TaxProf Blog

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

Friday, March 23, 2018

Marian: Is All Corporate Tax Planning Good For Shareholders?

Omri Y. Marian (UC-Irvine), Is All Corporate Tax Planning Good for Shareholders?, 52 U.C. Davis L. Rev. ___ (2018):

Does corporate tax planning benefit shareholders? The prevalent assumption is that it does, because lower corporate tax burden translates to enhanced shareholder value. In this article, I explain why this common perception is sometimes incorrect in practice. In many cases, successful (and legal) corporate tax planning schemes are not Pareto-optimal: some shareholders may see a net benefit, while others experience a net loss. Moreover, in certain instances it is reasonable to expect that legal corporate tax planning will be Kaldor-Hicks inefficient. Meaning, the financial losses incurred by some shareholders exceed the gains to others.

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March 23, 2018 in Scholarship, Tax | Permalink | Comments (0)

Thursday, March 22, 2018

Satterthwaite Presents Electing Into A Value-Added Tax Today At Indiana

SatterthwaiteEmily Satterthwaite (Toronto) presents Electing into a Value-Added Tax: Evidence from Ontario Micro-Entrepreneurs at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Across countries, value-added tax (VAT) statutes typically recognize the disproportionate burden of VAT compliance for smaller firms by exempting “small suppliers” (defined as businesses with annual revenues less than a specified registration threshold) from the obligation to register for, collect, and remit VAT on their sales.  But most input-credit-style VATs also offer small suppliers a curious choice: they can elect into the VAT by voluntarily registering.  Because VAT paid on inputs is refundable for registered firms, small suppliers have stronger incentives to voluntarily register as they (1) purchase more of their inputs from registered firms (the “input channel”) or (2) sell more of their output to registered firms (the “customer channel”).  In theory, these “formality chain effects” can improve the efficiency of a VAT.  In practice, however, many VATs feature registration thresholds that are far lower in dollar terms than recommended by economists.  Where a registration threshold is very low, might microenterprises’ high VAT compliance costs weaken their incentives to voluntarily register, thereby undermining the policy rationale for offering the election?  This paper uses qualitative and quantitative research methods to explore the relevance of the formality chain effect theory in the context of a low registration threshold.

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March 22, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Morse: Government-To-Robot Enforcement

Susan C. Morse (Texas), Government-to-Robot Enforcement, 2018 U. Ill. L. Rev. ___:

Automated legal systems occupy a central place in the administration of most regulatory regimes. Examples include TurboTax, wage and hour software, and self-driving cars. These systems produce results which invite examination and adjudication on a centralized, ex post basis. This is revolutionary. It means that the content of law, which technically applies to individual regulated parties, is determined centrally by interactions between the government and firms that make automated legal systems. I call this trend government-to-robot enforcement.

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March 22, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, March 21, 2018

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 15, No. 1 (2017):

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

Stewart: Redistribution Between Rich And Poor Countries

Miranda Stewart (Australian National University), Redistribution Between Rich and Poor Countries:

The topic of redistribution between rich and poor countries opens a can of worms. This paper first inquires into what we mean by some of these words and second, considers the role of taxation in redistribution. It briefly considers the various modes of redistribution to address poverty and inequality, including the role of taxation, within a country before turning to consider modes of redistribution between rich and poor countries. The paper then turns to consider whether we are asking the right question. Should the question, really, be about redistribution between rich and poor people? In an increasingly global and digital era, how might we reconsider the role of taxation in achieving this?

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

Taxing & Zapping Marijuana: Blockchain Compliance In The Trump Administration

Richard Ainsworth (Boston University) & Brendan Magauran, Taxing & Zapping Marijuana: Blockchain Compliance in the Trump Administration:

On January 4, 2018, the Trump Administration through Attorney General Sessions rescinded an Obama-era policy that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases under the federal Controlled Substances Act, as well as under the Bank Secrecy Act. Federal law is at odds with state law in the majority of states on the legalization and subsequent state taxation of marijuana. Twenty-eight states and the District of Columbia have at least partially legalized marijuana. Eight of these states have legalized both medicinal and recreational use. With limited exceptions, legalized sales of marijuana are taxed.

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

The Marital Wealth Gap

Erez Aloni (British Columbia), The Marital Wealth Gap, 93 Wash. L. Rev. ___ (2018):

Married couples are wealthier than people in all other family structures. The top 10% of wealth holders are, in great proportion, married. Even among the wealthiest households, married couples hold significantly more wealth than others. The Article identifies this phenomenon as the “Marital Wealth Gap,” and critiques the role of diverse legal mechanisms in creating and maintaining it. Marriage also contributes to the concentration of wealth because marriage patterns are increasingly assortative: wealth marries wealth. The law entrenches or even exacerbates these class-based marriage patterns by erecting structural barriers that hinder people from meeting across economic strata.

