TaxProf Blog

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

Friday, April 27, 2018

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

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

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

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

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

Thursday, April 26, 2018

Barker: Tax, Facts, And State Law

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

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

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

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

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

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

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

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

Liscow: Distributional Impacts From School Finance Litigation

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

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

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

Wednesday, April 25, 2018

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

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

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

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

Maynard: The NCAA Infringes On The Freedom Of Families

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

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

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

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

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

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

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

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

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

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

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

Recoupling Founders With Their IP: Improving Innovation By Rationalizing I.R.C. Section 351

Mira Ganor (Texas), Recoupling Founders with Their IP – Improving Innovation by Rationalizing IRC Section 351 (Licensing vs. Assignment of Founders’ IP in VC Backed Start-Ups):

This Article questions the conventional wisdom of the U.S. practice of early assignment of founder’s intellectual property to the venture capital backed startup-company. The Article shows that certain U.S. tax rules motivate founders to rush to assign their individually owned intellectual property to the startup-company rather than license it to the company. This tax enhanced distortion of the founders’ choice may have socially inefficient effects that under certain circumstances hinder innovation by decoupling the intellectual property from those who are most apt to exploit it. Thus, this Article offers for consideration, proposals to reform the current tax treatment of intellectual property transfers.

The proposed reform will level the playing field from a tax perspective and prevent distorting the founders’ choice between intellectual property assignment and intellectual property licensing.

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

Tuesday, April 24, 2018

Schön Presents Taxation And Democracy Today At NYU

SchoenWolfgang Schön (Max Planck Institute) presents Taxation and Democracy at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Political economy assumes that taxation and democracy interact beneficially when there exists “congruence” or “equivalence” among those who vote on the tax, those who pay the tax, and those who benefit from the tax. Yet this only holds true when we look at the community of taxpayers as an aggregate, not at the position of the individual taxpayer. Individuals might regard democratic decision-making as a tool for the majority to exploit the minority. They might also perceive powerful special interest groups to extract preferential tax treatment to the detriment of other constituencies.

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April 24, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Slemrod Presents U.S. Enforcement Against Evasive Foreign Accounts Today At Georgetown

Slemrod (2017)Joel Slemrod (Michigan) presents Taxing Hidden Wealth: The Consequences of U.S. Enforcement Initiatives of Evasive Foreign Accounts at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

In 2008, the IRS initiated efforts to curb the use of offshore accounts to evade taxes. This paper uses administrative microdata to examine the impact of the enforcement efforts on taxpayers’ reporting of offshore accounts and income. Enforcement caused approximately 60,000 individuals to disclose offshore accounts with a combined value of around $120 billion. Most disclosures happened outside offshore voluntary disclosure programs by individuals who never admitted prior noncompliance. The disclosed accounts were concentrated in countries whose institutions facilitate tax evasion. The enforcement-driven disclosures increased annual reported capital income by $2.5-$4 billion corresponding to $0.7-$1.0 billion in additional tax revenue.

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April 24, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Hungerford: History Shows That GOP's Corporate Tax Cuts Are Unlikely To Spur Economic Growth

Thomas L. Hungerford, Latest Tax Cuts: History Belies Promise of Growth:

One provision of The Tax Cuts and Jobs Act (TCJA; P.L. 115–97), enacted on December 22, 2017, dramatically reduces the statutory corporate tax rate from 35 percent to 21 percent. It is projected to cost the U.S. Treasury over $1.3 trillion over the next 10 years. Given widespread Republican concerns about federal budget deficits just eight years ago, it seems odd to call for tax changes that lower rates, reduce tax revenue, and increase deficits. The putative impetus for these calls is the belief that the statutory corporate income tax rate is too high–providing an excessive burden on U.S. corporations that leads to poor economic performance. This article examines corporate income-tax rates between 1946 and 2016 (before TCJA), and the argument linking low corporate tax rates with higher economic growth. This analysis finds no evidence that high corporate tax rates have a negative impact on economic growth. The new lower corporate income-tax rate is unlikely to spur economic growth.

