TaxProf Blog

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

Monday, April 9, 2018

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)

Sunday, April 8, 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 #1:

  1. [644 Downloads]   Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [522 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Brad Borden (Brooklyn)
  3. [340 Downloads]  The Elephant Always Forgets: U.S. Tax Reform and the WTO, by Reuven Avi-Yonah (Michigan) & Martin Vallespinos (S.J.D. 2018, Michigan)
  4. [291 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  5. [275 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)

April 8, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 7, 2018

Abreu: Tax 2018 — Requiem For Ability To Pay

Alice Abreu (Temple), Tax 2018: Requiem for Ability to Pay, 52 Loyola L.A. L. Rev. ___ (2018):

This is not just another tax reform piece. Although the tax system changed at midnight on New Year’s eve, 2017, in the flurry of activity to understand the new legislation and its effects, almost no attention has been paid to analyzing whether the income tax system has been transformed in any fundamental way. But transformed, it has been.

The new legislation, informally known as the Tax Cuts and Jobs Act, (or “TCJA”), transforms the income tax system in at least four fundamental ways, significantly undermining one of the bedrock principles of our tax system — horizontal equity — and ignoring ability to pay.

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

Friday, April 6, 2018

Satterthwaite Presents Entrepreneurs' Legal Status Choices and the C Corporation Penalty Today At Florida

SatterthwaiteEmily Satterthwaite (Toronto) presents Entrepreneurs' Legal Status Choices and the C Corporation Penalty at Florida today as part of its Graduate Tax Speaker Series:

Foundational to the American Dream is the ability to easily and rapidly start a new business. Over the past quarter century, the introduction of the limited liability company (LLC) has dramatically shifted the choice-of-legal-status calculus, and in its wake a consensus against the use of traditional C corporations by non-venture-backed start-ups has emerged.  The C corporation, scholars argue, has fatal drawbacks: tax disadvantages as well as governance inflexibility.  Due to historically limited sources of data, there has been little empirical research on choice-of-entity generally and none that explores the anti-C corporation thesis in particular.  Do C corporations under-perform as compared to similarly-situated businesses with alternative legal statuses?  This paper exploits a large panel dataset that contains legal status, owner, business, financing, and other firm-specific information collected from an eight-year panel survey of nearly five thousand enterprises that were formed in 2004.  The paper presents four main results. 

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

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Satterthwaite's Smallness And The Value-Added Tax

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

Mirit-Cohen (2018)In her article, Satterthwaite puts a powerful spotlight on the role of fairness in value-added taxation (“VAT”), which has gained much global traction and become one of the most dominant revenue instruments across the world. The VAT has been adopted by over 150 countries that comprise about 75% of the world’s population, and accounts for more than 20% of worldwide tax revenue raised. Satterthwaite utilizes this increasing global interest in the VAT as well as the growing appreciation of entrepreneurship and small businesses to address optimal VAT base and design issues. 

This Article examines one of the most important features of the VAT to small business and entrepreneurs—the exemption for businesses that meet the definition of a “small supplier.” Such exemptions relieve firms under a certain size (usually annual revenues) from the need to to register for and charge VAT at the point of sale. But what is the optimal VAT registration threshold? Satterthwaite begins to answer this question by exploring the economic literature that supports placing a higher floor and exempting a larger number of firms for efficiency reasons.

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April 6, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Corporate Philanthropy As A Tool For Political Influence

Marianne Bertrand (Chicago), Matilde Bombardini (British Columbia), Raymond J. Fisman (Boston University) & Francesco Trebbi (British Columbia), Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence:

We explore the role of charitable giving as a means of political influence, a channel that has been heretofore unexplored in the political economy literature. For philanthropic foundations associated with Fortune 500 and S&P500 corporations, we show that grants given to charitable organizations located in a congressional district increase when its representative obtains seats on committees that are of policy relevance to the firm associated with the foundation. This pattern parallels that of publicly disclosed Political Action Committee (PAC) spending. As further evidence on firms’ political motivations for charitable giving, we show that a member of Congress’s departure leads to a short-term decline in charitable giving to his district, and we again observe similar patterns in PAC spending. Charities directly linked to politicians through personal financial disclosure forms filed in accordance to Ethics in Government Act requirements exhibit similar patterns of political dependence. Our analysis suggests that firms deploy their charitable foundations as a form of tax-exempt influence seeking. Based on a straightforward model of political influence, our estimates imply that 7.1 percent of total U.S. corporate charitable giving is politically motivated, an amount that is economically significant: it is 280 percent larger than annual PAC contributions and about 40 percent of total federal lobbying expenditures. Given the lack of formal electoral or regulatory disclosure requirements, charitable giving may be a form of political influence that goes mostly undetected by voters and shareholders, and which is directly subsidized by taxpayers.

