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Sunday, December 21, 2014

Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #4 and #5. The #1 paper is now #78 in all-time downloads among 10,599 tax papers:

  1. [1449 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [255 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)
  3. [180 Downloads]  Corporate Inversions and the Unbundling of Regulatory Competition, by Eric L. Talley (UC-Berkeley)
  4. [154 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  5. [153 Downloads]  Corporate Inversions -- Background, Causes, and Policy Options, by J. Richard (Dick) Harvey (Villanova)

December 21, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, December 20, 2014

Judge Edwards on Rodell's Goodbye to Law Reviews

Harry T. Edwards (Senior Judge, U.S. Court of Appeals for the D.C. Circuit), Another Look at Professor Rodell's Goodbye to Law Reviews, 100 Va. L. Rev. 1483 (2014):

I am not advocating a return to the narrow-minded, provincial doctrinal scholarship that Professor Rodell singled out for criticism. My hope is that law schools will lead the way in valuing the work of all good scholars, those who write articles focused on professional practice, procedure, doctrine, legislation, and regulation, as well those who focus on theory, philosophy, and empirical studies. The law schools and law reviews should consider seriously Professor Rodell’s view that “law is supposed to be a device to serve society, a civilized way of helping the wheels go round without too much friction.” If the status quo remains, our profession may find itself criticized for merely “diddling while Rome burned.” Professor Rodell’s memorable phrase is as apt today as it was when he wrote it in 1936. 

Michael Dorf (Cornell), Judge Harry Edwards Is Still Unimpressed With Legal Scholarship:

In 1992, Judge Edwards took to the pages of the Michigan Law Review to decry what he called The Growing Disjunction Between Legal Education and the Legal Profession. Although Judge Edwards was careful to qualify his criticisms by acknowledging the existence of good scholarship, his basic attitude was nostalgia for a then-rapidly-fading era when legal scholarship was written almost exclusively by first-rate lawyers-turned-academics who were interested in the same sorts of questions as courts (and perhaps legislatures), rather than by the new generation of "ivory tower dilettantes, pursuing whatever subjects pique their interest, whether or not the subject merits scholarship, and whether or not they have the scholarly skills to master it." (Emphasis in original.) ...

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December 20, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Friday, December 19, 2014

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Johnson: Reflections on Home Concrete -- Writing Tax Regulations and Interpreting Tax Statutes

Steve R. Johnson (Florida State), Reflections on Home Concrete: Writing Tax Regulations and Interpreting Tax Statutes, 13 Fla. St. U. Bus. Rev. 77 (2014):

United States v. Home Concrete & Supply, LLC is the Supreme Court's most recent foray into the thicket of the validity of Treasury tax regulations. The decision disappointed some because the Court avoided many significant issues raised by commentators or briefed by the parties.

Nonetheless, Home Concrete gives us much to digest. Some reactions to the decision appear below. They are grouped under four headings: (1) litigation balance between the government and taxpayers, (2) retroactivity, (3) deference doctrine, and (4) statutory interpretation. These considerations are developed below after a brief description of the Home Concrete decision.

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

Thursday, December 18, 2014

Schizer: Limiting Tax Expenditures

David Schizer (Columbia), Limiting Tax Expenditures, 68 Tax L. Rev. ___ (2014):

The federal government devotes over a trillion dollars each year to tax provisions that pursue “nontax” goals. Scaling back these tax expenditures should be a high priority. Yet one-size-fits-all limits are often proposed, and are not good policy. Each tax expenditure generates its own mix of positive externalities and private benefits (or “programmatic benefits”). To choose the right limit, we should consider what programmatic benefits we would lose. The goal should be to reap programmatic benefits at lower cost. Different strategies are appropriate for each tax expenditure, including: tightening the definition of favored conduct; focusing on claimants who are easiest to motivate; favoring claimants who use the subsidy more effectively; calibrating how much favored activity we subsidize; and changing the government agency that administers the subsidy. We also should account for excess burden and distribution. Does repeal or a limit influence labor or savings decisions? Does it affect planning and administrative costs? Does it bring is closer to the distribution we want?

In addition to proposing this three-part framework for limiting tax expenditures, which focuses on programmatic benefits, excess burden, and distribution, this Article also analyzes seven different limits. They have very different effects. For example, a “cap” eliminates the subsidy for high levels of favored activity. In contrast, a “floor” disallows the subsidy for low levels. “Haircuts,” “maximum fractions,” and “phaseouts” preserve the subsidy for both high and low levels of favored activity, but in weakened form. Each limit offers a different mix of strengths and weaknesses, making it a better fit for some tax expenditures than others.

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

Sanchirico Presents Two Tax Papers in Italy

SanchiricoChris Sanchirico (Pennsylvania) presents two papers at the 10th Annual Conference of the Italian Society of Law and Economics at the University of Rome:

As American as Apple Inc.: International Tax and Ownership Nationality, 68 Tax L. Rev. ___ (2014):

The ownership nationality of large US multinational companies plays an implicit but important role in the current debate over how such companies should be taxed. This paper identifies that role and investigates what is actually known about where these companies’ shareholders reside. 

Self-Constructed Assets and Efficient Tax Timing:

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December 18, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Kwall & Wilbur: The Outer Limits of Realization

Florida Tax ReviewJeffrey L. Kwall (Loyola-Chicago) & Katie K. Wilbur (Varnum, Grand Rapids, MI), The Outer Limits of Realization: Weiss v. Stearn and Corporate Dilution, 16 Fla. Tax Rev. ___ (2014):

The Supreme Court’s 1924 Weiss v. Stearn decision involved a classic case of corporate dilution. In that case, a corporation (“Oldco”) transferred its business to a new corporation (“Newco”) in a transaction where the Oldco shareholders surrendered all their stock for 50% of the stock of Newco (and cash). The transaction diluted the proprietary interest of the Oldco shareholders from 100% to 50%. Because the Oldco shareholders surrendered control of the enterprise, the 50% interest they received in Newco was fundamentally different from the 100% interest they had owned in Oldco. Nevertheless, the Court held that the receipt of the Newco shares was not a taxable event (a “realization event”) to the Oldco shareholders. The Court reached this result by ignoring the dilution that occurred in the case.