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April 24, 2018 in Scholarship, Tax | Permalink | Comments (0)

Michigan Law Review Tax Book Reviews

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April 24, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Monday, April 23, 2018

Elkins Presents The Myth Of Corporate Tax Residence Today In China

Elkins (2015)David Elkins (Netanya) presents The Myth of Corporate Tax Residence today at the Academy of International Strategy and Law of Zhejiang University in Hangzhou, China:

The issue of corporate residence has recently attracted a great deal of attention in both the popular press and in academic discourse, primarily because of the phenomenon of corporate inversions. The consensus among commentators is that the root of the problem is a flawed definition of corporate residence, and they have therefore proposed replacing the current definition, which relies upon place of incorporation, with another that relies upon control and management, home office, customer base, source of income, or the residence of shareholders.

The thesis of this article is that the concept of tax residence is inapplicable to corporations. Residence in tax law delineates the boundaries of distributive justice, and whereas corporations cannot be parties to a scheme of distributive justice, corporate residence is a misnomer. The incongruity of corporate residence along with the fact that residence is a fundamental concept in international taxation is one reason that the current international tax regime has proven unviable.

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

Sunday, April 22, 2018

Brunson: God And The IRS — Accommodating Religious Practice In U.S. Tax Law

BrunsonSamuel D. Brunson (Loyola-Chicago), God and the IRS: Accommodating Religious Practice in United States Tax Law (Cambridge University Press 2018):

Seventy-five percent of Americans claim religious affiliation, which can impact their taxpaying responsibilities. In this illuminating book, Samuel D. Brunson describes the many problems and breakdowns that can occur when tax meets religion in the United States, and shows how the US government has too often responded to these issues in an unprincipled, ad hoc manner. God and the IRS offers a better framework to understand tax and religion. It should be read by scholars of religion and the law, policymakers, and individuals interested in understanding the implications of taxation on their religious practices.

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April 22, 2018 in Book Club, Scholarship, Tax | Permalink | Comments (2)

The Top Five New Tax Papers

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

  1. [778 Downloads]   Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [331 Downloads]  Taxing Income Where Value Is Created, by Allison Christians (McGill) & Laurens van Apeldoorn (Leiden)
  3. [326 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  4. [312 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  5. [298 Downloads]  Taxation of Investments in Bitcoins and Other Virtual Currencies: International Trends and the Brazilian Approach, by Flavio Rubinstein (Fundação Getúlio Vargas) & Gustavo Gonçalves Vettori (University of São Paulo)

April 22, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 21, 2018

Zelinsky: New Section 4968 And Taxing All Charitable Endowments

Edward A. Zelinsky (Cardozo), Section 4968 and Taxing All Charitable Endowments: A Critique and Proposal, 38 Va. Tax Rev. ___ (2018):

Section 4968, recently added to the Internal Revenue Code,imposes a tax on the investment incomes of some college and university endowments. Critics of Section 4968 disparage this new tax as selectively targeting what are widely perceived as wealthy, politically liberal institutions such as Harvard, Yale,Princeton, M.I.T. and Stanford.

There is a strong tax policy argument for taxing the net investment incomes of all charitable endowments including donor-advised funds, community foundations, all educational endowments,and foundations supporting hospitals, museums and other eleemosynary institutions.

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

Friday, April 20, 2018

Weekly SSRN Tax Article Review And Roundup: Stevenson Reviews Sugin's Competitive Philanthropy

This week, Ariel Jurow Stevenson (NYU; moving to San Diego) reviews a new work by Linda Sugin (Fordham), Competitive Philanthropy: Charitable Naming Rights, Inequality, and Social Norms, 79 Ohio St. L. J. __ (2018).

StevensonDespite decades of research, experts have not reached a firm conclusion regarding whether and how much the charitable deduction increases giving. As Linda Sugin convincingly argues in her recent article, this uncertainty should not counsel towards abandoning the deduction, but rather embracing it for the key social functions it performs. Shifting the focus away from economic factors, Sugin explains that the charitable deduction is important for signaling the value of communal support and deconcentrating wealth at the top of the income distribution. Sugin’s article offers a timely and vital critique of the charitable deduction literature’s overly narrow focus on economic analysis, and suggests a novel policy solution directed at today’s pressing social problems.

