values. So, I welcome Shirley Tillotson’s magnificent and richly researched new book on the era between the enactment of Canada’s federal income tax law in 1917 and its heady 1960s reform period, which saw taxpayer-citizens actively debating the contours of democracy through the vehicle of tax reform. At its heart, the book is about what we can learn about democracy from our engagement with taxation and how our democracy can be enhanced when we find ourselves talking about taxes over coffee. ...

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April 25, 2018 in Scholarship, Tax | Permalink | Comments (0)

Maynard: The NCAA Infringes On The Freedom Of Families

NCAA LogoGoldburn P. Maynard Jr. (Louisville), They’re Watching You: How the NCAA Infringes on the Freedom of Families, 2018 Wis. L. Rev. Forward 1:

The NCAA’s surveillance of the family and enforcement of its rules amounts to a consumption restraint on the families of talented NCAA athletes. In order to keep its cartel in place, the NCAA must ensure that not only an athlete but anyone in his family does not extract any value from his talent. These rules disproportionately disadvantage poor individuals of color.

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April 25, 2018 in Scholarship, Tax | Permalink | Comments (0)

Browde: A Consumer Protection Rationale For Regulation Of Tax Return Preparers

Pippa Browde (Montana), A Consumer Protection Rationale for Regulation of Tax Return Preparers, 101 Marq. L. Rev. 527 (2017):

Of the 150 million tax returns filed each year, approximately fifty-six percent are prepared with the help ofa paid preparer. Although state-licensed lawyers and certified public accountants may prepare tax returns for clients, the vast majority ofpaid tax return preparers are completely unregulated. For low-income taxpayers who are eligible for refundable tax credits, these unregulated tax return preparers do more than just fill out tax returns. Return preparers who serve low-income taxpayers often also market consumer credit products, such as refund anticipation loans or checks.

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April 25, 2018 in Scholarship, Tax | Permalink | Comments (0)

Graetz: The 2017 Tax Cuts — How Polarized Politics Produced Precarious Policy

Michael J. Graetz (Columbia), The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy:

In this lecture, Michael Graetz contends that the new tax law is unstable. This is hardly surprising because it was rushed through Congress in record time with only Republican votes and no ability for public comments on its changes. The new rules create significant new differences in tax burdens based on what kind of business is conducted, where goods and services are bought and sold, whether individual workers are employees or independent contractors, and where people live.

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April 25, 2018 in Scholarship, Tax | Permalink | Comments (1)