In 1991, the Supreme Court resurrected the Weiss v. Stearn decision in the Cottage Savings case. There, the Court relied on Weiss v. Stearn to establish that the exchange of property triggers a realization event only if the property received is “materially different” from the property surrendered. Once again, the Court ignored the dilution that occurred in Weiss v. Stearn. As a result, Supreme Court jurisprudence sheds no light on the question of whether corporate dilution can trigger realization.

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

Wednesday, December 17, 2014

Madison: The Tax Consequences of Services Provided by Single People in a Relationship

Allen D. Madison (South Dakota), The Taxation of Gratuitous Services Gone Out of 'Control', 45 U. Mem. L. Rev. 115 (2014):

How does the IRS’s ruling that both parties to an exchange of services are subject to income tax apply in the dating context? When meeting, dating, living together, or potentially raising a child together, single people provide services for each other. Most are unaware that potential tax liability lurks behind their performance and receipt of services. This article proposes a framework for determining when a service is gratuitous and thus subject to income tax and then applies that framework to the four potential phases of singlehood.

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

Morse: Important Developments in Federal Income Taxation (2014)

Edward A. Morse (Creighton), Important Developments in Federal Income Taxation (2014):

This outline, prepared for the 52nd Annual Great Plains Tax Institute in Omaha, Nebraska (December 4-5, 2014) covers significant developments in federal income taxation along with a few other interesting or noteworthy tax topics. It is not intended to provide exhaustive coverage, but it offers a selective treatment of items likely to interest practitioners and advisors within a broad range of professional practices. Coverage in this outline generally includes events from the prior Institute through December 1, 2014.

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

Crane Reviews Halperin & Warren, Understanding Income Tax Deferral

JotwellCharlotte Crane (Northwestern), Keeping Us Honest About the Timing Flaws in the Income Tax (Jotwell) (reviewing Daniel I. Halperin (Harvard) & Alvin C. Warren Jr. (Harvard), Understanding Income Tax Deferral):

The recent attempt of Halperin and Warren to lay out with some precision what is at stake in the various phenomena loosely called “deferral” is a welcome contribution and should become a go-to primer. The essay includes the math critical to the analysis, but in a way that does not require the reader to be able to reproduce it in order to get the full message. It is also a useful review of the literature produced by tax academics in law schools (significantly by Halperin and Warren themselves) that connects the relatively simple financial principles regarding the time value of money with the on-the-ground tax policy debates in which they properly appear.

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

Shaviro: The Case for 1986-Style Corporate Tax Reform

Tax Analysys Logo (2013)Daniel N. Shaviro (NYU), Evaluating the Case for 1986-Style Corporate Tax Reform, 145 Tax Notes 1267 (Dec. 15, 2014):

Shaviro explores the relationship between taxing corporate income at the entity level and the difficulties in evaluating whether a corporate rate cut would be desirable without significant structural changes.

December 17, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, December 16, 2014

Barry & Caron: Tax Regulation, Transportation Innovation, and the Sharing Economy

Jordan M. Barry (San Diego) & Paul L. Caron (Pepperdine), Tax Regulation, Transportation Innovation, and the Sharing Economy, 81 U. Chi. L. Rev. Dialogue ___ (2015):

Many emerging companies’ business models center on helping consumers to share assets in new ways. This “sharing economy” has already experienced tremendous growth and attracted considerable investment capital and talent. Yet, as is often the case with economic innovations, existing regulatory structures have hindered the growth of the sharing economy, reducing its popularity and slowing its development.

This Article explores the tension between innovation and regulation, both in general and in a specific context: the intersection of the transportation sector of the sharing economy and the qualified transportation fringe benefit rules of Internal Revenue Code Section 132. We illustrate how regulators’ legitimate concerns combine with the uncertainty surrounding new ways of doing business to create regulatory environments that place new industries at a disadvantage. We also argue that two of the most common approaches that regulators adopt to foster new industries – expanding regulation to encourage new industries and restricting regulation to spur innovation – are both flawed. In tax and other areas of law, these approaches tend to operate cyclically, with each coming into fashion for a time until its flaws are deemed unbearable and it gets replaced by the other. This cycle will continue until someone comes up with a better innovation.

December 16, 2014 in Scholarship, Tax | Permalink | Comments (0)

Monday, December 15, 2014

Brookings Hosts Conference Today on The Long Run Outlook for the Federal Budget

BrookingsThe Brookings Institution hosted a conference today on The Long Run Outlook for the Federal Budget: Do We Know Enough to Worry?:

Other commentators:

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

Elkins Presents The Achilles Heel of Corporate Taxation Today at Hebrew University

Elkins (2015)David Elkins (Netanya) presents The Achilles Heel of Corporate Taxation at Hebrew University of Jerusalem today as part of its Tax Colloquium Series:

A great deal of the complexity and inconsistency of the corporate tax structure can be traced to a 1921 decision in which the Supreme Court refused to bifurcate the amount paid for shares and to consider part of that amount as consideration for the right to participate in the distribution of already accumulated earnings. Although the government won that case, it turned out to be one of its most pyrrhic victories, as the consequent misallocation of basis created perhaps the most basic corporate tax shelter. Congress, instead of attacking the root of the problem by providing for bifurcation, chose to make it inconvenient for taxpayers to exploit what it viewed as an isolated glitch in the system (and in the process created a great deal of collateral damage). The Commissioner, with some degree of success, tends to look askance at corporations that engage in legitimate self-help by withdrawing profits before selling their shares. Bifurcation would contribute to the equity, efficiency, and simplicity of the corporate tax structure by equalizing the tax treatment of the various methods by which corporate shareholders realize their right to capital and earnings.