New York Times, Charitable Giving by Corporations Is Also About Getting, a New Study Finds:

Just months before the midterm congressional elections, a group of economists have published an analysis of how corporate America is spreading its philanthropic wealth.

Sifting through the donations to charity from 1998 to 2015 by foundations set up by the largest companies in the United States — those in the Fortune 500 or the Standard & Poor’s 500-stock index — [the professors] detected a pattern of contributions to 1,087 charities linked to 451 members of Congress.

Turns out that the spending is a little more self-serving than companies would have us believe. Some of the charitable giving looks a lot like corporate lobbying. Because companies get a break for such giving, it amounts to political spending at taxpayers’ expense. “Firms deploy their charitable foundations as a form of tax-exempt influence seeking,” the researchers write.

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

Thursday, April 5, 2018

Zolt Presents Tax Treaties And Developing Countries Post-BEPS Today At Duke

Zolt (2014)Eric M. Zolt (UCLA) presents Tax Treaties and Developing Countries: A Better Deal Post-BEPS? at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Developing countries face tough choices about whether to enter into bilateral tax treaties with developed countries. Several benefits flow from entering into tax treaties. These include increased foreign direct and portfolio investments that may result if tax treaties reduce double taxation, create greater tax certainty for investors, and provide for a dispute resolution mechanism for tax controversies. But there are real costs for developing countries in entering into tax treaties with developed countries. Treaty provisions invariably result in developing countries yielding taxing rights with respect to economic activity taking place in their country.

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

Burman Presents The Rising Tide Wage Credit Today At Indiana

Burman (2016)Len Burman (Syracuse & Tax Policy Center) presents The Rising Tide Wage Credit at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

The main factor depressing wages for low- and middle-skilled workers is technology. While technology once made workers more productive and boosted wages and employment, technology increasingly substitutes for workers. It is one reason manufacturing employment in the U.S. has plummeted even as production of manufactured goods has soared.

The failure of the market to broadly share the gains from economic growth calls for an intervention. This paper proposes something new ... : a wage tax credit of 100 percent of the first $10,000 of earnings financed by a broad-based dedicated value-added tax (VAT) of about 8 percent. The wage credit would grow over time with VAT revenues, so low- and middle-income workers would share in the gains from economic growth. I call the new wage supplement the Rising Tide Wage Credit (RTWC), evoking John F. Kennedy’s assertion that “A rising tide lifts all boats.” The RTWC would restore the connection between economic growth and the rewards to work. It would be a new kind of social insurance program—designed to ensure that workers at all income levels benefit from economic growth rather than just the highest earners, thus reversing the decades-long trend of wage stagnation. 

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April 5, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Blair-Stanek: Crises And Tax

Andrew Blair-Stanek (Maryland), Crises and Tax, 67 Duke L.J. 1155 (2017):

How can law best mitigate harm from crises like storms, epidemics, and financial meltdowns? This Article uses the law-and-economics framework of property rules and liability rules to analyze crisis responses across multiple areas of law, focusing particularly on the Internal Revenue Service’s numerous actions to battle the 2008-09 financial crisis.

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

Students Rate Male Professors More Highly Than Female Professors, Even When They Teach Identical Courses

Inside Higher Ed, Study Says Students Rate Men More Highly Than Women Even When They Are Teaching Identical Courses:

A new study in PS: Political Science [Gender Bias in Student Evaluations] combines elements of prior research on gender bias in student evaluations of teaching, or SETs, and arrives at a serious conclusion: institutions using these evaluations in tenure, compensation and other personnel decisions may be engaging in gender discrimination.

“Our analysis of comments in both formal student evaluations and informal online ratings indicates that students do evaluate their professors differently based on whether they are women or men,” the study says. “Students tend to comment on a woman’s appearance and personality far more often than a man’s. Women are referred to as ‘teacher’ [as opposed to professor] more often than men, which indicates that students generally may have less professional respect for their female professors.”

Table 1

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April 5, 2018 in Legal Education, Scholarship | Permalink | Comments (9)

Wednesday, April 4, 2018

Taite Presents Making Tax Policy Great Again: America You’ve Been Trumped Today At Boston College

TaitePhyllis Taite (Florida A&M) presents Making Tax Policy Great Again: America You’ve Been Trumped at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti, Shu-Yi Oei, and Diane Ring:

In December 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA) claiming it as the largest tax cuts in history. While the proponents of the TCJA claim this legislation provides tax breaks that benefit everyone, there are economic consequences that disproportionately benefit the wealthy to the detriment of the masses. Tax policy should benefit the majority of Americans, not just the elite. If we truly want to make tax policy great again, then we should go back to the very beginning when the tax base was primarily the responsibility of the wealthiest Americans.