Table 1

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March 21, 2018 in Scholarship, Tax | Permalink | Comments (2)

Tuesday, March 20, 2018

De Simone Presents Repatriation Taxes And Foreign Cash Holdings: The Impact Of Anticipated Tax Reform Today At NYU

De Simone (2018)Lisa De Simone (Stanford) presents Repatriation Taxes and Foreign Cash Holdings: The Impact of Anticipated Tax Reform (with Joseph Piotroski (Stanford) & Rimmy Tomy (Chicago)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

We examine whether anticipation of a repatriation tax reduction affects the amount of cash U.S. multinational corporations (MNCs) hold overseas. We find that U.S. MNCs most likely to benefit from a repatriation tax reduction accumulated significant cash holdings once Congress proposed legislation, at the expense of reduced shareholder payouts, relative to firms unlikely to benefit. This behavior was accompanied by complementary activities designed to maximize expected tax benefits. We contribute to the literature on how firms respond to taxinduced incentives, provide a new explanation for U.S. MNC cash holding growth, and raise questions about the consequences of U.S. tax reform.

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March 20, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Goldin Presents Complexity And Take-Up Of The Earned Income Tax Credit Today At Georgetown

Goldin (2017)Jacob Goldin (Stanford) presents Tax Benefit Complexity and Take-Up of the Earned Income Tax Credit at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

Tax benefits like the Earned Income Tax Credit (EITC) represent an important source of income to their recipients, but millions of those who are eligible to claim tax benefits fail to do so. One possible explanation is that the rules governing most tax benefits are extraordinarily complex. I consider efforts to increase tax benefit take-up in light of this complexity. A key fact in thinking about this issue is that the vast majority of tax filers today prepare their taxes with assisted preparation methods (APMs) like software or professional assistance. Because APMs eliminate most of the barriers to claiming tax benefits for which one is eligible, I ague that efforts to increase benefit take-up should focus on inducing benefit-eligible individuals to file a tax return using an APM. In contrast, efforts aimed at increasing awareness of a benefit (of the type widely employed by governments and nonprofits) are less likely to be successful, except to the extent they themselves induce an increase in tax filing.

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March 20, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mann Presents I Robot: U Tax? Today In Australia

Mann (2018)Roberta Mann (Oregon) presents I Robot: U Tax? today at Australian National University:

In a 2017 interview, Microsoft founder Bill Gates recommended taxing robots to slow the pace of automation. Funds raised could be used to retrain and financially support displaced workers. Up to 47 per cent of US jobs are at risk by advancements in artificial intelligence. Low-wage workers currently hold a majority of those at-risk jobs. Increased automation is likely to exacerbate income inequality.

While employment changes due to automation are not new, advances in artificial intelligence threaten many more jobs much more quickly than historic automation did. When considering how to tax job replacing robots, we should think about the broader purpose of a tax system. Taxes raise revenue, but for whom?

The informal title of the most recent tax bill gives a clue: The Tax Cuts and Jobs Act (TCJA).

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March 20, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Top 100 Law Schools, Based On 5-, 10-, And 15-Year Rolling Average U.S. News Rankings

Bradley A. Areheart (Tennessee), The Top 100 Law Reviews: A Reference Guide Based on Historical USNWR Data:

The best proxy for how other law professors react and respond to publishing in main, or flagship, law reviews is the US News and World Report (USNWR) rankings. This paper utilizes historical USNWR data to rank the top 100 law reviews. The USNWR rankings are important in shaping many – if not most – law professors’ perceptions about the relative strength of a law school (and derivatively, the home law review). This document contains a chart that is sorted by the 10-year rolling average for each school, but it also contains the 5-year and 15-year rolling averages. This paper also describes my methodology and responds to a series of frequently asked questions. The document was updated in March 2018.


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March 20, 2018 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

Newman Responds To Drennan's Conspicuous Philanthropy

Joel S. Newman (Wake Forest), Conspicuous Philanthropy: A Response, Am. U. L. F. 1 (2018):

In his Article [Conspicuous Philanthropy: Reconciling Contract and Tax Laws, 66 Am. U. L. Rev. 1323 (2017)], Professor Drennan notes that naming rights often have significant value. Therefore, he reasons that, when charitable contributions are made, the value of such naming rights should be subtracted from the amount of the contribution. Only the excess should be a tax-deductible contribution, and the burden should be on the donor to show that such an excess exists. To make this proposal work, there must be a way to determine (1) which categories of naming rights might be significant benefits; and (2) how such benefits can be valued.

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

Monday, March 19, 2018

Hemel Presents The Death And Life Of The State And Local Tax Deduction Today At BYU

HemelDaniel Hemel (Chicago) presents The Death and Life of the State and Local Tax Deduction at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

The December 2017 U.S. tax law imposed stringent limits on the deduction for state and local taxes (SALT). But the new law does not necessarily spell SALT’s demise. Several states are poised to enact statutes that could restore the SALT deduction for some of their residents and extend it to others who never claimed the deduction before. Ironically, the effort to kill the SALT deduction as part of the December 2017 tax law may have the unintended consequence of spurring states to enact reforms that effectively expand the deduction’s scope.

