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Thursday, November 6, 2014

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

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

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

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

The Earned Income Tax Credit and the Well-Being of American Families

Hilary W. Hoynes (UC-Berkeley), A Revolution in Poverty Policy: The Earned Income Tax Credit and the Well-Being of American Families, in Pathways: A Magazine on Poverty, Inequality, and Social Policy (Summer 2014):

EITC Cover 2Over the past 20 years, the safety net for families with children in the United States has been fundamentally transformed. The 1996 welfare reform led to a dramatic reduction in the amount of state cash assistance and to the elimination of the Aid to Families with Dependent Children (AFDC) program. At the same time, the amount of cash assistance given through the U.S. tax system increased substantially with the Earned Income Tax Credit (EITC).

The net result is an almost complete shift in the U.S. safety net for low-income families with children from out-of-work assistance to in-work assistance. In the midst of the slow recovery from the Great Recession, the EITC is now the largest cash transfer program for low-income families with children. The EITC cost roughly $59 billion in 2009, as compared with the $9 billion in Temporary Assistance to Needy Families (TANF) cash payments from the program that replaced AFDC.

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November 6, 2014 in Scholarship, Tax | Permalink | Comments (1)

Wednesday, November 5, 2014

Legal Education in Transition: Trends and Their Implications

Sheldon Krantz (Georgetown) & Michael A. Millemann (Maryland), Legal Education in Transition: Trends and Their Implications, 92 Neb. L. Rev. (2014):

This is a pivotal moment in legal education. Revisions in ABA accreditation standards, approved in August 2014, impose new requirements, including practice-based requirements, on law schools. Other external regulators and critics are pushing for significant changes too. For example, the California bar licensing body is proposing to add a practice-based, experiential requirement to its licensing requirements, and the New York Court of Appeals, New York’s highest court, is giving third-year, second semester students the opportunity to practice full-time in indigent legal services programs and projects. Unbeknown to many, there have been significant recent changes in legal education that have added practice-based courses, or practice-based components to courses, in all three years of legal education. Increasingly, law schools are reaching beyond the JD to establish projects in which graduates learn while practicing law. The innovations include first-year courses in which students engage in actual legal work to help provide legal services to clients; technology clinics in which students use or build state-of-the-art technology to help pro se litigants more effectively represent themselves; diversified experiential courses, including “practicums;” and post-JD “incubator,” “fellowship,” “residency,” “apprenticeship,” and “job corps” programs in which law graduates, and sometimes law students, practice and learn from practice. It is a dynamic period in which law schools, including through comprehensive strategic planning, should regain the leadership in facing the present and future challenges. The factors contributing to change — for example, the tough job market, reduced law school applications, interventions of regulators, U.S. News & World Report rankings and increased competition among law schools — are not likely to substantially change in the near future. Law schools are in, should be in, and will be in a period that calls for sustained innovation.

November 5, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Tuesday, November 4, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at Minnesota

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Minnesota today as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

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

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

The Unicap Regs and Trademark Royalties

Florida Tax ReviewGlenn Walberg (Vermont), Wrestling Control from the Unicap Regulations: The Irrelevance of Quality Control in Determining Capitalizable Trademark Royalties, 16 Fla. Tax Rev. 223 (2014):

Taxpayers generally must capitalize direct and indirect costs attributable to their production of inventory. Due to uncertainty about whether this requirement applies to sales-based trademark royalties, the regulations now clarify that these royalties are indeed capitalizable as indirect production costs. However, the regulations also let taxpayers allocate these sales-based costs entirely to cost of goods sold. So, to the relief of taxpayers, the regulations have the practical effect of permitting immediate cost recovery — similar to a business expense deduction — for sales-based royalties.

This Article questions the rationale for treating trademark royalties as capitalizable indirect costs. It argues that the regulations inappropriately rely on a licensor’s retention of control over product quality to link a licensed mark with inventory production and hence treat the associated royalties as production costs. The Article finds such reliance inappropriate because every valid trademark license involves a retention of control and the significance of control has diminished in modern trademark law and licensing practices. The Article further explains how this focus on control inadvertently makes all trademark royalties (including minimum and upfront royalties) capitalizable as indirect costs and therefore potentially allocable to ending inventory.

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

Avi-Yonah: What We Can Learn from the Tax Reform Act of 1986

Reuven Avi-Yonah (Michigan), Reinventing the Wheel: What We Can Learn from the Tax Reform Act of 1986:

This paper has suggested that as we consider tax reform in 2014 and thereafter, we should revert to some of the positive features of TRA 86, updated to reflect increasing globalization. Specifically:

  • The top individual rate, the KG rate and the dividend rate should be set at 28%;
  • The corporate rate should also be set at 28%;
  • Corporations should be taxed on global income with no deferral or exemption.

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

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

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

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

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

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

November 4, 2014 in Scholarship, Tax | Permalink | Comments (1)

Monday, November 3, 2014

Bankman & Shaviro: Piketty in America: A Tale of Two Literatures

PikettyJoseph Bankman (Stanford) & Daniel N. Shaviro (NYU), Piketty in America: A Tale of Two Literatures, 68 Tax L. Rev. ___ (2014):

Thomas Piketty’s widely-noted and bestselling book, Capital in the Twenty-First Century, does much to advance our empirical understanding of rising high-end wealth concentration, which is one of the central issues of our time. But its theoretical approach and policy recommendations differ sharply from those that have been prevalent in recent decades in the Anglo-American academic tax policy literature. We adjudicate this “confrontation” (insofar as it is one), and find that each approach in some respects both undermines and enriches the other. We find that the optimal tax response to wealth concentration is significantly more complicated than Piketty’s analysis recognizes. This is particularly true in the United States, where rising high-end wealth concentration has been driven by heterogeneous human capital, and where Piketty’s proposed wealth tax would face a substantial risk of being held unconstitutional.