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April 4, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

13th Annual International Conference On Tax Administration: Tax System Integrity In A Digital Age

ATax (2015)The 13th Annual International Conference on Tax Administration kicks off today on Tax System Integrity in a Digital Age at the University of New South Wales in Sydney, Australia. 

Nina Olson (National Taxpayer Advocate) delivers the keynote address on Some Observations on Tax Administration and the Digital Revolution.

Kristin Hickman (Minnesota) presents Restoring the Lost Anti-Injunction Act, 103 Va. L. Rev. 1683 (2017):

Should Treasury regulations and IRS guidance documents be eligible for pre-enforcement judicial review? The D.C. Circuit’s 2015 decision in Florida Bankers Association v. Treasury puts its interpretation of the Anti-Injunction Act at odds with both general administrative law norms in favor of pre-enforcement review of final agency action and also the Supreme Court’s interpretation of the nearly identical Tax Injunction Act. A 2017 federal district court decision in Chamber of Commerce v. Internal Revenue Service, appealable to the Fifth Circuit, interprets the Anti-Injunction Act differently and could lead to a circuit split regarding pre-enforcement judicial review of Treasury regulations and IRS guidance documents.

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April 4, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The Tax Lawyer Publishes New Issue

Susan Dynarski (Michigan Econ Prof) Accuses Kevin Hassett (Chair, White House Council Of Economic Advisers) Of Plagiarizing Her Work In WSJ Op-Ed

Inside Higher Ed, Prominent Scholar Accuses Trump Economist Of Plagiarism:

In a series of tweets Wednesday night, Susan Dynarski, an economist and professor at the University of Michigan, accused Kevin Hassett, the chairman of the White House Council of Economic Advisers, of in a 2007 column presenting her proposal to streamline the federal student aid system as his own without citing her or her graduate student co-author.

Dynarsky Tweet

A council official contested Dynarski's account. ...

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April 4, 2018 in Legal Education, Scholarship, Tax | Permalink | Comments (1)

Robinson: The Folly Of Conflating The Power To Fine With The Power To Tax

Mildred Robinson (Virginia), The Folly of Conflating the Power to Fine with the Power to Tax, 62 Vill. L. Rev. 925 (2017):

As citizens, we expect the police “to protect and to serve.” So how does a police force become revenue collector instead of protector? On the local level, we “purchase” through taxes police and fire protection as well as a myriad of other services. This article, an expansion of remarks made during the October 2016 Shachoy Symposium — Exploring Police Accountability in America — at the Villanova University School of Law, examines how reliance on traffic fines for general budgetary purposes became a matter of general practice in Ferguson and many other towns and cities. It ultimately serves as a reminder that there are very sound economic and civic reasons to rely upon “taxes [as] the price we pay for a civilized society?”

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April 4, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, April 3, 2018

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

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 NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

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

NYU Tax Law Review Publishes New Issue

NYU Law (2016)The Tax Law Review has published a new issue (Vol. 70, No. 4 (Summer 2017)):

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

Stanford Study: Race And Gender Bias In Online Courses

Stanford 2Inside Higher Education, Race and Gender Bias in Online Courses:

Many proponents of online education have speculated that the digital learning environment might be a meritocracy, where students are judged not on their race or gender, but on the comments they post.

A study [Bias in Online Classes: Evidence from a Field Experiment] being released today by the Center for Education Policy Analysis at Stanford University, however, finds that bias appears to be strong in online course discussions.

The study found that instructors are 94 percent more likely to respond to discussion forum posts by white male students than by other students. The authors write that they believe their work is the first to demonstrate with a large pool that the sort of bias that concerns many educators in face-to-face instruction is also present in online education.

Figure 1

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

Registration Is Open For NTA's 48th Annual Spring Symposium

National Tax Association (2016)Registration is now open for the National Tax Association's 48th Annual Spring Symposium on May 17-18, 2018 at the National Press Club in Washington, D.C.:

The symposium will examine the overhaul of the corporate and individual income tax systems undertaken by Congress at the end of 2017. Sessions will focus on the consequences of changes to the taxation of multinational enterprises, pass-through businesses, and individual taxpayers. Individual sessions will also address issues of tax planning and compliance, health care reform, and the impact on and responses of state and local governments.