This essay takes stock of SALT’s history and offers a tentative forecast as to its future.  It casts the recent rollback of SALT as the culmination of a seven-decade trend of successive SALT limitations, which even before 2017 had put the SALT deduction effectively out of reach for more than two-thirds of the taxpaying public.

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March 19, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Hemel: The Living Anti-Injunction Act

Daniel Hemel (Chicago), The Living Anti-Injunction Act, 104 Va. L. Rev. Online 74 (2018):

For decades, individuals and entities wishing to contest their federal tax liabilities have had a choice among three paths. First, they could file a prepayment petition in the U.S. Tax Court. Second, they could pay the tax and then sue for a refund in their local federal district court. Third, they could pay the tax and then file for a refund in the U.S. Court of Federal Claims. What they could not do is seek an injunction preventing the Internal Revenue Service from assessing or collecting the tax in question. Standing in their way would be the Anti-Injunction Act (AIA), which provides (in relevant part) that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” But all that is now in doubt. In 2017, a federal district court in Texas held that the AIA did not bar the U.S. Chamber of Commerce from bringing a pre-enforcement challenge to an Obama administration regulation that specified the circumstances under which domestic companies that seek to move their legal domicile overseas will be subject to a targeted tax on inversion gain. As far as judicial decisions on matters of tax procedure go, this one was a bombshell, with commentators noting that the holding breaks from decades of judicial precedent and opens the door to more challenges to IRS rules. The IRS is now contesting the district court’s ruling in a closely watched appeal to the Fifth Circuit.

In a though-provoking and comprehensive article [Restoring the Lost Anti-Injunction Act, 103 Va. L. Rev. 1683 (2017)], Kristin Hickman and Gerald Kerska argue that the district court’s holding in the Chamber of Commerce case is largely consistent with the “lost” history of the AIA.

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March 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

Morse: Seeking Comparables In Patent And Tax

Susan C. Morse (Texas), Seeking Comparables in Patent and Tax, 37 Rev. Litig Brief ___ (2018):

In their Article, Tax Solutions to Patent Damages, Jennifer Blouin and Melissa Wasserman argue that tax transfer prices can provide data to help calculate patent litigation damages. But tax transfer prices are imperfect for reasons of theory, doctrine, taxpayer and government incentives, and enforcement constraints. A court that relies on tax transfer prices to help set patent damage awards takes on the herculean task of analyzing many subtle contextual factors in two intricate regulatory systems, patent and tax.

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March 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

Sunday, March 18, 2018

Cockfield: Taxing Global Digital Commerce In A Post-BEPS World

Arthur J. Cockfield (Queen's University), Taxing Global Digital Commerce in a Post-BEPS World:

This chapter evaluates the recent OECD Base Erosion and Profit Shifting (BEPS) initiative directed at global digital income, and concludes that tax planning will not be inhibited by any significant extent.

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March 18, 2018 in 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 a new #1 paper and new papers debuting on the list at #4 and #5:

  1. [1059 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  2. [738 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane Ring (Boston College)
  3. [402 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Bradley Borden (Brooklyn)
  4. [265 Downloads]  The Elephant Always Forgets: U.S. Tax Reform and the WTO, by Reuven Avi-Yonah (Michigan) & Martin Vallespinos (S.J.D. 2018, Michigan)
  5. [260 Downloads]  Beat It: Tax Reform and Tax Treaties, by Reuven Avi-Yonah (Michigan)

March 18, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (1)

Saturday, March 17, 2018

How Much Time Does It Take to Write a Law Review Article? 250-500 Hours

Robert Anderson (Pepperdine), How Much Time Does It Take to Write a Law Review Article?:

How long does it take to write a law review article? This question sometimes arises as law faculties balance the competing expectations of teaching, service, and scholarship. ...

In an attempt to develop some back-of-the-envelope estimates on the amount of time to write a law review article, I ran the following poll on Twitter. The poll received 246 votes and the results appear to reflect a fairly surprising degree of consensus. 


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March 17, 2018 in Legal Education, Scholarship | Permalink | Comments (4)

Friday, March 16, 2018

Lawsky Presents A Logic For Statutes And Formalizing The Code Today At Florida

Lawsky (2017)Sarah Lawsky (Northwestern) presents A Logic for Statutes, 21 Fla. Tax Rev. ___ (2018), Formalizing the Code, 70 Tax L. Rev. 377 (2017), at Florida today as part of its Graduate Tax Speaker Series:

A Logic for Statutes:

Case-based reasoning is, without question, a puzzle. When students are taught to “think like lawyers” in their first year of law school, they are taught case-based common-law reasoning. Books on legal reasoning are devoted almost entirely to the topic. How do courts reason from one case to the next? Is case-based reasoning reasoning from analogy? How should case-based reasoning be modeled? How can it be justified?