November 3, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Weinzierl Presents The Promise of Positive Optimal Taxation Today at Loyola-L.A.

WeinzierlMatthew Weinzierl (Harvard Business School) presents The Promise of Positive Optimal Taxation at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

A prominent assumption in modern optimal tax research is that the objective of taxation is Utilitarian. I present new survey evidence that most people reject this assumption’s implications for several prominent features of tax policy, instead preferring tax policies based at least in part on a classic alternative objective: the principle of Equal Sacri…fice. I generalize the standard model to accommodate this preference for a mixed objective, proposing a method by which to make disparate criteria commensurable while respecting Pareto efficiency. Then, I show that optimal policy in this generalized model, calibrated to the survey evidence and U.S. microdata, is capable of quantitatively matching several features of existing tax policy that are incompatible in the conventional model but widely endorsed in the survey and reality, including the coexistence of substantial redistribution and limited tagging. Together, these fi…ndings demonstrate the potential of a positive theory of optimal taxation.

David Gamage (UC-Berkeley) is the commentator.

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

Moretti & Wilson Present Taxation, Migration, and Innovation: The Effect of Taxes on the Location of Star Scientists Today at UC-Berkeley

MorettiWilsonEnrico Moretti (UC-Berkeley, Department of Economics) & Daniel Wilson (Federal Reserve Bank of San Francisco) present Taxation, Migration, and Innovation: The Effect of Taxes on the Location of Star Scientists at UC-Berkeley today as part of the Robert D. Burch Center for Tax Policy and Public Finance Seminar:

This paper estimates tax-induced mobility of star scientists. Surprisingly there is  little research on tax-induced mobility of “economically valuable” individuals.

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

Sullivan: The Tax Aspects of Immigration Reform

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), The Tax Aspects of Immigration Reform, 145 Tax Notes 463 (Nov. 3, 2014):

Against all odds, Obama, who would love to include immigration reform as part of his legacy, and Republican leaders in Congress, who want their party to be competitive in the 2016 presidential election and to show they can get things done, are likely to make a serious attempt at putting together a bipartisan, bicameral deal on immigration in 2015. The estimates presented in this article are based on numerous assumptions about which there is considerable uncertainty, so they can hardly be taken as gospel. But the central finding, concerning the large difference in the revenue effects between legal and unauthorized immigration, is difficult to dispute given the differences in average income levels and the fact that many currently unauthorized immigrants already pay tax. As Congress struggles to fix our broken immigration system, it is likely to consider many variations of S.744 and its components. Those proposals that allow a large influx of new legal immigrants — particularly immigrants with high skills—will significantly increase tax revenue. Providing new legal status for current unauthorized immigrants will not.

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

Sunday, November 2, 2014

Top 5 Tax Paper Downloads

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

  1. [301 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  2. [297 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  3. [165 Downloads]  Home-Country Effects of Corporate Inversions, by Omri Y. Marian (Florida)
  4. [156 Downloads]  Rights Without Remedies, by Matthew L. M. Fletcher (Michigan State)
  5. [146 Downloads]  A World Turned Upside Down: Reflections on the 'New Wave' Inversions and Notice 2014-52, by Reuven S. Avi-Yonah (Michigan)

November 2, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 1, 2014

Simkovic & McIntyre: The Economic Value of a Law Degree: $1 Million

Michael Simkovic (Seton Hall) & Frank McIntyre (Rutgers Business School), The Economic Value of a Law Degree, 43 J. Legal Stud. 249 (2014):

We investigate the economic value of a law degree and find that for most law school graduates, the present value of a law degree typically exceeds its cost by hundreds of thousands of dollars. The median and 25th-percentile earnings premiums justify enrollment. We track lifetime earnings of a large sample of law degree holders. Previous studies focused on starting salaries, generic professional degree holders, or the subset of law degree holders who practice law. We incorporate unemployment and disability risk and measure earnings premiums separately for men and for women. After controlling for observable ability sorting, we find that a law degree is associated with median increases of 73 percent in earnings and 60 percent in hourly wages. The mean annual earnings premium is approximately $57,200 in 2013 dollars. Values in recent years are within historical norms. The mean pretax lifetime value of a law degree is approximately $1 million.

From Michael Simkovic:

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

Friday, October 31, 2014

Weekly SSRN Tax Roundup

October 31, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Weekly RoundupConor Clarke (J.D. 2015, Yale) & Edward Fox (J.D. 2015, Yale), Note, Perceptions of Tax Expenditures and Direct Spending: A Survey Experiment, 124 Yale L.J. ___ (2015):

This paper presents the results of an original survey experiment on whether the public prefers “tax expenditures” to “direct outlays” — that is, whether members of the public are more likely to support government spending that takes the form of a tax credit rather than a check or cash. Using a survey that spans a wide variety of policy areas — and with important variations in wording and information — we show that the public strongly prefers tax expenditures even when the “economic substance” of the proposed policies is identical. We also show that the public views tax expenditures as less costly than equivalent direct outlays. These results support a longstanding but largely unstudied hypothesis that tax expenditures “hide” the costs of government spending, and have implications for why tax expenditures have continued to grow in size and complexity.