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

Holderness: Questioning Quill — In Defense Of The Physical Presence Rule, But Not For Use Tax

Hayes R. Holderness (Richmond), Questioning Quill, 37 Va. Tax Rev. 313 (2018):

The physical presence rule of Quill Corp. v. North Dakota is under increasing attack from the “Kill Quill” movement — a consortium of state tax administrators, industry leaders, and academics opposed to the decision. The physical presence rule prohibits states from requiring many out-of-state vendors to collect taxes on goods sold into the states. Kill Quill states have grown increasingly aggressive, and litigation is well underway in South Dakota and Alabama over those states’ direct disregard for the rule. As a petition to the Supreme Court for certiorari grows closer, the case for overturning the physical presence rule remains cloudy.

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

Monday, April 2, 2018

Fleischer Presents The Architecture Of A Basic Income Today At BYU

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents The Architecture of a Basic Income (with Daniel Hemel (Chicago)) at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

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 2, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  This ranking includes downloads from two 30- and 35-page papers by 12 tax professors on the new tax legislation that garnered a lot of media attention (including the New York Times and Washington Post) and generated a massive amount of downloads (the papers are the most downloaded papers over the past 12 months across all of SSRN and the most downloaded tax papers of all-time by over 200%).  See Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings. (For some reason, Mitchell Kane (NYU) — the twelfth academic co-author of the two papers — is not included in the SSRN download rankings (although the downloads are included on his individual author page)).  Here is the new list (through  March 1, 2018) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):







Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Dan Shaviro (NYU)


Daniel Hemel (Chicago)



Lily Batchelder (NYU)


Lily Batchelder (NYU)



David Gamage (Indiana)


David Gamage (Indiana)



Daniel Hemel (Chicago)


Darien Shanske (UC-Davis)



Darien Shanske (UC-Davis)


Dan Shaviro (NYU)



Cliff Fleming (BYU)


Cliff Fleming (BYU)



David Kamin (NYU)


David Kamin (NYU)



Rebecca Kysar (Brooklyn)


Manoj Viswanathan (Hastings)



Manoj Viswanathan (Hastings)


Rebecca Kysar (Brooklyn)



Ari Glogower (Ohio State)


Ari Glogower (Ohio State)



Michael Simkovic (USC)


Gladriel Shobe (BYU)



Paul Caron (Pepperdine)


D. Dharmapala (Chicago)



D. Dharmapala (Chicago)


Michael Simkovic (USC)



Louis Kaplow (Harvard)


Richard Ainsworth (BU)



Vic Fleischer (San Diego)


Kyle Rozema (Chicago)



Ed Kleinbard (USC)


Hugh Ault (Boston College)



Jim Hines (Michigan)


Stephen Shay (Harvard)



Gladriel Shobe (BYU)


Omri Marian (UC-Irvine)



Richard Ainsworth (BU)


William Brynes (Texas A&M)



Richard Kaplan (Illinois)


Ed Kleinbard (USC)



Ted Seto (Loyola-L.A.)


Ruth Mason (Virginia)



Katie Pratt (Loyola-L.A.)


Jacob Goldin (Stanford)



David Weisbach (Chicago)


Sam Donaldson (Georgia St.)



Robert Sitkoff (Harvard)


Shu-Yi Oei (Boston College)


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

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April 2, 2018 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Sunday, April 1, 2018

Mayer: A (Partial) Defense of Section 501(C)(4)'s 'Catchall' Nature

Lloyd Hitoshi Mayer (Notre Dame), A (Partial) Defense of Section 501(C)(4)'s 'Catchall' Nature, 21 N.Y.U. J. Legis. & Pub. Pol'y ___ (2018):

Internal Revenue Code section 501(c)(4) provides exemption from federal income tax for “social welfare” organizations. The vagueness of this term and the failure of the Treasury Department and Internal Revenue Service to interpret it in a manner that would significantly limit that vagueness has led some commentators to criticize this section’s “catchall” nature. While much scholarly attention has been paid to this criticism with respect to the most visible section 501(c)(4) organizations, particularly those involved in political campaign activity and lobbying, almost no attention has been paid to the many less common types of section 501(c)(4) organizations that illustrate that section’s catchall nature. This article fills that gap by considering these less prominent organizations and whether their qualification for exemption under this section is problematic.

