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Wednesday, November 26, 2014

Hoenig: What's Wrong With Trafficking in NOLs?

Tax Analysys Logo (2013)Mark Hoenig (Weil, Gotshal & Manges, New York), Trafficking in Net Operating Losses: What's So Bad?, 145 Tax Notes 919 (Nov. 24, 2014):

Hoenig examines the almost century-long history of Congress’s efforts to allow tax losses and limit their transfer. He explores the rationale for those efforts, assesses the system now in place, and asks whether an alternative set of rules might better serve policy and the economy.

November 26, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, November 25, 2014

Alarie Presents Policy Preferences and Expertise in Canadian Tax Adjudication Today at Columbia

AlarieBenjamin Alarie (Toronto) presents Policy Preferences and Expertise in Canadian Tax Adjudication, 62 Canadian Tax J. ___ (2014) (with Andrew Green (Toronto)), at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

Both taxpayers and governments struggle to stay on top of the various complex sources of tax law and to apply them in a myriad of different contexts. Given the potential for confusion and disagreement (not to mention the sometimes very large financial stakes involved) it would make sense to have a process for taxpayers to appeal government decisions to an expert body that can provide authoritative, reasoned and rational solutions to tax disputes. For this reason Canada, like the United States, has a specialized tax court dedicated to hearing appeals from decisions of the tax administration. Yet there is some evidence in both Canada and the US that judges in tax cases may be influenced by their own personal policy preferences or other factors extraneous to the “true” legal merits in deciding appeals from decisions of the tax administration. This paper examines in more detail appeals from tax assessments in Canada to understand the relative influence of judicial tax expertise and the policy preferences of judges on appeals to the Tax Court of Canada and the Federal Court of Appeal.

Our analysis reveals three main results: (1) policy preferences of judges matter, but not that much; (2) resources matter — a lot; and (3) there are dynamics relating to affirmation of appeals that are difficult to explain, although a desire to avoid the apprehension of bias is possible.

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November 25, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tax Farming: Experimental Evidence on Performance Pay for Tax Collectors

Adnan Q. Khan (London School of Economics), Asim I. Khwaja (Harvard) & Benjamin A. Olken (MIT), Tax Farming Redux: Experimental Evidence on Performance Pay for Tax Collectors:

Performance pay for tax collectors has the potential to raise revenues, but might come at a cost if taxpayers face undue pressure from collectors. We report the first large-scale field experiment on these issues, where we experimentally allocated 482 property tax units in Punjab, Pakistan into one of three performance-pay schemes or a control. After two years, incentivized units had 9.3 log points higher revenue than controls, which translates to a 46 percent higher growth rate. The scheme that rewarded purely on revenue did best, increasing revenue by 12.8 log points (62 percent higher growth rate), with little penalty for customer satisfaction and assessment accuracy compared to the two other schemes that explicitly also rewarded these dimensions. Further analysis reveals that these revenue gains accrue from a small number of properties becoming taxed at their true value, which is substantially more than they had been taxed at previously. The majority of properties in incentivized areas in fact pay no more taxes, but do report higher bribes. The results are consistent with a collusive setting in which performance pay increases collector's bargaining power over taxpayers, who either have to pay higher bribes to avoid being reassessed, or pay substantially higher taxes if collusion breaks down.

(Hat Tip: Bruce Bartlett.)

November 25, 2014 in Scholarship, Tax | Permalink | Comments (1)

Monday, November 24, 2014

Akron Tax Journal Publishes New Issue

Akron LogoThe Akron Tax Journal has published Volume 29 (2014):

November 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Grewal: How King v. Burwell Jeopardizes the 2014-15 ACA Enrollment Season

Andy Grewal (Iowa), How King v. Burwell Jeopardizes the 2014-2015 ACA Enrollment Season:

Commentators have expressed concern that a government loss in King v. Burwell, which addresses whether taxpayers can enjoy tax credits for policies purchased on federal exchanges, will lead to a "death spiral." Because consumers will no longer enjoy tax credits, they would stay away from the federal exchanges, which would lead to higher prices, which would discourage more consumers, and so on.

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November 24, 2014 in Scholarship, Tax | Permalink | Comments (0)

Sunday, November 23, 2014

Top 5 Tax Paper Downloads

Saturday, November 22, 2014

USC Book Panel Discussion on Kleinbard's We Are Better Than This

Kleinbard Flyer

Prior TaxProf Blog coverage:

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November 22, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Friday, November 21, 2014

Hickman Presents Treasury's Retroactivity Today at Miami

Hickman 2014 2Kristin Hickman (Minnesota) presents Treasury's Retroactivity at Miami today as part of its Legal Theory Workshop Series hosted by Leigh Osofsky:

In Bowen v. Georgetown University Hospital, the Supreme Court described retroactivity as "not favored in the law" and generally rejected allowing federal administrative agencies to adopt regulations "altering the past legal consequences of past actions."  Unlike most regulatory agencies, Treasury and the IRS are expressly authorized by Congress to adopt regulations with precisely such primary retroactive effect.  Specifically, IRC § 7805(b) grants Treasury and the IRS the power to backdate tax regulations under a variety of circumstances.  Preliminary analysis shows that Treasury and the IRS utilize this authority regularly with little judicial oversight for abuse of discretion.  Using empirical data, this article will explore more fully Treasury and IRS utilization of the authority to adopt retroactively effective regulations interpreting the Internal Revenue Code.

