TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, March 29, 2016

Oei Presents The Tax Lives Of Uber Drivers Today At Southwestern

OeiShuyi Oei (Tulane) presents The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums (with Diane Ring (Boston College)) at Southwestern today as part of its Faculty Speaker Series:

In this Article, we investigate the tax issues and challenges facing Uber and Lyft drivers by studying their online interactions in three internet discussion forums: Reddit.com, Uberpeople.net, and Intuit TurboTax AnswerXchange. Using descriptive statistics and content analysis, we examine (1) the substantive tax concerns facing forum participants, (2) how taxes affect their driving and profitability decisions, and (3) the degree of user sophistication, accuracy of legal advising, and other cultural features of the forums.

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March 29, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Blinder & Watson:  The U.S. Economy Grows Faster Under Democratic Presidents

Alan S. Blinder (Princeton) & Mark W. Watson (Princeton), Presidents and the U.S. Economy: An Econometric Exploration, 106 Am. Econ. Rev. 1015 (2016):

The U.S. economy has grown faster--and scored higher on many other macroeconomic metrics--when the President of the United States is a Democrat rather than a Republican. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant, despite the fact that postwar history includes only 16 complete presidential terms. This paper asks why. The answer is not found in technical time series matters (such as differential trends or mean reversion), nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior TFP performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future. Many other potential explanations are examined but fail to explain the partisan growth gap.

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March 29, 2016 in Scholarship, Tax | Permalink | Comments (7)

Monday, March 28, 2016

Oei Presents The Tax Lives Of Uber Drivers Today At Pepperdine, UC-Irvine

OeiShuyi Oei (Tulane) presents The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums (with Diane Ring (Boston College)) today at Pepperdine (as part of our Tax Policy Workshop Series funded in part by a generous gift from Scott Racine) and UC-Irvine (as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian):

In this Article, we investigate the tax issues and challenges facing Uber and Lyft drivers by studying their online interactions in three internet discussion forums: Reddit.com, Uberpeople.net, and Intuit TurboTax AnswerXchange. Using descriptive statistics and content analysis, we examine (1) the substantive tax concerns facing forum participants, (2) how taxes affect their driving and profitability decisions, and (3) the degree of user sophistication, accuracy of legal advising, and other cultural features of the forums.

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March 28, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Crawford:  Widening The Critical Tax Lens

JotwellBridget Crawford (Pace), Widening the Critical Tax Lens (Jotwell) (reviewing Lily Kahng, The Not-So-Merry Wives of Windsor: The Taxation of Women in Same-Sex Marriages, 101 Cornell L. Rev. 325 (2015)):

In the wake of the Windsor and Obergefell decisions, some tax scholars have drawn important attention to legal issues created in the period between Windsor and Obergefell for same-sex couples whose states did not recognize their marriages, as well as challenges faced by those who choose civil unions over marriage. Other tax scholars are wary of Obergefell’s glorification of marriage as the highest form of human fulfillment, and are skeptical that marriage is the correct foundation for a variety of procedural and substantive rules.

Enter into this conversation Lily Kahng’s thoughtful examination at how women in same-sex couples might fare from a tax perspective in a post-Windsor, post-Obergefell world.

For almost twenty years, Kahng has been a leading and consistent voice in critiquing the fiction of marital unity in the tax law. In The Not-So-Merry Wives of Windsor: The Taxation of Women in Same-Sex Marriages, Kahng turns on its head the assumption that same-sex marriage is a salutary shift in the legal landscape for same-sex couples. Kahng argues that under federal law, women in same-sex couples will be taxed unfavorably compared to women in different-sex couples. ...

For anyone interested in understanding the tax implications of the Supreme Court’s recognition of same-sex marriage, Kahng’s article is a must-read. Writing squarely within the critical tax tradition, Kahng looks at the tax system to ask important questions about advantage and disadvantage. For years, critical tax theorists have taken up the challenge of identifying ways in which the tax system privileged different-sex couples over same-sex couples. With this article, Kahng widens the critical tax lens further, inviting readers to consider the ways that women in same-sex couples might experience the tax law differently than men in same-sex couples or men and women in different-sex couples. The quest for fairness in taxation must be a nuanced one, as Lily Kahng’s careful work demonstrates.

March 28, 2016 in Scholarship, Tax | Permalink | Comments (0)

Sunday, March 27, 2016

Is Income, Wealth Inequality In The United States Less Than We Think?

CNNCNN, The Top 1% Haven't Recovered Yet, Either:

The income of the Top 1% is also below where it was before the Great Recession, largely because America's richest took a massive hit during the economic downturn. They have yet to recover, despite the fact that they've captured the majority of the income gains since then.

The Top 1% had an average income of $1.26 million in 2014, down from $1.56 million in 2007. That's a 19.1% drop, according to an analysis of tax data by Emmanuel Saez, University of California, Berkeley, and Thomas Piketty, Paris School of Economics. ... The Bottom 90%, meanwhile, saw their average incomes fall 10.7% to $33,068 in 2014, from $37,017 in 2007. ... The tippy top of the ladder — the Top 0.01% — actually have the farthest to go in order to return to pre-2007 levels. Their incomes are down 27.4% to $29 million in 2014.

Slate:  Maybe Wealth Inequality Isn’t Surging After All, by Jordan Weismann:

Economists Emmanuel Saez and Gabriel Zucman appeared to upend much of the old wisdom about America's wealth distribution in 2014, when they released an innovative study that gave readers a peek into the exploding fortunes of the top 0.1 percent. ... The top 1 percent's portion of the nation's pie had climbed to 42 percent. The top 0.1 percent's share had more than tripled, from 7 percent in 1978 to 22 percent in 2012. ...

