Daly & Mason: The Apple State Aid Case

Stephen Daly (King's College London) & Ruth Mason (Virginia), State Aid: The General Court Decision in Apple, 168 Tax Notes Fed. 1791 (2020):

In this article, the authors analyze the Apple state aid case, concentrating on its implications for state aid analysis and use of the arm’s-length standard, and they consider the drawbacks of using state aid to prevent corporate tax abuse as well as the broader implications of the case.

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Cauble: Superficial Proxies For Simplicity In Tax Law

Emily Cauble (DePaul), Superficial Proxies for Simplicity in Tax Law, 53 U. Rich. L. Rev. 329 (2019):

Simplification of tax law is complicated. Yet, political rhetoric surrounding tax simplification often focuses on simplistic, superficial indicators of complexity in tax law such as word counts, page counts, number of regulations, and similar quantitative metrics. This preoccupation with the volume of enacted law often results in law that is more complex in a real sense. Achieving real simplification—a reduction in costs faced by taxpayers at various stages in the tax planning, tax compliance, and tax enforcement process—often requires enacting more law, not less. In addition, conceptualizing simplicity in simplistic terms can leave the public vulnerable to policies advanced under the guise of simplification that have real aims that are less innocuous. A perennial example involves lawmakers proposing a reduction in the number of tax brackets under the heading of simplifying tax law. In reality, this change does very little, if anything, to simplify law in a meaningful sense, and its truer aim is to reduce progressivity in the tax code.

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What’s Wrong With A Wealth Tax

Allison Schrager & Beth Akers (Manhattan Institute), What’s Wrong with a Wealth Tax:

In the coming months, Americans can expect calls to tax the wealth of the richest citizens. There are four oft-cited justifications for such a measure: inequality is rising, and there is a need to restore fairness; more revenue is necessary to bring exploding deficits under control, and taxing the wealthy is the least harmful way to do so; extreme wealth disparities harm economic growth; and the rich use their wealth to rig the political system, so democracy requires leveling the playing field.

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A Five-Year Retroactive Analysis Of Cut Score Impact: California’s Proposed Supervised Provisional License Program

Following up on last week's post, California's Bar Exam Cut Score: Minimum Competency, Public Protection, Disparate Impact, And National Standards:

Karen Sloan (Law.com), Study: Lower Bar Exam Cut Score Won't Solve California's Attorney Diversity Problem:

California’s newly lowered bar exam cut score won’t do much to bolster pass rates among minority test-takers.

An extensive new study finds that the California Supreme Court’s July decision to lower the cut score from 1440 to 1390 will reduce the disparity in pass rates between white and minority bar takers a mere 2.7 percentage points. A reduction to 1350—which is the national average—would go much further in narrowing that achievement gap, reducing it by 19.4 percentage points. ... The study confirms long-held suspicions that California’s historically high cut score has had a disparate impact on minority law graduates and impeded the flow of diverse attorneys into the state’s bar. California’s population is 60% minority, yet 68% of the state’s licensed attorneys are white.

Mitchel Winick (Dean, Monterey), Victor D. Quintanilla (Indiana), Sam Erman (USC), Christina Chong-Nakatsuchi (Monterey) & Michael Frisby (Michigan), A Five-Year Retroactive Analysis of Cut Score Impact: California’s Proposed Supervised Provisional License Program:

A five-year cohort of 39,737 examinees who sat for the California Bar Exam (“CBX”) between 2014-18 was analyzed using a simulation model based on actual exam results to evaluate how the minimum passing scores (“cut score”) of 1440, 1390, 1350, 1330, and 1300, if used as qualifying scores for a provisional licensing program, would affect the number of previous examinees, by race and ethnicity, who would qualify to participate within retroactive groupings of five-year, four-year, three-year, two-year, and one-year examinee cohorts.

The result of the simulation models indicated that selecting a qualifying score lower than the current California cut score of 1390 will significantly increase both the overall number of eligible participants and the diversity of the group eligible to participate in the proposed alternate licensing program.

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NALP: Bar Passage Required Jobs Rate Of 80% For Whites Compared To 62% For Blacks Shows 'Systemic Preference' For White Law Grads Over Black Law Grads

Following up on my previous post, NALP: Law School Class Of 2019 Attains Highest Employment Rate (90.3%) In 12 Years:

NALP’s New Employment and Salary Report Highlights Disparities in Outcomes by Race and Ethnicity:

New employment findings from the National Association for Law Placement, Inc. (NALP) show that Black and Native American law school graduates had the lowest overall employment rates, and Black graduates were employed in bar passage required jobs at a rate 17 percentage points lower than white graduates.

NALP today released its Jobs & JDs, Employment and Salaries of New Graduates, Class of 2019. Jobs & JDs is NALP’s hallmark annual research report that presents a comprehensive analysis of the types of employment and salaries obtained by the Class of 2019. How are law firm opportunities changing for new law graduates? Which geographic markets provided the most jobs? Where did the graduates who are not practicing law find jobs? How do employment findings vary by gender and race/ethnicity? Jobs & JDs presents the most comprehensive analysis of the types of employment and salaries obtained by the Class of 2019, with data on over 97% of Class of 2019 graduates from ABA-accredited law schools. The publication includes over 110 detailed tables and charts with data by geography, graduate demographics, and law school characteristics.

This year’s report shows that the Class of 2019 experienced the highest employment rate in the dozen years since the start of the Great Recession, as the overall employment rate for the Class of 2019 was up 0.9 percentage points to 90.3% of graduates for whom employment status was known, compared to 89.4% for the Class of 2018. This marks the highest employment rate recorded since the 91.9% rate for the Class of 2007.

“I find it particularly discouraging this year to have to report employment findings that highlight stark disparities by race and ethnicity, among other demographic markers, but this should serve as a wake-up call to everyone involved in legal education and the legal profession,” said NALP Executive Director James Leipold. “In a year when the overall class secured jobs and salaries at higher rates than we have seen since before the Great Recession, many subsets of graduates, but especially Black law school graduates, still meet with lower levels of success in the job market than the rest of the graduate pool.”