October 31, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Florida Hosts 10th Annual International Tax Symposium Today

Florida Logo (GIF)The University of Florida Graduate Tax Program hosts its  Tenth Annual International Taxation Symposium today (live webcast here):

October 31, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Gerzog: A Simplified Verifiable Gift Tax

Wendy Gerzog (Baltimore), A Simplified Verifiable Gift Tax:

The purpose of this article is to create a simpler and more accountable federal gift tax. The proposed tax would simplify gift completion rules, adopt a hard-to-complete rule of transfer taxation, reduce the annual exclusion while expanding the consumption exclusion, and, by replicating the portability reporting rules, employ gift tax preference inducements to increase gift tax compliance. The proposed gift tax reaffirms basic principles of transfer taxes, encourages simple, outright gifts, and eliminates some of the major valuation abuses in the current gift tax regime.

October 31, 2014 in Scholarship, Tax | Permalink | Comments (0)

Math for Law Students

MathTerrance O'Reilly (Willamette), Math for Law Students:

Topics include fractions, decimals, absolute values, powers/exponents, rounding, percent and percentage change, average, median, bytes, interest, future value, present discounted value and linear functions.

October 31, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

Thursday, October 30, 2014

MIT Law School: Legal Education in the 21st Century

Daniel Martin Katz (Michigan State), The MIT School of Law? A Perspective on Legal Education in the 21st Century, 2014 Ill. L. Rev. ___ :

MITDespite some of the blustery rhetoric attendant to the ongoing market transition, lawyers and the market for legal services are not going away. Lawyers serve integral roles in a wide variety of social and political systems. Their work supports the proper functioning of markets and helps individuals and organizations vindicate their respective rights. At the same time, the processes associated with completing their work — as well as the contours of their respective expertise and judgment — are already changing. These changes are being driven by a number of economic and technological trends, many of which Larry Ribstein identified in a series of important articles published in the years before his untimely death.

This Essay is offered as part of a symposium honoring the work of the late Larry Ribstein. This Essay is a thought exercise about a hypothetical MIT School of Law — an institution with the type of curriculum that might help prepare students to have the appropriate level of substantive legal expertise and other useful skills that will allow them to deliver value to their clients as well as develop and administer the rules governing markets, politics, and society as we move further into the 21st Century. It is a blueprint based upon the best available information, and like any other plan of action would need to be modified to take stock of shifting realities over time. It is not a solution for all of legal education. Instead, it is a targeted description of an institution and its substantive content that could compete very favorably in the existing and future market. It is a depiction of an institution whose students would arguably be in high demand. It is a high-level sketch of an institution that would be substantively relevant, appropriately practical, theoretically rigorous and world class.

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October 30, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Does Credit-Card Information Reporting Improve Small-Business Tax Compliance?

Joel Slemrod (Michigan), Brett Collins (IRS), Jeffrey Hoopes (Ohio State), Daniel Reck (Michigan) & Michael Sebastiani (IRS), Does Credit-Card Information Reporting Improve Small-Business Tax Compliance?:

1099-KThird-party information has greatly decreased tax underreporting, but substantial underreporting persists where third-party information is not present. We investigate the preliminary response of businesses filing a Schedule C to the introduction in 2011 of Form 1099-K, which provides the Internal Revenue Service (IRS) and taxpayers with information about small businesses’ sales done by payment card and other electronic means. We find evidence that taxpayers with high prior noncompliance and/or sufficient use of electronic payment methods did adjust their behavior in response to the new information returns. Theory and distributional analysis isolate a subset of taxpayers who respond to information reporting by reporting receipts equal to or slightly exceeding the amount of receipts reported on 1099-K. Information reporting made these taxpayers much more likely to file Schedule C and, conditional on filing a Schedule C, increased their reported receipts by up to 24 percent. However, firms largely offset this change with increased reported expenses (an area not subject to information reporting), so that the overall effect on reported net taxable income was significantly smaller than would otherwise be expected without the increase in expenses.

October 30, 2014 in Scholarship, Tax | Permalink | Comments (0)

Born to Run: How Law Schools Can Meet Law Firm Expectations for New Litigators

Neil Joel Dilloff (Senior Partner, DLA Piper), Born to Run: How Law Schools Can Meet Law Firm Expectations for New Litigators, 33 Rev. Litig. 857 (2014):

This is a tough time for the legal profession. Law firm revenue is mostly stagnant. Law school enrollment is down to 1975 levels. Jobs for recent law graduates are scarce by historical standards. Just 55% of law school graduates of the Class of 2011 had a law-related job nine months after graduation. The legal profession lost 1,000 jobs between December 2012 and December 2013. For litigators, the number of trials is shrinking'" About 97% of all civil cases settle. In 2009, only 1.7% of all federal court civil cases were tried by a jury. One might even question whether entry into the legal profession is worth it after considering the typical law graduate's indebtedness from student loans and the extremely difficult job market. Notwithstanding this dire picture, clients will still sue and bc sued, competent litigators of all kinds will still be needed, and the judicial system will not grind to a halt. Thus, this Article is directed to the hearty bunch of new law school graduates who will practice as litigators and their respective law schools. Both should want to increase the value of a law degree so that the litigators and trial lawyers of tomorrow can not only survive, but flourish, even in this difficult environment.