The findings seemed like a blockbuster sequel to Saez's work with Thomas Piketty, with whom he popularized the idea of using tax information to trace income inequality. They also seemed to dispel the idea that the wealth gap wasn't growing in line with the income gap. Piketty himself endorsed the new numbers, saying they were more reliable than the statistics he had used in his best-selling book Capital in the Twenty-First Century.

But now they seem to be facing some stiff criticism. In a working paper presented during a recent Brookings conference, a group of economists from the Federal Reserve Board and the University of Pennsylvania argue that while wealth inequality is indeed growing, its rise has been much slower and less dramatic than the surge depicted by Saez and Zucman.

[Jesse Bricker, Alice Henriques & John Sabelhaus (Federal Reserve Board) & Jacob Krimmel (Wharton), Measuring Income and Wealth at the Top Using Administrative and Survey Data:

Abstract:  Most available estimates of US wealth and income concentration indicate that top shares are high and rising in recent decades, but there is some disagreement about specific levels and trends. Household surveys are the traditional data source used to measure top shares, but recent studies using administrative tax records suggest that those survey-based top share estimates may not be capturing all of the increasing concentration. In this paper we reconcile the divergent top share estimates, showing how the choice of data sets and methodological decisions affect the levels and trends. Relative to the new and most widely-cited top share estimates based on administrative tax data alone, our preferred estimates for both wealth and income concentration are lower and rising less rapidly in recent years.]

The disagreement between the two sides starts with their data sources. ...  For many years, the Federal Reserve's triennial Survey of Consumer Finances was considered the most important trove of information on American wealth. But Saez and Zucman chose to rely on tax data instead, arguing that it was more likely to capture the wealth of the extremely rich, who respond to government surveys less frequently than other Americans. Because the IRS doesn't actually track anybody's net worth, however, the duo had to reverse-engineer their estimates using what's known as the "capitalization" method: First they looked at IRS records to find the distribution of income from things like stocks and bonds, then they calculated how much wealth would be required to generate that money based on likely rates of return.

In their new paper, the Fed-Penn team contends that the Survey of Consumer Finances in fact does a fine job tracking down the superaffluent. There is one major omission, however: The survey purposely doesn't include any members of the Forbes 400, the decades-old ranking of America's richest (so no Warren Buffett or Donald Trump). To fix that flaw, the authors construct a new wealth measure that uses the Survey of Consumer Finances as a base, then adds the Forbes data (which makes the rich look richer), along with the total value of all defined-benefit pensions (which makes the middle class look richer). The final outcome: A relatively gentle but sustained rise in inequality since the 1980s, such that the top 1 percent now claim about 33 percent of household wealth (9 percentages points below Saez and Zucman's estimate), while the top 0.1 percent claimed less than 15 percent (about 7 percentage points below Saez's and Zucman's estimate). ...

5A

5B

Why does their approach find such lower levels of wealth concentration? The authors offer three main reasons.

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March 27, 2016 in Scholarship, Tax | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

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

  1. [423 Downloads]  What Now? A Boomer's Baedeker for the Distribution Phase of Defined Contribution Retirement Plans, by Richard Kaplan (Illinois)
  2. [307 Downloads]  Lexisnexis® Guide to FATCA Compliance: Chapter 1, by Willliam Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  3. [258 Downloads]  The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums, by Shu-Yi Oei (Tulane) & Diane M. Ring (Boston College)
  4. [205 Downloads]  Taxing Wealth Seriously, by Edward J. McCaffery (USC)
  5. [201 Downloads]  Ownership of the Means of Production, by E. Glen Weyl (Chicago) & Anthony Lee Zhang (Stanford)

March 27, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, March 25, 2016

Weekly SSRN Tax Roundup

Schizer:  Energy Subsidies — Worthy Goals, Competing Priorities, And Flawed Institutional Design

David Schizer (Columbia), Energy Subsidies: Worthy Goals, Competing Priorities, and Flawed Institutional Design:

The government often relies on targeted subsidies for both “green” energy and hydrocarbons. These subsidies pursue worthwhile goals. But unfortunately, many have design flaws that make them less effective or even counterproductive. The goal of this Article is to show how we can do better.

This Article focuses on three sets of issues. First, there often is tension between our environmental and national security goals. Unfortunately, the economics literature on energy largely ignores these tradeoffs by omitting national security from the analysis. This Article takes issue with this approach and suggests ways to manage these tradeoffs. Second, as a strategy to deal with these and other costs, this Article criticizes subsidies, and argues that Pigouvian taxes are a better alternative. Third, if we are stuck with subsidies for political reasons, this Article offers a number of ways to improve them.

The U.S. faces increased defense costs in securing access to oil, for instance, in deploying forces in the Middle East. Yet the economics literature on energy does not account for these national security costs, arguing that they are too difficult to quantify. Even so, difficulties in computing costs are not a reason to ignore them. This Article argues that national security costs need to be incorporated in the analysis, and considers ways to manage tradeoffs between these costs and environmental externalities.

The best way to manage these tradeoffs is with Pigouvian taxes.

