TaxProf Blog

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. [503 Downloads]  Compelled Subsidies and the First Amendment, by William Baude (Chicago) & Eugene Volokh (UCLA)
2. [217 Downloads]  The Death of the Income Tax (or, the Rise of America's Universal Wage Tax), by Edward McCaffery (USC)
3. [203 Downloads]  Taxing the Robots, by Orly Mazur (SMU)
4. [198 Downloads]  The International Provisions of the TCJA: Six Results after Six Months, by Reuven Avi-Yonah (Michigan)
5. [143 Downloads]  Tax Competition and the Ethics of Burden Sharing, by van Ozai (McGill)

This Week's Ten Most Popular TaxProf Blog Posts

1. Jeffrey Kinsler (Founding Dean, Belmont), Bar Exam Failure Is A Harbinger Of Professional Discipline
2. Only 5% Of Households Are Complying With Nanny Tax Rules
3. July 2018 Massachusetts Bar Exam Results Are The Worst This Century
4. The Top 3% Of U.S. Taxpayers Pay 50% Of Income Taxes
5. Philip Hamburger (Columbia), Liberal Suppression: Section 501(c)(3) And The Taxation of Speech
6. Tennessee Higher Ed Commission Rejects Transfer Of Valparaiso Law School To Middle Tennessee State University
7. Bryan Camp (Texas Tech), Lesson From The Tax Court: Using CDP To Stop The Collection Train
8. John Bliss (Harvard), An Empirical Analysis Of 'Public Interest Drift' In Law School
9. What’s A Service Business? That’s Now A Multibillion-Dollar Tax Question
10. How Faculty Can Overcome Impostor Syndrome

Kysar Presents Unravelling The Tax Treaty At Northwestern

Rebecca Kysar (Fordham) presented Unravelling the Tax Treaty at Northwestern on Thursday as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties likely lose significant U.S. revenues. Additionally, they enable taxpayer abuse, stagnate domestic policy, and thwart reforms of the antiquated international tax system. These consequences are particularly problematic for the United States. Other nations, after all, have been able to supplement their revenues and pursue destination-based taxation through treaty-friendly VATs.

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Tax Reform Gone Wrong: Exposing The High Cost Of Trump Tax Cuts For People Of Color

Tax panel at the yesterday's Conference on Coalitions of Color and the Rule of Law in the Trump Administration at UNLV, jointly sponsored by Western Law Professors of Color and the Conference of Asian Pacific American Law Faculty:

TaxReform Gone Wrong: Exposing the High Cost of Trump Tax Cuts for People of Color:

The Tax Cuts and Jobs Act, also known as #TrumpTaxCuts, made sweeping changes to our tax laws. Far from addressing, fixing, or improving institutional racism in the tax code that financially disadvantages people of color, the new law strengthened some of these provisions and even added new ones. The panel of tax scholars will deconstruct and discuss these changes and suggest how we might move forward.

• Christine Kim (Utah) (moderator) 
• Darrick Hamilton (New School)
• Randall Johnson (Mississippi College)
• Goldburn Maynard (Louisville)
• Francine J. Lipman (UNLV)

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What Will Students Remember From Your Class In 20 Years?

Chronicle of Higher Education, What Will Students Remember From Your Class in 20 Years?:

One rainy September day, a small group of faculty members gathered around a conference table in a seminar room at my college to puzzle over an extraordinarily difficult question: Twenty years from now, what do we hope students will remember from our courses?

The answers were slow in coming, but fascinating. Some of us hoped students would remain intrigued by the subject of our course or discipline. ... Our answers were vague, broad, and aspirational. The things we wanted for our students, in the longest possible run, proved difficult to articulate in the language with which we normally described our teaching.

But one thing became painfully clear in the weeks that followed as we continued the conversation in person and in writing: None of us listed specific course content as something we hoped our students would recall in 20 years. The biologist made this point most clearly: "Everything I learned as an undergraduate, 25 years ago, is out of date. The same will be true for my students in 25 years." ...

It turned out we weren’t at all focused on hoping students "remember" some set of facts or ideas for 20 years, as we had framed it in the original question. Instead we hoped to have transformed our students in some fundamental way — to help enrich their intellectual lives, to make them into better people, to give them the skills and knowledge they would need to make the world a better place. ...