November 21, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

November 21, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

California’s Tax Hikes Versus Kansas’ Tax Cuts: Early Results Now In

Tax Justice Network, California’s Tax Hikes Versus Kansas’ Tax Cuts: Early Results Now In:

From a new paper by Paul Caron of Pepperdine University and Joseph Bankman of Stanford University:

The conventional wisdom in California two years ago was that raising taxes on the wealthy would harm the economy and doom any politician who dared touch this third rail. Instead, the public embraced this approach at the ballot box and, after enjoying the fruits of an economic turnaround, appears poised to reward the Governor with a landslide re-election.

LafferIt seems that the absurd Laffer Curve, which is often used to make the ridiculous proposition that tax cuts increase revenue, didn’t work in this case. Now in Kansas, they went the other way. ... “Kansas’ budget problems keep getting worse. . . . state revenues dropped 11 percent in the fiscal year 2014 (which ended in June) after the tax cuts took effect. But that may not even be the whole picture. A close look at the state’s new revenue projections makes clear they are highly optimistic, even after this week’s cut in the forecast.”

Back to the Caron / Bankman paper, which does an unusual and welcome thing for academics.

Get this: it urges scholars to take their heads out of the sand and get stuck into the real world. In fact, this is the central argument of the paper (which is entitled California Dreamin’: Tax Scholarship in a Time of Fiscal Crisis [48 U.C. Davis L. Rev. 405 (2014)]).

We have found that the need for more revenue is a common conversation topic among tax scholars. However, it is not a common topic in tax scholarship. Indeed, it is not even clear that it “qualifies” as scholarship, as that term is commonly defined. In law, at least, highly praised scholarship is generally marked by a masterful description of the law that suggests the need for change.

Quite so, and strong and unusual medicine.

Now here is some discussion that we at TJN and quite a few others have been saying for years. It’s worth quoting at length.

In recent years, legal tax scholars have made normative claims based on those arguments. However, those normative claims are quite limited and explicitly apolitical . . . . writing about the fiscal crisis, in contrast, throws the scholar directly into the political world. . . . Legal tax scholars who write on this subject run the risk of being dismissed as political, or lacking requisite knowledge.

Unfortunately, scholars in allied fields face similar problems. Economists are also reluctant to write on subjects so entwined with politics and often have less knowledge of specific tax provisions than legal tax scholars. Political scientists lack economic sophistication and knowledge of the tax law, and know less about the politics of tax preferences than either lawyers or economists. The fiscal crisis thus falls between at least three disciplines. As a result, scholars in each of those disciplines are reluctant to write on a subject they believe is central to the nation’s health.

They cite honourable exceptions, such as this highly recommended book by Ed Kleinbard [We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014)], if you’re interested in the U.S. tax system.

And they conclude:

Two years ago, both California and the nation were imperiled by long- term, structural, budget imbalances. California has reduced that peril by raising (already high) personal tax rates on the wealthy. The political success of that approach suggests that at the national level, Americans might be willing to support higher rates to maintain government services and move toward fiscal solvency.

November 21, 2014 in Scholarship, Tax | Permalink | Comments (0)

Viard: Moving Away From the Realization Principle

Tax Analysys Logo (2013)Alan D. Viard (American Enterprise Institute), Moving Away From the Realization Principle, 145 Tax Notes 847 (Nov. 17, 2014):

Viard describes the realization principle’s flaws and the federal tax system’s incremental movement toward mark-to-market taxation.

November 21, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Thursday, November 20, 2014

Polsky: A Compendium of Private Equity Tax Games

Gregg D. Polsky (North Carolina), A Compendium of Private Equity Tax Games:

This paper will describe and analyze tax strategies, lawful and unlawful, used by private equity firms to minimize taxes. While one strategy — the use of “carried interest” — should by now be well understood by tax practitioners and academics, the others remain far more obscure. In combination, these strategies allow private equity managers to pay preferential tax rates on all of their risky pay (through carried interest), pay preferential tax rates on much of their non-risky pay (through management fee waivers and misallocations of their expense deductions), and push much of the residual non-risky pay down to their funds’ portfolio companies who, unlike the fund, can derive significant tax benefits from the resulting deductions (through monitoring fees and management fee offsets).

November 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Zelinsky: The Giving Pledge and Reform of the Estate Tax Charitable Deduction

Giving PledgeEdward A. Zelinsky (Cardozo), Why the Buffett-Gates Giving Pledge Requires Limitation of the Estate Tax Charitable Deduction, 16 Fla. Tax Rev. 393 (2014):

The Buffett-Gates Giving Pledge, under which wealthy individuals promise to leave a majority of their assets to charity, is an admirable effort to encourage philanthropy. However, the Pledge requires us to confront the paradox that the federal estate tax charitable deduction is unlimited while the federal income tax charitable deduction is capped. If a Giving Pledger leaves his wealth to charity, the federal fisc loses significant revenue since the Pledger thereby avoids federal estate taxation as charitable bequests are deductible without limit for federal estate tax purposes. Despite its laudable qualities, the Giving Pledge is a systematic (albeit inadvertent) threat to the estate tax base.

