TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Sunday, May 28, 2017

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 new papers debuting on the list at #4 and #5:

  1. [323 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  2. [212 Downloads]  Can New York Publish President Trump's State Tax Returns? , by Daniel Hemel (Chicago)
  3. [194 Downloads]  A Global Treaty Override? The New OECD Multilateral Tax Instrument and Its Limits, by Reuven S. Avi-Yonah (Michigan) & Haiyan Xu (Michigan)
  4. [136 Downloads]  Recent Developments in Federal Income Taxation: The Year 2016 , by Martin J. McMahon Jr. (Florida) & Bruce A. McGovern (South Texas)
  5. [127 Downloads]  Why Don't White Supremacists Pay Taxes?, by Eric Franklin Amarante (UNLV)

May 28, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 27, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Raskolnikov:  A Tale of Two Tax Plans — What Trump And Ryan Get Wrong

Foreign Affairs 2Foreign Affairs:  A Tale of Two Tax Plans: What Trump and Ryan Get Wrong, by Alex Raskolnikov (Columbia):

Republicans have long panned the U.S. tax system; now they have a plan to change it. In fact, two plans. The first comes from Congress, the second from the White House. The congressional “Better Way” plan, championed by Paul Ryan, the Speaker of the House, and Kevin Brady, chair of the House Ways and Means Committee, would create a business tax system that has never existed anywhere in the world. The White House plan would enact a massive tax cut, mostly for the wealthy.

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May 27, 2017 in Tax | Permalink | Comments (3)

Friday, May 26, 2017

The Last Weekly Tax Highlight And Roundup?

TaxProf Blog LogoOn August 1, 2016, I announced that, due to my growing other commitments, I was reducing the amount of time that I devote to TaxProf Blog by dropping my weekly tax, legal education, SSRN, and student tax note roundups.  Happily, Joe Kristan took over the weekly tax roundup, Scott Fruehwald took over the weekly legal education roundup, and David Gamage (Indiana), Ari Glogower (Ohio State), Daniel Hemel (Chicago), and Erin Scharff (Arizona State) took over the weekly SSRN roundup — and frankly have done better jobs than I did. (Regrettably, no one volunteered to take over the weekly student tax note roundup and it remains dormant.) 

As Joe describes below, this is the 31st and last installment of his weekly tax roundup on TaxProf Blog.  On behalf of all of my readers, I thank Joe for sharing his great work with us.  Joe belongs on the Mount Rushmore of tax bloggers.  We will miss him greatly. 

As I get ready to assume the Pepperdine deanship on June 1 (more here, here, here, here, and here), I am struggling to fulfill my commitment to continue TaxProf Blog.  If you are a law professor who has found TaxProf Blog a helpful resource and would like to help it continue by contributing legal education or tax content on a regular basis, please email me.

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May 26, 2017 in About This Blog, Legal Education, Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by Chris William Sanchirico (Penn), Optimal Redistributional Instruments in Tax Policy and Law & Economics: Survey and Assessment, in The Oxford Handbook of Law & Economics, Vol. 1: Methodology and Concepts 321 (Francesco Parisi, ed., 2017)

Glogower (2016)In his new work, Chris Sanchirico surveys the current literature on the optimal redistributional instruments, which seeks identify the most efficient policy tool(s) for redistribution.

Sanchirico identifies three broad strands in the literature.  First, the tax substitution argument generally holds that redistribution is best accomplished through a tax on labor earnings, because redistribution through any other policy can be substituted for redistribution through the labor income tax, at a lower cost.  As Sanchirico has argued in prior work, however, the assumptions about labor income taxation underlying the tax substitution argument could similarly be used to justify optimal redistribution through other policies or instruments.

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May 26, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (1)

NY Times:  How London And Vancouver Tax Breaks Hollowed Out Hollywood's Visual Effects Industry

HollywoodNew York Times Sunday Magazine, Why Hollywood’s Most Thrilling Scenes Are Now Orchestrated Thousands of Miles Away:

The visual effects industry, and the “movie magic” blockbuster films spend huge shares of their budgets on, are being lured away from California — and into two of the most expensive cities in the world.

[W]hile visual effects’ role in movie making is growing, its presence in Hollywood is shrinking. From 2003 to 2013, at least 21 notable visual-effects companies went out of business, including Digital Domain, which produced the Oscar-winning effects in “Titanic.” Rhythm & Hues finally filed for bankruptcy protection in 2013, just days before winning an Oscar for “Life of Pi,” though it has since been revived under new ownership, working largely on TV shows like “Game of Thrones.”