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April 1, 2018 in Scholarship, Tax | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. [486 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Bradley Borden (Brooklyn)
  2. [315 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. [277 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  4. [254 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  5. [214 Downloads]  Country-by-Country Reporting and the International Allocation of Taxing Rights, by Michelle Hanlon (MIT)

April 1, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, March 30, 2018

Lederman Presents Information Matters In Tax Enforcement At Duke

Lederman (2018)Leandra Lederman (Indiana) presented Information Matters in Tax Enforcement at Duke yesterday as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Most legal and economics scholars recognize that the government needs information about taxpayers’ transactions in order to determine whether their reporting is honest, and that third-party reporting helps the government obtain that information. Yet, a recent paper by Professor Wei Cui [Taxation Without Information: The Institutional Foundations of Modern Tax Collection] asserts that “modern governments can practice ‘taxation without information.’” Cui’s argument rests on two premises: (1) “giving governments effective access to taxpayer information through third parties does not explain the success of modern tax administration” because, he argues, other important taxes, such as the value added tax (VAT), do not involve information reporting; and (2) modern tax administration succeeds because business firms are “sites of social cooperation under the rule of law,” fostering compliance. As this Essay argues, the literature demonstrates that Cui is wrong on both points.

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

Weekly SSRN Tax Article Review And Roundup: Glogower Reviews Marian's Is Corporate Tax Planning Good For Shareholders?

This week, Ari Glogower (Ohio State) reviews a new work by Omri Marian (UC-Irvine), Is All Corporate Tax Planning Good for Shareholders?, 52 U.C. Davis L. Rev. __ (2018). 

Glogower (2016)A common assumption is that tax planning by corporate managers benefits shareholders. Since corporate income is subject to “double taxation” at both the corporate and shareholder levels, tax-reduction strategies by corporate managers can reduce the entity-level tax, thereby increasing the after-tax corporate earnings available to the shareholders. 

Omri Marian’s new article challenges this conventional assumption by presenting a more nuanced understanding of the dynamic between corporate and shareholder-level tax effects. The work demonstrates how corporate tax planning may in fact disadvantage shareholders in many cases, and why certain shareholders may be unable to prevent it. 

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March 30, 2018 in Ari Glogower, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

McCormack: America's (D)evolving Childcare Tax Laws

Shannon Weeks McCormack (University of Washington), America's (D)evolving Childcare Tax Laws, 53 Ga. L. Rev. ___ (2018):

Proponents have touted the ability of the Tax Cuts and Jobs Act (the TCJA) — enacted in the twilight of 2017 — to help American working families. But while the TCJA expanded some benefits available to parents with dependent children, these parental tax benefits may be claimed regardless of whether or to what extent childcare costs are incurred to work outside the home. To help working parents with these costs (which are often their largest expense), Congress might have turned to two other mechanisms in the tax law — the “child and dependent care credit” and the “dependent care exclusion.” While these childcare tax benefits are only available to working parents that pay for childcare, stringent limitations have kept many from recovering anything near their actual costs, particularly in the critical years before children reach school-age. As a result, the Code has been taxing families with different childcare needs inequitably. But the TCJA left these childcare tax laws untouched and thus did nothing to address this problem. By exploring critical junctures in their development, this Article seeks to understand how America’s tax laws have (d)evolved in this manner and, in doing so, situates some of TCJA’s alleged reforms into their historical context.

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

Thursday, March 29, 2018

Hemel Presents Sexual Harassment And Corporate Law Today At Brooklyn

HemelDaniel Hemel (Chicago) presents Sexual Harassment and Corporate Law, 118 Colum. L. Rev. ___ (2018) (with Dorothy Lund (Chicago)) at Brooklyn today as part of its Faculty Workshop Series:

The year 2017 marked an inflection point in the evolution of social norms regarding sexual harassment. While victims of workplace harassment had long suffered in silence, the surfacing of serious sexual misconduct allegations against Hollywood producer Harvey Weinstein encouraged many more victims to tell their personal stories of abuse. These scandals have spread beyond Hollywood to the rest of corporate America, leading to the departures of several high-profile executives as well as sharp stock price declines at a number of firms. In the past year, shareholders at four publicly traded companies have filed lawsuits alleging that corporate directors and officers breached their fiduciary duties and/or violated federal securities laws in connection with sexual harassment scandals at those firms. More such suits are likely to follow in the months ahead.

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March 29, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, March 28, 2018

Oei Presents Whose Tax Law Is It? Constituencies And Control In Statutory Drafting Today At Toronto

Oei (2018)Shu-Yi Oei (Boston College) presents Whose Tax Law Is It? Constituencies and Control in Statutory Drafting (with Leigh Osofsky (Miami)), 104 Iowa L. Rev. ___ (2018)), at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The 2017 tax reform produced legislation that many have derided as convoluted and unreadable, leading commentators to ask how such legislation came to pass. But there is little existing research about drafting practices that helps us contextualize such critiques.