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November 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Harvey: Corporate Tax Aggressiveness -- Recent History and Policy Options

J. Richard (Dick) Harvey (Villanova), Corporate Tax Aggressiveness -- Recent History and Policy Options, 67 Nat'l Tax J. 831 (2014):

This paper examines corporate tax aggressiveness from the 1990s to 2014. The paper also discusses various public indicia of corporate tax aggressiveness and analyzes selected data from 21 public companies. Finally, the paper discusses several policy options for further reducing corporate tax aggressiveness, including: (1) improvements to the IRS whistleblower program, (2) increased transparency, and (3) changes to the penalty structure surrounding aggressive tax positions. 

November 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Pepperdine/Tax Analysts Symposium Papers: Tax Reform in a Time of Crisis

TaxSymposiumHeaderHere are links to the eleven published papers from the Pepperdine/Tax Analysts Symposium on Tax Reform in a Time of Crisis (Jan. 17, 2014):

Thanks to the paper commentators:  Donald Korb (Partner, Sullivan & Cromwell; former IRS Chief Counsel), Nancy Staudt (Dean, Washington University), and Eric Zolt (UCLA)

November 20, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (2)

Sander: The Mismatch Critique of Law School Affirmative Action and Its Opponents

MismatchRichard Sander (UCLA), Mismatch and the Empirical Scholars Brief, 48 Val. U. L. Rev. 555 (2014):

In April 2013, the Valparaiso University Law Review held a symposium on diversity in legal education, commemorating the contributions of Justice Randall Shepard and featuring a number of distinguished speakers. I was invited to participate in a panel on Fisher v. University of Texas, a then-pending Supreme Court case that seemed likely to revise the rules under which universities can consider race in higher education admissions. The conference organizers generously allowed me to participate by videoconference, as did my co-panelist Professor Eboni Nelson. They and I agreed that my talk should explore some of the empirical issues that might frame how the Supreme Court viewed Fisher.

I approached the event with some concern. I had been the bête noire of many diversity advocates ever since 2005, when the Stanford Law Review published my long analysis and critique of law school affirmative action programs. I had advanced, and since steadfastly defended, something called “the mismatch hypothesis,” which postulated that very large preferences--racial or of any other kind--may undermine student learning, because professors tend to teach to the middle of their class, and students far below the middle will have trouble keeping up and advancing as concepts build day by day. Critiques of my essay had been many, but I had answered them, and an increasingly broad array of other scholars had published articles that found other strong evidence of mismatch in a wide variety of academic contexts. Certainly, the evidence for mismatch was mixed--at least in some contexts--and social scientists who found evidence of mismatch never argued--to my knowledge--that the existence of mismatch should preclude affirmative action policies. But just as certainly, universities tended to completely ignore the mismatch problem, and this was quite disturbing. The Supreme Court's decision to review the Fifth Circuit's holding in Fisher--and to thus reconsider the constitutionality of university racial preferences--increased the level of interest and anxiety about mismatch research.

Lawyer and journalist Stuart Taylor, Jr., had joined forces with me to write a broadly accessible book on the effects of racial preferences, called Mismatch, which appeared in October 2012. That, along with two briefs that Stuart and I wrote as amici curiae to the Court on Fisher, helped to elevate the mismatch hypothesis to a prominent place in the public discussion of Fisher. The New York Times, The Economist, the Wall Street Journal, and NPR's All Things Considered all ran prominent articles on mismatch, generally treating it as, at the very least, an idea to be reckoned with seriously. The general tone was well-captured by The New York Times' David Brooks, who wrote: “[A]ffirmative action programs ... perpetrated some noteworthy wrongs .... The evidence on this is hotly disputed, but Richard Sander and Stuart Taylor Jr. make a compelling case ....”

Yet at law school events during the 2012-2013 academic year, when I was invited to speak about any aspect of Fisher, a strangely repetitive pattern emerged. Regardless of whether the topic at hand was mismatch, or some entirely different part of the affirmative action issue, panel members who disliked my mismatch research would start to recite from a document known as the Empirical Scholars Brief. This document, they would suggest, was the definitive refutation of Richard Sander, the other “mismatch” researchers, and all that we were taken to represent. Often they would distribute copies of the Empirical Scholars Brief to the audience, like revivalists passing out the Gospel of St. James. But--and this was the oddest part--these panelists were never interested in engaging or debating any of the claims that were actually in the Empirical Scholars Brief (which I will sometimes, as shorthand, refer to as the “ESB”). One panelist, at an AALS panel in a large ballroom, disclaimed any intention of getting into the details. “I'm not a trained quantitative empiricist,” she said, “instead I'm compelled to rely on critiques by other empiricists.” Pretty much exactly the same thing happened at the Valparaiso symposium. Professor Nelson began our panel with a very thoughtful discussion of the “deference” issue--that is, when and to what degree the Supreme Court should defer to the educational judgment of universities in evaluating their diversity programs. Professor Sumi Cho followed with some rather discursive remarks on the importance of diversity. I then spoke about some of my empirical findings on university behavior--a sort of empirical comment on some of the same issues Professor Nelson had raised. When we finished, and the question and answer portion began, Professor Cho distributed a copy of the ESB to the audience, with the standard comment that the audience could better evaluate my comments if they knew what other social scientists thought of my work. With my time up, and on my remote monitor, I was not in a very good position to respond to and engage the ESB claims. I encouraged anyone in the audience to ask me to discuss any specific claim they could identify, but there were no takers. It felt to me like a completely non-substantive, ad hominem, and unfair attack.