One factor behind these companies’ failure is a raft of tax-incentive programs that have popped up around the world in an effort to lure cash-starved VFX production companies — and their high-tech jobs and movie glamour — out of California. The chief destinations, at the moment, are London and another even more expensive city: Vancouver, British Columbia. The stunning, Oscar-winning spacescape of “Gravity”? Created by London’s Framestore. The fantastical jungles of “The Jungle Book”? Most of the credit (and the Oscar) belongs to the London-based Moving Picture Company. The grand, galactic battles in “Star Trek Beyond”? That work was led by Double Negative in Vancouver. The companies that make billion-dollar blockbusters possible are barely hanging on, and — for the most part — they aren’t anywhere near Los Angeles.

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May 26, 2017 in Tax | Permalink | Comments (0)

Thursday, May 25, 2017

Kim:  'Citizenship Taxation' — In Defense Of FATCA

Florida Tax Review  (2015)Young Ran (Christine) Kim (Utah), Considering 'Citizenship Taxation': In Defense of FATCA, 20 Fla. Tax Rev. 335 (2017):

Inspired by Ruth Mason’s recent article, Citizenship Taxation, [89 S. Cal. L. Rev. 169 (2016),] which reaches a general conclusion against citizenship taxation, this Article also questions citizen taxation under the same normative framework, but with a particular focus on efficiency and administrability, and takes a much less critical stance towards the merits of citizenship taxation.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (12)

Morrow:  Accelerating Depreciation In Recession

Florida Tax Review  (2015)Rebecca N. Morrow (Wake Forest), Accelerating Depreciation in Recession, 19 Fla. Tax Rev. 465 (2016):

What would you do if on January 13, 2016, you had won the $1.5 billion Powerball jackpot? The prize gives you the choice of a smaller lump sum now or the full jackpot parceled out for years to come. For the New York Times and numerous financial experts, the right choice is clear: take the money over time. While lump sums are nice, they are not worth a big discount when compared to “ultrasafe” income streams (like the Powerball annuity), especially in an “ultralow interest rate environment.”

What everyone understands about Powerball seems to elude us when it comes to the United States’ largest corporate tax expenditure. “Accelerated depreciation” rules give taxpayers a lump sum deduction now, rather than the gradual deductions they would normally claim. Called tax law’s “standard method for combating recessions,” accelerated depreciation has become the most important tax policy affecting businesses because it is thought to be an effective if costly way to stimulate the economy, particularly during tough economic times.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

Shaheen:  Treaty Aspects Of The McDonald's State Aid Investigation

McDonaldsFadi Shaheen (Rutgers), Tax Treaty Aspects of the McDonald's State Aid Investigation, 86 Tax Notes Int'l 275 (Apr. 24, 2017):

Supporting the European Commission’s conclusion that Luxembourg was under no treaty obligation to exempt income attributable to a U.S. branch of a McDonald’s Luxembourgian subsidiary, this paper suggests two alternative methods for reaching the same result in ways that avoid possible obstacles in the commission’s approach.

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May 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 24, 2017

Knoll Critiques Kleinbard's Influential Article Claiming That Competitiveness Has Nothing To Do With Inversions

Michael Knoll (Pennsylvania), Taxation, Competitiveness, and Inversions: A Response to Kleinbard, 155 Tax Notes 619 (May 1, 2017):

In a 2014 article [Competitiveness’ Has Nothing to Do With It, 144 Tax Notes 1055 (Sept. 1, 2014)], Professor Edward D. Kleinbard leaped into the center of [the inversion] debate. In that article, he contended that competitiveness arguments for corporate inversions are “almost entirely fact-free” and constitute “a false narrative,” and that “international business ‘competitiveness’ has nothing to do with the reasons for these deals.” He concluded that although the current U.S. tax system “is highly distortive and inefficient . . . one of the few deficiencies it has avoided is imposing an unfair international business tax competitive burden on sophisticated U.S. multinationals.”

Kleinbard and his article have played and continue to play a highly visible role in public policy debates over inversions.

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May 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

Dodge:  The Personal Realization Income Tax

Florida Tax Review  (2015)Joseph M. Dodge (Florida State), The Fair Tax: The Personal Realization Income Tax, 19 Fla. Tax Rev. 522 (2016):

This article argues that the properly conceived fairness norm for taxation leads to a personal realization income tax. Fairness in taxation refers to “allocative tax fairness,” that is, the ethical/political standard according to which taxes are to be apportioned among the relevant population. In concrete terms, the standard constitutes the tax base for individual taxpayers. Allocative fairness is but one norm bearing on taxation, but it is one that (in academia, at least) has unjustifiably taken a back seat to economics and welfarist norms, largely due to the perception that allocative tax fairness lacks any specific content apart from the speaker's political and personal tastes and, therefore, by implication, is without independent normative grounding. The short riposte is that exclusive adherence to economic and/or welfarist norms is itself a matter of personal taste.