December 15, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tobin: The IRS and a Crisis of Confidence -- A New Regulatory Approach for a New Era

Florida Tax ReviewDonald B. Tobin (Dean, Maryland), The Internal Revenue Service and a Crisis of Confidence: A New Regulatory Approach for a New Era, 16 Fla. Tax Rev. 429 (2014):

The Internal Revenue Service is not usually thought of as the agency charged with enforcing the nation’s campaign finance laws. It has found itself, however, at the center of a firestorm over both its involvement and its ineptitude in enforcing certain rules that regulate the campaign activities of tax-exempt organizations. For historical, legal, and practical reasons, the Internal Revenue Code regulates the political activity of tax-exempt groups, in some instances providing for disclosure of campaign donors and expenditures, and in other instances limiting the amount of political activity engaged in by tax-exempt organizations. As campaigns become more sophisticated and complicated, pressure is placed on the rules regulating the political activity of tax-exempt organizations. The current structure regulating the political activity of tax-exempt organizations is unworkable, and the recent crisis resulting from the IRS’s use of partisan criteria to determine what applications for exempt status should come under further inquiry highlights the breakdown in the current regulatory regime.

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

Sunday, December 14, 2014

Top 5 Tax Paper Downloads

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. The #1 paper is now #97 in all-time downloads among 10,578 tax papers:

  1. [1340 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [397 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [231 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)
  4. [206 Downloads]  A Conceptual Framework for the Regulation of Cryptocurrencies, by Omri Marian (Florida)
  5. [168 Downloads]  Corporate Inversions and the Unbundling of Regulatory Competition, by Eric L. Talley (UC-Berkeley)

December 14, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Witte: From Critical Legal Studies to Christian Legal Studies

Law Bible 4John Witte Jr. (Emory), Foreword: From Critical Legal Studies to Christian Legal Studies, in Law and the Bible: Justice, Mercy and Legal Institutions (Robert Cochran & David VanDrunen, eds.  2013):

This text reflects briefly on the precocious rise of Christian legal studies in North American and European law schools, and the past, present, and potential role of Scripture and the Christian tradition in shaping modern understandings of public, private, penal, and procedural law.

December 14, 2014 in Book Club, Legal Education, Scholarship | Permalink | Comments (1)

Friday, December 12, 2014

WSJ: Bonus Depreciation Fails to Boost Jobs, Capital Investment

Wall Street Journal, A Tax Break Fails to Produce Jobs:

With Congress poised to extend a raft of tax breaks, consider this: One such break has helped AT&T and Verizon slash their recent tax bills by billions of dollars without leading to the intended increase in investment or jobs.

The measure, known as “bonus depreciation,” lets companies offset their income with investments they have made more quickly. It was enacted in 2008 as part of the economic stimulus package with the goal of giving companies an incentive to build more factories or upgrade more equipment, creating jobs and giving a boost to sluggish economic growth in the process.

But that isn’t how it has worked, at least at AT&T and Verizon, whose vast networks of towers and cables make them two of the country’s biggest investors in infrastructure.

AT&T estimated its federal tax bill last year at $3 billion, down from about $5.9 billion in 2007, before the tax relief was enacted. Verizon estimated that it would get $197 million back last year, compared with a 2007 bill of $2.6 billion.

Meanwhile, the companies have kept their capital spending relatively flat since the stimulus was adopted, and their employee count has dropped by more than 100,000 people, a fifth of their combined work forces.

WSJ

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December 12, 2014 in Scholarship, Tax | Permalink | Comments (2)

Weekly SSRN Tax Roundup

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December 12, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Thursday, December 11, 2014

Avi-Yonah: Why AMT and No AMxT? A Comment on Hines and Logue

Reuven S. Avi-Yonah (Michigan), Why AMT and No AMxT? A Comment on Hines and Logue:

In Understanding the AMT, and Its Unadopted Sibling, the AMxT,  Jim Hines and Kyle Logue propose an interesting new theory about why the US has an Alternative Minimum Tax (AMT). The function of the AMT, they propose, is to enable Congress to adopt a progressive rate schedule and to accommodate heterogeneous preferences for tax expenditures. Hines and Logue write that "By taxing a broad definition of income, the AMT makes it possible to have a tax system that both encourages certain activities with generous tax preferences and maintains a semblance of distributional equity." This rationale, they suggest, also favors the adoption of an Alternative Maximum Tax (AmXT), which would cap tax liabilities of individuals with very few preference items and thereby afford Congress greater flexibility in designing the income tax. This analysis is certainly novel, since most of the existing tax literature is opposed to the AMT. The problem, however, is that Hines and Logue have no explanation why Congress adopted the AMT but not the AMxT. When a novel theory explains part but not all of the observed phenomena, it behooves us to take another look at the theory. The following suggests another explanation for the AMT, which I believe is more consistent with Congress’ intent. It also suggests a reason to retain the AMT even if Congress does not adopt the AMxT.

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

Yin: The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area

George K. Yin (Virginia), The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area:

This paper briefly explains why the IRS’s adoption of an abbreviated application form (Form 1023-EZ) for organizations seeking recognition of their tax exemption under section 501(c)(3) results in a misuse of scarce compliance resources in the exempt organization area.

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

Wednesday, December 10, 2014

Caron: Thomas Piketty and Inequality -- Legal Causes and Tax Solutions

Paul L. Caron (Pepperdine), Thomas Piketty and Inequality: Legal Causes and Tax Solutions, 64 Emory L.J. Online ___ (2015):

PikettyThomas Piketty's Capital in the Twenty-first Century has acted as an accelerant fueling the fiery public debate over increasing inequality in America and around the world. Piketty makes the provocative empirical claim that the rate of return to private capital inevitably exceeds the rate of economic growth (r > g) and thus leads to growing concentrations of wealth among the richest members of society. Piketty has spawned heated debates in newspapers, magazines, and blogs, which soon will continue in academic journals and law reviews. Shi-Ling Hsu is one of the first out of the gate with The Rise and Rise of the One Percent: Considering Legal Causes of Wealth Inequality, 64 Emory L.J. Online ___ (2015).