It therefore seems appropriate to take the opportunity afforded by the written version of the symposium to provide the sort of thoughtful engagement that I would have liked to provide the live symposium audience. What follows is an assessment--though it may sound more like an expose--of the “Empirical Scholars Brief.” The thrust of my analysis is that the ESB is not just substantively wrong, but it is also a deeply dishonest document that relies on outright falsehoods and misleading claims to support an argument, which should be embarrassing to its signatories, and is entitled to no substantive weight in discussions of mismatch and affirmative action.

Richard Sander (UCLA), The Stylized Critique of Mismatch, 92 Tex. L. Rev. 1637 (2014):

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November 20, 2014 in Legal Education, Scholarship | Permalink | Comments (7)

Wednesday, November 19, 2014

Raskolnikov Presents Rational Decisions Under Legal Uncertainty Today at Washington University

RaskolnikovAlex Raskolnikov (Columbia) presents Rational Decisions Under Legal Uncertainty at Washington University today as part of its Faculty Workshop Series:

Law is full of rules that are neither clear nor socially optimal. How do rational actors respond to these rules? What are the implications of these responses? These deceptively simple questions have no answers in law and economics. This paper offers a model of rational decisionmaking under legal uncertainty and explores its implications by combining formal economic analysis with a practical understanding of the market for legal advice. The model produces a number of intuitive, realistic results. It demonstrates why rational actors take uncertain positions even if these positions are highly likely to be detected. It suggests that most of these positions will have a better than a fifty-fifty chance of being sustained. And it allows us to investigate a popular but controversial view that greater legal certainty does not necessarily lead to greater compliance. The model’s analysis both refutes the obvious explanation for this view and offers an alternative one. When detection uncertainty is taken into account, the model confirms that the standard damages multiplier works when legal rules are ambiguous. At the same time, the model raises difficult questions about the meaning of compliance when rules are uncertain, the normative significance of various types of uncertainty, and the challenges of assessing private responses to legal uncertainty outside of the familiar confines of the optimal deterrence theory.

November 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hayashi Presents Phantom Income and the Simple Economics of Paying In Kind Today at Texas A&M

HayashiAndrew Hayashi (Virginia) presents Phantom Income and the Simple Economics of Paying In Kind at Texas A&M today as part of its Business Law Seminar:

Modern tax instruments impose cash taxes on non-cash bases. Property taxes, income taxes, gift taxes and estate taxes all must be paid in cash, even though income, gifts and estates only sometimes take the form of cash, and property never does. If it is costly to convert the tax base into cash, taxpayers may suffer from liquidity problems that require them to make painful adjustments to their savings or consumption. Although concern about taxpayer liquidity has shaped tax law and looms large in current debates about wealth taxation, tax accounting, and mark-to-market reforms, the economic factors that influence the welfare costs of cash tax collection have not been explored in a rigorous way. In this paper I present an economic analysis of the liquidity problem, identifying the factors that determine the welfare costs of cash tax collection. I apply this analysis to the property tax and to the taxation of income that accrues before it is received, sometimes called “phantom income.”

November 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Macnaughton Presents Income Splitting and Anti-Avoidance Legislation Today at Toronto

AlanAlan Macnaughton (Waterloo) presents Income Splitting and Anti-Avoidance Legislation: Evidence from the Canadian “Kiddie Tax” (with Andrew Bauer (Illinois)  & Anindya Sen (Waterloo)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

We examine whether “kiddie tax” legislation in Canada, effective as of 2000, deters income splitting between parents and minor children by taxing at the top marginal rate certain types of non-labour income received by children. OLS estimates based on cross-province and time-series data reveal that the share of dividend income reported by children aged 19 and under declines by 86% after the introduction of this anti-avoidance rule. The estimates also reveal that the share of capital gains (income not covered by the legislation) reported by minor children increases by 70% in the post-legislation period, suggesting that parents are switching to an alternative income splitting technique. However, the latter percentage effect is on a small base, and thus the decrease in dividend income is much larger than the increase in capital gains income. Hence, our analysis suggests that the “kiddie tax” is an effective method to deter income splitting.

November 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Blank Presents Reconsidering Corporate Tax Privacy Today at Rutgers

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Rutgers-Newark today as part of its Faculty Colloquium Series:

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy protections, should be publicly accessible. The ongoing global discussion of base erosion and profit shifting by multinational corporations has generated calls for greater tax transparency. Throughout this debate, participants have focused exclusively on the potential reactions of a corporation’s managers, shareholders and consumers to a corporation’s disclosure of its own tax return information. There is, however, another perspective: how would the ability of a corporation’s stakeholders and agents to observe other corporations’ tax return information affect the corporation’s compliance with the tax law?

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November 19, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, November 18, 2014

Hanlon Presents Tax Rates and Corporate Decision Making Today at Columbia

HanlonMichelle Hanlon (MIT) presents Tax Rates and Corporate Decision Making (with John Graham (Duke), Terry Shevlin (UC-Irvine) & Nemit Shroff (MIT)) at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

We analyze survey responses from 500 corporate tax executives to better understand which tax rate firms use to incorporate taxes into their decision making. Prior research assumes that managers use the marginal tax rate (MTR) to evaluate incremental corporate decisions. However, we find that approximately 45% of tax executives surveyed state that their firms use some form of effective tax rate (ETR) as the tax rate input into capital structure, capital expenditure, and acquisition decisions, whereas less than 13% state that their firms use the MTR. We then examine the determinants and consequences of managers’ tax rate choice. We find that public firms and firms with greater analyst following are more likely to incorporate the GAAP ETR as the tax rate input into their decisions, whereas larger firms and firms with high R&D intensity are less likely to do so. Finally, we find that firms using GAAP ETRs as the tax rate input for investment decisions are less responsive to their growth opportunities and have lower acquisition announcement returns when the difference between the firm’s GAAP ETR and MTR is large. Further, we find that these firms adopt an aggressive (conservative) debt policy when the GAAP ETR is greater (less) than MTR. These results suggest that the use of GAAP ETRs instead of the theoretically suggested MTR as the tax rate input for decision making leads to inefficient corporate decisions.