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May 24, 2017 in Scholarship, Tax | Permalink | Comments (2)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through May 1, 2017) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):







Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Michael Simkovic (S. Hall)


Lily Batchelder (NYU)



Paul Caron (Pepperdine)


Michael Simkovic (S. Hall)



D. Dharmapala (Chicago)


D. Dharmapala (Chicago)



Louis Kaplow (Harvard)


Michael Graetz (Columbia)



Vic Fleischer (San Diego)


Richard Ainsworth (BU)



James Hines (Michigan)


Ed Kleinbard (USC)



Ed Kleinbard (USC)


David Weisbach (Chicago)



Richard Kaplan (Illinois)


Dan Shaviro (NYU)



Ted Seto (Loyola-L.A.)


Louis Kaplow (Harvard)



Richard Ainsworth (BU)


David Gamage (Indiana)



Katie Pratt (Loyola-L.A.)


William Byrnes (Texas A&M)



David Weisbach (Chicago)


Paul Caron (Pepperdine)



Robert Sitkoff (Harvard)


Robert Sitkoff (Harvard)



Brad Borden (Brooklyn)


Jeff Kwall (Loyola-Chicago)



Carter Bishop (Suffolk)


Omri Marian (UC-Irvine)



Francine Lipman (UNLV)


Francine Lipman (UNLV)



Jen Kowal (Loyola-L.A.)


Brian Galle (Georgetown)



Chris Sanchirico (Penn)


Darien Shanske (UC-Davis)



Dan Shaviro (NYU)


Jordan Barry (San Diego)



Bridget Crawford (Pace)


Bridget Crawford (Pace)



Dennis Ventry (UC-Davis)


Steven Bank (UCLA)



David Walker (BU)


Brad Borden (Brooklyn)



Steven Bank (UCLA)


Christopher Hoyt (UMKC)



Gregg Polsky (Georgia)


Yariv Brauner (Florida)


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

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May 24, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Ventry:  Trump's Tax Plan Will Boost, Not Reduce, Home Ownership

The Hill op-ed: Trump's Tax Plan Can Boost, Not Reduce, Homeownership, by Dennis J. Ventry, Jr. (UC-Davis):

President Trump’s tax plan has the housing industry in a tizzy. The National Association of Realtors (NAR) says it puts “at risk ... targeted tax incentives” like the mortgage interest deduction (MID) and property tax deduction (PTD), which “help lower- and middle-class families purchase” a home. It would “effectively nullify the current tax benefits of owning a home for the vast majority of tax filers,” the NAR continues. In addition, it could make “home values plummet ... equity evaporate,” and Americans’ “nest eggs” disappear.

It sounds scary. But almost none of it is true. 

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May 24, 2017 in Tax | Permalink | Comments (1)

Tuesday, May 23, 2017

3rd Annual Mid-Career Tax Professors Workshop Concludes Today At Arkansas

Arkansas Fayetteville LogoPanel #6

Susan Morse (Texas), Skewed Deference
Commentator:  Charlene Luke (Florida)

Jordan Barry (San Diego), Taxation and Innovation: The Sharing Economy as a Case Study
Commentator:  Shu-Yi Oei (Tulane)

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May 23, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

House Holds Hearing Today On The Border Adjustment And International Tax Reform

Ways & Means (2016)The House Ways & Means Committee held a hearing this morning on Increasing U.S Competitiveness and Preventing American Jobs from Moving Overseas:

The hearing focused on border adjustment and international tax modernization as a core element of comprehensive tax reform and the implications of these policies for increasing jobs, investment, and economic growth in the United States.

Witness List
Juan Luciano
President & CEO, Archer Daniels Midland

Brian Cornell
Board Chairman & CEO, Target

William Simon
Former President & CEO, Walmart

Lawrence B. Lindsey
President & CEO, The Lindsey Group

Kimberly Clausing
Thormund A. Miller & Walter Mintz Professor of Economics, Reed College

Clausing 4

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May 23, 2017 in Congressional News, Tax | Permalink | Comments (0)

Kades:  Reducing Inequality With A Progressive State Tax Credit

Eric A. Kades (William & Mary), Giving Credit Where Credit Is Due: Reducing Inequality with a Progressive State Tax Credit, 77 La. L. Rev. 359 (2016):

Widening economic inequality is fast becoming the defining social problem of this era. Although there are a number of policy mechanisms available for addressing the problem, taxation is the first and best tool for the job. The federal income tax code is already moderately progressive and thus partially counteracts growing inequality in before-tax incomes. State taxation, however, is an entirely different matter: every single state has some combination of sales, property, and income taxes that, taken together are regressive: average (“effective”) state tax rates fall as income rises. It is perverse that taxation in each and every state exacerbates instead of ameliorates the nation’s burgeoning income inequality.