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October 30, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Mirkay: State Tax Law in a Post-Windsor World

Nicholas A. Mirkay III (Creighton), Equality or Dysfunction? State Tax Law in a Post-Windsor World, 47 Creighton L. Rev. ___ (2014):

Depending on one’s religious and political proclivities, the United States Supreme Court’s decision in United States v. Windsor can either been seen as a progressive step towards equality or a troublesome departure from traditional marriage norms. Notwithstanding, from a federal tax perspective, the Windsor decision clearly raised a myriad of issues that spanned virtually the entire Internal Revenue Code (the “Code”), including but not limited to income taxes (including filing status), estate and gift taxes, payroll taxes, and the tax treatment of retirement account contributions and social security benefits. In the aftermath of Windsor, the IRS was left with a quandary in administering marital-status-dependent Code provisions: should it base its administration of the Code on the taxpayer’s valid marriage in the state in which it was performed (commonly referred to as the “state of celebration” test) or the taxpayer’s state of residence or domicile (commonly referred to as the “state of residence” test)? The IRS resolved most of the federal tax issues raised by Windsor in its issuance of Revenue Ruling 2013-17, which chiefly adopted a state of celebration test for income and other tax purposes. However, the ruling did not extend to quasi-marital statuses, such as domestic partnerships and civil unions, resulting in federal tax non-recognition and complexities for couples in those legally recognized relationships.

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October 30, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, October 29, 2014

Mawani Presents Payout Policies of Canadian REITs Today at Toronto

MawaniAmin Mawani (York University) presents Payout Policies of Canadian REITs at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

This study examines whether Canadian REITs that distribute relatively more of the tax-favoured returns (i.e., return of capital) do so by offering lower pre-tax returns in an efficient securities market. In other words, do Canadian REITs that offer significant amounts of tax-favoured return of capital bear an implicit tax in the form of lower pre-tax return? The study also examines whether higher proportions of returns of capital are statistically associated with more volatile distributions, higher growth opportunities, lower agency costs, stronger trust governance and / or higher management ownership of trust units.

October 29, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Rosenzweig: Revisiting the Law of Moses' Rod -- The Case of Inversions

Tax Analysys Logo (2013)Adam Rosenzweig (Washington University), Revisiting the Law of Moses' Rod: The Case of Inversions, 145 Tax Notes 429 (Oct. 27, 2014):

This article revisits Marty Ginsburg’s law of Moses’ rod in the context of inversions, in particular how proposed revisions to the antiinversion rules could be used to justify new, or even more aggressive, expatriation strategies. While not advocating that any taxpayer or other party pursue specific strategies or that they are ‘‘good’’ from a tax policy standpoint, the goal in examining potential inversion strategies even in the face of anti-inversion rules is to help find ways to incorporate antiabuse provisions into the larger structural goals of the income tax.

October 29, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, October 28, 2014

Kleinbard Presents We Are Better Than This: How Government Should Spend Our Money Today at Columbia

We Are Better Than This (2014)Edward Kleinbard (USC) presents We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014) at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

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

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

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October 28, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Monday, October 27, 2014

Turmel Presents The Reasons of Taxation: Efficiency, Freedom, Equality Today at McGill

TurmelPatrick Turmel (Laval University, Department of Philosophy) presents The Reasons of Taxation: Efficiency, Freedom, Equality (with David Robichaud (University of Ottawa, Department of Philosophy)) at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series hosted by Allison Christians and Daniel Weinstock:

In Capital in the 21st Century, Thomas Piketty argues for a series of controversial policy recommendations, such as a substantial increase in tax rates on higher incomes and a global tax on capital whose explicit aim is to halt the current spiral of inequality. Piketty’s main argument for these recommendations is not moral, but economic. Indeed, higher tax rates on top revenues and a progressive global tax on capital have not much to do with social justice or equality per se. According to Piketty, they are mostly needed in order to correct the market and maximize efficiency. But Piketty also put forth democratic reasons in favour of fighting inequalities, since they not only threaten the market, but also the very foundations of political freedom. These two types of reasons – reasons of efficiency and reasons of freedom - certainly go a long way to justify fighting the current dynamics of inequality and thus resisting the return of the Belle Époque’s patrimonial capitalism. But they remain somehow weak, when looked at from the perspective of most theories of social justice. They certainly don’t have much normative force when it comes to justifying important redistribution of wealth, as social justice seems to call for. At the very least, they fall short of creating a complete argument. The aim of this paper is to contribute to filling this gap by showing that alongside reasons of efficiency and freedom, a third type of reasons should play a central role in our understanding and justification of taxation, namely: reasons of equality.

October 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Crane Presents What Should Be the Criteria for Tax-base Design? Today at Loyola-L.A.

CraneCharlotte Crane (Northwestern) presents What Should Be the Criteria for Tax-base Design? at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

The legal academic discussions about the choice of tax base have paid little attention to the interactive effects of tax base choices with political and social institutions. Some work has been done by sociologists, political scientists and economic historians that connects the choice of tax base to the cultures and institutions that chose them that demonstrates the importance of taxes to the possibility of stable political institutions. Very little thought is given to the effect of the choice of tax base on the institutions that will evolve in response to this choice. These byproducts of taxation can be as obvious as a new cadre of tax collectors loyal to the government (but likely to insist that the tax remain in place) or as subtle as a population that learns to keep its accounts under a uniform methods or that develops uniform modes of doing business so as to avoid complications in tax compliance. This paper will explore several episodes in the history of taxes in the United States in which those making the choice were keenly aware of the political institutions that would result not just from the provision of a stable revenue source, but from the tax base chosen to provide that revenue.