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March 25, 2016 in Scholarship, Tax | Permalink | Comments (0)

Thursday, March 24, 2016

Polsky Presents The Up-C Tax Revolution Today At Duke

Polsky (2015)Gregg Polsky (North Carolina) presents The Up-C Revolution (with Adam Rosenzweig (Washington University)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Over the past few years, a revolutionary new tax structure, known as the Up-C, has been increasingly utilized, particularly in instances where an LLC is being taken public. In such an Up-C IPO, a newly formed C corporation is placed on top of the existing LLC, which continues to operate the business. Shares of the C corporation are sold to new investors, and the proceeds are used by the C corporation to buy an interest in the LLC. Meanwhile, the original owners of the LLC (typically, founders and private investment funds) retain their interests in the LLC, while receiving exchange rights that allow them to swap their LLC interests for equivalent-value shares of the C corporation. In addition, the original owners often receive the benefit of tax receivables agreements (TRAs), which provide that the owners will receive a specified percentage (usually 85 percent) of the tax benefits to the C corporation resulting from future exchanges. In combination, these features seem to provide a near-nirvana of tax efficiency. It is therefore unsurprising that the use of Up-Cs is growing at an exponential rate.

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March 24, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Cauble Presents Reforming The Non-Disavowal Doctrine Today At Indiana

Cauble (2016)Emily Cauble (DePaul) presents Reforming the Non-Disavowal Doctrine, 36 Va. Tax Rev. ___  (2016), at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

One well established feature of tax law is that, oftentimes, substance prevails over form. In other words, the substance of a transaction will determine the transaction’s tax consequences. For instance, tax consequences will not depend solely on the label that a taxpayer assigns to a given transaction. Instead, the IRS can examine the transaction’s economic features to more accurately characterize it for tax purposes.

Also deeply entrenched in tax law is the notion that, frequently, the IRS experiences more success than taxpayers when invoking the notion that substance prevails over form. In other words, when substance matters, the IRS can freely assert that a transaction should be taxed based on its true substance rather than the form selected by the taxpayer. A taxpayer, by contrast, is less likely to succeed when making the same assertion. The resistance to taxpayers’ attempts to invoke the substance-over-form doctrine is known as the "Non-Disavowal Doctrine."

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March 24, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Henderson:  Solving The Legal Profession's Diversity Problem

William D. Henderson (Indiana), Solving the Legal Profession's Diversity Problem (blogged here):

Among both diverse and white lawyers, there is a widespread perception that the legal profession's lack of diversity is due to a lack of moral resolve. As a result, each successive generation of leadership pledges to deepen its level of commitment. This article argues that the lack of progress is attributable to a systems problem rather than a moral deficit.

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March 24, 2016 in Legal Education, Scholarship | Permalink | Comments (2)

Wednesday, March 23, 2016

Shuldiner Presents The Deferral Effects Of Passing Through Foreign Subsidiaries’ Passive Income Today At Penn

ShuldinerReed Shuldiner (Pennsylvania) presents The Deferral Effects of Passing Through Foreign Subsidiaries’ Passive Income (with Chris Sanchirico (Pennsylvania)) at Pennsylvania today as part of its Center for Tax Law and Policy Seminar Series:

The immediate U.S. taxation of foreign subsidiaries’ passive, but not active income is a scenario of increasing practical importance. This paper builds on Alvin Warren’s recent analysis of this partially deferral-tempering case [Income of Foreign Subsidiaries: A Review of the Basic Analytics, 145 Tax Notes 321 (2014)]. It clarifies some of the legal and economic mechanics behind Warren’s formula. It also makes several points de novo. It highlights the conceptual relationship between passive-income pass-through and delayed realization of accrued gains. It points out that delayed realization inside the subsidiary effectively deactivates passive-income pass-through. And it describes when it does and does not matter that the parent takes interim distributions from the subsidiary, as when it uses such distributions to pay its interim pass-through tax liability.

March 23, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Gamage & Shanske:  Tax Cannibalization And Fiscal Federalism

David Gamage (UC-Berkeley) & Darien Shanske (UC-Davis), Tax Cannibalization and Fiscal Federalism in the United States, 110 Nw. U. L. Rev. ___ (2016):

The current structure of U.S. federal tax law incentivizes state governments to adopt tax policies that inflict costs on the federal government, at the expense of national welfare. We label this the “tax cannibalization problem.”

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March 23, 2016 in Scholarship, Tax | Permalink | Comments (0)

Luke Presents The Captive Insurance Conundrum Today At Boston College

Luke (2016)Charlene Luke (Florida) presents The Captive Insurance Conundrum at Boston College today as part of its Tax Policy Workshop Series hosted by James Repetti and Diane Ring:

Premiums paid for insurance covering business or investment assets are deductible, and insurance companies are taxed favorably when compared to other corporations. At the same time, in an income tax system, managing risk by moving money into savings or investment vehicles is not deductible, and any income generated on such savings or investments is taxed to the vehicles’ owner. These alternative tax outcomes have given rise to a strategy for mimicking the benefits of savings or investments while still reducing taxes: Paying insurance premiums to a captive insurance company. In both its prior and current efforts to distinguish abusive captive arrangements from acceptable insurance structures, the central approach of the Internal Revenue Service (Service) has been to attempt to control the definition of “insurance” for tax purposes. This approach has been failing. The courts instead view themselves as the final arbiters of what constitutes “insurance.”