In this Article, we conduct the first in-depth empirical examination of how drafters make tax law drafting decisions. We report findings from interviews with government counsels who participated in the tax legislative process over the past four decades. Our key finding was that the tax law is written for a small group of experts by a small group of experts: Most counsels did not consider statutory formulation or readability important, as long as substantive meaning was accurate. Many held this view because their intended audience was experts and software companies, not ordinary taxpayers or even Congress Members. When revising law, drafters preserve existing formulations so as to not upset settled expectations, even at the cost of increasing convolution. And the entire drafting process is controlled by a few tax law specialists, with little input on formulation decisions from Congress Members or other counsels.

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March 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mann Presents How Do Corporate Tax Rates Affect Corporate Social Responsibility? Today In Australia

Mann (2018)Roberta Mann (Oregon) presents How Do Corporate Tax Rates Affect Corporate Social Responsibility?today at University of New South Wales:

A growing literature has developed on the topic of enforcement crowding out altruism. This literature may apply to the idea of corporate social responsibility. If the government requires social responsibility, by imposing a carbon price or by otherwise increasing tax liabilities to pay for social goods, does that reduce the corporate social response? Similarly, would reducing regulations and corporate tax liability increase the social response? The U.S. and Australia have significant differences in corporate taxation under 2017 law. Post-2017, the U.S. is moving closer to Australia in its corporate tax rate and also in its international tax system. In both the U.S. and Australia, corporations use tax strategies to reduce their effective tax rates (ETRs). Using a case study approach, we examine whether low corporate tax rates appear to encourage firms' investment in sustainability.

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March 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pichhadze Presents Guide To Transfer Pricing: Lessons From Australia And New Zealand At Boston University

AdamAmir Pichhadze (Deakin Law School) presented Guide to Drafting and Interpreting Transfer Pricing Legislation: Lessons From Australia and New Zealand at Boston University yesterday as part of its Graduate Tax Program Speaker Series:

Countries around the world are undertaking legislative reforms in response to the OECD’s BEPS action plans. In his current research, part of which will be presented at the Boston University Law School’s Graduate Tax Program Lecture Series, Dr. Amir Pichhadze distills lessons from the legislative reform agenda which is currently undertaken by the New Zealand government and based on recent Australian case law.

As Pichhadze recently explained at the 30th Annual Australasian Tax Teachers Association, OECD member countries, as well as many non-member countries, have chosen to follow the OECD’s transfer pricing guidelines — an internationally coordinated relational (soft law) agreement on how to apply domestic transfer pricing laws.

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March 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Graetz Delivers Lecture On The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy Today At Temple

Graetz (2018)Michael J. Graetz (Columbia) delivers the 2018 Frank & Rose Fogel Lecture at Temple today at noon EST on The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy (livestream here):

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. Finally, although it was estimated to be a $1.5 trillion tax cut over ten years, it's actual cost is likely to be double that amount, producing unsustainable annual deficits and an unacceptable level of public debt.

March 28, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, March 27, 2018

Jones Presents How Do Distributions From Retirement Accounts Respond To Early Withdrawal Penalties? Today At NYU

HarrisDamon Jones (Chicago) presents How Do Distributions from Retirement Accounts Respond to Early Withdrawal Penalties? Evidence from Administrative Tax Returns (with Gopi Shah Goda (Stanford) & Shanthi Ramnath (U.S. Treasury Department, Office of Tax Analysis)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

The design of retirement savings accounts must balance the long-term goal of retirement wealth accrual with the potential need for liquidity. Penalties (and exceptions) on pre-retirement withdrawals provide a possible lever for striking this balance. In the United States, penalties amount to 10 percent of withdrawn funds and several exceptions are available, including partial or full exemptions for the unemployed, disabled, or those incurring unreimbursed medical expenses. In this paper, we investigate how individuals respond to the removal of the 10 percent penalty imposed on Individual Retirement Account (IRA) withdrawals prior to the account holder turning 59 1/2. Our analysis employs rich tax records from the Internal Revenue Service (IRS) and develops new empirical techniques which allow us to use annual data to better understand patterns at higher levels of frequency. We find a large increase in withdrawals upon reaching age 59 1/2, implying an 80 percent increase in annual withdrawals on average among our population.