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April 20, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Development Journal Publishes New Issue

TDJ4The Tax Development Journal of California State University, Northridge (a double-blind, peer-reviewed journal), has published Volume 8 (Spring 2018):

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

Thursday, April 19, 2018

Columbia Journal Of Tax Law Publishes New Tax Matters: The U.S. And The WTO

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with short pieces by tax practitioners responding to a specific cutting-edge tax law issue posed by a tax academic.
Reuven S. Avi-Yonah (Michigan), Does the United States Still Care About Complying With Its WTO Obligations?, 9 Colum. J. Tax L. Tax Matters 12 (2018):

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

Camp: A New In Camera Review Requirement For Summons Proceedings?

Bryan Camp (Texas Tech), A New in Camera Review Requirement for Summons Proceedings?, 158 Tax Notes 1201 (Feb. 26, 2018):

This paper looks at what appears to be an emerging trend in tax summons enforcement: that district courts actually review documents for which the summoned party claims a privilege. In December 2017 the Ninth Circuit seemingly joined the Second Circuit and the D.C. Circuit in finding that a district court's failure to review documents in camera was an abuse of discretion.

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

Wednesday, April 18, 2018

Florida Tax Review Publishes New Issue

Florida Tax Review (2018)The Florida Tax Review has published Vol. 21, No. 1:

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

Columbia Journal Of Tax Law Publishes New Tax Matters: Charitable Contributions And State Tax Credits

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with short pieces by tax practitioners responding to a specific cutting-edge tax law issue posed by a tax academic.
Kirk J. Stark (UCLA), The Tax Treatment of Charitable Contributions & State Tax Credits, 9 Colum. J. Tax L. Tax Matters 1 (2018):

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

Sugin: Competitive Philanthropy — Charitable Naming Rights, Inequality, And Social Norms

Linda Sugin (Fordham), Competitive Philanthropy: Charitable Naming Rights, Inequality, and Social Norms, 79 Ohio St. L. J. ___ (2018):

Income inequality today is at a high not seen since the 1920s, and one way the very richest display their wealth is through charitable giving. Gifts in excess of $100 million are no longer rare, and in return for their mega-gifts, the biggest donors get their names on buildings, an astonishingly valuable benefit that the tax law ignores. The law makes no distinction between a gift of $100 and a gift of $100 million.

This Article argues that the tax law of charity should focus on the very rich and harness the culture of philanthropy among the elite. The law should encourage and celebrate what this Article calls “competitive philanthropy,” which defines philanthropic success as inspiring others to exceed your generosity. To promote competitive philanthropy, this Article proposes a legal regime that includes both more and less generous elements for donors than current law. It introduces a hierarchy of gift restrictions that calibrates the charitable deduction to reflect the burdens that restrictions impose on charities, disfavoring perpetuity and mission-diverting restrictions. It recommends eschewing the standard donor-centered perspective of the tax law to consider the perspective of charities.

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

Columbia Journal Of Tax Law Publishes New Tax Matters: Tax Treatment Of A Marijuana Business

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with short pieces by tax practitioners responding to a specific cutting-edge tax law issue posed by a tax academic.
Douglas A. Kahn (Michigan), The Tax Treatment of a Marijuana Business, 8 Colum. J. Tax L. Tax Matters 23 (2017):

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April 18, 2018 in Scholarship, Tax | Permalink | Comments (2)

Tuesday, April 17, 2018

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

SatterthwaiteEmily Satterthwaite (Toronto) presents Electing into a Value-Added Tax: Evidence from Ontario Micro-Entrepreneurs at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

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

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

Mehrotra Presents T.S. Adams And The Beginning Of The Value-Added Tax Today At Georgetown

Mehrotra (2017)Ajay Mehrotra (American Bar Foundation & Northwestern) presents Economic Expertise, Democratic Constraints, and the Historical Irony of U.S. Tax Policy: Thomas S. Adams and the Beginnings of the Value-Added Tax at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

I have recently embarked upon a new long-term research project (The VAT Laggard: A Comparative History of U.S. Resistance to the Value-added Tax), which explores why the United States remains the only advanced, industrialized nation that continues to resist the global spread of the value-added tax (VAT). The first part of this comparative-history project examines the 1920s intellectual beginnings of the VAT in the United States.

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

Columbia Journal Of Tax Law Publishes New Issue

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published Vol. 9, No. 2:

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

Monday, April 16, 2018

Can Tenured Faculty Contracts Be Terminated In A College's Bankruptcy?