Twenty years from now, they want students to have retained:

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Schmalbeck & Zelenak's The NCAA And The IRS

This week, Mirit Eyal-Cohen (Alabama) reviews Richard Schmalbeck (Duke) & Lawrence Zelenak (Duke), The NCAA and the IRS: Life at the Intersection of College Sports and the Federal Income Tax, 91 S. Cal. L. Rev. ___ (2018).

This Article is right down my alley. Athletics pretty much dominates my household of four boys (five, if you count my husband) that eat, sleep, and breathe all types of sports. Also, living in Tuscaloosa, AL, home of the Crimson Tide NCAA Champion leaves a mark. Bama’s beloved coach Nick Saban is often the subject of many discussions in my tax classes. So when I find something that interconnects both business (tax) and pleasure (sports), such as this Article, I grab the opportunity with both hands.

This Article offers a detailed account of the history and current status of the intersection between federal tax laws and college sports. The authors begin by stating that for many decades, college athletics enjoyed preferential tax treatment due to either the IRS’s lack of enforcement or direct tax benefits provided by Congress to college sports. This status quo was maintained until last year with the enactment of the Tax Cuts and Jobs Act of 2017 (“The 2017 Act”) that increased the tax burden on college athletics in several aspects. The authors seem optimistic about this change, yet recognize, that no similar signs of transformation have yet been observed from the IRS that has continued its lax enforcement policy regarding college sports.

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Weekly Legal Education Roundup

• ABA Journal, Law school at University of Puerto Rico out of compliance with academic support standard
• Above the Law, Law School Professor Screws Up Crim Law Grades — Twice — In Grading Debacle
• Boston Business Journal, Law School Grads Reach a New Low on Mass. Bar Exam
• Bernard A. Burk (Independent), Jerome M. Organ (St. Thomas) & Emma Rasiel (Duke), Competitive Coping Strategies in the American Legal Academy: An Empirical Study

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Tax Policy In The Trump Administration

• American Prospect, Think the GOP Tax Cut Was for the Rich? Actually, It Was for the White and Rich.
• Atlantic, Kamala Harris’s Trump-Size Tax Plan
• Bloomberg, Top-Spending Republican Group Says Little About Trump Tax Law in Campaign
• CNN, Facebook Co-founder Wants to Repeal Trump Tax Cuts to Pay For a $500 Per Month Basic Worker Income

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G-20 Eyes Tax Gold Mine In ‘Sexy’ Crypto Market

Bloomberg Tax, G-20 Eyes Tax Gold Mine in ‘Sexy’ Crypto Market:

Tax authorities across the world, dazzled by potential revenue, have taken notice of the cryptocurrency market—despite its many booms and busts.

For tax authorities, the cryptocurrency market could be a rich source of revenue that has gone largely untapped—the market once soared in value to about $800 billion. But in their quest for cash, tax authorities have had to create new definitions and regulatory approaches. ...

Yet, in a stark warning to regulators in the U.S., economist Nouriel Roubini—noted for calling the 2008 financial crisis—bludgeoned the credibility of cyrptocurrencies in testimony before the Senate Banking Committee on Oct. 11.

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Stiglitz: America’s Growing Inequality — Causes And Remedies

Joseph E. Stiglitz (Columbia), America’s Growing Inequality: Causes and Remedies:

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Heritage Foundation Suspends Clerkship Boot Camp After NY Times Questions Secrecy, Loyalty Oaths

New York Times:  A Conservative Group’s Closed-Door ‘Training’ of Judicial Clerks Draws Concern, by Adam Liptak:

The closed-door “training academy” was aimed at a select group: recent law school graduates who had secured prestigious clerkships with federal judges. It was organized by the Heritage Foundation, a conservative group that has played a leading role in moving the courts to the right, and it had some unusual requirements.

“Generous donors,” the application materials said, were making “a significant financial investment in each and every attendee.” In exchange, the future law clerks would be required to promise to keep the program’s teaching materials secret and pledge not to use what they learned “for any purpose contrary to the mission or interest of the Heritage Foundation.”