Hsu focuses on the interesting question of how law and legal institutions foster inflated returns on capital (Piketty's r). He also makes the important point that lawmakers often conflate Piketty's r with g (public economic growth), resulting in laws that boost the former with little discernible impact on the latter. The bulk of Hsu's argument is devoted to explaining how five areas of American law contribute to "the legal enrichment of the one percent": financial regulation, antitrust law, oil and gas subsidies, transition relief, and electric utility regulation. He concludes with a plea for greater federal funding of education to spur greater economic growth and bridge the deepening inequality chasm in America.

Hsu's essay is a significant contribution to what is certain to be an energetic debate over the implications of Piketty's work. The need to examine the impact of legal rules and institutions on both private capital returns and public economic growth will be an enduring contribution to future scholarship on the extent, consequences, and reduction of income and wealth inequality. I offer here two modest reactions to Hsu's essay: (1) recent inequality research has shifted the focus of high-end wealth concentration from the Top 1% to the Top 0.1% (and even the Top 0.01%), with important implications for the work of both Piketty and Hsu, including (2) the inquiry into whether policymakers should intervene before the fact to re-shape the distribution of the benefits and burdens of economic activity (Hsu's approach) or instead redistribute wealth after the fact (Piketty's approach).

In a recent essay, Joseph Bankman and I argued that tax scholars need to focus more of our work on how policymakers should address the federal government's unprecedented (and growing) fiscal imbalance. California Dreamin’: Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014). In Piketty terms, s (spending) > r (revenues). We proposed that California's recent tax increases on the wealthy should provide a template for the nation to bring r more into alignment with s.

Piketty's pioneering work provides added impetus for deploying the tax system in this effort. Increasing the tax burden on the wealthy would both raise revenue to meet the nation's spending needs and redistribute wealth to alleviate Gatsby-level inequality in America. Hsu’s proposed focus on the distributional impact of laws and legal institutions may prove to be helpful in the long run but a chimera in the short term as the nation's fiscal and inequality challenges demand solutions that only the tax system stands ready to provide. In short, raising taxes on the wealthy would both increase r (revenues) to better match s (spending) and decrease r (private capital returns) to better match g (public economic growth). 

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

Manhire: Do Tax Audits Matter?

J. T. Manhire (U.S. Treasury Department), Do Audits Matter?: A Speculative Theory on the Relation between Tax Audits and Underreporting:

The theory expressed in this paper stems from the conviction that the underreporting rate is discoverable if one understands the relationship between the audit perspective of the tax authority and the underreporting perspective of the population filing individual income tax returns. This theory, if correct, allows for an approximation of the underreporting rate given only enforcement statistics.

After deriving the hidden measure, the paper then approximates the underreporting rate for the categories of individual income tax return filers regularly published by the tax authority and correlates the published audit rates with the approximated underreporting rates. In an attempt to answer the question, “do audits matter for voluntary compliance?,” this paper hypothesizes that a negative correlation between audit and underreporting rates suggests that those categories of tax returns have a hypersensitivity to the audit rate and any underreporting is perhaps intentional. A positive correlation suggests underreported tax is more a result of ignorance or mistake due to a complex tax code and its administration. At a system (non-individual) level, audits appear to matter for certain categories of tax return filers. For other categories, audits appear to have no effect on voluntary compliance rates.

These results can be instructive for tax administration policymakers. For example, as increased investment in enforcement against the categories of returns that suggest underreporting might be intentional could yield more significant compliance effects than enforcement against those categories that contain underreporting as a result of mistake or ignorance. At the same time, an investment in taxpayer education could possibly yield more significant compliance effects for taxpayers in the latter category.

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

Tuesday, December 9, 2014

California Offers Budgetary Lessons For U.S. Government

Stanford Report, California Offers Budgetary Lessons For U.S. Government, Stanford Professor Says:

Once the fodder of late-night comedians, California's budgetary strategy is actually one that national lawmakers might emulate, a Stanford tax scholar says.

Just two years ago, California's budget situation was among the worst in the nation, wrote Joseph Bankman, a law professor at Stanford University, in a new journal article [California Dreamin': Tax Scholarship in a Time of Fiscal Crisis, 48 U.C. Davis L. Rev. 405 (2014):]. The Golden State's annual budget deficits soared past $20 billion, its net asset deficit was more than $127 billion, and the state legislature seemed dysfunctional.

Then, pushed to the brink with very real fears of cutbacks in state services, schools and escalating college tuition, California voters approved Proposition 30 in November 2012.

"California voters defied the conventional political wisdom in resoundingly embracing Prop. 30 by an over-10 percent point margin, 55.4 percent to 44.6 percent," wrote Bankman and his co-author Paul Caron, a law professor at Pepperdine University. ...

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December 9, 2014 in Scholarship, Tax | Permalink | Comments (4)

Monday, December 8, 2014

Raskolnikov: Law and Economics of Variable Sanctions

Alex Raskolnikov (Columbia), Six Degrees of Graduation: Law and Economics of Variable Sanctions:

From parking tickets to tax fines and punitive damages, legal sanctions matter in people’s lives. Yet neither the legal nor the economics literature offers a comprehensive treatment of sanctions. Their practical complexity is not well-understood and their theoretical analysis is fragmented. This essay prepared for an edited volume addresses both limitations. On the practical side, I highlight the complexity of sanctions using tax law as a primary example. The complexity exists because sanctions may (and do) vary along six different dimensions: aggressiveness, magnitude, culpability, effort to comply, likelihood of detection, and offense history. These six degrees of sanctions graduation are distinct, potentially independent, but often intertwined in obscure and perplexing ways. On the theoretical side, I review the economics literature in search of the reasons underlying each degree (or axis) of graduation. I conclude that three graduation axes of great practical significance — aggressiveness, culpability, and offense history — are the least developed theoretically. Two other dimensions — the likelihood of detection and the effort to comply with the law — are more conceptually advanced, although the theory is still fairly removed from the enforcement realities. In contrast, economic analysis reveals a good grasp of the magnitude axis and a clear path to modeling the real-life features that have remained overlooked thus far. By highlighting the complexity of sanctioning regimes and emphasizing the related theoretical successes and shortcomings, this essay identifies fruitful areas of future research, some of which I pursue in related work.