In contrast, rule-based legal reasoning (as exemplified in much statutory reasoning) is taken as simple in legal scholarship. Statutory interpretation — how to determine the meaning of words in a statute, the relevance of the lawmakers’ intent, and so forth — is much discussed, but there is little treatment of the structure of statutory reasoning once the meaning of the words is established. Once the meaning of terms is established, statutory reasoning is considered, roughly speaking, to be deductive reasoning.

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

Weekly SSRN Tax Article Review And Roundup: Scharff Reviews Satterthwaite's Smallness And The VAT

This week, Erin Scharff (Arizona State) reviews a new article by Emily Ann Satterthwaite (Toronto), On the Threshold: Smallness and the Value-Added Tax, 9 Colum. J. Tax L. ___ (2018):

Scharff (2017)Emily Satterthwaite’s latest article explores the ways tax law should reflect the needs (and especially the relatively high-compliance costs) of small businesses. Her focus is on Value-Added Taxes (VATs) and, in particular, on the VAT exemption threshold.  

Though there is widespread expert agreement that VATs should exempt small firms, there is significant variation in the VAT thresholds, particularly among developing countries. Further, exemption thresholds are often set much lower than what VAT experts have recommended for optimal efficiency. Satterthwaite’s article argues that this expert recommendation not only advances efficiency goals, but would also improve distributional equity.

Satterthwaite does yeomen’s work in making her argument accessible, particularly to U.S. readers who might be less familiar with the way VATs operate, and the first part of her article is an excellent and highly accessible introduction to VATs and its relative advantages over cascading turnover taxes and retail sales taxes. 

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March 16, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Corporate Tax Avoidance And Honoring The Fiduciary Duties Owed To Corporation And Its Stockholders

Eric C. Chaffee (Toledo) & Karie Davis-Nozemack (Georgia Tech), Corporate Tax Avoidance and Honoring the Fiduciary Duties Owed to Corporation and Its Stockholders, 58 B.C. L. Rev. 1425 (2017):

Corporate tax avoidance is a pressing issue of both national and international concern. In recent years, the tax strategies of Apple, Facebook, Pfizer, Starbucks, and numerous other corporations have reminded the public that firms regularly undertake highly aggressive tax strategies to minimize their corporate taxes. Corporations often claim that they are legally required to engage in these aggressive strategies. But this article proves that claim is utterly and completely incorrect when based upon the fiduciary duties owed to the corporation and its stockholders.

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

What to Teach Law Students About Artificial Intelligence and Law?

Harry Surden (Colorado), What to Teach Law Students About Artificial Intelligence and Law?, 112 Nw. U. L. Rev. Online ___ (2018):

It is helpful to provide law students with a basic understanding of the current state of artificial intelligence (AI) and its likely near-term impact on law. With this knowledge, students can orient their careers to avoid those legal positions that are most vulnerable to automation and focus instead on activities for which their legal training and cognitive abilities provide the most value for clients.

March 16, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

Galle: Kill Quill, Keep The Dormant Commerce Clause — History's Lessons On Congressional Control Of State Taxation

Brian D. Galle (Georgetown), Kill Quill, Keep the Dormant Commerce Clause: History's Lessons on Congressional Control of State Taxation, 70 Stan. L. Rev. Online 158 (2018):

The world of internet commerce was shaken to its foundations in January this year, when the Supreme Court agreed to reconsider its landmark holding in Quill Corp. v. N. Dakota. For more than twenty-five years, Quill has barred states from imposing tax-collection obligations on retailers lacking “physical presence” in the taxing state. As a practical matter, this has meant that internet retailers with no employees or facilities in a state can sell into the state without collecting the sales taxes that local retailers must. In this Essay, I’ll argue that original historical evidence I’ve collected suggests that the political economy premises on which Quill rests are fundamentally mistaken. But I believe that same evidence should lead the Court to keep in place the larger body of “Dormant Commerce Clause” jurisprudence from which Quill first sprung.

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

Thursday, March 15, 2018

Glogower Presents Taxing Inequality Today At UCLA

Glogower (2016)Ari Glogower (Ohio State) presents Taxing Inequality on Friday as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

Economic inequality in the United States is now approaching historic levels last seen in the years leading up to the Great Depression. Scholars have long argued that the federal income tax alone cannot curtail rising inequality and that we should look beyond the income tax to a wealth tax. Taxing wealth also faces two central and resilient objections in the literature: A wealth tax penalizes savings and overlaps with a tax on capital income.