Figure 8

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May 23, 2017 in Scholarship, Tax | Permalink | Comments (2)

Weber:  Killing Zombie Mortgages With Differential Property Taxes

David P. Weber (Creighton), Taxing Zombies: Killing Zombie Mortgages with Differential Property Taxes, 2017  U. Ill. L. Rev. 1135 (2017):

Zombie mortgages and abandoned properties are costly problems for cities and counties across the country. The term “zombie mortgage” is meant to, and hopefully does, evoke images of undead mortgages that are nearly impossible to eliminate. In the legal literature, the term is used to describe the circumstance when a lender or mortgagee has initiated foreclosure proceedings, the homeowner has quit the premises, and the lender later abandons the foreclosure process, often without notifying the owner of record. The mortgages, accompanying fees, and real estate taxes are “zombies” because the affected homeowner cannot escape them by abandoning the property, even after notice of eviction. Generally, the affected homeowner cannot shed these “zombies” through bankruptcy, either.

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May 23, 2017 in Scholarship, Tax | Permalink | Comments (1)

Monday, May 22, 2017

3rd Annual Mid-Career Tax Professors Workshop Kicks Off Today At Arkansas

Arkansas Fayetteville LogoPanel #1

Jennifer Bird-Pollan (Kentucky), Sovereignty, Tax, and BITs
Commentator: David Herzig (Valparaiso)

John Brooks (Georgetown), Income Tax as Wealth Tax
Commentator:  Rebecca Kysar (Brooklyn)

Emily Cauble (DePaul), Tax Law’s Inconsistent Treatment of Gains and Losses
Commentator:  Heather Field (UC-Hastings)

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May 22, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)

WSJ:  The Blind Spot In The Sharing Economy — Tax Collection?

Airbnb uberWall Street Journal Tax Report: The Blind Spot in a Sharing Economy: Tax Collection, by Laura Saunders:

A loophole is helping gig-economy workers, online sellers and home-sharing hosts cheat on their taxes.

Under a law enacted in 2008 and later clarified by the Internal Revenue Service, many online-platform businesses that connect buyers and sellers and take credit-card payments, such as Airbnb, TaskRabbit, Etsy and ride-sharing firms, fall into a special category.

These businesses have to report a provider’s income to the IRS only if that person earns more than $20,000 and has more than 200 transactions. In that case, the company sends both the provider and IRS a Form 1099-K listing gross income.

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May 22, 2017 in Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, May 21, 2017

John Oliver Property Tax Scam Uses Loophole Created By Donald Trump

John Oliver 2New York Observer, The John Oliver Property Tax Scam: HBO Comedian Secretly Buys Manhattan Mansion; Liberal Deity Avoids Taxes By Using Loophole Created By Donald Trump:

The hypocrisy really gets ratcheted up with John Oliver, the No. 1 darling to so many liberal anti-Trumpies, who regularly attacks GOP tax schemes as giveaways to the rich and detrimental to the poor. ... 

For years, Oliver has criticized the estate tax, which opponents, in a smart linguistic move dreamed up by Frank Luntz, long ago labeled the “death tax”; and the tax code’s raft of loopholes that benefit special interests he identified as oil companies and hedge fund managers. Oliver even briefly established the bogus Our Lady of Perpetual Exemption to draw attention to tax-exempt status granted to churches and charities.

Back in July 2014, in an episode in which he lamented the Wealth Gap in America” (which has resulted in the richest one percent of Americans controlling 20 percent of annual income), Oliver said, “At this point the rich are just running up the score…What sets America apart is that we are actively introducing policies that disproportionately benefit the wealthy,” such as tax cuts and loopholes like trusts.

So it’s a little surprising to discover that just months before, Oliver had a tax attorney set up two revocable trusts, one for him and one for his wife, to hide the couple’s purchase of a $9.5 million Manhattan penthouse. Then he used a tax loophole created by Donald Trump himself back in the 1970s, when the current president was merely a prominent New York real estate developer and aspiring celebrity author.