November 18, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Repetti Presents The Role of Economic Efficiency in Formulating Tax Policy Today at Loyola-Chicago

Repetti (2014)James R. Repetti (Boston College) presents What is the Appropriate Role for Economic Efficiency in Formulating Tax Policy? at Loyola-Chicago today:

Traditionally, the great democracies of the western world assigned equal weight to distributive justice and economic efficiency in designing a tax system. In the past few decades, however, economic efficiency has dominated the debate about the best design of a tax system in politics and analysis by legal academics. For example, many advocate low tax rates on capital gains to reduce the efficiency effects of taxing capital income despite the fact that a capital gains preference reduces progressivity and significantly complicates our tax system. Similarly, discussions of progressive tax rates often focus on the adverse efficiency effects of high rates while ignoring benefits arising from a progressive rate structure’s reduced burden on lower income individuals. In addition, many have proposed replacing the income tax with a consumption tax in order to eliminate the tax burden on investment income even though a consumption tax, regardless of its design, would increase the tax burden for many lower income taxpayers.

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November 18, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Bankman & Caron: Tax Scholarship in a Time of Fiscal Crisis

Joseph Bankman (Stanford) & Paul L. Caron (Pepperdine), California Dreamin': Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014):

This essay makes three claims about the current state of tax law and academic tax scholarship in America: (1) the federal budget imbalance, caused by the failure of both political parties to raise the tax revenues needed to fund the nation’s spending priorities, is unsustainable and threatens our nation’s future; (2) tax scholars need to shift our focus from technocratic work to systemic solutions to the existential threat posed by this fiscal gap; and (3) California’s response to its seemingly intractable budget problems provides a template for resolving the federal budget stalemate in Washington, D.C.

Two years ago, both California and the nation were imperiled by long-term, structural, budget imbalances. California has reduced that peril by raising (already high) personal tax rates on the wealthy. The political success of that approach suggests that at the national level, Americans might be willing to support higher rates to maintain government services and move toward fiscal solvency.

The fiscal crisis highlights a problem with the dominant conception of legal tax scholarship. Under that conception, scholarship is (or should be) apolitical and confined to subjects about which the writer can demonstrate mastery. Unfortunately, the most pressing problem in the field is inescapably political and requires the scholar to address some issues about which no one can master. If we hew to a restrictive definition of scholarship, we limit our voice on a subject about which we have much to say.

November 18, 2014 in Scholarship, Tax | Permalink | Comments (2)

Monday, November 17, 2014

Cauble Presents Relying on the IRS Today at Chicago

Cauble (2014)Emily Cauble (DePaul) presents Relying on the IRS at Chicago today as part of its Legal Scholarship Workshop Series hosted by Lisa Bernstein:

The IRS issues different types of guidance to taxpayers, and the extent to which taxpayers can rely on IRS guidance depends on the form in which it was offered. For instance, taxpayers generally cannot rely on oral advice provided over the phone but can rely on more formal types of advice. The current state of the law harms unsophisticated taxpayers who disproportionately obtain informal advice -- the least reliable type of IRS guidance.

Existing literature lacks a thorough discussion of why, as a policy matter, we allow taxpayers to rely on some forms of IRS guidance more than others. This Article fills that gap by suggesting and critically evaluating potential justifications for this practice.

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November 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Dietsch Presents Catching Capital: The Ethics of Tax Competition Today at McGill

DietschPeter Dietsch (Université de Montréal) presents Catching Capital: The Ethics of Tax Competition (Oxford University Press) at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series hosted by Allison Christians and Daniel Weinstock:

When individuals stash away their wealth in offshore bank accounts and multinational corporations shift their profits or their actual production to low-tax jurisdictions, this undermines the fiscal autonomy of political communities and contributes to rising inequalities in income and wealth. These practices are fuelled by tax competition, with countries strategically designing fiscal policy to attract capital from abroad.

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November 17, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Bird-Pollan Presents Utilitarianism and Wealth Transfer Taxation Today at Loyola-L.A.

Bird-PollanJennifer Bird-Pollan (Kentucky) presents Utilitarianism and Wealth Transfer Taxation at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

This Article is the third in a series examining the continued relevance and philosophical legitimacy of the United States wealth transfer tax system. The earlier two Articles used the frameworks of Nozickian libertarianism [Death, Taxes, and Property (Rights): Nozick, Libertarianism, and the Estate Tax, 66 Maine L. Rev. 1 (2013)] and Rawlsian equality of opportunity [Unseating Privilege: Rawls, Equality of Opportunity, and Wealth Transfer Taxation, 59 Wayne L. Rev. 713 (2014)], concluding that the taxation of wealth transfers is consistent with both theoretical approaches. This Article examines the utilitarianism of John Stuart Mill and his philosophical progeny, distinguishing the philosophical approach of utilitarianism from contemporary welfare economics. The Article first identifies the current state of wealth transfer taxation in the United States. Next, the Article explicates the fundamental elements of utilitarianism, starting with Jeremy Bentham’s hedonistic approach, identifying utility with pleasure, and then moving to Mill’s more sophisticated definition of utility, distinguishing between “higher” and “lower” pleasures. After exploring classical utilitarianism, the Article compares the philosophical theory to its more contemporary interpretation in the form of welfare economics. Finally, the Article concludes that heavily redistributive wealth transfer taxation is consistent with the ethical imperatives of classical utilitarianism.