This Article moves beyond this stalemate to redefine the role of wealth in a progressive tax system. The argument proceeds in three main parts. The Article first interrogates the justifications in the literature for a wealth tax and introduces a new justification grounded in the relative economic power theory which explains how inequality generates social and political harm. This theory formalizes the problem of inequality and has specific implications for the way that economic inequality should be measured and constrained. In particular, this theory implies that economic inequality should be measured by differences in economic spending power during the taxing period.

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March 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Rossi: Carbon Taxation By Regulation

Jim Rossi (Vanderbilt), Carbon Taxation by Regulation, 102 Minn. L. Rev. 277 (2017):

This Article argues that, even though a carbon tax remains politically elusive, “carbon taxation by regulation” has begun to flourish as a way of financing carbon reduction. For more than a century, energy rate setting has been used to promote public good and redistributive goals, akin to general financial taxation. Various non-tax subsidies in customer energy rates have enormous untapped potential for promoting low-carbon sources of energy, while also balancing broader economic and social welfare goals.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

Cauble: Tax Law's Loss Obsession

Emily Cauble (DePaul), Tax Law's Loss Obsession, 2018 Utah L. Rev. ___ :

This Article will address tax law’s inconsistent treatment of gains and losses – focusing in particular on certain instances in which a taxpayer is prevented from shifting a built-in loss to another taxpayer but would be allowed to shift a built-in gain to another taxpayer. The article will explore whether any legitimate justification can explain the inconsistency.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

Christians: Tax And The Immigrant Investor

Allison Christians (McGill), Jumping the Line or Out of the Net? Tax and the Immigrant Investor, 88 Tax Notes Int'l 357 (Oct. 23, 2017):

Many countries seek to attract wealthy individuals — their capital, if not actually themselves — with programs that confer residence or citizenship in exchange for specified investments in local property or business ventures. Some programs simply facilitate jumping the immigration line, while other facilitate jumping out of the tax net in one country to land in another potentially more favorable.

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March 15, 2018 in Scholarship, Tax | Permalink | Comments (0)

Kleinbard: Perversion Of The Tax Policymaking Process

Wednesday, March 14, 2018

Crawford Presents Tax Talk And Reproductive Technology Today At Toronto

Crawford (2018)Bridget Crawford (Pace) presents Tax Talk and Reproductive Technology at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

What do the busiest fertility clinics in the United States communicate to their clients about the tax consequences of so-called human egg “donation”? As in Canada, the purchase of human ova is illegal in the United States. Nevertheless, it is an open and common practice for an egg providers, aided by a fertility clinic, to contract with intended parents for substantial remuneration. How do egg providers understand their remuneration vis-a-vis the tax system? How does that understanding square with existing tax laws in the U.S. and Canada? Through a content analysis of publicly-available websites and internet message boards, this paper examines the tax information that U.S. fertility clinics and doctors make available to patients, as well as the information that compensated egg providers share with each other. The paper demonstrates that correct and reliable tax information is in short supply, and there is a need for clear administrative or judicial guidance.

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March 14, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wallace: Congressional Control Of Tax Rulemaking

Tax Law ReviewClint Wallace (South Carolina), Congressional Control of Tax Rulemaking, 71 Tax L. Rev. ___ (2018):

The notice and comment process is often touted as a mechanism for establishing political accountability, and providing a check on agency decision-making. Based on a survey of three years of recently proposed tax regulations, this Article shows that many notice-and-comment processes for tax regulations have been ineffective for these purposes. Fully one-third of the time, no one participated. The few participants there are have been heavily weighted towards private interests, which commented on approximately two-thirds of all proposed regulations from 2013 through 2015. In contrast, public interest groups commented on less than 24% of proposed regulations. If the notice and comment process almost always fails to meet the ideal of robust and diverse participation, who is accountable for tax regulations?

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March 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

Mason: EU State Aid

Ruth Mason (Virgina), EU State Aid:

March 14, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, March 13, 2018

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 37, No. 1 (Fall 2017):

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March 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

Satterthwaite: Smallness And The Value-Added Tax

Columbia Journal of Tax Law LogoEmily Satterthwaite (Toronto), On the Threshold: Smallness and the Value-Added Tax, 9 Colum. J. Tax L. ___ (2018):

Three-quarters of the world’s population live in a country in which a value-added tax (VAT) is collected on sales of goods and services. The registration threshold determines which businesses — typically as measured by their annual revenues — remain exempt from the obligation to register for and collect VAT on their sales. Among VAT economists, there is broad consensus that setting thresholds higher rather than lower (such that more rather than fewer businesses are exempt) increases the economic efficiency of a VAT. Despite these high stakes and the longstanding expert consensus in favor of high thresholds, real-world thresholds vary widely and skew low, even within OECD and European countries. This article leverages the insights of the economic model to address an issue that lies outside of it but is central to lawyers and policymakers: distributional equity.