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March 23, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, March 22, 2016

Kwak Presents Reducing Inequality With A Retrospective Tax On Capital Today At NYU

KwakJames Kwak (Connecticut) presents Reducing Inequality With a Retrospective Tax on Capital, 24 Cornell J.L. & Pub. Pol'y 191 (2015), at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Chris Sanchirico:

Inequality in the developed world is high and growing: in the United States, 1% of the population now owns more than 40% of all wealth. In Capital in the Twenty-First Century, the economist Thomas Piketty argues that inequality is only likely to increase: invested capital tends to grow faster than the economy as a whole, causing wealth to concentrate in a small number of hands and eventually producing a society dominated by inherited fortunes. The solution he proposes, an annual wealth tax, has been reflexively dismissed even by supporters of his overall thesis, and presents a number of practical difficulties. However, a retrospective capital tax — which imposes a tax on the sale of an asset based on its (imputed) historical values — can reduce the rate of return on investments and thereby slow down the growth of wealth inequality.

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March 22, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Oei Presents The Tax Lives Of Uber Drivers Today At Georgetown

OeiShuyi Oei (Tulane) presents The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums (with Diane Ring (Boston College)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

In this Article, we investigate the tax issues and challenges facing Uber and Lyft drivers by studying their online interactions in three internet discussion forums: Reddit.com, Uberpeople.net, and Intuit TurboTax AnswerXchange. Using descriptive statistics and content analysis, we examine (1) the substantive tax concerns facing forum participants, (2) how taxes affect their driving and profitability decisions, and (3) the degree of user sophistication, accuracy of legal advising, and other cultural features of the forums.

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March 22, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The OECD’s Conquest Of The United States: Understanding The Costs And Consequences Of The BEPS Project And Tax Harmonization

Jason J. Fichtner & Adam N. Michel (Mercatus Center, George Mason University), The OECD’s Conquest of the United States: Understanding the Costs and Consequences of the BEPS Project and Tax Harmonization:

The Base Erosion and Profit Shifting (BEPS) Project of the Organisation for Economic Co-operation and Development (OECD) attempts to fundamentally change the international tax system by protecting high-tax states at the expense of economically friendly low-tax states. The OECD is concerned that globalization and increasingly easy movement of capital and labor across borders will undermine the tax bases of its high-tax members. The proposed solution, however, favors consolidated, uniform, and transparent tax rules at the cost of compliance, diminished taxpayer rights, and diminished institutional diversity. Tax policy should remain an area of domestic decision-making, allowing each country to choose a tax system that best fits its unique needs within the global landscape. The international community should be cautious of OECD attempts to eliminate tax competition by consolidating international tax rules. Instead, the United States should lead other countries by reforming its domestic tax code and rejecting many of the BEPS Project’s new rules.

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March 22, 2016 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Monday, March 21, 2016

Kleinbard Presents The New Political Economy Of Capital Income Taxation Today At USC

Kleinbard (2015)Edward Kleinbard (USC) presents The New Political Economy of Capital Income Taxation at USC today as part of its Faculty Workshop Series:

The standard view in the U.S. tax law academy remains that capital income taxation is both a poor idea in theory and completely infeasible in practice. But this ignores the first-order importance of political economy issues in the design of tax instruments. Taxing capital income is responsive to important political economy exigencies confronting the United States, including substantial tax revenue shortfalls relative to realistic government spending targets, increasing income and wealth inequality at the top end of distributions, and the surprising persistence of dynastic wealth.

More surprisingly, a flat-rate (proportional) income tax on capital has attractive theoretical and political economy properties that can be harnessed in actual tax instrument design.

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March 21, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (2)

Brooks:  The Missing Tax Benefit Of Donor-Advised Funds

John R. Brooks (Georgetown), The Missing Tax Benefit of Donor-Advised Funds, 150 Tax Notes 1013 (Feb. 29, 2016):

Donor-advised funds are often billed, by both their critics and advocates, as providing a preferred from of charitable donation relative to typical giving. This is because the tax law allows for a full deduction of the money or property contributed to the fund in the year of the contribution, even if the money does not go to operating charities until a future year.

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March 21, 2016 in Scholarship, Tax | Permalink | Comments (2)

Sunday, March 20, 2016

The Top 5 Tax Paper Downloads

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

  1. [397 Downloads]  What Now? A Boomer's Baedeker for the Distribution Phase of Defined Contribution Retirement Plans, by Richard Kaplan (Illinois)
  2. [382 Downloads]  Uncle Sam Wants … Who? A Global Perspective on Citizenship Taxation, by Allison Christians (McGill)
  3. [263 Downloads]  Lexisnexis® Guide to FATCA Compliance: Chapter 1, by Willliam Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  4. [207 Downloads]  The Tax Lives of Uber Drivers: Evidence from Internet Discussion Forums, by Shu-Yi Oei (Tulane) & Diane M. Ring (Boston College)
  5. [193 Downloads]  Taxing Wealth Seriously, by Edward J. McCaffery (USC)

March 20, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, March 18, 2016

Tax Notes Symposium:  The Future Of Tax Administration

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March 18, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

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March 18, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

The Cost Of Legal Scholarship:  3 Law Review Articles = 1 Habitat For Humanity House

HabitatJeffrey Harrison (Florida), The Cost of Scholarship (and Peeps):

In an article I wrote with Dean Amy Mashburn [Citations, Justifications, and the Troubled State of Legal Scholarship: An Empirical Study, 3 Tex. A&M L. Rev. 45 (2015)] we estimated that $240 million a year is spent on legal scholarship. ... There are about 8000 law review articles published every year. That means about $30,000 per article. ...