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Chief Justice Roberts' Rules For Leading In Polarized Times

In Polarized Times, Lead Like a Chief Justice, by Sam Walker (author, The Captain Class: The Hidden Force That Creates the World’s Greatest Teams (2018)):

For leaders, holding the center without compromising your authority, your relationships or your principles is a daunting challenge. It requires a delicate balance of aggression and restraint, hard work and tactical savvy, personal charisma and alligator skin.

There’s only one manager I know who has been trying to thread this needle for well over a decade. It’s John Roberts, the 65-year-old chief justice of the United States. ...

Since his 2005 appointment by President George W. Bush, the chief justice’s reliably conservative judicial record hasn’t won many admirers from the left. That said, he has also sided with the court’s liberal wing often enough to become a target for the right. President Donald Trump once called him “an absolute disaster.” ...

By my count, there are four “Roberts Rules” of leadership.

1. Muscular Messaging
Since his confirmation hearings, when he famously likened the role of a judge to that of an umpire, Chief Justice Roberts has consistently expressed support for the court’s political independence. The more polarized we become, the more aggressive he gets. ... In divided times, it’s tempting to strike a measured tone. But that’s not a particularly useful way to defend your integrity. ...

2. Practical Gradualism
Great leaders, as a rule, never surrender moral authority. You can’t give people the impression that you stand for nothing. Sometimes, however, holding the center means making decisions that don’t align with your principles.

In several closely watched cases, Chief Justice Roberts has protected the court’s independence by breaking ranks with fellow conservatives, even when his judicial record suggested he wouldn’t.

In June, for example, he voted to strike down a Louisiana law that placed some restrictions on doctors who perform abortions, even though he had ruled the opposite way, in dissent, on a similar case in 2016. ... A better example is the decisive vote he cast in 2012, under enormous public scrutiny, to uphold President Obama’s Affordable Care Act. ...

The lesson is this: When all eyes are on you and the center is vulnerable, leaders should resist the urge to act boldly on principle. A better approach is to imagine that you’re trying to ride a bike as slowly as possible. You need to look down, not up: to focus on the small maneuvers that keep you from falling over.

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28,000 Charities Had Their Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Democratic Lawmakers Say

Forbes, 28,000 Charities Had Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Lawmakers Say:

More than 30,000 nonprofit organizations in the U.S. have had their tax-exempt status automatically revoked by the Internal Revenue Service since May, Democratic lawmakers wrote in a letter to Treasury Secretary Steven Mnuchin, after an “apparent error” by the IRS may have erroneously revoked thousands of organizations’ tax-exempt status. ...

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Harvard Will Remain Online in the Spring. Will Other Law Schools Follow?

Karen Sloan (Law.com), Harvard Law Will Remain Online in the Spring. Will Others Follow?:

Harvard law students won’t be returning to campus in the spring.

Harvard Law School Dean John Manning announced Tuesday that the school will remain fully remote in the winter and spring semesters due to the COVID-19 pandemic. Harvard is among the first law schools to unveil concrete plans to stay remote after a fully online fall.

“Though we had very much hoped to be able to resume teaching and learning on campus, we have with great disappointment concluded that it is neither prudent nor equitable for us to resume in-person instruction,” Manning wrote in a message to students. “We miss seeing you all in person tremendously. And we understand and regret that today’s decision will land hard with many of you.”

Harvard was also a trailblazer this summer when it announced in June that the fall semester would be fully remote. About 30 other law schools later followed suit, though many waited until July or later to unveil those plans. ...

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Guide To Election Year Activities Of § 501(c)(3) Organizations

Continuing a TaxProf Blog tradition, Steven H. Sholk (Gibbons, Newark, NJ) has made available to readers the annual update of his wonderful 568-page Guide to Election Year Activities of Section 501(c)(3) Organizations (PLI 2020).

Dean Presents A Constitutional Moment In Cross-Border Taxation Virtually Today At Oregon

Steven Dean (NYU) presents A Constitutional Moment in Cross-Border Taxation virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

The Classification and Assignment Constitution has shaped cross-border policymaking for a century. Two global crises in quick succession have created both an opportunity and an urgent need to remake that material constitution, altering its substantive rules by transforming the processes that shape them. In tax, just as in trade and investment law, critics find “not a borderless market without states but a doubled world kept safe from mass demands for social justice and redistributive equality by the guardians of the economic constitution.” In order to rewrite the protective algorithm at the core of the Classification and Assignment Constitution to provide all states—and developing states in particular—with access to the revenues they desperately need, a more inclusive cast of constitutional actors must be empowered.

Over the last decade, during what the ongoing pandemic has revealed to be merely the eye of a fiscal storm, persistent inequality and austerity attracted an unprecedented level of attention to the way states collect revenues to meet their growing needs. A window of time that might have witnessed a restructuring of global tax policy instead culminated in an internecine struggle over how—and whether—the profits of digital giants such as Amazon and Google fit within its rigid numerus clausus algorithm. The arrival of COVID has only exacerbated those unresolved tensions.

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Yin: Repairing The Tax Privacy Rules

George K. Yin (Virginia), Repairing the Tax Privacy Rules:

This brief essay, adapted from remarks delivered to the Tax Policy and Simplification Committee of the ABA Tax Section on October 2, 2020, describes needed changes in three tax privacy areas: access and disclosure of presidential tax information, civil enforcement of congressional subpoenas, and confidentiality protections for tax return information obtained by subpoena.

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Pounded In The Butt By My Self-Plagiarized Tingler Negging Legal Scholarship

Brian L. Frye (Kentucky), Pounded in the Butt by My Self-Plagiarized Tingler Negging Legal Scholarship:

This article is a legal scholarship that takes the form of a tingler reflecting on the meaning of legal scholarship.

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ABA Tax Section Hosts Free Webinar Today On The Tax System and Social Policy

The ABA Tax Section hosts a free webinar today on The Tax System and Social Policy at 1:00 ET:

The tax system has been used with increasing frequency as a social policy tool to administer social programs. From the Earned Income Tax Credit to the recent Economic Impact Payments, the IRS has been asked to do more with an ever decreasing budget. While the tax system may be an attractive vehicle to administer certain payments or benefits, it can also pose challenges. Panelists will examine the history of the tax code as a way to administer social programs. Panelists will then evaluate certain programs and discuss some advantages and disadvantages of administering these programs through the tax code. In particular, panelists will discuss the recent Economic Impact Payments and some of the challenges with administering these payments successfully. Lastly, panelists will propose some changes and alternatives to the way programs are administered to better serve the communities that are most in need of these benefits.