Edward McCaffery (USC) is the commentator.

October 27, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Call for Papers: IFA International Tax Symposium

IFAThe International Fiscal Association has issued a Call for Papers for the Second International Tax Research Symposium in Basel, Switzerland:

We are pleased to announce the call for papers for the Second International Tax Research Symposium held in conjunction with the 69th Congress of the International Fiscal Association in Basel, Switzerland (August 30 to September 3, 2015). After the success of the first International Tax Research Symposium held during the IFA Congress in Boston in 2012 we are delighted to invite you for the Second International Tax Research Symposium in Basel. The International Tax Research Symposium aims to provide a platform for international scholars in international taxation. The Second IFA International Tax Symposium will be held on Sunday, August 30, 2015 (afternoon) in Basel and is supported by the International Fiscal Association. 

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October 27, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Brooks: Income-Based Repayment and the Public Financing of Higher Education

John R. Brooks II (Georgetown), Income-Based Repayment and the Public Financing of Higher Education:

IBR 2The growth in higher education costs has outrun inflation for decades, in part for reasons outside of an institution’s control. This has serious distributional consequences, given that higher education is a quasi-public good that should be consumed widely. Full public financing is a possible answer to the distributional and spillover problems, but the budgetary impact of doing so makes that close to politically impossible in the United States.

Except that the federal government has, to a first approximation, already created a system of public financing of higher education, paid for with progressive taxation: The Income-Based Repayment student loan program. As of 2010, the federal government provides essentially all student loans, and as of 2012, students may pay no more than 10% of discretionary income to service those loans. After a maximum of 20 years, the remaining debt is forgiven — for any borrower, regardless of degree, career, or debt load. Thus higher education tuition is paid by the government and funded with something that looks very much like a tax on income.

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October 27, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (1)

Avi-Yonah Reviews Kleinbard's We Are Better Than This

We Are Better Than ThisReuven S. Avi-Yonah (Michigan), Why Not Tax the Rich? (reviewing Edward D. Kleinbard (USC), We Are Better Than This: How Government Should Spend Our Money (Oxford University Press, 2014)):

Ed Kleinbard’s new book, We Are Better Than This: How Government SHould Spend Our Money (Oxford University Press, 2014), is a well-balanced and important contribution to the tax literature. Kleinbard convincingly sets out the case for addressing inequality not through taxation but rather through spending. While the emphasis on treating both sides of the federal budget ledger with equal respect is not new (Michael Graetz, for one, said it in the 1980s), Kleinbard updates the analysis and addresses it to a wider audience. Kleinbard’s book is also well positioned as an antidote to Thomas Piketty’s obsession with taxing the rich [Capital in the Twenty-First Century].

The problem with the book, however, is that its proposed solutions [restore the pre-2001 tax rates on the middle class and lift the cap on social security] are much too narrow. These have the virtue of being (perhaps) sellable on Capitol Hill, despite the bipartisan promise not to increase taxes on the middle class. But as a solution to our inequality problem they are woefully inadequate.

Update:  Dan Shaviro (NYU), Avi-Yonah Reviews Kleinbard

October 27, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Sunday, October 26, 2014

Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with a new #1 paper and a new paper debuting on the list at #2:

  1. [266 Downloads]  Trying Times 2014: Important Lessons to Be Learned from Recent Federal Tax Cases, by Nancy A. McLaughlin (Utah) & Steven J. Small (Law Office of Stephen J. Small, Newton, MA)
  2. [235 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [158 Downloads]  'Show Me the Money!' -- Analyzing the Potential State Tax Implications of Paying Student-Athletes, by Kathryn Kisska-Schulze (North Carolina A&T) & Adam Epstein (Central Michigan)
  4. [153 Downloads]  Home-Country Effects of Corporate Inversions, by Omri Y. Marian (Florida)
  5. [152 Downloads]  Rights Without Remedies, by Matthew L. M. Fletcher (Michigan State)

October 26, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 25, 2014

Are You a Chicago-Style (Quantity) or a Harvard-Style (Quality) Scholar?

CHOrin Kerr (George Washington), Writing, Fast and Slow:

Zachary Kramer's thoughtful post, The Slow Writing Movement, brings up a broader choice between two approaches to producing legal scholarship.   Fast versus slow.  Or what I think of as the Chicago style versus the Harvard style.  

The Chicago style is to pump out a bunch of articles every year.  When you get an idea for an article, whether big or small, you write it up.  The idea is to produce a steady stream of scholarship. Not every article will be a home run.  But among your articles enough will be a hit that you'll produce a major body of influential work.  I call this the Chicago style because it is most closely associated with the traditional faculty culture at the University of Chicago Law School.  

On the other hand, the Harvard style is to write less but bigger.  You focus on quality instead of quantity, not sending out an article unless and until you think it is the definitive statement about that area of law.  You won't win any productivity awards.  But what you send out should be a signficant statement -- if not a home run, at least a double or triple.  And by focusing your efforts on really big ideas, the thinking runs, you'll produce a major body of influential work.  I call this the Harvard style because I have heard it associated with the traditional faculty culture at Harvard Law School. ...