December 8, 2014 in Scholarship, Tax | Permalink | Comments (2)

Manhire: Reconsidering the Tax Compliance Puzzle

Florida Tax ReviewJ. T. Manhire (U.S. Treasury Department), There Is No Spoon: Reconsidering the Tax Compliance Puzzle, 17 Fla. Tax Rev. 1 (2014):

For over 40 years theorists have sought the effects of tax audits on voluntary compliance rates by studying individual taxpayer motivations. Yet no single theory has produced a taxpayer incentive model that both comports with experience and explains the effects of audits on compliance. This quandary is often termed the “tax compliance puzzle.” Consequently, some theorists have called for more capacious models that make room for the panoply of individual compliance motivations. This Article proposes that a more complex model is unnecessary. To the contrary, complex compliance and enforcement data can result from extremely simple behavioral rules of individual taxpayers and government examiners interacting over time.

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December 8, 2014 in Scholarship, Tax | Permalink | Comments (0)

Sunday, December 7, 2014

Top 5 Tax Paper Downloads

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. The #1 paper is now #101 in all-time downloads among 10,560 tax papers:

  1. [1281 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [395 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [386 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  4. [262 Downloads]  A World Turned Upside Down: Reflections on the 'New Wave' Inversions and Notice 2014-52, by Reuven S. Avi-Yonah (Michigan)
  5. [219 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)

December 7, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, December 5, 2014

Weekly SSRN Tax Roundup

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December 5, 2014 in Scholarship, Tax | Permalink | Comments (0)

Weekly Student Tax Note Roundup

December 5, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Newsweek Names Kleinbard's We Are Better Than This One of the Top Books of 2014

We Are Better Than This (2014)Newsweek,  Our Favorite Books of 2014: Newsweek Staff Picks:

We Are Better Than This: How Government Should Spend Our Money by Edward D. Kleinbard (Oxford University Press)

Americans feel the pain of an income tax system that raises twice as much as it actually does because of hidden spending through tax favors. This masterpiece on how we tax ourselves, and how Congress spends our money, explains why the mostly lightly taxed modern country feels so heavily burdened while offering workable solutions.

Drawing on insights from Adam Smith’s The Theory of Moral Sentiments, lawyer Edward D. Kleinbard shows how applying ancient financial and moral principles would make America happier, healthier and wealthier. Kleinbard spent two decades designing sophisticated tax avoidance strategies for rich clients before becoming a law school professor on a mission to expose the tax system’s flaws.

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December 5, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Barton: The Decline and Rebirth of the Legal Profession

GlassBenjamin H. Barton (Tennessee), Glass Half Full The Decline and Rebirth of the Legal Profession (Oxford University Press, 2014):

The hits keep coming for the American legal profession. Law schools are churning out too many graduates, depressing wages, and constricting the hiring market. Big Law firms are crumbling, as the relentless pursuit of profits corrodes their core business model. Modern technology can now handle routine legal tasks like drafting incorporation papers and wills, reducing the need to hire lawyers; tort reform and other regulations on litigation have had the same effect. As in all areas of today's economy, there are some big winners; the rest struggle to find work, or decide to leave the field altogether, which leaves fewer options for consumers who cannot afford to pay for Big Law.

It would be easy to look at these enormous challenges and see only a bleak future, but Ben Barton instead sees cause for optimism. Taking the long view, from the legal Wild West of the mid-nineteenth century to the post-lawyer bubble society of the future, he offers a close analysis of the legal market to predict how lawyerly creativity and entrepreneurialism can save the profession.

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December 5, 2014 in Book Club, Legal Education, Scholarship | Permalink | Comments (1)

Thursday, December 4, 2014

IRS Issues Call for Tax Statistics Research Proposals

IRS Logo 2The IRS Statistics of Income Division has issued a call for proposals for research projects with potential to make significant contributions to tax administration.

The call for proposals describes the details of the program and the application process. Although all submissions will be considered, topics identified as especially relevant to researchers include:

  • Tax administration in a global economy
  • Taxpayer needs and behavior, particularly the roles of information, complexity, salience, engagement, and compliance costs
  • Filing, payment, and reporting compliance measures, behaviors, and drivers
  • Benefit participation measures, behaviors, and drivers, particularly related to the Affordable Care Act
  • Taxpayer response to policy changes, particularly taxpayer responses to changes in incentives
  • The role of complex business structures in tax planning

The due date for research proposal application is December 15, 2014.

December 4, 2014 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Wells: Revisiting Section 367(d)

Florida Tax ReviewBret Wells (Houston), Revisiting Section 367(d): How Treasury Took the Bite Out of Section 367(d) and What Should Be Done About It, 16 Fla. Tax Rev. 519 (2014):

Section 367(d) seeks to prevent residual profits related to U.S. developed intangible assets from migrating out of the U.S. tax jurisdiction via the outbound contribution or transfer of intangibles to a foreign corporation. There has been a great hue and cry over the outbound migration of intangibles in recent years, which by implication has created significant agitation about whether section 367(d) is effective. For at least a decade, the Treasury Department and IRS have identified section 367(d) as an area in need of regulatory reform, and recent comments by government officials indicate that guidance may be forthcoming in the future. Concurrently, the Obama administration has proposed amendments to section 367(d) and the U.S. subpart F rules to address outbound migration of intangible value.