Matthew A. Bruckner (Howard), Terminating Tenure: Rejecting Tenure Contracts in Bankruptcy, 92 Am. Bankr. Inst. L. Rev. 255 (2018):

Many institutions of higher education are in dire financial straits and will close, merge, or file for bankruptcy in the near future. This Article considers the effect of bankruptcy laws on the ability of higher education institutions to restructure their workforces and, in particular, the impact that a bankruptcy filing may have on tenured professors.

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April 16, 2018 in Legal Education, Scholarship | Permalink | Comments (7)

Sunday, April 15, 2018

The Top Five New Tax Papers

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #3:

  1. [680 Downloads]   Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [370 Downloads]  The Elephant Always Forgets: U.S. Tax Reform and the WTO, by Reuven Avi-Yonah (Michigan) & Martin Vallespinos (S.J.D. 2018, Michigan)
  3. [308 Downloads]  Taxing Income Where Value Is Created, by Allison Christians (McGill) & Laurens van Apeldoorn (Leiden)
  4. [301 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  5. [297 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)

April 15, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 14, 2018

21st Annual Critical Tax Theory Conference At South Carolina

South Carolina Logo (2018)South Carolina hosts the 21st Annual Critical Tax Theory Conference today and tomorrow:

The Critical Tax Theory Conference has a long history of fostering the work of both established and emerging scholars whose research challenges and enriches the tax law and policy literature. Critical tax scholars question assumptions of objectivity in tax, as their work explores how tax law and policy impact historically marginalized groups. At a time when tax policy is once again at the forefront of politics and public discourse, the work of these and other critical tax scholars supports a more robust discussion of the role for tax law in current and future social and economic policy.

Panel #1: Inequality and the Current Political Climate

  • Shu-Yi Oei (Boston College) (Chair)
  • Charlotte Crane (Northwestern), A Matter of Legislative Grace: The Net Income Norm in the Implementation of the Income Tax
  • Goldburn P. Maynard Jr. (Louisville), Hold on to Your Student Loan... I'll Take the Cash Instead
  • Nancy Shurtz (Oregon), Horizontal Inequity Under the Tax Cuts and Jobs Act of 2017

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April 14, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Friday, April 13, 2018

Brown Presents The Hegemony Of International Tax Reform Today At Georgetown

Brown (Karen)Karen B. Brown (George Washington) presents The Hegemony of International Tax Reform at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

The vast needs of the developing world, especially after the great recession of 2008, underscore the urgency of allowing these countries a meaningful voice in international tax reform. Twentyfirst century international tax reform has diminished power to conquer the challenges of the global marketplace when it ignores, minimizes, or undervalues the perspective and input of developing countries. The continued export of terrorism and the rising tide of political and economic refugees from these neglected areas of the world will shed a harsh light on efforts to ignore the importance of these nations to the economic and political stability of the remainder of the world.

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

Weekly SSRN Tax Article Review And Roundup: Mazur Reviews Morse's Government-To-Robot Enforcement

This week, Orly Mazur (SMU) reviews a new work by Susan C. Morse (Texas), Government-To-Robot Enforcement, 2018 U. Ill. L. Rev. ___.

Mazur (2017-2)As Tax Day approaches, millions of people are using tax software, such as TurboTax, to prepare their tax returns. But what if you make a legal error on your tax return as a result of the tax preparation software? Under current law, the legal liability for the error is directly on you - the taxpayer.

In her new work, Susan Morse proposes to fundamentally change the way regulatory law is enforced. She proposes government-to-robot enforcement. Specifically, Morse argues that an automated law system, which is any machine that produces a legal determination, should be held directly liable for compliance errors made by its users. Therefore, if you use TurboTax to prepare your taxes and you correctly input your facts, but the system produces a return that understates your tax liability, you would not be directly liable for this error. Instead, if the error is discovered, the IRS would pursue enforcement against and impose liabilities directly on TurboTax.

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April 13, 2018 in Orly Mazur, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Herzig & Brunson: Let Prophets Be (Non) Profits

David Herzig (Valparaiso) & Samuel D. Brunson (Loyola-Chicago), Let Prophets Be (Non) Profits,  52 Wake Forest L. Rev. 1111 (2017):

In this article, we take a step back and ask whether the Supreme Court’s application of the fundamental public policy rule as espoused in the Bob Jones case is the normatively correct position. In our analysis, we conclude that using fundamental public policy as a filter in granting tax exemption gets both tax and public policy wrong. Our conclusion is informed by the history of the role played by public charities espousing minority views. We believe that a legitimate space in society should exist and populated by nonprofits to both espouse popular and unpopular minority views. But it is also informed by tax policy: applying the fundamental public policy rule to qualification for tax exemption misunderstand how exemption fits into the corporate income tax.