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October 25, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

Friday, October 24, 2014

Hoffer, Lederman & Walker Debate Tax Court Exceptionalism Today at Kentucky

HLWStephanie Hoffer (Ohio State), Leandra Lederman (Indiana), and Christopher Walker (Ohio State) debate Tax Court exceptionalism at Kentucky today as part of its Faculty Workshop Series (blogged here):

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

Talley Presents Corporate Inversions and the Unbundling of Regulatory Competition Today at Virginia

Talley 2Eric Talley (UC-Berkeley) presents Corporate Inversions and the Unbundling of Regulatory Competition at Virginia today as part of its Faculty Workshop Series:

A sizable number of US public companies have recently executed “tax inversions” – acquisitions that move a corporation’s residency abroad while maintaining its listing in domestic securities markets. When appropriately structured, inversions replace American with foreign tax treatment of extraterritorial earnings, often at far lower effective rates. Regulators and politicians have reacted with alarm to the “inversionitis” pandemic, with many championing radical tax reforms. This paper questions the prudence of such extreme reactions, both on practical and on conceptual grounds. Practically, I argue that inversions are simply not a viable strategy for many firms, and thus the ongoing wave may abate naturally (or with only modest tax reforms). Conceptually, I assess the inversion trend through the lens of regulatory competition theory, in which jurisdictions compete not only in tax policy, but also along other dimensions, such as the quality of their corporate law and governance rules. I argue that just as US companies have a strong aversion to high tax rates, they have a strong affinity for strong corporate governance rules, a traditional strength of American corporate law. This affinity has historically given the US enough market power to keep taxes high without chasing off incorporations, because US law specifically bundles tax residency and state corporate law into a conjoined regulatory package. To the extent this market power remains durable, radical tax overhauls would be unhelpful (and even counterproductive). A more blameworthy culprit for inversionitis, I argue, can be found in an unlikely source: Securities Law. Over the last fifteen years, financial regulators have progressively suffused US securities regulations with mandates relating to internal corporate governance matters – traditionally the domain of state law. Those federal mandates, in turn, have displaced and/or preempted state law as a primary source of governance regulation for US-traded issuers. And, because US securities law applies to all listed issuers (regardless of tax residence), this displacement has gradually “unbundled” domestic tax law from corporate governance, eroding the US’s market power in regulatory competition. The most effective elixir for this erosion, then, may also lie in securities regulation. I propose two alternative reform paths: either (a) domestic exchanges should charge listed foreign issuers for their consumption of federal corporate governance policies; or (b) federal law should cede corporate governance back to the states by rolling back many of the governance mandates promulgated over the last fifteen years.

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

Weekly SSRN Tax Roundup

October 24, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Hickman Reviews Blank's Collateral Compliance

JotwellKristin Hickman (Minnesota), Evaluating the Efficacy of Nonmonetary Penalties (Jotwell) (reviewing Joshua D Blank (NYU), Collateral Compliance, 162 U. Pa. L. Rev. 719 (2014)):

Monetary penalties for noncompliance are a routine feature of the tax laws. The tax literature includes extensive debate over different ways of structuring those penalties to improve tax compliance and eliminate the tax gap. In Collateral Compliance, Josh Blank shifts his gaze beyond that debate to examine what he labels “collateral tax sanctions”—nonmonetary penalties that federal and state governments impose, in addition to the monetary ones, for failing to comply with the tax laws. ...

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

Cauble: Redefining Qualifying Income for Publicly Traded Partnerships

Tax Analysys Logo (2013)Emily Cauble (DePaul), Redefining Qualifying Income for Publicly Traded Partnerships, 145 Tax Notes 107 (Oct. 6, 2014):

In general, business entities are subject to the section 11 corporate tax if they are publicly traded. Corporate tax is justified under the rationale that entities will pay tax in exchange for access to an established market because liquidity has value. It allows owners of large enterprises to easily exit by selling their shares. Publicly traded partnerships can avoid being subject to corporate tax under current law if they earn primarily qualifying income. The best rationale for this exemption from corporate tax is that the partners could have access to the income of the publicly traded partnership by buying the assets of the partnership directly. Congress should redefine qualifying income to make the definition better fit that rationale by classifying income as qualifying only if it is earned by holding publicly traded stock or other publicly traded assets.

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

Thursday, October 23, 2014

Hickman Presents Treasury's Retroactivity Today at UC-Irvine

Hickman 2014 2Kristin Hickman (Minnesota) presents Treasury's Retroactivity at UC-Irvine today as part of its Faculty Workshop Series:

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

October 23, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Osofsky: Tax Law Nonenforcement

Leigh Osofsky (Miami), Tax Law Nonenforcement:

The Obama Administration has engaged in what some have characterized as an “unprecedented use of executive power” not to enforce certain laws, including immigration laws, federal marijuana laws, and even parts of the Obama Administration’s own Patient Protection and Affordable Care Act. In response to this nonenforcement, commentators have begun asking what would have happened if a President Romney, or a future Republican President, decided not to enforce the tax laws. Could a President decide not to enforce the estate tax, the income tax with respect to millionaires, or the income tax for anyone who has already paid a specified percentage of income in taxes? In answering this question, constitutional scholars have suggested that the President cannot declare categorical, or complete, prospective nonenforcement of some aspect of the law. Recent tax literature examining IRS pronouncements that it will not enforce particular aspects of the tax law has also determined that categorical tax law nonenforcement is troublesome from the perspective of the rule of law.