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March 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

A Law And Economics Critique Of The Law Review System

Timothy T. Lau (Federal Judicial Center), A Law and Economics Critique of the Law Review System, 55 Duq. L. Rev. 369 (2017):

The law review system prizes placement of articles in highlyranked journals, and the optimum method to ensure the best placement, which many scholars have intuited, is a saturation submission strategy of submitting articles to as many journals as possible. However, there has neither been an explanation as to what incentivizes this submission strategy nor any analysis as to what happens to scholars who cannot afford this strategy. This article uses a law and economics approach to study the incentive structures of the law review system, and identifies two features of the system that encourage saturation submission and punishes the poorly-resourced: (a) journals have no availability to accept all articles of equal quality; and (b) there is an insufficient match between acceptance and journal ranking.

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March 13, 2018 in Legal Education, Scholarship | Permalink | Comments (0)

Zelenak: Congress, Treasury, And The Design Of The Early Modern Income Tax

LZelenakawrence Zelenak (Duke), Figuring Out the Tax: Congress, Treasury, and the Design of the Early Modern Income Tax (Cambridge University Press 2018):

Figuring Out the Tax recounts the forgotten early development of the federal income tax in the US, resulting from the interplay between Congress and the Treasury Department in the decades following the enactment of the tax in 1913. It covers a wide range of topics including the income tax treatments of marriage, capital losses, charitable contributions and homeownership, as well as the rise, demise and resurrection of income tax withholding. Lawrence Zelenak deftly illustrates how the income tax achieved its current form through a range of stories which are new to tax history scholarship and involve some remarkable personalities and surprising plot twists. Although of particular interest to tax academics and professionals, this book will also serve as a useful introduction to the development of income tax for undergraduate students and law students.

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March 13, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Monday, March 12, 2018

Thomas Presents Taxing The Gig Economy Today At UC-Irvine

Thomas (2017)Kathleen Delaney Thomas (North Carolina) presents Taxing the Gig Economy,  166 U. Pa. L. Rev. ___ (2017), at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce compliance burdens for this new generation of business owners, while simultaneously enhancing the government’s ability to collect tax revenue.

First, Congress should create a “non-employee withholding” regime that would allow online platform companies such as Uber to withhold taxes for their workers without being classified as employers. Second, the Article proposes a “standard business deduction” for gig workers, which would eliminate the need to track and report business expenses.

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March 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Christians Presents Taxing Income Where Value Is Created Today At BYU

Christians (2018)Allison Christians (McGill) presents Taxing Income Where Value Is Created, 21 Fla. Tax Rev. ___ (2018) (with Laurens van Apeldoorn (Leiden)) at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Subscribing to the core idea that income should be taxed where value is created, the international community has devised a set of tax base protecting rules to counter a world in which highly profitable multinational companies like Apple, Google, and Amazon pay very little in taxation. But these rules rely on assumptions about value that tend to allocate most revenues from international trade and commerce to rich countries while, whether intentionally or not, depriving poorer countries of their proper share. This article argues that a rigorous examination of what we mean by value would prompt changes in this allocation.

To demonstrate with a concrete example, the article examines wages paid to workers in low income countries and reveals a clear and well-documented gap between market price and fair market value resulting from labor exploitation.

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March 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Sunday, March 11, 2018

Kahrl Presents Lien On Me: Race, Power, And The Property Tax At UCLA

KahlrAndrew Kahrl (Virginia) presented Lien On Me: Race, Power, and the Property Tax at UCLA on Friday as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Kirk Stark:

This paper forms part of a larger book project I am currently completing on the taxation of black Americans from Reconstruction to the present. The project focuses specifically on the property tax and examines its role in shaping—and frustrating—African Americans’ struggles for political and economic empowerment, and claims to property rights, during the long Black freedom movement. Because of the opaque nature of the assessment process, the legal barriers to uncovering and challenging assessment irregularities, and the harsh penalties for tax delinquency in many states, the property tax, I argue, became a powerful instrument of white homeowner advantage, on the one hand, and racial discrimination and black property dispossession, on the other.

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March 11, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Top Five New Tax Papers

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

  1. [32,717 Downloads]  The Games They Will Play: An Update on the Conference Committee Tax Bill, by Ari Glogower (Ohio State), David Kamin (NYU), Rebecca Kysar (Brooklyn) & Darien Shanske (UC-Davis) et al.
  2. [1983 Downloads]  Understanding the Tax Cuts and Jobs Act, by Sam Donaldson (Georgia State)
  3. [1059 Downloads]  Federal Income Tax Treatment of Charitable Contributions Entitling Donor to a State Tax Credit, by Joseph Bankman (Stanford), David Gamage (Indiana), Jacob Goldin (Stanford) & Daniel Hemel (Chicago) et al.
  4. [720 Downloads]  Is New Code Section 199A Really Going to Turn Us All into Independent Contractors?, by Shu-Yi Oei (Boston College) & Diane Ring (Boston College)
  5. [359 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Bradley Borden (Brooklyn)

March 11, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, March 9, 2018

Weekly SSRN Tax Article Review And Roundup: Mazur Reviews Thimmesch’s Nexus And The Dormant Commerce Clause

This week, Orly Mazur (SMU) reviews a new work by Adam B. Thimmesch (Nebraska), A Unifying Approach to Nexus Under the Dormant Commerce Clause, 116 Mich. L. Rev. Online ___ (2018).