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March 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Thomas Presents Taxing The Gig Economy Today At Georgetown

Thomas (2017)Kathleen Delaney Thomas (North Carolina) presents Taxing the Gig Economy, 166 U. Pa. L. Rev. ___ (2017), at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

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

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

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March 27, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Containing Systemic Risk By Taxing Banks Properly

Mark Roe (Harvard) & Michael Troege (ESCP Europe), Containing Systemic Risk By Taxing Banks Properly, 35 Yale J. on Reg. ____ (2018):

Tax specialists normally don’t focus on financial stability and financial regulators and analysts typically do not focus on taxes. This is too bad because the corporate tax structure affects financial stability and does so significantly, as we analyze in this article.

The reason is simple: tax rules influence the capital structure choices of corporations in general and banks in particular, by allowing tax benefits to debt—principally the deductibility of interest—that equity lacks. Today, the corporate tax penalizes equity finance and subsidizes debt relative to equity. As a consequence, corporations overall use more debt than they would in a tax-neutral world.

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March 27, 2018 in Scholarship, Tax | Permalink | Comments (0)

Monday, March 26, 2018

Kleinbard Delivers Lecture On Fiscal Policy In An Age Of Inequality Today At BYU

Kleinbard (2015)Edward D. Kleinbard (USC) delivers the annual Bruce C. Hafen Lecture today on What’s a Government Good For?: Fiscal Policy in an Age of Inequality at BYU today:

The debate surrounding the Tax Cuts and Jobs Act demonstrated the intellectual bankruptcy of U.S. fiscal policy debate. The TCJA has serious flaws as a matter of narrow tax policy, but it is more fundamentally flawed when viewed through the proper policy lens, which is overall fiscal policy – the net of government taxing and spending. The TCJA greatly exacerbates already untenable budget deficits. Its tax prescriptions are even more regressive when the spending cuts contemplated by the legislation itself are reflected. And the law’s regressivity is compounded further when plausible financing paths for these large deficits are included in the analysis. In particular, the “dynamic” growth analysis whose tax ramifications were part of the debate leading up to the law was predicated on enormous cuts to future transfer payments, and confused GDP growth with enhanced welfare.

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

Ring Presents Leak-Driven Law Today At UC-Irvine

Ring (2017)Diane Ring (Boston College) presents Leak-Driven Law, 65 UCLA L. Rev. __ (2018) (with Shu-Yi Oei (Boston College)), at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

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

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

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

Repetti Presents Tax Rates, Efficiency and Inequality Today At BYU

Repetti (2018)James R. Repetti (Boston College) presents Tax Rates, Efficiency and Inequality at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Traditionally, the great democracies of the western world assigned equal weight to distributive justice and economic efficiency in designing a tax system. In the past few decades, however, economic efficiency has dominated the debate about the best design of a tax system in politics and in analysis by legal academics. Discussions of progressive tax rates often focus on the adverse efficiency effects of high rates while ignoring benefits arising from a progressive rate structure’s reduced burden on lower income individuals. For example, many advocate low tax rates on investment income to reduce the efficiency effects of taxing savings.

In an attempt to increase efficiency, individual tax rates have decreased over the past 60 years. In 1956, the maximum statutory tax rate was 91%. Currently, the maximum tax rate is 37%. At the same time that tax rates were reduced, inequality increased, fueled in part by the declining tax rates.

There are several explanations for the intense focus on efficiency.

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

Boston College-Tulane Tax Roundtable

BC TulaneBoston College hosted the annual Boston College-Tulane Tax Roundtable on Friday:

James Alm (Tulane), Is the Haig-Simons Standard Dead? The Uneasy Case for a Comprehensive Income Tax
Discussant: Rebecca Kysar (Brooklyn)

Thomas Brennan (Harvard), Debt and Equity Taxation: A Combined Economic and Legal Perspective
Discussant: James Repetti (Boston College)

Heather Field (UC Hastings), Tax Lawyers as Tax Insurance
Discussant: Natalya Shnitser (Boston College)

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

Shaviro: Evaluating The New U.S. Pass-Through Rules

Daniel Shaviro (NYU), Evaluating the New US Pass-Through Rules, 2018 British Tax Rev. 49:

The pass-through rules that the US Congress enacted in 2017 — permitting the owners of unincorporated businesses in favored industries to escape tax on 20 per cent of their income — achieved a rare and unenviable trifecta, by making the tax system less efficient, less fair, and more complicated. It lacked any coherent (or even clearly articulated) underlying principle, was shoddily executed, and ought to be promptly repealed.

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

Sunday, March 25, 2018

Wells:  Get With The BEAT

Bret Wells (Houston), Get With the BEAT, 158 Tax Notes 1023 (Feb. 18, 2018):

The United States, Europe, and a host of other nations have been grappling with the BEPS phenomenon for several years. The efforts have been fragmented and in some instances, chaotic. With the enactment of section 59A, the United States has taken a bold and decisive step toward protecting the U.S. tax base against inbound profit-shifting strategies. The BEAT protects the nation’s tax base by ensuring that the United States maintains its source country right to a 50-50 profit-split outcome, thus limiting the efficacy of excessive base erosion strategies. This outcome is consistent with existing U.S. treaty obligations, and other trading partners should consider adopting this unilateral approach in their own jurisdictions.