But let's play with the 240 million and 8000 and 30,000 per article. I read the other day that the  average Habitat for Humanity House costs $85K. So the tab for legal scholarship is equal to 2800 houses per year for the less affluent. Yes, that would be just less that three law review articles. There may be three law review articles out there that are worth a house for a relatively poor person. In fact, I bet there are. None of mine are and I have a hunch that goes for about 80% or more of the articles written.

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March 18, 2016 in Legal Education, Scholarship | Permalink | Comments (8)

Why Has Yale Beaten Harvard In The U.S. News Law School Rankings For 22 Consecutive Years?

Harvard YaleBusiness Insider, Yale Law Has Beaten Harvard for the Past 22 years in US News Rankings — And It's a Complete Mystery Why:

On Wednesday, US News & World Report released its annual ranking of top law schools. Yale Law took the highest award as the No. 1 law school in the country.

This makes Yale Law the reigning champion every single year US News has rated law schools based on data metrics. "Yale has been No. 1 every year since 1994. US News may have published law rankings before that based only on reputation, but our data team doesn’t have rankings that go back further," Sophia Sherry, communications and PR coordinator at US News, told Business Insider.

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March 18, 2016 in Legal Education, Scholarship | Permalink | Comments (7)

Thursday, March 17, 2016

Bankman Presents Using The 'Smart Return' To Reduce Tax Evasion Today At British Columbia

Bankman (2016)Joseph Bankman (Stanford) presents Using the 'Smart Return' to Reduce Tax Evasion (with Clifford Nass (Stanford) & Joel Slemrod (Michigan)) at the University of British Columbia today as part of its Tax Law and Policy Workshop Series:

Tax evasion costs federal, state and local governments over 400 billion dollars a year. Compliance efforts have centered on the monetary payoff of evasion. Evasion has been reduced through third-party reporting, which increases the odds of detection (in some cases, to a near certainty) and audits. Increased penalties have also been used to reduce evasion. At the margin, however, these methods have proven too expensive or politically unpopular to reduce substantially this core residue of evasion.

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March 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mehrotra Presents A History Of U.S. Income Tax Withholding Today At UCLA

MehrotraAjay Mehrotra (Executive Director & Research Professor, American Bar Foundation) presents A Brief History of U.S. Income Tax Withholding: From Contested Concept to Cornerstone of Administrative Practice at UCLA today as part of its Tax Policy and Public Finance Colloquium Series hosted by Jason Oh and Eric Zolt:

Among the many modern administrative innovations adopted to facilitate effective tax compliance, arguably none has been more significant than the use of third-party reporting and tax withholding. Since at least the early nineteenth century, when Great Britain first adopted a crude form of withholding as part of its national income tax, modern governments have increasingly relied on harnessing the knowledge and power of third parties to increase income tax compliance. As a result, employers, financial institutions, and business corporations have become instrumental remittance vehicles and reporting agents for nearly all modern taxing agencies.

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March 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mason Presents The Supreme Court's Decision In Wynne In Austria, Germany

Mason (2015)Ruth Mason (Virginia) has presented The Supreme Court's Decision in Wynne: An American Kerckhaert & Morres (with Michael Knoll (Pennsylvania)) at Vienna University of Economics and Business Administration (March 14), Johannes Kepler University (March 16), and Max Planck Institute for Tax Law and Public Finance (March 17):

Last Term, a sharply divided Supreme Court decided a landmark state tax discrimination case, Comptroller of the Treasury of Maryland v. Wynne. This Essay explains the significance of Wynne by exploring why the majority ruled as it did, why the dissenters’ objections to the majority’s reasoning miss their mark, and what Wynne means for state taxation. In deciding Wynne, the Court relied on economic analysis we provided in an amicus brief, and Wynne  represents the Court’s first clear acknowledgement of the economic underpinnings of one of its main doctrinal tools for resolving tax discrimination cases, the internal consistency test.  In her talk, Ruth Mason also will compare Wynne with the double tax doctrine of the Court of Justice.

March 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Speck Presents The Social Boundaries Of Corporate Taxation Today At Colorado

SpeckSloan Speck (Colorado) presents The Social Boundaries of Corporate Taxation at Colorado today as part of its Tax Policy Colloquium Series:

Classical corporate taxation relies on rules that distinguish taxable corporations from nontaxable conduit entities. Since the advent of the “check-the-box” regime for entity classification, commentators and Treasury have looked to efficiency, broadly construed, as the principal metric by which to gauge the success or failure of these legal rules. This turn to efficiency, however, downplays the fact that corporate taxation intersects with nontax legal regimes, as well as social understandings about corporations’ personhood, rights, and obligations. Indeed, changes in corporate law and business practices, as well as the recent renaissance in judicial, academic, and popular engagement with the nature of corporate personality, have intensified and complicated the stakes of entity classification for tax purposes.

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March 17, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wednesday, March 16, 2016

Sikes Presents Aggregate Corporate Tax Avoidance And Cost Of Capital Today At Penn

SikesStephanie Sikes (Pennsylvania) presents Aggregate Corporate Tax Avoidance and Cost of Capital (with Robert Verrecchia (Pennsylvania)) at Pennsylvania today as part of its Center for Tax Law and Policy Seminar Series hosted by Chris Sanchirico and Reed Shuldiner:

We identify a pecuniary externality that arises when firms engage in tax avoidance. As more firms avoid tax, the cost of capital increases for all firms, even those that do not engage in such strategies. The intuition behind this prediction is that firms share risk with the government via taxation. The lower the tax rate applied to a firm’s earnings, the more risk that is borne by its shareholders relative to the government. As a meaningful percentage of firms avoid taxes, the variance of the market’s after-tax cash flow increases. Consequently, the covariance risk of all firms increases, which in turn translates into a higher cost of capital for all firms. Consistent with our prediction, we find that firms’ implied cost of capital is negatively related to the annual median long-run cash effective tax rate (Cash ETR) in the economy. The result holds both for firms with high and low long-run Cash ETRs, suggesting that the effect exists even for non-tax-avoiding firms.