Miranda Perry Fleischer (San Diego) is the commentator.

November 17, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Kleinbard Presents We Are Better Than This: How Government Should Spend Our Money at Loyola Marymount

We Are Better Than This (2014)Edward Kleinbard (USC) presents We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014) at Loyola Marymount tomorrow as part of its Center for Accounting Ethics, Governance, and the Public Interest Speaker Series:

We Are Better Than This fundamentally reframes budget debates in the United States. Author Edward D. Kleinbard explains how the public's preoccupation with tax policy alone has obscured any understanding of government's ability to complement the private sector through investment and insurance programs that enhance the general welfare and prosperity of our society at large.

He argues that when we choose how government should spend and tax, we open a window into our "fiscal soul," because those choices are the means by which we express the values we cherish and the regard in which we hold our fellow citizens. Though these values are being diminished by short-sighted decisions to starve government, strategic government spending can directly make citizens happier, healthier, and even wealthier.

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November 17, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (5)

Sunday, November 16, 2014

Top 5 Tax Paper Downloads

Saturday, November 15, 2014

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation concludes today in Santa Fe. Tax Prof speakers include:

The Philosophy of Taxation:
Session Chair:  Brian Galle (Boston College)
Papers:

Discussants:  Brian Galle (Boston College), Linda Sugin (Fordham)

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November 15, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Friday, November 14, 2014

Weekly SSRN Tax Roundup

November 14, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

November 14, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Class Crits VII Conference Kicks Off Today at UC-Davis

Class CritsThe two-day Class Crits VII Conference on Poverty, Precarity, & Work: Struggle & Solidarity in an Era of Permanent(?) Crisis kicks off today at UC-Davis.  Tax Prof speakers include:

Debt & Taxes:

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November 14, 2014 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (2)

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation continues today in Santa Fe. Tax Prof speakers include:

Conceptualizing the Social and Regulatory Nature of Taxation:

Session Chair:  David Gamage (UC-Berkeley)
Papers:

  • David Hasen (Colorado), Income Taxation and Risk-Taking
  • Tracey Roberts (UC-Hastings), Law,  The Taxing Power as a Check on Private Property Rights and a Source of Regulatory Authority
  • Theodore Seto (Loyola-L.A.), Some Implications of Preference-Shifting for Optimal Tax Theory

Discussants: David Gamage (UC-Berkeley), Leandra Lederman (Indiana)

Hitting the Target: Public and Private Savings:
Session Chair:  Travis St. Clair (Maryland)
Papers:

Discussants:  Elizabeth Chorvat (Illinois), Jason Seligman (Ohio State), Travis St. Clair (Maryland)

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November 14, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, November 13, 2014

Fleming & Peroni: A Hitchhiker's Guide to International Tax Reform

J. Clifton Fleming Jr. (BYU) & Robert J. Peroni (Texas), A Hitchhiker's Guide to Outbound International Tax Reform, 18 Chapman L. Rev. 133 (2014):

In this article, we argue that although some U.S. international income tax reforms, such as limitations on earnings stripping, can be handled by targeted legislative action, broad reform of the U.S. international income tax system should take place only as part of a general revision of the U.S. corporate income tax. We further argue that U.S. international income tax reform should not lose revenue, should take fairness issues into account, and should discount the competitiveness and complexity arguments. We also explain that broad U.S. international income tax restructuring should eschew both an explicit territorial system and formulary apportionment (although either would be better than the current U.S. regime) and, instead, should revise the current, badly flawed, U.S. worldwide system into a real worldwide system by abolishing deferral and severely limiting cross-crediting. We recommend strengthening this real worldwide system by correcting flaws in the source rules, limiting earnings stripping, repealing the Section 911 exclusion, and expanding the Section 904(j) de minimis rule and making it mandatory.

November 13, 2014 in Scholarship, Tax | Permalink | Comments (0)

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation kicks off today in Santa Fe. Tax Prof speakers include:

Tax Enforcement and Collections Discretion:
Session Chair:  Leigh Osofsky (Miami)
Papers:

  • Joshua Blank (NYU), Reconsidering Corporate Tax Privacy
  • Andrew Hayashi (Virginia), An Economic Analysis of Taxpayer Liquidity
  • Shu-Yi Oei (Tulane), What is Fair Tax Administration?
  • Leigh Osofsky (Miami),  Announcing Enforcement Priorities

Discussants:  Leandra Lederman (Indiana), Diane Ring (Boston College)

Municipal, Local, and Global Tax Incentives:
Session Chair:  Neil Buchanan (George Washington)
Papers:

  • Mirit Eyal-Cohen (Alabama), Urban Mavericks
  • Omri Marian (Florida), Corporate Inversions, Tax Residence, and Real Economic Effects: A Case Study Approach
  • Agustin Leon-Moreta (New Mexico), Tax-Expenditure Limitations and Special District Finance in the United States
  • Erin Scharff (Arizona State), Powerful Cities, Efficient Revenues: Limits on Municipal Taxing Authority and What to do About it