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

Thursday, April 12, 2018

Fleischer Presents The Architecture Of A Basic Income Today At Duke

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents The Architecture of a Basic Income (with Daniel Hemel (Chicago)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway across the globe, including in Canada, Finland, Italy, Kenya, and Uganda. Here in the United States, the city of Stockton, California, has partnered with a nonprofit organization to give checks of $500 a month—no strings attached—to several dozen families. And prominent voices from across the ideological spectrum have taken up the UBI idea as well: libertarian Charles Murray, Facebook co-founder and Obama campaign strategist Chris Hughes, and former labor leader Andy Stern all have offered proposals for nationwide programs that resemble a UBI.

To be sure, even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years—if not decades—ahead. And accordingly, one might argue that hashing out the nitty-gritty programmatic specifications of a UBI puts the cart before the horse. But as we seek to show below, these design details in many cases are the horse. What might seem like technical aspects of a UBI (e.g., whether it is paid monthly or annually; whether an individual’s future stream of UBI payments can be posted as collateral for a loan; and whether a spouse’s income is factored into the calculation of a phaseout) turn out to be essential elements that affect whether a future UBI will live up to the high expectations that supporters have set.

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

Bird-Pollan Presents Sovereignty, Tax, And Bilateral Investment Treaties Today At Indiana

Bird-Pollan (2017)Jennifer Bird-Pollan (Kentucky) presents The Sovereign Right to Tax: How Bilateral Investment Treaties Threaten Sovereignty at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Bilateral Investment Treaties, or “BITs,” are both a response to and likely at least partly responsible for the significant increase in international investments in the last fifty years. BITs provide potential private investors government assurances regarding a variety of factors relevant to their investments. Among these assurances, BITs regularly address the tax authority that the host government has with regard to the foreign investor, often protecting that foreign private investor against changes to the host country’s tax system. If an investor believes the host country has violated the terms of the BIT, that investor can bring a claim against the country in front of an independent arbitration panel, whose decision will be final and binding. Because the power to tax is at the heart of what makes a sovereign authority a sovereign, restrictions on a sovereign’s ability to tax foreign investors, which can be enforced by an external body, threaten that sovereign’s very essence. As a result, tax provisions in BITs and the adjudication of those provisions by arbitration bodies must be carefully examined and potentially reconsidered, to protect the sovereign rights of governments to assess tax, to evolve their tax policies, and administer the laws of their countries in the best interests of their people. This Article explains the background and use of BITs, explores theories of sovereignty, and then demonstrates that the current use of BITs to restrict governments’ ability to assess and collect tax within their borders threatens sovereign rights. The Article concludes by suggesting ways that the regulation of the taxation of international investments could be modified to protect sovereign rights.

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

Wallace: Centralized Review Of Tax Regulations

Clint Wallace (South Carolina), Centralized Review of Tax Regulations, 70 Ala. L. Rev. __ (2018):

Centralized oversight of agency policymaking and spending by the President’s Office of Management and Budget is a hallmark of the modern administrative state. But tax regulations have almost never been subject to centralized review. Scholars and policymakers have provided various incomplete justifications for excepting tax policy from centralized review, including concerns about politicizing tax administration, resource constraints within OMB, and a perception that tax is somehow different from other types of regulatory policy in ways that matter for the desirability of centralized review.

This Article undertakes a holistic analysis of the advantages and disadvantages of centralized review of tax regulations, as well as the challenges arising from such review. I conclude that none of the reasons offered in the past for a default rule of no review is sufficient in light of the normative benefits of centralized review.