The debate over the efficacy of section 367(d) to prevent IP migration is being waged along two fronts. As to the first front of this debate, the central question is whether a fatal loophole (a “goodwill loophole”) exists within the architecture of section 367(d) that allows the outbound migration of intangible value under the protective cloak of “goodwill” with the consequence that a substantial portion of the ongoing residual profits related to the transferred goodwill items escape the application of section 367(d)’s super royalty obligation. In Subparts II.A. through II.B., this Article addresses why this “goodwill loophole” that has received so much attention is nonexistent. All that is needed is for the courts to correctly apply section 367(d) as it should be applied, and once this is done the “goodwill loophole” should be defrocked of all of its purported cloaking capabilities.

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December 4, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, December 3, 2014

Gamage Presents Analyzing the Optimal Choice of Tax Instruments Today at Harvard

Gamage (2014)David Gamage (UC-Berkeley) presents Analyzing the Optimal Choice of Tax Instruments: The Case for Levying (all of) Labor-Income Taxes, Value-Added Taxes, Capital-Income Taxes, and Wealth Taxes, 68 Tax L. Rev. ___ (2014), at Harvard today as part of its Tax Law, Policy and Practice Workshop Series hosted by Daniel Halperin and Stephen Shay:

Economic analyses of taxation have largely focused on the problems of labor-to-leisure and saving-to-spending distortions. Based on these analyses, the prior literature has generally treated labor-income and consumption taxes as being essentially equivalent, and has also treated capital-income and wealth taxes as being essentially equivalent. Further, based on these analyses, the dominant view in the prior literature has been that neither capital income nor wealth should be taxed.

This Article expands on these prior analyses by incorporating a variety of tax-gaming responses and also administrative and compliance costs. By doing so, this Article argues that it is probably optimal for governments to levy some version of (all of) labor-income taxes, value-added taxes, capital-income taxes, and wealth taxes.

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December 3, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Aging of the American Law Professoriate

David Barnhizer (Cleveland State), The Aging of the American Law Professoriate:

RetireA recent (rather tasteless) article argued: “Professors approaching 70 … have an ethical obligation to step back and think seriously about quitting. If they do remain on the job, they should at least openly acknowledge they’re doing it mostly for themselves.” In The Forever Professors: Academics Who Don’t Retire Are Greedy, Selfish, and Bad For Students, the insensitive author added: “the number of professors 65 and older more than doubled between 2000 and 2011.” The author’s most intellectually savage comments were that: “faculty who delay retirement harm students, who in most cases would benefit from being taught by someone younger than 70, even younger than 65.” All I can say is “OMG!” how can these doddering demented cretins be so irresponsible as to do that to these innocent and needy young people?

Deans and law faculties are facing a situation where they can’t “reload”. The “aging” of the law school and general university tenure track professoriates has created a situation in which some have voiced concerns about what they see as a systemic blockage. The claim is that the refusal of senior faculty to retire is preventing academic institutions from hiring new and younger faculty, thus presumably inhibiting the fully oxygenated “intellectual blood flow” essential for the highest levels of performance by the collective “brain” of the academic institution. As I suggest in this brief analysis the claim that a main problem is the number of senior professors on university and law school faculties and that those older faculty members are somehow harming students is a disingenuous posturing masking other agendas.

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December 3, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

Avi-Yonah: The Rise and Fall of the Consumption Tax

Reuven S. Avi-Yonah (Michigan), The Rise and Fall of the Consumption Tax: A Historical Perspective:

This article will survey the great consumption vs. income tax debate from a historical perspective. The focus here is not on which tax base is better, but rather on how this debate evolved over time inside and outside legal academia. As we shall see, there was one point in which the consumption tax came close to being adopted - in 2005, when it was one of two alternatives recommended by the Bush tax reform panel. But the moment passed, and it seems unlikely to return.

December 3, 2014 in Scholarship, Tax | Permalink | Comments (0)

Call for Tax Papers: Yale/Stanford/Harvard Junior Faculty Forum

JuniorYale/Stanford/Harvard Junior Faculty Forum:

Yale, Stanford, and Harvard Law Schools announce the 16th session of the Yale/Stanford/Yale Junior Faculty Forum to be held at Harvard Law School on June 16-17, 2015 and seek submissions for its meeting.

The Forum’s objective is to encourage the work of scholars recently appointed to a tenure-track position by providing experience in the pursuit of scholarship and the nature of the scholarly exchange. Meetings are held each spring, rotating at Yale, Stanford, and Harvard. Twelve to twenty scholars (with one to seven years in teaching) will be chosen on a blind basis from among those submitting papers to present. One or more senior scholars, not necessarily from Yale, Stanford, or Harvard, will comment on each paper. The audience will include the participating junior faculty, faculty from the host institutions, and invited guests. The goal is discourse on both the merits of particular papers and on appropriate methodologies for doing work in that genre. We hope that comment and discussion will communicate what counts as good work among successful senior scholars and will also challenge and improve the standards that now obtain. The Forum also hopes to increase the sense of community among American legal scholars generally, particularly among new and veteran professors.

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December 3, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Cauble & Polsky: The Problem of Abusive Related-Partner Allocations

Florida Tax ReviewEmily Cauble (DePaul) & Gregg D. Polsky (North Carolina), The Problem of Abusive Related-Partner Allocations, 16 Fla. Tax Rev. 479 (2014):

This Article highlights a flaw in the existing rules regarding partnership tax allocations that has not yet received sufficient attention by existing literature. Namely, the partnership tax allocation rules are implicitly premised on the assumption that partners are unrelated and, thus, transact with each other at arm’s length. As a result, related partners can and do devise tax allocation schemes that exploit the gap in the current partnership tax allocation rules to achieve unwarranted tax savings.