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March 16, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Cui Presents Information Reporting And State Capacity Today At Toronto

CuiWei Cui (University of British Columbia, Allard School of Law) presents Information Reporting and State Capacity at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

A prominent strand of recent economic research hypothesizes that information reporting is essential to the capacity of modern states to collect tax revenue. In this paper I critically examine both the theoretical models and the empirical evidence that have emerged surrounding this hypothesis, and argue for two contrary conclusions: first, the use of information reporting has strong limitations even in developed countries, both in the income tax and VAT contexts; second, the use of information reporting and withholding does not mark major differences in the tax capacity of developed and developing countries.

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March 16, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Women (And Men) Lead By Leaving Big Law In Search Of Work/Life Balance

Paula Schaefer (Tennessee), On Balance: Leading by Leaving:

Even though women make up half of law school classes in the U.S., hold half of elite judicial clerkships, and accept almost half of the jobs in large U.S. law firms, only a small number of women make partner or serve in leadership roles in those firms. Much has been written about the things that stand in the way of gender equality in elite law firms. Yet misconceptions persist about why the time demands of “big law” have a disproportionate impact on women.

This Article points to evidence that is contrary to those misconceptions and argues that the women – and men – who leave large law firms in search of balance are exhibiting leadership. Contrary to Sheryl Sandberg’s advice that they should “lean in” if they hope to lead, these former big law attorneys are leading by leaving.

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March 16, 2016 in Legal Education, Scholarship | Permalink | Comments (0)

Barry & Pollman:  Regulatory Entrepreneurship

Jordan M. Barry (San Diego) & Elizabeth Pollman (Loyola-L.A.), Regulatory Entrepreneurship:

Numerous corporations, ranging from Airbnb to Tesla, and from DraftKings to Uber, have built huge businesses that reside in legal gray areas. Instead of taking the law as a given, these companies have become agents of legal change; for each of them, changing the law is a major part of their business plan. To achieve their political goals, these companies employ conventional lobbying techniques, but also more innovative tactics. In particular, some attempt to enter markets quickly, then grow too big to ban before regulators can respond. If regulators do take aim at them, they respond by mobilizing their users for political support.

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March 16, 2016 in Scholarship, Tax | Permalink | Comments (0)

Fleischer:  The Hidden Difficulties Of Taxing Wealth

Miranda Perry Fleischer (San Diego), Not so Fast: The Hidden Difficulties of Taxing Wealth:

As an antidote to increasing inequality, policymakers and academics frequently call for heavier taxes on the wealthy. To those outside the tax academy, proposals such as increasing marginal rates, implementing a wealth tax, or strengthening the estate tax likely sound like variations on the same theme. Many discussions of using the tax system to fight inequality therefore ignore differences among tax instruments. As this Essay shows, using the tax system to fight inequality requires careful consideration of both normative and practical concerns.

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March 16, 2016 in Scholarship, Tax | Permalink | Comments (0)

Disrupting Law School: How Disruptive Innovation Will Revolutionize The Legal World

DisruptingMichele R. Pistone (Villanova; Founder, LegalED) & Michael B. Horn (Clayton Christensen Institute for Disruptive Innovation), Disrupting Law School: How Disruptive Innovation Will Revolutionize the Legal World:

Facing dramatic declines in enrollment, revenue, and student quality at the same time that their cost structure continues to rise and public support has waned, law schools are in crisis. A key driver of the crisis is shrinking employment opportunities for recent graduates, which stem in part from the disruption of the traditional business model for the provision of legal services.

Although this root problem will soon choke off the financial viability of many schools, most law schools remain unable or unwilling to address this existential problem in more than a marginal way, as they instead prefer to maintain the status quo and hope that the job market soon improves. In reaction to the growing crisis, most law schools have accordingly continued to focus their attention and energies on maintaining their existing status within the legacy model used to rank and compare law schools: the U.S. News & World Report’s annual law school rankings. In the face of the crisis, the dominant focus of law schools and their administrators has been to retain their school’s ranking so that their school can outlast competitor law schools—some of which, the argument goes, may have to shut their doors—until, in the long run they hope, the market evens out and everything returns to the pre-crisis status quo.

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March 16, 2016 in Legal Education, Scholarship | Permalink | Comments (2)

Tuesday, March 15, 2016

Kamin Presents The Under-Appreciated Potential And Misunderstood Failings Of Tax Incentives Today At Georgetown

Kamin (2015)David Kamin (NYU) presents Getting Americans to Save: The Under-Appreciated Potential and Misunderstood Failings of Tax Incentives at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

Americans under-save, and one of the primary systems for getting them to save more—a system of tax-preferred retirement accounts—is fundamentally broken, according to much of the recent literature. This system of 401(k)s, Individual Retirement Accounts (IRAs), and other tax-preferenced accounts cost the government about $80 billion per year relative to a pure income tax system,  and influential new research derides tax incentives like these as a rather expensive mistake, at least as a way of increasing saving.  However, that literature is wrong—or at least it is wrong in the way it has confidently condemned these accounts as necessarily failing to achieve the desired end of increasing saving. Tax incentives have other serious shortcomings, as this article explains, but they can in fact increase saving.