Discussant:  Neil Buchanan (George Washington)

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November 13, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Wednesday, November 12, 2014

Closing The Law School Gender Gap: 'Gender Inequality In Grading Is Sensitive to Pedagogy'

Gender GapInside Higher Ed, Closing the Law School Gender Gap:

Reducing class size and shaking up grading systems could help close the gender gap in professional schools, suggests new research in the Journal of Legal Studies [A Natural Experiment in Law]. Authors Daniel Ho and [Vice Dean] Mark Kelman, both professors of law at Stanford University, say that common professional school pedagogies, such as the Socratic and adversarial methods, may put women at a disadvantage when class sizes are big. In their study, Ho and Kelman analyzed 15,689 grades assigned by 91 instructors to 1,897 students from 2001-12.  

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November 12, 2014 in Legal Education, Scholarship | Permalink | Comments (3)

Vanderbilt Roundtable on Comptroller v. Wynne

Vandy 2The Vanderbilt Law Review En Banc Roundtable takes up Maryland State Comptroller of the Treasury v. Wynne, to be argued today in the Supreme Court:

In Wynne, the Court considers whether the Constitution bans a state from taxing its residents’ income, wherever earned, by requiring a credit for taxes paid on income taxed in other states. The Court could answer many questions: How far is the reach of the dormant Commerce Clause in the context of income taxation? What is the extent of a state’s power to enforce personal income taxes on its residents? What kinds of residents are subject to double taxation and why? .

November 12, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tuesday, November 11, 2014

Steuerle Presents How to Restore Fiscal Freedom and Rescue Our Future Today at Columbia

DeadC. Eugene Steuerle (Urban Institute) presents Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

Eugene Steuerle argues that these seemingly separable economic and political problems are actually symptoms of a common disease, one unique to our time. Unless that disease and the history of how it spread over time is understood, Steuerle says, it is easy for politicians and voters alike to fall prey to believing in simple but ineffective nostrums, hoping that a cure lies merely in switching political parties or reducing the deficit or protecting and expanding our favorite program.

Despite the despairing claims of many, Steuerle points out that we no more live in an age of austerity than did Americans at the turn into the twentieth century with the demise of the frontier. Conditions are ripe to advance opportunity in ways never before possible, including doing for children and the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains. Recognizing this extraordinary but checked potential is also the secret to breaking the political logjam that —as Steuerle points out —was created largely by now dead (or retired) men.

November 11, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Buchanan: Legal Scholarship Makes the World a Better Place

WorldNeil H. Buchanan (George Washington), Legal Scholarship Makes the World a Better Place:

This article responds to claims that law professors are engaged in scholarly pursuits that fail to serve important social functions. I argue that legal scholarship “matters” in important ways, and in particular that the legal academy has improved its service to society by embracing interdisciplinary approaches to studying the law.

November 11, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (3)

Harvey: Corporate Inversions -- Background, Causes, and Policy Options

J. Richard Harvey (Villanova), Corporate Inversions -- Background, Causes, and Policy Options:

Corporate inversions have been front page news during most of 2014. In addition to providing background on inversions, this presentation discusses why inversions are occurring and various policy options.

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November 11, 2014 in Scholarship, Tax | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 944 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through November 1, 2014) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

41,073

Reuven Avi-Yonah (Mich.)

6743

2

Paul Caron (Pepperdine)

26,895

Ed Kleinbard (USC)

5136

3

Louis Kaplow (Harvard)

23,155

D. Dharmapala (Chicago)

2787

4

D. Dharmapala (Chicago)

20,980

Richard Ainsworth (BU) 

2603

5

Vic Fleischer (San Diego)

20,248

Paul Caron (Pepperdine)

2552

6

James Hines (Michigan)

20,069

Omri Marian (Florida)

1990

7

Ted Seto (Loyola-L.A.)

19,350

Robert Sitkoff (Harvard)

1979

8

Richard Kaplan (Illinois)

19.183

Katie Pratt (Loyola-L.A.)

1803

9

Ed Kleinbard (USC)

16,778

Jen Kowal (Loyola-L.A.)

1552

10

Katie Pratt (Loyola-L.A.)

16,486

David Gamage (UCBerkeley)

1551

11

Dennis Ventry (UC-Davis)

15,449

Bridget Crawford (Pace)

1550

12

Carter Bishop (Suffolk)

15,332

Brad Borden (Brooklyn)

1535

13

Jen Kowal (Loyola-L.A.)

14,690

Jeff Kwall (Loyola-Chicago)

1502

14

David Weisbach (Chicago)

14,581

Louis Kaplow (Harvard)

1483

15

Chris Sanchirico (Penn)

14,459

Dan Shaviro (NYU)

1376

16

Richard Ainsworth (BU)

14,437

Francine Lipman (UNLV)

1371

17

Robert Sitkoff (Harvard)

14,244

James Hines (Michigan)

1370

18

Brad Borden (Brooklyn)

14,123

Dick Harvey (Villanova)

1316

19

Francine Lipman (UNLV)

14,075

Vic Fleischer (San Diego)

1314

20

Bridget Crawford (Pace)

14,030

Richard Kaplan (Illinois)

1266

21

David Walker (Boston Univ.)

14,007

Ted Seto (Loyola-L.A.)