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May 21, 2017 in Celebrity Tax Lore, Tax | Permalink | Comments (6)

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 new papers debuting on the list at #3, #4, and #5:

  1. [306 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  2. [229 Downloads]  BEPS and the New International Tax Order, by Allison Christians (McGill)
  3. [202 Downloads]  Can New York Publish President Trump's State Tax Returns? , by Daniel Hemel (Chicago)
  4. [171 Downloads]  A Global Treaty Override? The New OECD Multilateral Tax Instrument and Its Limits, by Reuven S. Avi-Yonah (Michigan) & Haiyan Xu (Michigan)
  5. [149 Downloads]  Base Erosion by Intra-Group Debt and BEPS Project Action 4's Best Practice Approach: A Case Study of Chevron, by Antony Ting (Sydney)

May 21, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 20, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Reinterpreting Corporate Inversions: Non-Tax Competitions And Frictions

Inho Andrew Mun (J.D. 2017, Yale), Note, Reinterpreting Corporate Inversions: Non-Tax Competitions and Frictions, 126 Yale L.J. 2152 (2017)

Corporate inversions have drawn outrage from all segments of society. In an inversion, a company reincorporates abroad to escape its U.S. tax burden. Regulators and academics have typically sought tax law solutions to curb tax inversions. However, the resulting tax regulations have been ineffective, while more radical tax reforms are not politically feasible. This Note argues that inversion is not a tax problem in isolation, but a problem of aligning tax paid with benefits conferred by a given country. By introducing non-tax dimensions into the equation, this Note refines the oft-ignored benefit tax theory. The benefit tax theory proposes that the U.S. corporate tax regime accounts for superior legal and nonlegal benefits that companies enjoy by incorporating or operating in the United States. While paying U.S. tax, corporations receive the benefits of corporate governance, securities regulation, intellectual property law, and other areas of law; furthermore, benefits include many nonlegal business factors such as access to a large consumption market, skilled labor pool, capital markets, and more.

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May 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Friday, May 19, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses a recent Tax Court case highlighting the perils of do-it-yourself tax preparation.

KristanThe perils of do-it-yourself tax prep.

I’ve tried to do plumbing myself. I have learned that it is cheaper in the not-very-long run to pay a plumber.

An insurance consultant learned a similar lesson about tax preparation in Tax Court last week. His client specialty was accountants. Whether out of thrift or because he didn’t want to be seen playing favorites, he used TurboTax. It went badly in Tax Court.

The taxpayer claimed disallowed deductions for alimony and for a net operating loss. The court determined that he reported too much Alimony, and that he whiffed entirely on the NOL. The deficiency was big enough to bring the 20% “accuracy related” penalty into play. Judge Holmes considers the issue:

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May 19, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews an article by Darien Shanske (Davis), The (Now Urgent) Case for State-Level Monitoring of Local Government Finances (or, One Way to Protect Localities from Trump's 'Potemkin Villages of Nothing'), forthcoming in the NYU Journal of Legislation and Public Policy: 

Scharff (2017)Darien Shanske’s forthcoming article on local government financing suggests reforms that might protect local governments from their own bad decisions.   The fiscal challenges facing local governments are enormous, and Shanske persuasively argues localities are ill equipped to deal with these problems on their own.  And his proposal responds to the variety of fiscal problems facing cities. There are problems both with the ways cities spend their revenue and also their revenue streams.  Too often, we foucs on only one side of this problem.

At the time Shanske wrote the paper, he was particularly worried about the possibility of a federal infrastructure plan that would flood local governments with public-private partnership opportunities that would fail to deliver promised benefits.  As Shanske’s title alludes to, Larry Summers denounced such infrastructure spending as a “Potemkin Village [] of nothing.”

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May 19, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Houston Hosts Third Annual Texas Tax Faculty Workshop

Houston (2017)The University of Houston Law Center hosts the Third Annual Tax Faculty Workshop today:

Bryan Camp (Texas Tech), Application of Equitable Principles to Jurisdictional Time Periods
Commentator: Terri Helge (Texas A&M)

Calvin Johnson (Texas), Beckemeyer and the Tax Benefit Rule
Commentator: Johnny Buckles (Houston)

Susan Morse (Texas), The Dark Side of Safe Harbors?
Commentator: Bruce McGovern (South Texas)

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May 19, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tax Policy In The Trump Administration

Soled & Thomas:  Regulating Tax Return Preparation

Jay A. Soled (Rutgers) & Kathleen DeLaney Thomas (North Carolina), Regulating Tax Return Preparation, 58 B.C. L. Rev. 151 (2017):

Every year the U.S. government collects nearly $3 trillion of income and employment taxes, a large share of which is used to deliver social welfare benefits to the poor. With respect to these collections and deliveries, the Form 1040 (U.S. Individual Income Tax Return) seeks to ensure taxpayer accuracy. In the twenty-first century, there are two sets of key players that dominate the Form 1040 preparation and submission process, namely, tax return preparers and tax return preparation software companies. The former hand-hold taxpayers through the entire tax return preparation and submission process while the latter provide taxpayers with the necessary tools to complete and submit tax returns on their own. These two groups – tax return preparers and tax software companies – thus stand as vital intermediaries between the government and taxpayers, assisting in the preparation of over 90 percent of all individual tax returns.