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March 15, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Marian:  Unilateral Responses To Tax Treaty Abuse

Omri Y. Marian (UC-Irvine), Unilateral Responses to Tax Treaty Abuse: A Functional Approach, 41 Brook. J. Int'l L. ___ (2016):

Recent years have seen a dramatic increase in the attention given to abusive tax schemes that take advantage of bilateral tax treaties. The ensuing discourse tends to view potential responses to treaty abuses as a hierarchical set of options, gradually escalating, in which treaty termination is a last resort option. This article argues that the hierarchical view of unilateral responses to treaty abuse is misguided. Unilateral responses to treaty-based abuse are not hierarchically ordered. Rather, the approach to treaty abuse is (and should be) functional, adopting specific types of unilateral responses based on the type of treaty abuse at issue.

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March 15, 2016 in Scholarship, Tax | Permalink | Comments (0)

Brauner:  Treaties In The Aftermath Of BEPS

Yariv Brauner (Florida), Treaties in the Aftermath of BEPS, 41 Brook. J. Int'l L. ___ (2016):

The article argues that despite the fanfare around it, the outcome of the BEPS project is unlikely to be dramatic, at least in the short term. Beyond a period of increased legal uncertainty and aggressive enforcement by some countries, it expects little substantive change in tax treaties. The challenges to the dominance of the OECD and the richest countries would likely be assuaged with marginal concessions, most or all of which not affecting tax treaties. Yet, the article sees a silver lining in the non-substantive, structural and instrumental outcomes of the BEPS project.

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March 15, 2016 in Scholarship, Tax | Permalink | Comments (0)

McMahon:  Tax's Exceptional Regulatory Process

Stephanie Hunter McMahon (Cincinnati), The Perfect Process is the Enemy of the Good Tax: Tax's Exceptional Regulatory Process, 36 Va. Tax Rev. ___ (2016):

Many courts and academics critique existing tax exceptionalism or the ability of the federal income tax to be created, applied, or interpreted differently from other laws. Critics have successfully complained that the Treasury Department, and the IRS as a bureau of the Department, issues guidance implementing the Internal Revenue Code using different processes from those required by the Administrative Procedure Act. At the same time, courts are increasing the level of deference given to this guidance to conform to that given other agencies. This article responds to these critics by urging they re-focus their attention on the objectives of administrative law and comparisons to other agencies’ procedures as opposed to limiting their assessment to the APA.

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March 15, 2016 in Scholarship, Tax | Permalink | Comments (0)

Monday, March 14, 2016

Osofsky Presents Simplexity Today At UC-Irvine

Osofsky (2016)Leigh Osofsky (Miami) presents Simplexity (with Joshua Blank (NYU)) at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

In recent years, federal government agencies have increasingly attempted to use plain language in written communications with the public. The Plain Writing Act of 2010, for instance, requires agencies to incorporate “clear and simple” explanations of rules and regulations into their official publications. In the tax context, as part of its “customer service” mission, the Internal Revenue Service bears a “duty to explain” the tax law to hundreds of millions of taxpayers who file tax returns each year. Proponents of the plain language movement have heralded this form of communication as leading to simplicity in tax compliance, more equitable access to federal programs and increased open government.

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March 14, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Gutman Delivers Lecture On Why A VAT Is The Path To Real Business Tax Reform Today At Temple

GutmanHarry L. Gutman delivers the 2016 Fogel Lecture on Why a VAT Is the Path to Real Business Tax Reform at Temple today:

Legislators face significant challenges in enacting meaningful business tax reform. For at least the last five years the multi-national business community has urged reform; prominent scholars have produced serious policy analyses; and politicians have talked endlessly about the need to reform business taxation. Yet nothing has occurred and the likelihood is that nothing significant will occur this year-- except for more rhetoric. Mr. Gutman will offer his thoughts on what has happened and why, and make the case for a national consumption tax, in the form of a value added tax (VAT), as the best way to fund needed changes to a system of business income taxation that is utterly broken.

March 14, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Stiglitz:  Rewriting The Tax Code For A Stronger, More Equitable Economy

Roosevelt LogoJoseph Stiglitz (Columbia), Reforming Taxation to Promote Growth and Equity:

This white paper by Roosevelt Chief Economist Joseph Stiglitz outlines concrete policy measures that can restore equitable and sustainable economic growth in the United States, in the context of the country’s recurring budgetary crises. Effective policies are within our grasp because these budgetary crises are the result of political and not economic failings.

Tax reform in particular offers a path toward both resolving budgetary impasses and making the kinds of public investments that will strengthen the fundamentals of the economy. The most obvious reform is an increase in the top marginal income tax rates—this would both raise needed revenues and soften America’s extreme and harmful inequality. But there are also a variety of other effective possible reforms related to corporate taxation, the estate and inheritance tax, environmental taxes, and ensuring that the government gets full value when it sells public assets. This white paper describes the gravity of the economic situation in the United States, but also shows that there is a way out.

Eric Harris Bernstein (Roosevelt Institute) & Joseph Stiglitz (Columbia), Rewriting the Tax Code for a Stronger, More Equitable Economy:

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March 14, 2016 in Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

The Contemporary Tax Journal Publishes New Issue

Contemporary
The San Jose State University Masters of Science in Taxation Program in the Lucas Graduate School of Business has published the sixth issue (Vol. 5, No. 2 (Winter 2016)) of The Contemporary Tax Journal.