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

The Top Five New Tax Papers

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #3, #4, and #5:

  1. [438 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Bradley Borden (Brooklyn)
  2. [293 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. [248 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  4. [217 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)
  5. [197 Downloads]  Country-by-Country Reporting and the International Allocation of Taxing Rights, Michelle Hanlon (MIT)

March 25, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, March 24, 2018

Galle: Mistaken Precedent And The Meaning Of 'Gift'

Brian Galle (Georgetown), Can I Return This? Mistaken Precedents and the Meaning of “Gift”:

What happens when the Supreme Court gets its own precedents wrong? And not in the new Roberts-court “anxiety of influence” style, where the Court deliberately misreads an old case in order to avoid admitting that it is overruling that case. I mean, what if the Court says that it aims to continue a prior interpretation, but its description of that old practice is inaccurate? Which law governs in the next case? If that is too hard to think about in the abstract, consider the law of gifts.

Most tax students can tell you that a transfer is a “gift” that can be excluded from income if it is given out of “detached and disinterested generosity” (DADG). This is a curious rule. Say Jared works for his father-in-law. When Jared receives a $1,000 check from FIL Don on his anniversary, which happens to also be the anniversary of his employment, does he have income, or not? Worse, say that Stormy works in a trade in which she often has intimate relations with others for money. She strikes up a friendly conversation with a client and they agree to meet again for drinks, where he pays. Income? From a tax policy perspective, these questions are nonsense: as Henry Simons argued, all gifts are income, because “ability to pay” depends on your resources, not their source.

For all that the DADG standard looks indefensible as a policy approach, it seems required by the Supreme Court’s decision in the famous Dubersteincase. But what if I told you that everything you learned in your Federal Income Tax course (about Duberstein) was wrong?

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March 24, 2018 in Scholarship, Tax | Permalink | Comments (4)

Stewart: Expert Discourse And The Politics Of Tax Reform

Miranda Stewart (Australian National University), 'Waiting for Consensus of the Experts?' Expert Discourse and the Politics of Tax Reform:

Tax reform is deeply political. There is now a significant body of political and economic research by political scientists and sociologists, concerning fiscal politics or sociology, in particular addressing taxation in democracies. At the same time, we take for granted, nowadays, that the deployment of a body of expertise is required in the formulation, legislation and application of tax policy and law. In this context, it is often said that politics is an obstacle to tax reform, so that tax reform will be most successful where a space is created in the political process for experts to do their work. Yet, it is clear that tax reform processes dominated by experts may also fail. This paper attempts to develop a theory of the role of tax experts that can help explain the more complex and situated outcomes of tax reform processes.

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March 24, 2018 in Scholarship, Tax | Permalink | Comments (1)

Friday, March 23, 2018

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Hasen's Rules, Standards And Detection

This week, Sloan Speck (Colorado) reviews a new work by David Hasen (Florida), Rules, Standards and Detection (2018).

Speck (2017)David Hasen’s paper, Rules, Standards and Detection, develops a formal economic model to explore and quantify the interrelationship of detection with the choice between rules and standards. Hasen deploys his highly tractable model toward two principal ends. First, Hasen’s model reveals that compliance costs have severe effects on parties’ responsiveness to regulators’ increased efforts at detection. Hasen finds that, when compliance costs are high, enforcement plays second fiddle to adjustments to legal rules in terms of fostering good behavior. By contrast, when compliance costs are low, audit becomes a more potent factor in encouraging compliance. Second, Hasen elaborates an important qualification of his first point. Under a view of regulation as ameliorating negative externalities, low compliance costs imply that the social costs of noncompliance also are small. Although the magnitude of these costs depends on the specific facts at issue (and, in particular, on the relevant elasticities of supply and demand), these considerations temper the broader point that compliance dollars are best spent in low-cost situations.

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March 23, 2018 in Scholarship, Sloan Speck, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Marian: Is All Corporate Tax Planning Good For Shareholders?

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

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

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

Thursday, March 22, 2018

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

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

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

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

Morse: Government-To-Robot Enforcement

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

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

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

Wednesday, March 21, 2018

Pittsburgh Tax Review Publishes New Issue

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

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

Stewart: Redistribution Between Rich And Poor Countries

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

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

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