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May 19, 2017 in Scholarship, Tax | Permalink | Comments (1)

Thursday, May 18, 2017

Roin:  Retroactive Taxation, Unfunded Pensions, And Shadow Bankruptcies

Julie Roin (Chicago), Retroactive Taxation, Unfunded Pensions, and Shadow Bankruptcies, 102 U. Chi. L. Rev. 559 (2017):

Academics and journalists criticize politicians for the dismal financial situations of many state and local jurisdictions. And certainly, politicians routinely make inaccurate fiscal claims. However, the voting public bears some of the blame for continuing to vote for politicians peddling what amounts to fiscal “magic.” This Article suggests a mechanism for holding them at least partially accountable for their carelessness: retroactive taxation triggered by objective measures of fiscal distress.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (1)

Barry & Pollman:  Regulatory Entrepreneurship

Jordan M. Barry (San Diego) & Elizabeth Pollman (Loyola-L.A.), Regulatory Entrepreneurship, 90 S. Cal. L. Rev. 383 (2017):

This Article examines what we term “regulatory entrepreneurship”—pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Grinberg:  The House GOP Blueprint Can Be Drafted To Comply With WTO Rules

Itai Grinberg (Georgetown), The House GOP Blueprint Can Be Drafted to Comply with WTO Rules:

The House GOP Blueprint can be drafted into legislation in a manner that would comply with the United States’ international trade obligations. This paper presents two alternative approaches that avoid the key WTO discrimination and subsidy issues often raised in discussions of destination-based cash flow tax proposals.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

NTA 47th Annual Spring Symposium On Taxation In The Trump Era


The NTA 47th Annual Spring Sympoisum on Taxation in the Trump Era: Reforms, Revenues and Repercussions kicks off today in Washington, D.C.  Tax Prof speakers include:

Exploring the Destination-Based Cash Flow Tax

Organizer: Itai Grinberg, Georgetown University Law Center
Moderator: Lily Faulhaber, Georgetown University Law Center

Destination-Based Cash Flow Taxation
Alan Auerbach, University of California, Berkeley, Michael P. Devereux, Oxford University Centre for Business Taxation, Michael Keen, International Monetary Fund, and John Vella, Oxford University Centre for Business Taxation

Problems with Destination-Based Corporate Taxes and the Ryan Blueprint
Kimberly Clausing, Reed College and Reuven Avi-Yonah, University of Michigan Law School

Can a Destination-Based Cash Flow Tax be Compatible with the WTO Commitments of the United States?
Itai Grinberg, Georgetown University Law Center

Is the Destination-Based Cash Flow Tax Easily Gamed?
John Vella, Oxford University Centre for Business Taxation

Using the Tax Code to Support Families: Past, Current and Future Policy


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May 18, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (2)

Hurt:  The Private Ordering Of Publicly Traded Partnerships

Christine Hurt (BYU), The Private Ordering of Publicly Traded Partnerships:

Publicly traded partnerships, or master limited partnerships as they are sometimes called, are hybrid entities. Attempting to achieve the perfect structure for organizing economic activity, new statutes added limited liability to entities that enjoy flow-through taxation. However, because of parallel refinements by federal regulators involving taxation and amendments by state legislatures involving fiduciary duties, a strange genetic mutation flourished: the publicly traded partnership (PTP). The PTP organized as a Delaware limited partnership combines limited liability and tax advantages with elimination of fiduciary duties and free transferability of shares. In what might be the pinnacle of separation of ownership and control, unitholders purchase limited partnership units on a public exchange representing equity interests in an entity whose managers have no fiduciary duties toward the purchasers or their investment. Furthermore, new proposals seek to expand the universe of firms that may choose this structure, creating interesting, or alarming, questions about the future of this once tiny but now growing population of firms.