March 14, 2016 in Scholarship, Tax | Permalink | Comments (0)

Sunday, March 13, 2016

Academia Isn’t So Bad For Conservative Professors

Book CoverWashington Post op-ed:  Forget What the Right Says: Academia Isn’t So Bad for Conservative Professors, by Jon A. Shields (Claremont McKenna) & Joshua M. Dunn, Sr. (Colorado), coauthors, Passing on the Right: Conservative Professors in the Progressive University (Oxford University Press, March 2016):

As two conservative professors, we agree that right-wing faculty members and ideas are not always treated fairly on college campuses. But we also know that right-wing hand-wringing about higher education is overblown. After interviewing 153 conservative professors in the social sciences and humanities, we believe that conservatives survive and even thrive in one of America’s most progressive professions.

First, conservative professors are not helpless victims — they have become quite skilled at navigating the progressive university. About a third of the professors we interviewed said they concealed their politics prior to earning tenure. Of course, being in the closet is not easy. (One particularly distressed professor told us: “It is dangerous to even think [a conservative thought] when I’m on campus, because it might come out of my mouth.”) But it’s also a temporary hardship, since nearly all the conservatives whom we interviewed planned to emerge from the ivory tower’s shadows after gaining tenure. Once tenured, conservatives are free to express their politics and publish research that reflects right-wing interests and perspectives. As one put it to us: “I don’t mind causing trouble now.”

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March 13, 2016 in Book Club, Legal Education, Scholarship | Permalink | Comments (5)

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list, with some reshuffling of the order within the Top 5:

  1. [393 Downloads]  The Taxation of Crowdfunding: Income Tax Uncertainties and a Safe Harbor Test to Claim Gift Tax Exclusion, by Paul Battista
  2. [385 Downloads]  What Now? A Boomer's Baedeker for the Distribution Phase of Defined Contribution Retirement Plans, by Richard Kaplan (Illinois)
  3. [368 Downloads]  Uncle Sam Wants … Who? A Global Perspective on Citizenship Taxation, by Allison Christians (McGill)
  4. [285 Downloads]  Profit Shifting Of U.S. Multinationals, by Tim Dowd (Joint Committee on Taxation), Paul Landefeld (Joint Committee on Taxation) & Anne Moore (Joint Committee on Taxation)
  5. [254 Downloads]  Evaluating BEPS, by Reuven Avi-Yonah (Michigan)

March 13, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, March 11, 2016

Tulane Hosts 6th Annual Tax Roundtable

TulaneTulane hosts its 6th Annual Tax Roundtable today:

The Tulane Tax Roundtable brings together tax scholars from around the country, resident Tulane faculty and Tulane students for discussion and debate about important tax policy issues of our time. The roundtable showcases the drafts and works-in-progress of its participants and subjects these works to rigorous analysis in a discussant-driven workshop format.

James Alm (Tulane), Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (with Bibek Adhikari (Tulane))
Discussant:  Brian Galle (Georgetown)

Leigh Osofsky (Miami), Simplexity (with Joshua Blank (NYU))
Discussant:  Lawrence Zelenak (Duke)

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March 11, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

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March 11, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

BYU Hosts Symposium Today On The Cutting Edge Of International Tax Reform

BYU (2016)2016 BYU Law Review Symposium, A Scholarly Conversation at the Cutting Edge of International Tax Reform:

  • Allison Christians (McGill), Not-So-Soft Law: The OECD Tax Regime
  • Kimberly Clausing (Reed College), Competitiveness, Tax Base Erosion, and the Essential Dilemma of Corporate Tax Reform
  • J. Clifton Fleming Jr. (BYU) & Robert J. Peroni (Texas), You Can Run But You Can’t Hide: Addressing Inversions and Defending Worldwide Taxation with a Shareholder-based Definition of Corporate Residence
  • Omri Marian (UC-Irvine), Private Investment Funds and International Tax Avoidance

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March 11, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Infanti Presents Tax Law And Politics: Seeing Self And Other In The Tax Mirror At Birmingham

Infanti (2016)The Centre for Tax Governance at the University of Birmingham hosted its second annual conference yesterday on Taxation as a Social and Political Institution (program here).   Anthony C. Infanti (Pittsburgh) delivered the keynote address on Tax Law and Politics: Seeing Self and Other in the Tax Mirror:

This talk focused on recognizing the larger political dimensions of taxation and addressing the significant resistance to outsider perspectives both within and without the tax academy in the United States. Using the metaphor of tax law as a mirror of society, the talk focused on shifting away from thinking about tax as just an economic or pocketbook issue and toward a greater understanding of why tax is relevant not only to each of us separately as individuals but to all of us together as a society. Naturally, we all understand that taxes are important because they directly impact how much money we have left at the end of each pay period, how much things cost us at the store, etc. But what gets overlooked is the important role that taxes play in communicating who and what we are as a society. The U.S. tax system, for example, paints a picture of American society that lets us clearly see those who are included in the collective American “self” (i.e., those whom we value, validate, and support) as well as the many “others” whom we dismiss or leave out because they fail to meet this “ideal.” Once we understand the expressive power of our tax system, it is easy to see that taxes are about much more than just economics or finances. Our tax laws are a reflection of ourselves—of our society as it is and as we wish it would be.

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March 11, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)