What has been missing in the existing discussion, especially in the preoccupation with flashy, and relatively infrequent, presidential nonenforcement of the tax law, is a broad based examination of what tax law nonenforcement looks like at the agency level and an accompanying examination of categorical nonenforcement through the lens of the legitimacy of the administrative state.

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October 23, 2014 in Scholarship, Tax | Permalink | Comments (0)

Mann: Subchapter S: Vive Le Difference!

Roberta F. Mann (Oregon), Subchapter S: Vive Le Difference!, 18 Chapman L. Rev. 65 (2014):

Is Subchapter S obsolete, or does it still serve a rational purpose in the economy? This Article will examine that issue, focusing on the comparison between S corporations and LLCs. The Article begins with a history of Subchapter S and the “check-the-box” regulations. Next, the Article will compare the arguments for and against repealing Subchapter S. Statistics appear to show that the number of S corporation returns is still increasing. Why are S corporations still being used, and do those reasons justify its continued existence? Perhaps the answer is political: politicians love small businesses and S corporation stands for “small business.” Ultimately, the answer to these questions may depend on whether politicians’ favorable view of small business is justified.

October 23, 2014 in Scholarship, Tax | Permalink | Comments (1)

Cockfield: BEPS and Global Digital Taxation

Tax Analysys Logo (2013)Arthur J. Cockfield (Queen's University Faculty of Law), BEPS and Global Digital Taxation, 75 Tax Notes Int'l 933 (Sept. 15, 2014):

In 2013, the Organization for Economic Cooperation and Development (OECD) launched its base erosion and profit shifting (BEPS) project to inhibit aggressive international tax planning. Action 1 of the BEPS project requires the OECD to identify the main challenges that the digital economy poses for the application of current international tax rules and develop reforms to address these challenges. The article reviews related academic perspectives, and discusses how the digital world facilitates aggressive tax planning. It concludes that any new tax rules should apply broadly and neutrally to substantively similar economic activities from either the digital or traditional commercial world. In addition, the OECD should more carefully examine how Internet technologies can help enforce national tax laws to constrain aggressive planning.

October 23, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, October 22, 2014

Faulhaber: Charitable Giving, Tax Expenditures, and Direct Spending in the US and EU

Lilian Faulhaber (Boston University), Charitable Giving, Tax Expenditures, and the Fiscal Future of the European Union, 39 Yale J. Int'l L. 87 (2014):

This Article compares the ways in which the United States and the European Union limit the ability of state-level entities to subsidize their own residents, whether through direct subsidies or through tax expenditures. It uses four recent charitable giving cases decided by the European Court of Justice (ECJ) to illustrate the ECJ’s evolving tax expenditure jurisprudence and argues that, while this jurisprudence may suggest a new and promising model for fiscal federalism, it may also have negative social policy implications. It also points out that the court analyzes direct spending and tax expenditures under different rubrics despite their economic equivalence and does not provide a clear rule for distinguishing between the two, adding to the confusion of Member States and taxpayers. The Article then surveys the Supreme Court’s Dormant Commerce Clause jurisprudence, under which the Court analyzes discriminatory state spending provisions. The Article concludes that although both the Supreme Court and the ECJ prioritize formalism over economic equivalence, the Supreme Court’s approach to tax expenditures is more defensible than that of the ECJ due to the different federal structures of the two jurisdictions.

October 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Mann: The Tax Policy Implications of Economists/Policymakers Miscommunication

Roberta F. Mann (Oregon), Economists are from Mercury, Policymakers are from Saturn: The Tax Policy Implications of Communication Failure, 5 Wm. & Mary Pol'y Rev. 1 (2013):

SaturnPolicymaking lawyers and economists are different types of people who come together in the policymaking realm. Sometimes policymakers rely on economic analysis to make decisions. Sometimes policymakers use economic analysis to support decisions already made. In particular, economic analysis has played a large role in the formation of tax and budgetary policy. However, there is a problem. Not only do economists and lawyers communicate differently, they think, perceive, react and respond differently. They almost seem to be from different planets, speaking different languages. While both lawyers and economists use “stories” to persuade, economic analysis cloaks the story in a complex mathematical model, opaque to those without training in economic theory. The results of economic modeling can obscure the decisions that policymakers and the public need to make — about the direction of the tax system, the nation, and the economy. This article examines the roles economists and lawyers play in the development and implementation of the income tax system. 

October 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Osofsky: Concentrated Enforcement

Florida Tax ReviewLeigh Osofsky (Miami), Concentrated Enforcement, 16 Fla. Tax Rev. 325 (2014):

When enforcement resources are limited, how should the scarce enforcement resources be allocated to increase compliance with the law? The answer to this question can determine to what extent the law on the books translates to the law in practice. A dominant school of thought in the tax literature suggests that they should be allocated based on a “worst-first” method, whereby the individuals likely to be most noncompliant are targeted. However, while “worst-first” methods can encourage all individuals to increase compliance so as not to be deemed the “worst,” they can also provide cover to engage in noncompliance that is perceived moderate for the relevant population. This dynamic can become most problematic in highly noncompliant populations. In such populations, existing, high levels of noncompliance, and underlying, structural causes of the high noncompliance can serve as coordinating mechanisms, providing mutual assurance of low compliance. Moreover, “worst-first” theories do not provide a comprehensive explanation for the group and project-based enforcement practices that are found in a number of actual enforcement settings. In response to these deficits, I draw on work from across different disciplines to develop a new theory for the allocation of scarce tax enforcement resources. I suggest that, under certain conditions, deterrence can be enhanced by allocating scarce enforcement resources among a low-compliance population of taxpayers through a process I call concentrated enforcement. After setting forth the theoretical case for concentrated enforcement, I examine how it might apply in the cash business tax sector, a highly noncompliant sector that presents particular challenges for “worst-first” methods. I conclude that concentrated enforcement may increase compliance, meriting its application and empirical evaluation.

October 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Willis & Tanzler: ObamaCare Violates the Origination Clause

Steven J. Willis (Florida) & Hans G. Tanzler IV (Florida), ObamaCare Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed:

ObamaCare 2The Affordable Care Act violates the Constitution's Origination Clause: Article One, Section 7. What began as House Bill 3590 was not a "bill for Raising Revenue" because it solely covered non-taxes: spending items such as credits and recapture exclusions. Further, the Senate amendment adding I.R.C. section 5000A - the tax for lacking health insurance - was not germane to the House Bill; however, the amendment was indeed a "bill for Raising revenue" that must originate in the House.

The D.C. Circuit - in Sissel - and the District Court - in Hotze - each used a mistaken "primary purpose" test to overcome an Origination Clause challenge. Both Courts mistakenly focused on the "primary purpose" of the Affordable Care Act, rather than the purpose of the isolated section 5000A tax. As the Supreme Court in Rainey (1914) and Flint (1911) demonstrated, an Origination Clause challenge must examine the individual provision of the Act on its own merits as to germaneness and revenue raising, rather than as compared to the Act as a whole.

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October 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, October 21, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at UNLV

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

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

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

Marian: A Conceptual Framework for the Regulation of Cryptocurrencies

Omri Y. Marian (Florida), A Conceptual Framework for the Regulation of Cryptocurrencies, 81 U. Chi. L. Rev. Dialogue ___ (2015):

BitcoinThis Essay proposes a conceptual framework for the regulation of transactions involving cryptocurrencies. Cryptocurrencies offer tremendous opportunities for innovation and development, but at the same time are uniquely suited to facilitate illicit behavior. The suggested regulatory framework is intended to support (or, at the least, not impair) cryptocurrencies’ innovative potential. At the same time, the aim is to disrupt cryptocurrencies’ utility for criminal activities. To achieve such purposes, this Essay suggests a regulatory framework that imposes costs on the characteristics of cryptocurrencies that make them particularly useful for criminal behavior (in particular, anonymity), but does not impose costs on characteristics that are at the core of the generative potential (in particular, the decentralization of value-transfer processes). Using a basic utility model of criminal behavior as a benchmark, the Essay explains how regulatory instruments can be so designed. One such regulatory instrument is proposed as an example – an elective anonymity tax on cryptocurrency transactions in which at least one party is not anonymous.

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

Osofsky: Unwinding the Ceiling Rule

Leigh Osofsky (Miami), Unwinding the Ceiling Rule, 33 Va. Tax Rev. 63 (2014):

As is widely known, the so-called “ceiling rule,” which applies under the traditional method for section 704(c) allocations, can create the wrong tax result. Specifically, the ceiling rule can result in misallocations of income, gain, loss, and deduction to both a partner contributing property and to the noncontributing partners. Notwithstanding these predictable misallocations, the Treasury Department still permits application of the ceiling rule under section 704(c). This Article challenges longstanding assumptions regarding the operation of the ceiling rule in the context of section 704(c). Historically, Congress and partnership tax experts assumed that the ceiling rule is perfectly unwound on liquidation or sale of a partnership interest. This assumption still operates to some extent today. The assumption glosses over a significantly more complicated reality. This Article closely examines the history of section 704(c) and the interaction between the ceiling rule and the rules regarding sales and liquidations of partnership interests. Doing so reveals that when and to what extent the perfect unwinding assumption holds depends (perhaps to a surprising degree) on (1) a variety of relatively arbitrary facts regarding the assets held by the partnership on liquidation or sale, and (2) the unintended interactions of inordinately complicated partnership tax rules. In reaching this conclusion, this Article displays that the ceiling rule, which has always been part of the section 704(c) regime, is even worse than it is commonly thought to be.

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

Johnson: Repatriation Tax -- Are We Churchill or Chamberlain?

Tax Analysys Logo (2013)Calvin H. Johnson (Texas), Repatriation Tax: Are We Churchill or Chamberlain?, 144 Tax Notes 1459 (Sept. 22, 2014):

Under current law, earnings of a foreign subsidiary are not subject to tax until they are repatriated. At repatriation, the U.S. parent pays 35% corporate tax, less foreign tax credits. A tax on repatriation has no effect on repatriations, by mathematical law, if the tax remains. If the United States reduces or forgives the tax in the foreseeable future, U.S. corporations will delay repatriation to take advantage of the reduction. This project proposes an increase in tax on repatriation after a short window during which the 35% tax, less foreign tax credits, will remain. The increase will induce corporations to repatriate their foreign earnings within the window to take advantage of the relatively generous 35% rate.

October 21, 2014 in Scholarship, Tax | Permalink | Comments (1)

Monday, October 20, 2014

Sanchirico Presents International Tax and Ownership Nationality Today at Northwestern

SanchiricoChris Sanchirico (Pennsylvania) presents As American as Apple, Inc.: International Tax and Ownership Nationality, 68 Tax L. Rev. ___ (2014), at Northwestern today as part of its Law and Economics Workshop Series organized by Bernard Black:

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

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