1240

22

Herwig Schlunk (Vanderbilt)

12,550

Carter Bishop (Suffolk)

1235

23

Dan Shaviro (NYU)

12,250

Chris Sanchirico (Penn)

1224

24

Wendy Gerzog (Baltimore)

11,799

Gregg Polsky (North Carolina)

1158

25

Ed McCaffery (USC)

11,820

David Weisbach (Chicago)

1105

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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November 11, 2014 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Monday, November 10, 2014

Logue Presents Delegating Tax Today at Loyola-L.A.

Logue 2Kyle D. Logue (Michigan) presents Delegating Tax (with James R. Hines, Jr. (Michigan)) at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Congress delegates extensive and growing lawmaking authority to federal administrative agencies in areas other than taxation, but tightly limits the scope of IRS and Treasury regulatory discretion in the tax area, specifically not permitting these agencies to select or adjust tax rates. This Article questions why tax policy does and should differ from other policy areas in this respect, noting some of the potential policy benefits of delegation. Greater delegation of tax lawmaking authority would permit policies to benefit from the expertise of administrative agencies, and afford timely adjustment to changing economic circumstances. Furthermore, delegation of the tax reform process to an independent commission or agency offers the prospect of Congress committing itself to rational reform and long-run budget sustainability in a way that is more apt to succeed than are piecemeal legislative efforts. The Article concludes with an analysis of the constitutionality of tax delegation, noting the applicability of recent Supreme Court interpretations that Congress has broad discretion to delegate rulemaking authority to federal agencies, and that tax policy is of a kind with other federal policies.

Jason Oh (UCLA) is the commentator.

November 10, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Dwenger Presents Improving Tax Collection by Public Shaming Today at UC-Berkeley

Dwenger 2Nadja Dwenger (Max Planck) presents Improving Tax Collection by Public Shaming: Evidence from Slovenia, at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

Do the public spotlight and social-image concerns provide an effective measure for facilitating tax compliance and tax collection? This question is at the heart of an ongoing debate in the tax compliance literature asking whether tax compliance decisions are co-determined by social incentives. If social incentives such as social-image concerns are at play in taxpayers’ tax compliance decisions it might be attractive for tax authorities to revert to an instrument which has been widely used in our societies in other contexts: public shaming.

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November 10, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

O'Neill Presents Corporations, Conventionalism, Taxation, and Social Justice Today at McGill

OneilMartin O’Neill (York University) presents Corporations, Conventionalism, Taxation and Social Justice at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series hosted by Allison Christians and Daniel Weinstock:

A failure to take seriously the conventionality of corporations has led to an unimaginative view of corporate taxation as being structurally analogous to the taxation of individuals. There are, in fact, many disanalogies between the two: corporate profit should not be treated as analogous to individual income; low-profit corporations should not be treated advantageously by a tax system in the same way as it should treat low-income individuals; and, most significantly, corporations are not owed the same level of care and determinacy as individuals with regard to the tax rules that they face. Breaking the perceived link between individual taxation and corporate taxation makes room for a reassessment of the structure and purpose of corporate taxation.

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November 10, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Graetz & Warren: Unlocking Business Tax Reform

Tax Analysys Logo (2013)Michael J. Graetz (Columbia) & Alvin C. Warren Jr. (Harvard), Unlocking Business Tax Reform, 145 Tax Notes 707 (Nov. 10, 2014):

In this article, Graetz and Warren explain why integration should be on today’s tax reform agenda and discuss how that change could be structured.

In conjunction with this article, Tax Analysts is republishing as an eBook, now available on Amazon, the 1998 volume of Integration of the U.S. Corporate and Individual Income Taxes: The Treasury Department and American Law Institute Reports:

Integration 2Business tax reform now seems stymied despite important proposals from prominent political leaders in both parties, including the president and the chairs of the House and Senate tax writing committees. Each represents a serious effort to reform business taxation. But those proposals have failed to advance in either the House or Senate.

Integration of corporate and shareholder taxes offers a straightforward approach that could help resolve many of the most difficult issues and provide the key to unlocking business tax reform. The general idea is to convert at least part of the corporate tax into a withholding tax that would be credited against individual shareholder taxes due on dividends.

The United States has long had what is called a classical income tax system, under which income is taxed to corporations and shareholders as distinct taxpayers. As a result, taxable income earned by a corporation and then distributed as a dividend may be taxed twice, once to the corporation and once to the shareholder on receipt of a dividend. In contrast, earnings on corporate debt are not taxed at the corporate level because, unlike dividends, interest is deductible. And businesses taxed as partnerships can benefit from lower total taxes than those taxed as corporations. This incoherent combination of results creates undesirable distortions in corporate and investor behavior.

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November 10, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Sunday, November 9, 2014

Top 5 Tax Paper Downloads

Friday, November 7, 2014

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Thursday, November 6, 2014

Hayashi: Property Taxes and Their Limits: Evidence from New York City

Andrew T. Hayashi (Virginia), Property Taxes and Their Limits: Evidence from New York City, 26 Stan. L. & Pol'y Rev. 33 (2014):

I report evidence from New York City that property assessment caps on small residential properties represent a significant tax benefit that accrues to the most valuable properties and the wealthiest neighborhoods. Moreover, rather than benefiting the long-time homeowners on fixed incomes who are their putative targets, the largest benefits go to the properties that are most likely to have been recently sold and to be located in neighborhoods where cash incomes have increased the most.

November 6, 2014 in Scholarship, Tax | Permalink | Comments (0)