Mazur (2017-2)Adam Thimmesch’s timely new essay considers whether and how the Supreme Court should regulate a state’s taxing power over online transactions if the Court abolishes the physical presence nexus rule. According to this rule, upheld in the 1992 case, Quill Corp. v. North Dakota, a state cannot collect sales and use taxes from out-of-state vendors unless the vendor has a physical presence in that state. The Supreme Court is set to reexamine the continued validity of the physical presence mandate this year in the case of South Dakota v. Wayfair.

Many legal scholars (including 60 tax professors) and policymakers have urged the Court to take this opportunity to overrule Quill and the physical presence rule and have provided numerous and persuasive reasons to support this position. Adam Thimmesch’s new work contributes to this literature by evaluating what the Court should do if the Court were to abandon the physical presence rule. He concludes that the Court’s best option in Wayfair is to repeal the physical presence rule and not replace it with a different nexus requirement. In other words, Thimmesch argues that a separate jurisdictional rule is not necessary to regulate the state’s ability to tax online transactions.

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March 9, 2018 in Scholarship, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Thursday, March 8, 2018

Schmalbeck Presents Ending The Sweetheart Deal Between Big-Time College Sports And The Tax System Today At Duke

Schmalbeck (2018)Richard Schmalbeck (Duke) presents Ending the Sweetheart Deal between Big-Time College Sports and the Tax System at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

This paper was prepared for a conference of the National Center for Philanthropy and Law, of the NYU Law School in October, 2014. The overall topic was “Tax Issues Affecting Colleges and Universities,” and I was asked to address specifically those issues relating to athletics. This paper considers two specific issues that have in common that they involve college ”revenue” sports, and are plagued by egregiously bad tax rules. In particular, they are: the failure of the IRS to regard any part of the revenue from college sports as unrelated business income, and the choice by Congress to allow taxpayers to deduct 80% of contributions that they make to colleges or their “booster clubs,” even when those contributions entitle the donors to special privileges in purchasing tickets to college athletic events. Together, these defects amount to an implicit tax subsidy of college sports that is neither healthy nor in any way justified.

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

Polsky: Explaining Choice-of-Entity Decisions By Silicon Valley Start-Ups

Gregg D. Polsky (Georgia), Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups:

Perhaps the most fundamental role of a business tax advisor is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most tax practitioners across the United States consistently recommend flow-through entities, such as LLCs and S corporations, to their clients. In contrast, a discrete group of highly sophisticated tax professionals, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially plausible explanations, all of which they ultimately conclude are not wholly persuasive. The puzzle therefore remains.

This article attempts to finally solve the puzzle by examining two factors that have been either vastly underappreciated or completely ignored in the existing literature.

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March 8, 2018 in Scholarship, Tax | Permalink | Comments (1)

Repetti: The Impact Of The 2017 Act's Tax Rate Changes On Choice Of Entity

Florida Tax Review  (2015)James R. Repetti (Boston College), The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, 21 Fla. Tax Rev. ___ (2018):

In an ideal world, the effective tax rates for C corporations and partnerships would be identical and tax rates would not play a role in selecting an entity for conducting a business. Unfortunately, the new statutory rates in the 2017 Tax Act and the 20% § 199A deduction have not leveled the playing field.

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March 8, 2018 in Scholarship, Tax | Permalink | Comments (1)

Wednesday, March 7, 2018

Race, Cognitive Biases, And The Power Of Law Student Teaching Evaluations

Gregory S. Parks (Wake Forest), Race, Cognitive Biases, and the Power of Law Student Teaching Evaluations, 51  U.C. Davis L. Rev. 1039 (2018):

Decades of research shows that students' professor evaluations are influenced by factors well-beyond how knowledgeable the professor was or how effectively they taught. Among those factors is race. While some students' evaluative judgments of professors of color may be motivated by express racial animus, it is doubtful that such is the dominant narrative. Rather, what likely takes place are systematic deviations from rational judgment, whereby inferences about other people and situations are illogically drawn. In short, students' cognitive biases skew how they evaluate professors of color. In this Article, I explore how cognitive biases among law students influence how they perceive and evaluate law faculty of color.