Speakers:

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SSRN Tax Professor Rankings

SSRN has updated its monthly ranking 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 October 1, 2020) 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):

		All-Time		Recent
1	Reuven Avi-Yonah (Michigan)	193,644	Reuven Avi-Yonah (Michigan)	7,672
2	Dan Shaviro (NYU)	121,471	D. Dharmapala (Chicago)	4,492
3	Lily Batchelder (NYU)	118,169	Lily Batchelder (NYU)	4,194
4	David Gamage (Indiana-Bloom.)	117,337	Ruth Mason (Virginia)	4,050
5	Daniel Hemel (Chicago)	117,219	David Kamin (NYU)	3,780
6	Darien Shanske (UC-Davis)	110,644	Daniel Hemel (Chicago)	3,475
7	David Kamin (NYU)	106,364	Bridget Crawford (Pace)	3,252
8	Cliff Fleming (BYU)	105,240	Diane Ring (Boston College)	3,139
9	Manoj Viswanathan (Hastings)	102,274	Shu-Yi Oei (Boston College)	3,046
10	Rebecca Kysar (Fordham)	101,172	Hugh Ault (Boston College)	2,782
11	Ari Glogower (Ohio State)	100,006	Richard Ainsworth (BU)	2,420
12	Michael Simkovic (USC)	44,741	Dan Shaviro (NYU)	2,246
13	D. Dharmapala (Chicago)	42,038	David Gamage (Indiana-Bloom.)	2,207
14	Paul Caron (Pepperdine)	37,416	Margaret Ryznar (Indiana-Indy)	2,152
15	Louis Kaplow (Harvard)	33,734	Brad Borden (Brooklyn)	1,846
16	Richard Ainsworth (BU)	30,711	Darien Shanske (UC-Davis)	1,840
17	Ed Kleinbard (USC)	27,177	Robert Sitkoff (Harvard)	1,833
18	Vic Fleischer (UC-Irvine)	26,388	Louis Kaplow (Harvard)	1,553
19	Jim Hines (Michigan)	25,307	Paul Caron (Pepperdine)	1,480
20	Brad Borden (Brooklyn)	25,161	Cliff Fleming (BYU)	1,404
21	Bridget Crawford (Pace)	24,987	Ari Glogower (Ohio State)	1,359
22	Robert Sitkoff (Harvard)	24,876	Manoj Viswanathan (Hastings)	1,341
23	Ted Seto (Loyola-L.A.)	24,569	Katie Pratt (Loyola-L.A.)	1,310
24	Gladriel Shobe (BYU)	24,217	Michael Simkovic (USC)	1,264
25	Katie Pratt (Loyola-L.A.)	23,838	Yariv Brauner (Florida)	1,197

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Mark Zuckerberg Has Spent Over $10 Million To Overhaul California's Proposition 13 Tax Law

Vox, Mark Zuckerberg Is Spending Millions Like Never Before to Overhaul a Landmark Law:

[Mark] Zuckerberg has chosen to embark on a decidedly dicey political crusade: an attempt to touch the so-called third rail of California politics — the state’s 40-year-old landmark tax law — in the most expensive electoral play of the billionaire’s career.

Zuckerberg has been waging a costly and risky political battle for more than a year against California’s Proposition 13, the law that critics say has hamstrung the state’s economy by capping its property taxes, and thus underfunding two priorities of Zuckerberg and his wife, Priscilla Chan: schools and housing. While other tech leaders have conspicuously avoided weighing in until the very last minute, if at all, Zuckerberg stuck his neck out early and has now spent almost $11 million — including $4.5 million more just this month — on the cause, raising the stakes for Election Day.

Zuckerberg is backing what is called the “split roll” reform measure through his and his wife’s philanthropy, the Chan Zuckerberg Initiative. For the past year, he has been a key player behind the scenes and the only major Silicon Valley leader who has publicly endorsed it. And because he has been so alone in this effort, the vote on Prop 13 reform in some ways serves as a test of his and his ambitious philanthropy’s political muscle. ...

[W]hat Zuckerberg is attacking isn’t just a California tax law. It’s the nucleus of the modern, national anti-tax movement.

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2021 U.S. News Global Universities Rankings

U.S. News & World Report, 2021 Best Global Universities Rankings:

These institutions from the U.S. and more than 80 other countries have been ranked based on 13 indicators that measure their academic research performance and their global and regional reputations. Students can use these rankings to explore the higher education options that exist beyond their own countries' borders and to compare key aspects of schools' research missions. These are the world's nearly 1,500 top universities.

1.   Harvard (100.0)
2.   MIT (97.9)
3.   Stanford (95.3)
4.   UC-Berkeley (89.8)
5.   Oxford (87.0)
6.   Columbia (86.7)
7.   Cal-Tech (86.3)
8.   U. Washington (86.0)
9.   Cambridge (85.8)
10. Johns Hopkins (85.1)
11.  Princeton (85.0)
11.  Yale (85.0)
13.  UCLA (84.3)
14.  Pennsylvania (84.2)
15.  UC-San Francisco (84.1)
15.  Chicago (84.1)
17.  Michigan (83.5)
17.  Toronto (83.5)
19.  University College London (83.4)
20.  Imperial College London (83.3)
21.  UC-San Diego (83.1)
22.  Cornell (81.9)
23.  Duke (81.6)
24.  Northwestern (80.4)
25.  Melbourne (79.7)

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Saez & Zucman: Trends In US Income And Wealth Inequality

Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley), Trends in US Income and Wealth Inequality: Revising After the Revisionists:

Recent studies argue that US inequality has increased less than previously thought, in particular due to a more modest rise of wealth and capital income at the top (Smith et al., 2019; Smith, Zidar and Zwick, 2020; Auten and Splinter, 2019). We examine the claims made in these papers point by point, separating genuine improvements from arguments that do not appear to us well grounded empirically or conceptually. Taking stock of this body of work, and factoring in other improvements, we provide a comprehensive update of our estimates of US income and wealth inequality. Although some of the points raised by the revisionists are valuable, the core quantitative findings of this literature do not appear to be supported by the data. The low capital share of private business income estimated in Smith et al. (2019) is not consistent with the large capital stock of these businesses. In Smith, Zidar and Zwick (2020), the interest rate assigned to the wealthy is higher than in the datasets where both income and wealth can be observed, leading to downward biased top wealth shares; capitalizing equities using almost only dividends dramatically underestimates the wealth of billionaires relative to the Forbes 400. In Auten and Splinter (2019), business profits earned by the top 1% but not taxable (due in particular to generous depreciation rules) are classified as tax evasion; tax evasion is then allocated to the bottom 99% based on an erroneous reading of random audit data.