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April 12, 2018 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Azam: International Tax Norms In The Era Of Globalization And BEPS

Rifat Azam (Radzyner), Ruling the World: Generating International Tax Norms in the Era of Globalization and BEPS, 50 Suffolk U.L. Rev. 517 (2017):

In this innovative and comprehensive article, I will explore how international tax norms are generated in the era of globalization within the theoretical framework of international relations that studies International Regimes and tries to answer questions of formation, implementation, compliance, effectiveness, and spectrum of success. I will study the multilateral efforts that preceded BEPS to predict the prospects of BEPS. I deeply examine regulatory, institutional and political aspects of the key multilateral initiatives on international taxation to better understand the structure and politics of international tax law making in the global digital economy and infer from this past experience with regards to the prospects and feasibility of the BEPS project. This interdisciplinary article is the first to systematically study these previous initiatives, gauge their impacts, and apply these lessons to the current BEPS endeavor. The article contributes to an emergent line of interdisciplinary scholarship that integrates political economy literature into the analysis of the current international tax regime and its challenges. This innovative method of scholarship has contributed substantially to the current academic understanding of international taxation in the 21st century and offers potential solutions to the obstacles facing international taxation.

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

Wednesday, April 11, 2018

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 37, No. 2 (Winter 2018):

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

Law Profs Should Impose Mandatory Pro Bono On Themselves

Rima Sirota (Georgetown), Making CLE Voluntary and Pro Bono Mandatory: A Law Faculty Test Case, 78 La. L. Rev. 547 (2017):

The vast majority of attorneys in this country are required to complete 10 to 15 hours of continuing legal education (“CLE”) every year, an experience well summarized by one attendee’s observation that “[k]nowledge is good, but coerced seat time is wasteful [and] insulting.” The primary rationale for mandatory CLE is to help ensure competent client representation, but the mandatory system fails to achieve that goal. Instead, mandatory CLE has become a self-perpetuating industry that earns hundreds of millions of tuition dollars for course purveyors but demonstrates little, if any, connection to better serving the public.

By contrast, almost no attorney is required to complete a single hour of pro bono service. Although the American Bar Association (“ABA”) recognizes the “critical” need for free legal services for “persons of limited means,” attorneys simply are encouraged to volunteer their time. This voluntary pro bono system has proven to be so woefully inadequate that Justice Sonia Sotomayor recently declared her support for a “forced labor” approach to attorneys’ pro bono responsibilities.

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April 11, 2018 in Legal Education, Scholarship | Permalink | Comments (7)

Shanske: Interpreting State Fiscal Constitutions

Darien Shanske (UC-Davis), Interpreting State Fiscal Constitutions: A Modest Proposal, 69 Rutgers L. Rev. 1331 (2017):

The fiscal constitutions of many states limit the ability of governments to raise taxes. These same constitutions typically do not impose similar limits on the ability of governments to impose a fee, say a building permit fee. But what if a locality chose to levy a gigantic building permit fee and used the proceeds to fund general services? Such a fee would — and should — be considered a “hidden tax” and thus subject to the same limitations as ordinary taxes.

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

Tuesday, April 10, 2018

Varner Presents Millionaire Migration And Taxation Of The Elite Today At Georgetown

VarnerCharles Varner (Stanford) presents Millionaire Migration and Taxation of the Elite: Evidence from Administrative Data (with Ithai Lurie (Office of Tax Analysis, U.S. Treasury Department), Richard Prisinzano (Pennsylvania) & Cristobal Young (Stanford)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

A growing number of U.S. states have adopted “millionaire taxes” on top income-earners. This increases the progressivity of state tax systems, but it raises concerns about tax flight: elites migrating from high-tax to low-tax states, draining state revenues, and undermining redistributive social policies. Are top income-earners “transitory millionaires” searching for lower-tax places to live? Or are they “embedded elites” who are reluctant to migrate away from places where they have been highly successful? This question is central to understanding the social consequences of progressive taxation. We draw on administrative tax returns for all million-dollar income-earners in the United States over 13 years, tracking the states from which millionaires file their taxes. Our dataset contains 45 million tax records and provides census-scale panel data on top income-earners. We advance two core analyses: (1) state-tostate migration of millionaires over the long-term, and (2) a sharply-focused discontinuity analysis of millionaire population along state borders. We find that millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance.

Figure 1

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

Furman Presents Should Policymakers Care Whether Inequality Is Helpful Or Harmful For Growth? Today At NYU

FurmanJason Furman (Harvard) presents Should Policymakers Care Whether Inequality Is Helpful or Harmful For Growth? at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

The view that inequality is harmful for growth is increasingly fashionable among policymakers around the world. In the strongest form of this argument, high levels of inequality can make sustained growth impossible or even cause recessions. In a weaker form, lower levels of inequality are good for growth. Among policymakers this view has almost entirely supplanted the traditional economic view that there was a tradeoff between inequality and growth, and that greater inequality might be the cost of higher levels of growth.