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March 7, 2018 in Legal Education, Scholarship | Permalink | Comments (1)

Cooper: Soldiers With Fortunes? Rethinking The Tax Treatment Of Fallen Combatants

Jeffrey A. Cooper (Quinnipiac), Soldiers with Fortunes?: Rethinking the Tax Treatment of Fallen Combatants, 9 Colum. J. Tax L. 113 (2017):

Section 2201 of the Internal Revenue Code provides a partial estate tax exemption for members of the armed forces who die in, or as a result of, combat operations. In this Article, I explore the origins of this exemption and assess the extent to which it serves three important policy goals: (1) reducing financial and administrative burdens on military families, (2) incentivizing military service, and (3) avoiding the moral hazard of the government being able to “profit” (through increased tax revenues) as a result of combat deaths.

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

Tax Policy Center Hosts Conference Today On Wealth Taxation, Entrepreneurship, And Philanthropy

Tax Polcy Center Logo (2017)The Tax Policy Center hosts a conference today on Wealth Taxation, Entrepreneurship, and Philanthropy (live webcast from 9:00-10:30am EST):

Entrepreneurs strengthen the economy directly by innovating and taking risks, and indirectly through their contributions to philanthropic organizations. The tax code affects entrepreneurial activity and can encourage or stifle an entrepreneur’s philanthropic giving. At this forum, scholars will discuss new research that examines how estate and inheritance taxes affect entrepreneurship and how income and estate taxes affect the very wealthy. A discussion will follow about giving patterns among wealthy entrepreneurs and ways entrepreneurs are engaging in philanthropy in the 21st century.

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March 7, 2018 in Conferences, Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Tuesday, March 6, 2018

Philipps Presents Gendering The Analysis Of Tax Expenditures Today At NYU

PhilipsLisa Philipps (Osgoode Hall) presents Gendering the Analysis of Tax Expenditures: Bridging Two Solitudes in Canadian Fiscal Policy at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

This paper seeks to connect two fiscal policy files that have attracted significant scholarly and public interest in Canada since the 2015 election of a new federal government led by Prime Minister Justin Trudeau. Within a few months the government acted on an election promise by launching a Federal Review of Tax Expenditures. This was followed by a second, less anticipated announcement that it would undertake a gender-based analysis of budget measures. The federal budget of March 2017 included an inaugural Gender Statement, with a commitment to further develop this tool in future. Each of these projects carries important potential for fiscal reform but they have so far unfolded in parallel, conceptually isolated from one another. Our research considers what additional insights could be gained by bringing the two together. How might a gender analysis further illuminate the distributive impacts, behavioural effects and cost efficiency of tax expenditures? And what are the limitations of a gender budgeting exercise that focuses on direct spending measures, without equal attention to the revenue side of the budget and specifically tax expenditures? ...

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March 6, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Solomon Presents Drivers And Effects Of The 2017 Tax Act Today At Georgetown

SolomonEric Solomon (Ernst & Young) presents Drivers and Effects of the 2017 Tax Act at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

On December 22, 2017, the President signed “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (P.L. 115-97), hereinafter called the 2017 Tax Act (or the Act). The 2017 Tax Act made substantial changes to the Internal Revenue Code, particularly lowering the corporate tax rate and revising the international tax provisions. In the words of Mark Prater, Deputy Staff Director and Chief Tax Counsel for the Senate Finance Committee, three important factors in the development of this Act were policy, process and politics.

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March 6, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

More Tax Profs Weigh In On South Dakota v. Wayfair

Following up on this morning's post, 60 Tax Profs File Amicus Brief Urging Supreme Court To Overrule Quill v. North Dakota:

Edward Zelinsky (Cardozo), The Political Process Case to Overturn Quill v. South Dakota:

By deciding to review Wayfair v. South Dakota, the US Supreme Court has thrust itself into the long and contentious debate about the proper tax treatment of internet sales. As I argue [The Political Process Argument for Overruling Quill, 82 Brook. L. Rev. 1177 (2017)], the Court should use this opportunity to overturn Quill v. North Dakota. In light of the relevant political process concerns, the Supreme Court should overrule Quill in the Court’s role as guardian of the states against federal commandeering. ...

Adam B. Thimmesch (Nebraska), A Unifying Approach to Nexus Under the Dormant Commerce Clause, 116 Mich. L. Rev. Online ___ (2018):

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March 6, 2018 in New Cases, Scholarship, Tax | Permalink | Comments (0)

Lucas: Voter Psychology And The Carbon Tax

Gary Lucas, Jr. (Texas A&M), Voter Psychology and the Carbon Tax, 90 Temple L. Rev. 1 (2017):

Economists across the political spectrum argue that a carbon tax is the most effective and economically efficient policy for addressing climate change. Voters, however, strongly oppose the carbon tax and instead favor “green” subsidies and command-and-control regulations. If carefully designed, these policies might complement a carbon tax, but by themselves, they will make global warming mitigation incredibly expensive and perhaps even infeasible. Moreover, if poorly designed, subsidies and regulations can be counterproductive.

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March 6, 2018 in Scholarship, Tax | Permalink | Comments (0)