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May 18, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 17, 2017

Watson:  Rethinking The Pell Program And Federal Tax Incentives For Education

Camilla E. Watson (Georgia), The Future of Lower-Income Students in Higher Education: Rethinking the Pell Program and Federal Tax Incentives:

As the costs of higher education have soared, the value of Pell grants has declined, making it more difficult for lower-income students to obtain an education without being hopelessly mired in debt. This article traces the evolution of the Pell program and discusses the diametrically opposed proposals of Presidents Obama and Trump to reform federal funding for higher education. The article proposes an alternative plan that would require a redirection of a portion of the funds from the Pell program and a reshuffling of the current tax incentives for higher education.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Sanchirico:  Pass-Through, Public Trading, And The Dubious Obstacle Of Inside Basis Adjustments

Chris Sanchirico (Pennsylvania), Pass-Through, Public Trading, and the Dubious Obstacle of Inside Basis Adjustments (web appendix):

Elective “inside basis adjustments” are a central feature of partnership taxation, and their prospective infeasibility for publicly traded companies has played an important role in shaping leading corporate integration proposals.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Taylor:  The U.S. Rules For Taxing Business Entities

Florida Tax Review  (2015)Willard Taylor (NYU), Can We Clean This Up? A Brief Journey Through the U.S. Rules for Taxing Business Entities, 19 Fla. Tax Rev. 323 (2016):

This article summarizes the 80-plus year history of the U.S. Federal income tax rules for classifying business entities, concluding that they result largely from administrative and/or legislative reactions to specific problems or legislative accommodations to industry lobbying efforts and do not reflect an effort to develop a comprehensive and coherent system for taxing (or not taxing) business income.

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May 17, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 16, 2017

Alice Abreu Receives Temple University's Great Teacher Award

Abreu (2017)Temple Law Professor Alice Abreu Honored with Great Teacher Award:

From the volume of letters offered in support of her nomination, it is clear that Temple Law Professor Alice Abreu has been a Great Teacher for a very long time. On April 25th, Temple University made that official by honoring her with the Great Teacher Award, the highest honor bestowed by Temple upon its faculty.

Temple Law Dean Gregory Mandel took the opportunity to heap praise upon Professor Abreu, tempered with light-hearted teasing for her “boundless and infectious passion for tax law.” “Yes, you heard me correctly,” he confirmed to laughter from the faculty in attendance. “I realize that phrase has never before been uttered.” Mandel went on to describe the “universal admiration of all who know Professor Abreu,” not only for her “zeal for tax law,” but also for her “passion for teaching… and her excitement for drawing colleagues into the intersection of tax law and their practice areas.”

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May 16, 2017 in Legal Education, Tax, Teaching | Permalink | Comments (1)

Chang:  Inequality, Trusts And Estates, And Tax

Felix B. Chang (Cincinnati), Asymmetries in the Generation and Transmission of Wealth,  78 Ohio St. L.J. ___ (2017):

This Article assigns a redistributive role to the legal rules of trusts and estates. Unlike business law, trusts and estates has lagged in articulating a comprehensive theory on inequality. Consequently, income inequality is compounded intergenerationally as wealth inequality, with dire consequences for economic productivity and social stability. To move the discourse on wealth inequality, this Article explores the divergent approaches toward inequality in business law and trusts and estates.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (2)

Kleinbard:  Capital Taxation In An Age Of Inequality

Edward Kleinbard (USC), Capital Taxation In An Age Of Inequality, 90 S. Cal. L. Rev. 593 (2017):

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. The pervasive presence of gifts and bequests renders moot the claim that the results obtained by Atkinson and Stiglitz in 1976 counsel against taxing capital income in practice.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (1)

Manolakas:  The Mortgage Interest Deduction And Unmarried Co-Owners

Christine Manolakas (McGeorge), Qualified Residence Interest Deduction: A Win for Unmarried Co-Owners, 17 Nev. L.J. 199 (2016):

Despite the seemingly simple language of the statute, the interpretation of the home mortgage interest deduction has recently garnered much attention as the Internal Revenue Service and the courts grappled with its application to unmarried co-owners of a residence.

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May 16, 2017 in Scholarship, Tax | Permalink | Comments (1)

Monday, May 15, 2017

Grewal:  Congress Handcuffs The IRS

Andy Grewal (Iowa), The IRS Gets Handcuffed by the Congress, Yale J. on Reg.: Notice & Comment (May 3, 2017):

The House and Senate recently reached agreement on a comprehensive spending bill and expect to pass it soon. Regarding the IRS, the bill freezes the agency’s budget at $11.2 billion and thus does not, as some feared, make substantial cuts to its funding. Nonetheless, the IRS may face hardships, because its funding remains significantly below its 2010 level ($13.6 billion) while its responsibilities have greatly expanded in recent years, especially because of the Affordable Care Act.