This paper is not a fresh attempt to assess the empirical evidence on inequality and growth or a survey of the existing literature. Instead this paper addresses the question of whether policymakers should even be interested in this question in its traditional form, answering with a resounding no for three reasons. ...

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

Leviner Presents Public Opinion And Tax Justice Today At Sapir School of Law

Leviner (2018)Sagit Leviner (Ono Academic College, Israel) presents In the Eye of the Beholder: Public Opinion on Tax Justice at Sapir School of Law today as part of its Faculty Seminar Series:

The tax system is one of the most influential of civic institutions of our time. Taxes often detract at least one third of our income and they present an immediate and consequential effect with respect to a broad array of actions we make daily, when we choose to get married, have kids, go to college, or buy a loaf of bread. And, even though tax cuts and reforms are accordingly appealing to many people, it is worth taking time to ponder over the consequences of such cuts and reforms. This essay addresses the issue of fairness in taxation and how the tax system is perceived desirable not from a purely academic or theoretical perspective, but rather from a public opinion prism.

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

Abreu & Greenstein: Rebranding Tax/Increasing Diversity

Alice Abreu (Temple) & Richard Greenstein (Temple), Rebranding Tax/Increasing Diversity, 96 Denv. L. Rev. ___ (2018):

Tax gets a bad rap. It is generally thought to be coercive, burdensome, complicated, unpleasant, and boring. The annual ritual of filing tax returns underscores the taking aspect of taxation by reminding even those who receive refunds that money has been taken from them. This view of tax—that it is about taking—is not only inaccurate and incomplete, but it may have had two related, significant, deleterious, but unexamined effects. Viewing the tax system only as an instrument of taking may contribute to the creation of a tax bar that is more white and less diverse than the bar in general, and that may, in turn, contribute to the existence of a tax system that disproportionately favors the relatively non-diverse population of taxpayers at the top of the income distribution. This Article examines the first of these effects. We attempt to answer to a question that has gone unasked for far too long: Why is the tax bar so white?

AG2

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

Hackney: Subsidizing The Heavenly Chorus — Labor Unions And Tax Exemption

Philip Hackney (LSU), Subsidizing the Heavenly Chorus: Labor Unions and Tax Exemption, 91 St. John's L. Rev. 315 (2017):

Labor Unions are nonprofit organizations that provide laborers a voice before their employer and before governments. They are classic interest groups. United States federal tax policy exempts labor unions from the income tax, but effectively prohibits labor union members from deducting union dues from the individual income tax. Because these two policies directly impact the political voice of laborers, I consider primarily the value of political fairness in evaluating these tax policies rather than the typical tax critique of economic fairness or efficiency. I apply a model that presumes our democracy should aim for one person, one political voice. For the model, political voice means the ability of citizens to participate in setting and discussing the political agenda and to vote on any final decision. In a modern democratic state, citizens largely depend upon organized interest groups to fulfill this role of political voice. In the Article, I demonstrate that tax policy applicable to labor unions likely modestly harms political voice equality.

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

Monday, April 9, 2018

Scharff Presents Green Fees: Pricing Externalities Under State Law Today At UC-Irvine

Scharff (2017)Erin Scharff (Arizona State) presents Green Fees: The Challenge of Pricing Externalities under State Law at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

Policymakers at the state and local level are increasingly interested in using market-based pricing mechanisms as regulatory tools. At the state level, Massachusetts, Rhode Island, and Washington have recently considered state-level carbon pricing, while California is moving forward with its own cap-and-trade program. At the local level, municipal governments are increasingly turning to stormwater remediation fees to pay for the treatment of municipal runoff required by the Clean Water Act. And Philadelphia, Berkeley, and Seattle all recently joined Chicago and impose a soda tax on high-caloric beverages.

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

Kaplow And Shavell And The Priority Of Income Taxation And Transfer

David Blankfein-Tabachnick (Michigan State) & Kevin A. Kordana (Virginia), Kaplow and Shavell and the Priority of Income Taxation and Transfer, 69 Hastings L.J. 1 (2017):

This Article rejects a central claim of taxation and private law theory, namely, Kaplow and Shavell’s prominent thesis that egalitarian social goals are most efficiently achieved through income taxation and transfer, as opposed to egalitarian alterations in private law rules. Kaplow and Shavell compare the efficiency of rules of tort to rules of tax and transfer in meeting egalitarian goals, concluding that taxation and transfer is always more efficient than other private law legal rules. We argue that Kaplow and Shavell reach this conclusion only through inattention to the body of private law that informs the very basis of their discussion: underlying property entitlements. This Article contends that Kaplow and Shavell’s comparison of rules of taxation to rules of tort fails to take proper account of the powerful role that (re)assigning underlying property entitlements plays in achieving egalitarian goals, even at the level of formal theory.

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

Jukin’ The Stats: The Gaming Of Law School Rankings And How To Stop It

U.S. News 2019Darren Bush (Houston) & Jessica Peterson (Durham Jones & Pinegar, Salt Lake City), Jukin’ the Stats: The Gaming of Law School Rankings and How to Stop It, 45 Conn. L. Rev. 1235 (2013):

“Jukin' the stats” means manipulating pertinent information to advance one's position. In the case of law schools, manipulation of law school rankings, put forth by U.S. News and World Report, potentially enables the school to gain advantage relative to competitors. This Article describes the U.S. News Law School rankings methodology followed by prospective law students everywhere. The Article then discusses how law schools manipulate their data submissions in order to change their relative rankings. The Article also describes the inability of the stakeholders in the rankings process to obtain adequate recourse for rankings manipulation, and the lack of incentive U.S. News possesses to strongly police data submissions.

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April 9, 2018 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

The Rule Of Law Is Not A Rule Of Law: Thoughts On Solum And Meyer

Pardon me while I diverge from the topic of legal education to talk about something abstract like "the rule of law," provoked by recent work of two of my favorite legal educators.  

Solum-lawrence_1On April 4, Larry Solum (Georgetown) delivered the Regula Lecture at the University of Akron on "Surprising Originalism", which you can watch here.  I am always interested in what Larry has to say, first, because we share some common interests in language and philosophy, and, second, because he delivers it so well.  If I can summarize his point quickly, it is that (1) sensible originalism is possible if we look not at the founders' intentions, but what the words of the constitutional text actually meant at the time they were uttered; and (2) that originalism in constitutional interpretation is preferable to alternatives like the "living constitution" because the former is more likely to preserve the rule of law - that is, as a restraint on rule by pure power and might.  Larry's particular contribution is the application of the work of the philosopher of language H.P. Grice to the constitutional text - looking not merely at the semantics of the sentences as written, but at their pragmatics as well.  At the time they were written, what did they say but, more importantly, what did they implicate to the public that would have read or heard the words?

I am not a constitutional scholar, but I have my own reasons for being interested in Grice.  Robin Bradley Kar and Margaret Radin have just placed the first Harvard Law Review article on contract law in over ten years.  They use Grice's principles to argue that extensive boilerplate and click-throughs in consumer and other contracts ought not to be considered part of the parties' actual agreement.  I wrote a response, not necessarily disagreeing with the policy issues regarding boilerplate, but taking issue with, among other things, the references to Grice.

I didn't take issue with Larry Solum's point (1) above, at least in terms of thinking about constitutional meaning as guided by Grice.  What I wondered about, as I listened to his lecture, was the move in point (2) - that hewing to a philosophy of constitutional originalism was central to the rule of law.  What went through my head was a line I have used before: "the rule of law is not a rule of law."

1864So I was delighted to see that Linda Meyer (Quinnipiac) happens to have just posted an essay that expands far more eloquently on that thought.  It is not a direct response to Larry Solum's argument; I'm the one making that connection!  Her essay is Sisyphus and the Clockmaker: Two Views of the Rule of Law in Keally McBride's 'Mr. Mothercountry: The Man Who Made the Rule of Law.'  You can see from the abstract why it caught my eye:

This essay is an engagement with Keally McBride's excellent book, "Mr. Mothercountry: The Man Who Made the Rule of Law," and argues that the rule of law is not a law of rules, but a culture of self-restraint and humility.

Some comments below the break.

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April 9, 2018 in Books, Jeff Lipshaw, Legal Education, Miscellaneous, Scholarship | Permalink | Comments (1)