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December 3, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, December 2, 2014

Weisbach Presents The Use of Neutralities in International Tax Policy Today at Columbia

WeisbachDavid Weisbach (Chicago) presents The Use of Neutralities in International Tax Policy at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

This paper analyzes the use of neutrality conditions, such as capital export neutrality, capital import neutrality, capital ownership neutrality, and market neutrality, in international tax policy. Neutralities are not appropriate tools for designing tax policy. They each identify a possible margin where taxation may distort business activities. Because these neutralities cannot be all satisfied simultaneously, however, they do not allow analysts to determine the appropriate trade-offs of these distortions, unlike deadweight loss measures used in other areas of tax policy. International tax policy should instead be tied directly to the reasons for taxing capital income, reasons which are derived from optimal tax or similar models.

December 2, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Driessen: Corporate Tax Fate May Hinge on Modeling Omission

Tax Analysys Logo (2013)Patrick Driessen (former revenue estimator, Joint Committee on Taxation and Treasury Department), Corporate Tax Fate May Hinge on Modeling Omission, 145 Tax Notes 1043 (Dec. 1, 2014):

By omitting corporate income, traditional distribution models overstate the U.S. corporate tax rate and overall tax progressivity. The prevailing capital gains realization approach could be replaced by an inclusive corporate income method that would correctly show corporate equity owners as more lightly taxed than capital gains realization models indicate. That replacement would accord with how the individual tax is modeled for distribution as well as with results from corporate tax studies conducted outside the distribution context. Augmenting corporate income in distribution models would also enable proper reflection of proposals, such as corporate integration, and provide a better perspective on how much corporate tax is borne by labor.

(Hat Tip: David Cay Johnston.)

December 2, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

2014 Tannenwald Tax Writing Competition Results

TannenwaldHere are the results in the 2014 Tannenwald Tax Writing Competition, sponsored by The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and the American College of Tax Counsel:

  • First Prize (tie) ($4,500):  Alex Levy (NYU), Believing in Life After Loving: IRS Regulation of Tax Preparers (Faculty Sponsor:  David Kamin)
  • First Prize (tie) ($4,500):  Mark C. Westenberger (Washington University), Tax-Exempt Hospitals and the Community Benefit Standard: A Flawed Standard and a Way Forward (Faculty Sponsor:  Cheryl Block)
  • Honorable Mention:  Nika Antonikova (San Diego), Real Taxes in Virtual Economies: What Does the IRS Say (Faculty Sponsor:  Brian Galle)
  • Honorable Mention:  Michael Daly (Georgetown University), Bound and Gagged: Making the Case for Congress Delegating Tax Policy to the Experts (Faculty Sponsor:  Tom Field)

December 2, 2014 in Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

Monday, December 1, 2014

Yagan Presents Capital Tax Reform and the Real Economy Today at UC-Berkeley

YaganDanny Yagan (UC-Berkeley) presents Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

Policymakers frequently propose to use capital tax reform to stimulate investment and increase labor earnings. This paper tests for such real impacts of the 2003 dividend tax cut -- one of the largest reforms ever to a U.S. capital tax rate -- using a quasi-experimental design and a large sample of U.S. corporate tax returns from years 1996-2008. I estimate that the tax cut caused zero change in corporate investment, with an upper bound elasticity with respect to one minus the top statutory tax rate of .08 and an upper bound effect size of .03 standard deviations. This null result is robust across specifications, samples, and investment measures. I similarly find no impact on employee compensation. The lack of detectable real effects contrasts with an immediate impact on financial payouts to shareholders. Economically, the findings challenge leading estimates of the cost-of-capital elasticity of investment, or undermine models in which dividend tax reforms affect the cost of capital. Either way, it may be di¢ cult for policymakers to implement an alternative dividend tax cut that has substantially larger near-term effects.

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

Vanderbilt Symposium: The Role of Federal Law in Private Wealth Transfer

VandySymposium, The Role of Federal Law in Private Wealth Transfer, 67 Vand. L. Rev. 1531-2006 (2014):

December 1, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Zucman: Taxing Across Borders -- Tracking Personal Wealth and Corporate Profits

Gabriel Zucman (London School of Economics), Taxing Across Borders: Tracking Personal Wealth and Corporate Profits, 28 J. Econ. Perspectives 121 (Fall 2014):

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry.

Figure 1

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December 1, 2014 in Scholarship, Tax | Permalink | Comments (0)

Gender Disparity in Law Review Citation Rates: Women Outperform Men

Christopher Anthony Cotropia (Richmond) & Lee Petherbridge (Loyola-L.A.), Gender Disparity in Law Review Citation Rates:

Gender disparity in scholarly influence – measured in terms of differential citation to academic work – has been widely documented. The weight of the evidence is that, in many fields of academic inquiry, papers authored by women receive fewer citations than papers authored by men. To investigate whether a similar gender disparity in scholarly influence exists in legal studies we analyze the impact of gender on citation to articles published in top 100 law reviews between 1990 and 2010. We find evidence of gender disparity in citation rates, but in surprising contrast to observations made in other disciplines, we observe that articles authored by women receive significantly more citations than articles authored by men.

Table 3

December 1, 2014 in Legal Education, Scholarship | Permalink | Comments (7)

Call for Papers: Taxing Racism

Call for Papers Taxing Racism: Racial Hoarding, Redistribution, and Contestations of ‘The Public’:

SociologyDuring the 1950s, ’60s, and ’70s, the Black Freedom Struggles pushed for minority inclusion into “mainstream” institutions, seeking integration in schools and housing as well as access to social safety net policies — all gains that would signify acceptance into larger society. As these preliminary steps toward inclusion occurred, we have witnessed large-scale reconfigurations in the very institutions that represented minority access to the public in these struggles. White racial resentment has seen expression in tax revolts, anti-welfare and “social entitlements” discourse, and the decimation of cities’ tax bases through white withdrawal to suburbs. The past few decades have also seen the growth of seemingly neutral tax policies at local, state and federal levels that privilege whites at the expense of blacks (and other people of color too). Through collective as well as corporate interests, whites have sought to lessen their tax obligations for those public services seen as disproportionately benefitting blacks. We have also seen the diversion and hoarding of public tax funds to private pockets in for-profit charter schools, economic development and “urban renewal,” and the growth of private prisons, all of which capitalize on the suffering of a racialized war against the poor.

All these examples allude to broader themes on the racialized meaning of the public itself. If struggles between power and resistance over taxation can reveal anything to scholars of race, it may be that the whole notion of the public is a politically contested battleground in which racial groups assert and defend their collective interests. Taxation can be either a democratizing social force or a site for the reproduction of inequality and racial repression; perhaps even both. Open-ended questions of the public, what constitutes it, who defines it, and whom it should serve all represent contentious matters of racial politics that manifests in conflicts over taxation. Yet what we know of the public as a racially-contested concept has been one subject that remains relatively unexplored by academics generally and sociologists specifically.

This special issue fills this theoretical and empirical gap by uniting a discussion of contemporary racial trends in taxation, with special attention paid to racially-motivated revisions of the public, all with the intent of generating broader hypotheses about race and belonging in the modern era. Preferred approaches will be sociological in nature, but interdisciplinary orientations will be considered. Papers that use a variety of theoretical and methodological approaches are welcomed. Manuscripts may include, but are not limited to the following themes:

  • Property Tax Revolts, White Backlash, and Education Finance
  • “The 47 Percent,” the “Food-Stamp President,” and Racial Redistribution
  • The Earned Income Tax Credit: When Tax Policy becomes “Welfare”
  • Tax Increment Financing, Urban Growth Regimes, and Transforming “Inner-cities”
  • Tax Exemptions, White Flight, and Segregation Academies
  • The “Death” Tax, Growing Wealth Disparity, and the Racial Politics of Deservingness
  • Fiscal Cliffs, BIG Government, and the Racial State
  • Business Tax Breaks in Overtaxed Black Cities
  • Brownfield Redevelopment and School Tax Capture
  • Court Fines and Fees, Government Finance in Ferguson, Missouri

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December 1, 2014 in Scholarship, Tax | Permalink | Comments (0)

Sunday, November 30, 2014

The Research Productivity of New PhDs in Economics: The Surprisingly High Non-success of the Successful

John P. Conley (Vanderbilt) & Ali Sina Önder (Bayreuth), The Research Productivity of New PhDs in Economics: The Surprisingly High Non-success of the Successful:

We study the research productivity of new graduates from North American PhD programs in economics from 1986 to 2000. We find that research productivity drops off very quickly with class rank at all departments, and that the rank of the graduate departments themselves provides a surprisingly poor prediction of future research success. For example, at the top ten departments as a group, the median graduate has fewer than 0.03 American Economic Review (AER)-equivalent publications at year six after graduation, an untenurable record almost anywhere. We also find that PhD graduates of equal percentile rank from certain lower-ranked departments have stronger publication records than their counterparts at higher-ranked departments. In our data, for example, Carnegie Mellon's graduates at the 85th percentile of year-six research productivity outperform 85th percentile graduates of the University of Chicago, the University of Pennsylvania, Stanford, and Berkeley. These results suggest that even the top departments are not doing a very good job of training the great majority of their students to be successful research economists. Hiring committees may find these results helpful when trying to balance class rank and place of graduate in evaluating job candidates, and current graduate students may wish to re-evaluate their academic strategies in light of these findings.

Table 2

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November 30, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (2)

Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads on SSRN is the same as last week's list.  The #1 paper is now #115 in all-time downloads among 10,535 tax papers:

  1. [1176 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [390 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [372 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  4. [240 Downloads]  A World Turned Upside Down: Reflections on the 'New Wave' Inversions and Notice 2014-52, by Reuven S. Avi-Yonah (Michigan)
  5. [229 Downloads]  A White Paper on Executive Action to Restore Trust in the Internal Revenue Service by Rebuilding Field Operations, by Frank Wolpe (Bentley)

November 30, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 29, 2014

Burk: The Evolving Market for New Lawyers in the 21st Century

Bernard A. Burk (North Carolina), What's New About the New Normal: The Evolving Market for New Lawyers in the 21st Century, 41 Fla. St. U. L. Rev. 541 (2014):

Everyone agrees that job prospects for many new law graduates have been poor for the last several years; there is rather less consensus on whether, when, how or why that may change. This article analyzes historical and current trends in the job market for new lawyers in an effort to predict how that market may evolve.

The article derives quantitative measurements of the proportion of law graduates over the last thirty years who have obtained initial employment for which law school serves as rational substantive preparation (“Law Jobs”). In comparing entry-level hiring patterns since 2008 with those in earlier periods, a significant development emerges: While other sectors of the market for new lawyers have changed only modestly during the Great Recession, one sector — the larger private law firms colloquially known as “BigLaw” — has contracted six times as much as all the others. Though BigLaw hiring has historically accounted for only 10%-20% of each graduating class, it is responsible for over half the entry-level Law Jobs lost since 2008.

While some observers predict a return to business as usual as the economy recovers, this article is skeptical of that account. The article identifies significant structural changes in the way that the services traditionally provided by BigLaw are being produced, staffed and priced that diminish BigLaw’s need for junior lawyers both immediately and in the longer term. These observations suggest that entry-level BigLaw hiring, and thus the market for new lawyers overall, will remain depressed below pre-recession levels well after demand for the services BigLaw has traditionally provided recovers. At the same time, new lawyers’ job prospects may nevertheless improve as the contraction in the legal academy now underway reduces the number of new graduates competing for work.

Chart

November 29, 2014 in Legal Education, Scholarship | Permalink | Comments (2)