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Layser Presents How Place-Based Tax Incentives Can Reduce Economic Inequality Virtually Today At NYU

Michelle Layser (Illinois) presents How Place-Based Tax Incentives Can Reduce Economic Inequality, 74 Tax L. Rev. ___ (2020), virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Place-based tax incentives are frequently used by governments to encourage investment in low-income areas. But no standard exists to describe the ideal place-based tax incentive, making evaluation of these programs nearly impossible. This Article provides the necessary baseline by explaining when, where, and how to design place-based tax incentives that can benefit low-income communities by reducing geographic inequality. Using Geospatial Information System (GIS) mapping methods, this Article demonstrates how lawmakers can use public data to map spatial disadvantage. It then draws on tax theory to show how to design place-based tax incentives to reduce geographic inequality in targeted areas. The result is not a one-size-fits-all prescription, but a place-specific approach that can help place-based tax incentives become an effective vehicle for reducing underlying, geographic causes of neighborhood disadvantage.

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Thomas Presents Taxing Nudges Virtually Today At UC-Hastings

Kathleen Delaney Thomas (UNC) presents Taxing Nudges 106 Va. L. Rev. ___ (2020), virtually at UC-Hastings today as part of its Tax Speakers Series hosted by Heather Field and Manoj Viswanathan:

Governments are increasingly turning to behavioral economics to inform policy design in areas like health care, the environment, and financial decision-making. Research shows that small behavioral interventions, referred to as “nudges,” often produce significant responses at a low cost. The theory behind nudges is that, rather than mandating certain behaviors or providing costly economic subsidies, modest initiatives may “nudge” individuals to choose desirable outcomes by appealing to their behavioral preferences. For example, automatically enrolling workers into savings plans as a default rather than requiring them to actively sign up has dramatically increased enrollment in such plans. Similarly, allowing individuals to earn “wellness points” from attendance at a gym, redeemable at various retail establishments, may improve exercise habits.

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Meet The Excel Warriors Saving The World From Spreadsheet Disaster

Wired, Meet the Excel Warriors Saving the World From Spreadsheet Disaster:

David Lyford-Smith is an expert at solving spreadsheet mysteries. Once, in a previous job, he was sent a payroll form to look over for a new starter. It had the number 40,335 in a random box, and payroll wasn’t clear why it was there. “So they assumed it was a joining bonus for the employee and drew up a draft pay slip with a £40,335 bonus,” he says. But, when it comes to spreadsheets, assumptions can be costly.

Lyford-Smith isn’t just a spreadsheet enthusiast. He’s the technical manager for the Institute of Chartered Accountants in England and Wales (ICAEW), running its Excel community group — and as such has always been suspicious of numbers in that range. “That’s how Excel stores dates, as serial numbers,” he says. He was right: that wasn’t a generous signing bonus, but the new hire’s starting date.

Lyford-Smith is part of a community of accountants, auditors and Excel power users who have joined forces in a quiet battle against illogical formulas, copy-and-paste errors, and structural chaos that cause data carnage.

Last week, the government stumbled into its own spreadsheet nightmare when it admitted contact-tracing efforts were stymied by a simple data processing mistake. They’re not the first to fall victim to the curse of Excel – and they won’t be the last either. ...

Research suggests more than 90 per cent of spreadsheets have errors, and half of spreadsheet models used in large businesses have “material defects”. Given some 750 million people use Excel globally, there are plenty of errors needing attention. One prominent researcher calls spreadsheets the dark matter of corporate IT. And that’s why people like Lyford-Smith have become defenders of the spreadsheet, mitigating the risks by fixing everyone else’s mistakes. ...

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Hamilton And The Law

Hamilton and the Law: Reading Today's Most Contentious Legal Issues through the Hit Musical (Lisa Tucker (Drexel) ed., Cornell University Press 2020):

Lawyers and legal scholars, recognizing the way the musical speaks to some of our most complicated constitutional issues, have embraced Alexander Hamilton as the trendiest historical face in American civics. Hamilton and the Law offers a revealing look into the legal community's response to the musical, which continues to resonate in a country still deeply divided about the reach of the law.

A star-powered cast of legal minds―from two former U.S. solicitors general to leading commentators on culture and society―contribute brief and engaging magazine-style articles to this lively book. Intellectual property scholars share their thoughts on Hamilton's inventive use of other sources, while family law scholars explore domestic violence. Critical race experts consider how Hamilton furthers our understanding of law and race, while authorities on the Second Amendment discuss the language of the Constitution's most contested passage. Legal scholars moonlighting as musicians discuss how the musical lifts history and law out of dusty archives and onto the public stage. This collection of minds, inspired by the phenomenon of the musical and the Constitutional Convention of 1787, urges us to heed Lin-Manuel Miranda and the Founding Fathers and to create something new, daring, and different.

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For Minority Law Students, Learning The Law Can Be Intellectually Violent

ABA Journal op-ed:  For Minority Law Students, Learning the Law Can Be Intellectually Violent, by Shaun Ossei-Owusu (Penn):

Apologies to minority law students feel necessary. ... 

I’m a Black criminal law professor who studies inequality in the legal profession. Because of my work, I am in contact with law students across the country. Many are trying to make sense of the disconnect between the law on the books and what they see in the criminal justice system.

I feel compelled to apologize, not because of some personal responsibility, but because the learning of law—particularly for racial minorities—can be intellectually violent. It pales in comparison to the structural and physical violence that people experience outside the ivory tower, but it is also unforgiving, can feel unrelenting and often goes unnamed. ...

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The Economic Impact Of Biden's Tax Policy

Hoover Institution Study:  An Analysis of Vice President Biden’s Economic Agenda: The Long Run Impacts of Its Regulation, Taxes, and Spending, by Timothy Fitzgerald (Texas Tech), Kevin Hassett (Hoover Institution), Cody Kallen (Wisconsin) & Casey Mulligan (Chicago):

We estimate possible effects of Joe Biden’s tax and regulatory agenda. We find that transportation and electricity will require more inputs to produce the same outputs due to ambitious plans to further cut the nation’s carbon emissions, resulting in one or two percent less total factor productivity nationally. Second, we find that proposed changes to regulation as well as to the ACA increase labor wedges. Third, Biden’s agenda increases average marginal tax rates on capital income. Assuming that the supply of capital is elastic in the long run to its after-tax return and that the substitution effect of wages on labor supply is nontrivial, we conclude that, in the long run, Biden’s full agenda reduces fulltime equivalent employment per person by about 3 percent, the capital stock per person by about 15 percent, real GDP per capita by more than 8 percent, and real consumption per household by about 7 percent.

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Dan Markel's Murder Trial: A Video Recap

Katherine Magbanua's Arthur Hearing (Sept. 14, 2020):

15 Things Katherine Magbanua Wants the Judge and Jury to Know (Sept. 16, 2020):

The State vs Katherine Magbanua: The State's Key Evidence (Sept. 17, 2020):

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Trump’s Taxes Were Not A Flaw In The System

New York Times op-ed:  Trump’s Taxes Were Not a Flaw in the System, by Veronique de Rugy (George Mason):

When Americans recently learned how little President Trump has paid in taxes in the past 15 years and how he benefited from financial maneuvers, it reinforced the widespread belief that the rich don’t pay their fair share. Lost in the outrage is the fact that the tax provisions that allowed Mr. Trump to trim his tax bill were probably not illegal or the results of tax schemes concocted by anti-tax legislators.

Those provisions, and many others like them, delivered exactly what their drafters intended: They are engineered to benefit certain kinds of taxpayers — and most Americans are not among them. ...

[I]f your vision is for a more equitable system that can actually be enforced by the I.R.S., what we really need is a simpler and fairer tax code. Some of the current rules are good, but many are political giveaways to special interests. Telling those rules apart is actually harder than it seems, but there are some obvious places to start.

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Wilking Presents Employees v. Independent Contractors: Evidence From U.S. Tax Returns Virtually At Michigan

Eleanor Wilking (Cornell) presented Independent Contractors in Law and in Fact: Evidence from U.S. Tax Returns virtually at Michigan yesterday as part of its Law and Economics Workshop Series hosted by J.J. Prescott & Veronica Santarosa:

Federal tax law divides workers into two categories depending on the degree of control exercised over them by the service purchaser (i.e. the firm): employees, who are subject to direct supervision; and independent contractors, who operate autonomously. Worker classification is consequential, determining how the income tax is administered and what it subsidizes, as well as which non-tax regulations pertain, such as workplace safety and anti-discrimination protections. The Internal Revenue Service and other federal agencies have codified common law agency doctrine into multi-factor balancing tests that are challenging to apply and costly to enforce. Yet almost nothing is known about how firms actually classify workers, and how such classification relates to the control they exercise. To bridge this gap between legal principles and legal practice, this Article introduces a novel empirical analysis using a comprehensive data source—all digitized U.S. income tax filings. This analysis establishes several new empirical facts.

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Dharmapala Presents Do Multinational Firms Use Tax Havens To The Detriment Of Other Countries? Virtually Today At Loyola-L.A.

Dhammika Dharmapala (Chicago) presents Do Multinational Firms Use Tax Havens to the Detriment of Other Countries? virtually today at Loyola-L.A. as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

The use of tax havens by multinational corporations (MNCs) has attracted increasing attention and scrutiny in recent years. This paper provides an exposition of the academic literature on this topic. It begins with an overview of the basic facts regarding MNCs’ use of havens, which are consistent with the location of holding companies, intellectual property, and financial activities in havens. However, there is also evidence of significant frictions that limit MNCs’ use of havens. These limits can be attributed to non-tax frictions (such as the legal and business environment in different jurisdictions), to tax law provisions limiting profit shifting, and to the costs of tax planning. There is evidence consistent with the relevance of each of these channels. The paper also argues that non-haven countries have available a range of powerful tax law instruments to neutralize the impact of MNCs’ use of havens. To the extent that it is not due to political dysfunction, their failure to deploy these instruments more extensively can be viewed as a deliberate policy choice, attributable either to collective action problems among non-havens or to the possibility that in certain circumstances MNCs’ use of havens increases the welfare of non-haven countries. In either case, MNCs’ use of havens is facilitated in crucial respects by the laws of non-haven countries.

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A Reckoning Over Law Faculty Inequality

Melanie D. Wilson (Former Dean, Tennessee), A Reckoning Over Law Faculty Inequality, 90 Denver U. L. Rev. Online (2020):

In this review, I examine Dr. Meera E. Deo’s book, Unequal Profession: Race and Gender in Legal Academia, published last year by Stanford University Press. In Unequal Profession, Deo, an expert on institutional diversity, presents findings from a first-of-its-kind empirical study, documenting many of the challenges women of color law faculty confront daily in legal academia. Deo uses memorable quotes and powerful stories from the study’s faculty participants to present her important work in 169 readable and revealing pages. Unequal Profession begins by outlining the barriers women of color face when entering law teaching and progresses through the life cycle of the law professor (including the treacherous tenure process). It covers leadership, before concluding with work-life balance.

Unequal Profession is especially timely and important. In the wake of George Floyd’s death and the national outrage it ignited, law schools denounced racism and vowed to take concrete, anti-racist steps to improve society, the legal profession, and law schools themselves. Many law faculties committed to hiring and retaining more underrepresented faculty colleagues and, correspondingly, to attracting a more diverse student body.

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Chronicle Of Higher Education Debate: Is Academe Awash In Liberal Bias?

Chronicle of Higher Education op-ed (Sept. 14, 2020):  Is Academe Awash in Liberal Bias?, by Naomi Oreskes (Harvard) & Charlie Tyson (Harvard):

Is academe dominated by liberals? Most people think so. And why wouldn’t they? It’s what we hear all the time on social media, in newspaper and magazine articles, and even in academe itself. Conservatives routinely call out higher education’s “liberal bias,” and sometimes insist that something should be done to ensure that conservative voices are heard within the ivory tower. ...

The most comprehensive study to date of American faculty politics found a much more centrist professoriate than is alleged in conservative discourse. In that 2006 study, the sociologists Neil Gross and Solon Simmons found that some 44 percent of professors described themselves as “extremely liberal” (9 percent) or “liberal” (35 percent); 46 percent described themselves in centrist terms (18 percent as “slightly liberal,” 17 percent as “middle of the road,” and 11 percent as “slightly conservative”); 8 percent described themselves as “conservative” and 1 percent as “extremely conservative.” In other words, liberals outnumber conservatives, but the largest cohort of faculty — 46 percent — are moderates, spanning the terrain between center-left and center-right.

As academics, it behooves us to be receptive to ideas, open to evidence, and willing to listen. But we should not succumb to stereotype threat and rush to “remedy” a problem of liberal bias that exists primarily in the anxieties of some conservative commentators. And it certainly does not behoove us, as William F. Buckley famously exhorted, to stand astride history — or, for that matter, science — yelling, “Stop!”

Chronicle of Higher Education op-ed (Sept. 24, 2020):  Tenured Radicals Are Real,, by Phillip W. Magness (American Institute for Economic Research):

In their recent essay “Is Academe Awash in Liberal Bias?,” Naomi Oreskes and Charlie Tyson seek to dispute the increasingly common perception of the American university system as a hostile environment for viewpoints that stray from a left-leaning orthodoxy. Though their analysis acknowledges that the professoriate falls somewhat to the left of the general public, they nonetheless argue that academe is still firmly anchored at the middle of the political spectrum. Conservative talking points about “liberal bias” in the university system, it follows, are overblown and reveal their own unacknowledged biases under the guise of a corrective. 

This political culture-wars debate is unlikely to be resolved by editorial analysis, yet one dimension of Oreskes and Tyson’s argument warrants scrutiny: its empirical claims. ... Liberal and far-left faculty numbers swelled from 44.8 percent in 1998 to a clear majority of 59.8 percent in 2016-17, 

Digging deeper into the surveys, we find that one of the primary drivers of the leftward shift is the rapid growth of faculty members who identify on the far left.

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Freshmen Enrollment Is Down 16% This Fall

National Student Clearinghouse Research Center, Fall 2020 Enrollment (Oct. 15, 2020):

Roughly one month into the fall semester, undergraduate enrollment is running 4.0 percent below last year’s level, and the upward trend for graduate enrollment has slipped to 2.7 percent. Overall postsecondary enrollment is down 3.0 percent as of September 24. Most strikingly, first-time students are by far the biggest decline of any student group from last year (-16.1% nationwide and -22.7% at community colleges).

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Lesson From The Tax Court: §6662 Penalties Treated As One For Supervisory Approval Requirement

Last week, the Tax Court issued an important opinion on the §6751(b)(1) supervisory review requirements.  In Jesus R. Oropeza v. Commissioner, 155 T.C. No. 9 (Oct. 13, 2020) (Judge Lauber), held that the 20% penalty under §6662(b)(6) is the same as the 40% penalty under §6662(i) and therefore the failure to secure proper approval for assertion of the former in an RAR precludes assertion of the latter in a later NOD.  The latter subsection simply “enhances” the amount of §6662(b)(6) penalty and does not impose a separate penalty.

The path of the law is not linear. Doctrinal development sometimes involves two steps forward, one step backwards, and maybe even a step or two sideways.  In Oropeza the Tax Court took what some may view as a step sideways, and what the government will likely view as a step backwards.  The decision seems in tension with prior Tax Court opinions that treat §6662 as containing multiple penalties for supervisory approval purposes, including an opinion by the same judge about the same taxpayer!  The upshot of today’s opinion is that practitioners need to read NODs very carefully. Details below the fold.

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Judge Denies Pre-Trial Release Of Dan Markel Murder Suspect Katherine Magbanua

WTXL Tallahassee, Judge Denies Katherine Magbanua's Pre-trial Release Motion:

A Leon County judge has denied Katherine Magbanua's second motion for pretrial release.

Magbanua is one of three suspects facing charges for the murder of Florida State law professor, Dan Markel.

Judge Robert Wheeler submitted a three-page order Friday, saying "the proof is evident or the presumption is great as to the defendant's guilt for first-degree murder." Magbanua's lawyers filed the motion, reasoning that since her last case was declared mistrial, and the coronavirus pandemic risks her health, is grounds for a pretrial release.

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TaxProf Blog Weekend Roundup

Saturday:

• This Week's Ten Most Popular TaxProf Blog Posts
• The Best Stimulus: 0% Income Tax
• Pitt Law Adjunct Prof Resigns After Using N-Word In Class On Offensive Speech
• Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability And Transparency In Form 990

Sunday:

• Black Lawyers Matter
• The Intersection Of Race And Taxes
• Test Takers Slam New York's First Online Bar Exam In New Survey
• The Top Five New Tax Papers

Black Lawyers Matter

Houston Chronicle op-ed:  Black Attorneys Matter. We Must Diversify Texas Law Firms., by Leonard M. Baynes (Dean, Houston) & Jennifer Collins (Dean, SMU):

Prior to 1950, if a Black Texas resident wanted to become a lawyer, they had to leave the state and study at a Northern law school or serve as an apprentice under a willing white Texas lawyer in order to become licensed. They had to do this because, at that time, none of the Texas law schools admitted Black students no matter their qualifications.

This year, we celebrate the 70th anniversary of the landmark Supreme Court opinion Sweatt v. Painter, the case that led to the desegregation of Texas law schools. We feel the best way to honor Heman Marion Sweatt is to continue to expand the number of students of color who are ready to be trained and join the ranks of practicing attorneys in Texas — a state that sorely needs to bolster that racial diversity. Co-hosting the Black Lawyers Matter Conference on Oct. 30, a Zoom-style webinar, will allow us to take stock of this challenge and share best practices to solve them. ...

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The Intersection Of Race And Taxes

The Philadelphia Bar Association Tax Section hosted a webcast on Friday on The Intersection of Race and Taxes:

Amid a renewed focus on racial justice in our society, this CLE program will address the scholarship and client-facing work on issues related to our tax system and its impact on racial inequality. The panelists share their insights and perspectives on how different aspects of international, federal, state and local tax structures effect racial inequities. Join your colleagues in the Tax Section for this fascinating examination of the intersection of racial diversity and federal, state and local tax policy.

• Alice Abreu ( Temple)
• Steven Dean (NYU)

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Test Takers Slam New York's First Online Bar Exam In New Survey

Karen Sloan (Law.com), Test Takers Slam New York's First Online Bar Exam in New Survey:

A survey of those who took New York’s first-ever online bar exam last week suggests that technical problems were more widespread than officials have indicated.

Among the nearly 500 survey respondents, 41% said they experienced Internet or software disruptions during the Oct. 5 and 6 remote exam. That’s in contrast to early data from the New York State Board of Law Examiners that indicated just 20 or fewer examinees experienced technical problems. (More than 30,000 people took online bar exam nationwide on those days, and bar examiners have hailed the test as a success, saying nearly everyone was able to complete it successfully.)

The survey was conducted by New York State Sen. Brad Hoylman and New York Assemblymember Jo Anne Simon, who partnered on an as-yet-unsuccessful bill that would established a diploma privilege for recent law graduates and enable them to become licensed without taking the bar exam after practicing under the supervision of an experienced attorney. The lawmakers asked examinees to share their experiences with the test. The survey respondents represent about 10% of the 5,165 people who took New York’s exam.

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The Top Five New Tax Papers

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

1. [568 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley)
2. [270 Downloads]  Good Tax Governance: International Corporate Tax Planning and Corporate Social Responsibility – Does One Exclude the Other?, by Ave-Geidi Jallai (Tilburg)
3. [251 Downloads]  The Rise of Cooperative Surplus Taxation, by Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill)
4. [244 Downloads]  Economic Reality in EU VAT, by Ad van Doesum (Maastricht) & Frank Nellen (Maastricht)
5. [131 Downloads]  Why Is So Much Redistribution In-Kind and Not in Cash? Evidence from a Survey Experiment, by Zachary Liscow (Yale) & Abigail Pershing (J.D. 2020, Yale)

This Week's Ten Most Popular TaxProf Blog Posts

1. Video, Dan Markel's Murder: Wendi Adelson's Alibi
2. NBC Chicago, Loyola-Chicago Grad Took Online Illinois Bar Exam While In Labor, Then Gave Birth And Finished Test In The Hospital
3. Bryan Camp (Texas Tech), Lesson From The Tax Court: The Slippery Slope Of Tax Court Review
4. Karen Sloan (Law.com), Despite The Hype, Law School Clinics Stagnate
5. New York Times, Four Books That Explain The U.S. Tax System
6. Roger Alford (Notre Dame), Letter In Support Of Amy Coney Barrett
7. Inside Higher Ed, #Manterrupting In The VP Debate ... And The Academy
8. Paul Caron (Dean, Pepperdine), An Invitation To Alumni To Join Our Important Work On Racial Justice
9. Jacob Goldin (Stanford) & Katherine Michelmore (Michigan), Who Benefits from the Child Tax Credit?
10. Paul Caron (Dean, Pepperdine), Should Law School Deans Have A Chief Of Staff?

The Best Stimulus: 0% Income Tax

Wall Street Journal op-ed:  The Best Stimulus: 0% Income Tax, by Stephen Moore:

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

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Pitt Law Adjunct Prof Resigns After Using N-Word In Class On Offensive Speech

Pittsburgh Post-Gazette, Pitt Law School Adjunct Professor Resigns After Using a Racial Slur in Class:

Another professor on a city campus, this time at the University of Pittsburgh School of Law, is no longer in his position after uttering a racial slur in class, the second such incident in five weeks.

Officials at Pitt did not identify the adjunct professor or the class. But an email from law school administrators, including Law Dean Amy Wildermuth, sent Wednesday said the incident was followed by the professor’s announcement to students that he would resign.

“Early Tuesday morning, we learned that an adjunct professor at the law school used an offensive racial epithet (specifically, the “n word”) in the course of an academic class discussion on a particular case involving offensive language,” the email stated. “The instructor apologized and expressed his deep regret to the class, and informed the class at 1 p.m. today that he was resigning immediately from teaching at Pitt Law.

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Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability And Transparency In Form 990

Patrick R. Baker (Tennessee), Paula Hearn Moore (Tennessee) & Kaleb Paul Byars (J.D. 2021, Tennessee), Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability and Transparency in the IRS Form 990 Procedure, 2019 BYU Educ. & L.J. 167:

Private colleges are closing at an increasing rate due to mismanagement by their boards of directors. Because of inadequate standing to sue nonprofits and courts not questioning board decisions due to the business judgement rule, management of nonprofits is minimal after mishaps occur. Prevention measures must be established to ensure these breaches are prevented on the front-end. One solution is to strengthen IRS Form 990 by enforcing faster and more in-depth disclosures. This solution will allow stakeholders of nonprofits, such as Burlington College and Sweet Briar, to complete their due diligence, make informed decisions faster and more efficiently, and increase the likelihood that such educational institutions will survive and thrive.

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Strategic Nonconformity To The TCJA

This week, Ariel Jurow Kleiman (San Diego) reviews a two-part essay, Strategic Nonconformity to the TCJA, Part I: Personal Income Taxes, 97 Tax Notes State 17 (July 6, 2020), by Adam Thimmesch (Nebraska), Darien Shanske (Davis), and David Gamage (Indiana); and Strategic Nonconformity, State Corporate Income Taxes, And the TCJA: Part II, 97 Tax Notes State 123 (July 13, 2020), by Darien Shanske, Adam Thimmesch, and David Gamage.

No one reading this review will be surprised to hear that states need cash. They need it to fund vital public services and to shore up coffers eviscerated by the economic fallout of the pandemic. While borrowing and federal support are both logical revenue sources, state borrowing limits prevent deficit spending and aid to state and local governments has been a major sticking point in federal stimulus talks. For the foreseeable future, states may be on their own.

Well, not entirely on their own. They do have some very able tax law scholars to help them navigate these rocky fiscal shoals. In this two-part essay, Adam Thimmesch, Darien Shanske, and David Gamage offer several ways that states can raise revenue during the current crisis. Part of a larger effort called Project SAFE (State Action in Fiscal Emergencies), this two-part installment considers how states’ tax laws should or should not conform with changes enacted in the Tax Cuts and Jobs Act (TCJA).

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Tax Policy In The Trump Administration

• Bloomberg, Biden Would Smother the Economy by Raising Taxes
• Bloomberg, Biden’s Tax Plan Would Raise Just $2.4 Trillion
• Bloomberg, Larry Summers and Robert Reich Clash Over a Wealth Tax
• Cato Institute, Income Taxes on the Ballot 
• Cato Institute, King v. Burwell: A Clear Example of Legislating from the Bench 

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Weekly Legal Education Roundup

• ABA Journal, Recent Equal Pay Lawsuits by Female Law Professors Has Shined a Light on Academic Compensation Process
• Judith Areen (Executive Director, AALS), Law Prof Hiring Is Down 25% This Year
• Paul Caron (Dean, Pepperdine), An Invitation To Alumni To Join Our Important Work On Racial Justice
• Paul Caron (Dean, Pepperdine), Should Law School Deans Have A Chief Of Staff?
• Inside Higher Ed, #Manterrupting In The VP Debate ... And The Academy

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Stark Presents South Dakota v. Wayfair: One Small Step for Man Virtually Today At Florida

Kirk Stark (UCLA) presents South Dakota v. Wayfair: One Small Step for Man virtually today at Florida as part of its Tax Colloquium Series:

My objective in this article is to situate the Wayfair decision within the broader historical and institutional context of U.S. fiscal federalism, with a particular emphasis on what Wayfair may portend for U.S. fiscal federalism and future of the retail sales tax. With apologies to Neil Armstrong, the Supreme Court’s repudiation of the Quill physical presence rule surely marks a “small step” in the development of state and local retail sales taxes. Tax policy analysts, myself included, have long bemoaned the adverse effects of the physical presence rule, so its demise is unquestionably welcome news. But does the Wayfair holding represent a “giant leap” toward a more coherent and rational system of taxing household consumption in the United States? 

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15th Annual Junior Tax Scholars Workshop Continues Virtually Today At Utah

Andrew Appleby (Stetson), Subnational Digital Services Taxes
Commentators: Christine Kim (Utah), Shelly Layser (Illinois)

Ed Fox (Michigan, presenting) & Zach Liscow (Yale), When the Taxman Pays Taxpayers: Understanding the Psychology of Negative Tax Liability
Commentators: Jeremy Bearer-Friend (George Washington), Clint Wallace (South Carolina)

Jacob Goldin (Stanford, presenting) & Ariel Jurow Kleiman (San Diego), Whose Child Is This?
Commentators: Jeremy Bearer-Friend (George Washington), Daniel Schaffa (Richmond)

Christine Kim (Utah), Taxing Teleworks in the Wake of COVID-19
Commentators: Goldburn Maynard (Indiana Business School), Ariel Jurow Kleiman (San Diego)

Shelley Layser (Illinois), Magnet Zones
Commentators: Zach Liscow (Yale), Tracey Roberts (Cumberland)

Daniel Schaffa (Richmond), Payroll Subsidies as a Policy Tool
Commentators: Tracey Roberts (Cumberland), Eleanor Wilking (Cornell) 

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Dagan Presents Re-Imagining Tax Justice In A Globalized World Virtually Today At Boston College

Tsilly Dagan (Oxford) presents Re-Imagining Tax Justice in a Globalized World virtually at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

In this paper I explain why designing a country’s tax policy with the elasticity of taxpayers’ choices of residency in mind, although a rational welfare-maximizing move by the state as a whole, and possibly even for its immobile as well as mobile constituents, is a policy that may not be justified under a liberal-egalitarian social contract.

I discuss two polar views of the social contract: one endorsing the state with the coercive power to promote the joint interests of its constituents. The other views the coercive power of the state as a way to fulfill the collective will of its constituents as a society of equals in order to promote who they are as people.

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The LSAT Will Be Online Through April

From LSAC:

Important announcement: All January, February, and April 2021 LSAT administrations will be moving to the online, remotely proctored LSAT-Flex format. More info here. ...

As you know, the LSAT-Flex gives candidates the opportunity to earn an LSAT score and continue their law school journeys despite COVID-19 restrictions on travel or public gatherings. Over the past six months, we have taken an incremental approach to canceling the in-person LSATs one by one and replacing them with LSAT-Flex administrations, based on public health guidance. Given the ongoing disruption and uncertainty over how the COVID-19 situation will evolve, and feedback from candidates, we want to provide clarity for the next six months, so that everyone can plan accordingly.

The January, February, and April 2021 LSAT-Flex administrations will begin on the same date as the previously announced in-person tests, with scores released less than three weeks later.

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Amy Coney Barrett And Law School Exams

So no final exams this year, right? pic.twitter.com/m0aoAmccny

— Melissa Stewart (@LissaJoStewart) October 14, 2020

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Goldin & Michelmore: Who Benefits From The Child Tax Credit?

Jacob Goldin (Stanford) & Katherine Michelmore (Michigan), Who Benefits from the Child Tax Credit?:

The Child Tax Credit (CTC) provides a cash transfer of up to $2,000 per child under age 17 to millions of families in the United States. Using the Current Population Survey, we examine the aggregate effects and distributional implications of the rules governing children’s eligibility for the credit. While approximately 90% of all children qualify for at least a partial CTC, we document striking disparities in eligibility by income and race. The vast majority of children living in households in the bottom decile of the national AGI distribution are completely ineligible for the CTC and the majority of filers in the bottom thirty percent are eligible only for a partial credit. In contrast, virtually all children living in households in the top half of the income distribution qualify for the full credit amount. Approximately three-quarters of white and Asian children are eligible for the full CTC, compared to only about half of Black and Hispanic children. We use our results to estimate the distributional effects of a range of reforms to the CTC eligibility rules. Our results suggest that reforming the credit to include a larger share of children would more evenly distribute the credit’s benefits across children of different races and incomes.

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