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Weisbach, Hemel & Nou: The Marginal Revenue Rule In Cost-Benefit Analysis

David A. Weisbach (Chicago), Daniel J. Hemel (Chicago) & Jennifer Nou (Chicago), The Marginal Revenue Rule in Cost-Benefit Analysis, 160 Tax Notes 1507 (Sept. 10, 2018):

In April 2018, the U.S. Department of the Treasury and the Office of Management and Budget released a memorandum of agreement stating that certain tax-related regulations must be accompanied by a formal cost-benefit analysis. In this report, we propose a method of performing cost-benefit analysis of tax related-regulations. Our approach — which we call the marginal revenue rule — instructs that the social benefit of an increase in revenue generated by a tax regulation is equal to the increase in revenue resulting from reporting and behavioral changes induced by the regulation.

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NY Times Op-Ed: Think Professors Are Liberal? Try School Administrators

New York Times op-ed:  Think Professors Are Liberal? Try School Administrators, by Samuel J. Abrams (Sarah Lawrence College):

While considerable focus has been placed in recent decades on the impact of the ideological bent of college professors, when it comes to collegiate life — living in dorms, participating in extracurricular organizations — the ever growing ranks of administrators have the biggest influence on students and campus life across the country.

Today, many colleges and universities have moved to a model in which teaching and learning is seen as a 24/7 endeavor. Engagement with students is occurring as much — if not more — in residence halls and student centers as it is in classrooms. Schools have increased their hiring in areas such as residential life and student centers, offices of student life and success, and offices of inclusion and engagement. It’s not surprising that many of the free-speech controversies in the past few years at places like Yale, Stanford and the University of Delaware have concerned events that occurred not in classrooms but in student communal spaces and residence halls.

Intrigued by this phenomenon, I recently surveyed a nationally representative sample of roughly 900 “student-facing” administrators — those whose work concerns the quality and character of a student’s experience on campus. I found that liberal staff members outnumber their conservative counterparts by the astonishing ratio of 12-to-one. Only 6 percent of campus administrators identified as conservative to some degree, while 71 percent classified themselves as liberal or very liberal. It’s no wonder so much of the nonacademic programming on college campuses is politically one-sided.

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WSJ: U.S. Is World’s Most Competitive Economy For First Time In A Decade

Wall Street Journal, U.S. Is World’s Most Competitive Economy for First Time in a Decade:

The U.S. is back on top as the most competitive country in the world, regaining the No. 1 spot for the first time since 2008 in an index produced by the World Economic Forum, which said the country could still do better on social issues.

America climbed one place in the rankings of 140 countries, with the top five rounded out by Singapore, Germany, Switzerland and Japan. All five countries’ scores rose from 2017, with the U.S. notching the second-biggest gain after Japan’s.

The top spot hasn’t gone to the U.S. since the financial crisis stalled output and triggered a global economic slowdown.

“Economic recovery is well underway, with the global economy projected to grow almost 4% in 2018 and 2019,” said the report, published Tuesday by the organization that produces the Davos conference on global politics and economics.

However, “recovery remains vulnerable to a range of risks and potential shocks,” the authors warned. They cite a brewing trade war between the U.S. and China as a possible hindrance to growth that could potentially derail the recovery and deter investment. ...

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Trump’s Tax Law Failed To Kill Off Corporate America's Prized Dodge

Bloomberg, Trump’s Tax Law Failed to Kill Off Corporate America's Prized Dodge:

U.S. corporations have largely abandoned the contentious deals that allowed them to shift their addresses abroad for a lower tax rate. Yet a key part of the transactions is continuing quietly even after President Donald Trump’s tax overhaul.

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WSJ: What’s A Service Business? That’s Now A Multibillion-Dollar Tax Question

Wall Street Journal, What’s a Service Business? That’s Now a Multibillion-Dollar Tax Question:

For Extraco Banks of central Texas, the 2017 tax law that promised a 20% deduction is turning into something of a headache.

S-corporation banks such as Extraco technically qualify for the break. But under proposed IRS regulations, Extraco might lose out, because it gets too much revenue from managing trusts and selling mortgages into the secondary market. Those activities may be ineligible and taint the ability of the whole business to qualify.

Situations like Extraco’s were a crucial part of an IRS public hearing Tuesday, as the agency prepares to finish the rules for the new 20% deduction for pass-through businesses such as partnerships and S corporations, closely held companies that don’t pay standard corporate taxes.

Companies and the government are struggling over who is eligible for the tax break, and representatives of veterinarians, escrow agents, automobile dealers and franchised businesses pleaded their case at the hearing. Major League Baseball sent in a new detailed letter explaining why teams think they should get the tax break.

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