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May 15, 2017 in Congressional News, IRS News, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, May 14, 2017

Higher Taxes Lead To Consistently Worse Results In MLB, NBA, NFL, And NHL


New York Times op-ed: Another Terrible Thing About Taxes, by Erik Hembre (University of Illinois at Chicago):

I gathered data on the outcomes of every professional sports game over the past 40 years as well as data on state and local tax rates each team member faces. I then computed how much taxes predict winning for each league in every year while controlling for other factors such as population, income, franchise age and local amenities (i.e., weather).

Results of the analysis [Income Taxes and Team Performance: Do They Matter?] show that higher taxes consistently predict worse performance in every league — not just the N.B.A. but also Major League Baseball, the N.H.L., and the N.F.L. over the past 20 years. The findings do not change if I use championships or finals appearances instead of regular season wins, and no single city, team or year drives the results.

Figure 4

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May 14, 2017 in Tax | Permalink | Comments (6)

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 #4:

  1. [430 Downloads]  Background and Current Status of FATCA, by William Byrnes (Texas A&M) & Robert J. Munro (Texas A&M)
  2. [380 Downloads]  House Plan's Bad Math: Over-Estimates of Revenue from a Border Adjustment, by David Kamin (NYU) & Brad Setser (Council on Foreign Relations)
  3. [298 Downloads]  The Offshore Tax Enforcement Dragnet, by Shu-Yi Oei (Tulane)
  4. [225 Downloads]  Should Robots Pay Taxes? Tax Policy in the Age of Automation, by Ryan Abbott (University of Surrey) & Bret N. Bogenschneider (University of Surrey)
  5. [215 Downloads]  BEPS and the New International Tax Order, by Allison Christians (McGill)

May 14, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 13, 2017

This Week's Ten Most Popular TaxProf Blog Posts

President Trump Nominates David Kautter To Be Assistant Secretary For Tax Policy

KautterFollowing up on my April 3 post, David Kautter To Be Named Assistant Secretary For Tax Policy: White House Press Release, President Donald J. Trump Announces Key Additions to his Administration:

David J. Kautter of Virginia to be an Assistant Secretary of the Treasury, Tax Policy. If confirmed, Mr. Kautter will serve as Assistant Secretary of the Treasury for Tax Policy.  Mr. Kautter currently serves as Partner-in-Charge of the Washington National Tax practice for RSM, an audit, tax, and consulting services firm. He was also previously the Managing Director of the Kogod Tax Center and Executive-in-Residence at the Kogod School of Business at American University (AU).

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May 13, 2017 in IRS News, Tax | Permalink | Comments (0)

Friday, May 12, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses another in a long line of bizarre Eighth Circuit ESOP decisions.

KristanAnother 8th Circuit ESOP debacle.

The Eighth Circuit Court of Appeals has seen more than its share of cases involving Employee Stock Ownership Plans. That’s because Iowa is in the Eight Circuit, and Iowa was the home of practitioners whose creative use of ESOPs often led to unfortunate tax results.

The Eighth Circuit yesterday upheld another bad ESOP, in a case involving a Kansas orthopedic surgeon. The ESOP had an Iowa address, so we can add it to the roster of bad Iowa ESOPs.

The Tax Court had disallowed the ESOP on the grounds that it allocated shares to an owner with no compensation — a violation of the plan document — and that it failed to get the required annual appraisals. Either item standing alone is enough to disqualify the ESOP.

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May 12, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Daniel Hemel (Chicago) reviews a new paper by Fabio Gaertner (Wisconsin), Jeffrey Hoopes (North Carolina), and Edward Maydew (North Carolina), Shareholder Wealth Effects of Border Adjustment Taxation.

HemelWho wins and who loses from a border-adjusted cash flow tax like the one proposed by House Republicans? Fabio Gaertner, Jeffrey Hoopes, and Edward Maydew seek to shed light on that question by examining stock market reactions to news about the House Republicans’ plan. Their topline result is that on days when news events make a border-adjusted cash flow tax look more likely, share prices of firms in high-import industries perform worse than the rest of the market.

Gaertner, Hoopes, and Maydew contribute to a fast-growing literature on the trade balance effects of border-adjusted cash flow taxation. I imagine that most readers of this blog have been following that debate, but for those who haven’t, a brief primer: A pure cash flow tax would tax businesses on revenues minus expenses. A border-adjusted cash flow tax allows an exemption for revenues from exports but denies a deduction for the cost of imports. 

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May 12, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration