TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, October 21, 2018

The Top Five New Tax Papers

SSRN Logo (2018)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)

October 21, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 20, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Kysar Presents Unravelling The Tax Treaty At Northwestern

Kysar (2018)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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October 20, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

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

Conference LogoTax 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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October 20, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (2)

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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October 20, 2018 in Legal Education | Permalink | Comments (2)

Friday, October 19, 2018

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).

Mirit-Cohen (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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October 19, 2018 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

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. ...

Bloomberg

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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October 19, 2018 in Tax | Permalink | Comments (0)

Stiglitz: America’s Growing Inequality — Causes And Remedies

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

HeritageNew 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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October 19, 2018 in Legal Education | Permalink | Comments (5)

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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October 19, 2018 in Scholarship, Tax | Permalink | Comments (0)

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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October 19, 2018 in Legal Education | Permalink | Comments (2)

Thursday, October 18, 2018

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

WSJWall 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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October 18, 2018 in Tax | Permalink | Comments (0)

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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October 18, 2018 in Tax | Permalink | Comments (0)

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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October 18, 2018 in IRS News, Tax | Permalink | Comments (0)

Brooks: Legal Education, Legal Services, And Income-Contingent Loans

John R. Brooks (Georgetown), Curing the Cost Disease: Legal Education, Legal Services, and the Role of Income-Contingent Loans, 68 J. Legal Educ. ___ (2019):

The costs of both legal education and legal services have been rising steadily for decades. This is because they share a common root: the constant above-inflation growth in the cost of labor-intensive goods and services known as the “cost disease.”

Brooks 2

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October 18, 2018 in Legal Education | Permalink | Comments (1)

July 2018 Massachusetts Bar Exam Results Are The Worst This Century

Boston Business Journal, Law School Grads Reach a New Low on Mass. Bar Exam:

Nearly one in three aspiring lawyers who took the Massachusetts bar examination this summer failed the test, the highest failure rate in the Bay State this century.

Only 69.2 percent of test-takers passed the bar exam in July, according to statistics posted by the Massachusetts Board of Bar Examiners on Monday. The previous low for the July exam this century — 70.9 percent — occurred in 2016.

First-Time Bar Pass Rank (Rate)

 

School

US News Rank

MA (Overall)

1 (98.6%)

Harvard

1 (3)

2 (93.7%)

Boston University

2 (22)

3 (92.6%)

UMass

Tier 2

4 (87.8%)

Northeastern

4 (74)

5 (86.8%)

Boston College

3 (27)

   (69.2%)

Statewide Average

 

6 (64.5%)

Suffolk

5 (144)

7 (63.7%)

New England

Tier 2

8 (58.7%)

W. New England

Tier 2

9 (35.9%)

Mass (Andover)

Tier 2

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October 18, 2018 in Legal Education | Permalink | Comments (6)

NY Times: Trump’s Tax Cut Isn’t Paying For Itself (At Least Not Yet)

New York Times, No, Trump’s Tax Cut Isn’t Paying for Itself (at Least Not Yet):

The Treasury Department released figures on Monday showing the federal budget deficit widened by 17 percent in the 2018 fiscal year, to $779 billion. That’s an unusual jump for a year in which unemployment hit a five-decade low and the economy experienced a significant economic expansion. But the increase demonstrates that the tax cuts President Trump signed into law late last year have reduced federal revenues considerably, even against the backdrop of a booming economy.

Some conservatives don’t see the rising deficit numbers that way. They note that the Treasury reported that federal revenues rose by 0.4 percent from the 2017 fiscal year to the 2018 fiscal year, and view that as a sign that the tax cuts are “paying for themselves,” as Republicans and Mr. Trump promised.

That’s not the case. ...

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October 18, 2018 in Tax | Permalink | Comments (1)

How Faculty Can Overcome Impostor Syndrome

Following up on my previous post, How A Dean Got Over Impostor Syndrome:  Chronicle of Higher Education, How to Overcome Impostor Syndrome:

Pathologized for a reason, "impostor syndrome" runs thick in the veins of academics, from newly arrived graduate students to those nearing retirement (yes, really). It seems to be such a deep part of the ecosystem of the academy that it is hard to imagine faculty life without it. At the same time, it can be deeply painful and damaging, almost paralyzing. ...

You can find ways to feel better about who you are and what you have done, and as a result, maybe even achieve more. ...

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October 18, 2018 in Legal Education | Permalink | Comments (5)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review (2017)The Pittsburgh Tax Review has published Vol. 15, No. 2 (2018):

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October 18, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, October 17, 2018

Gale Presents Fiscal Therapy Today At Pennsylvania

GaleWilliam G. Gale (Brookings Institution) presents Fiscal Therapy: Curing America’s Debt Addiction and Investing in the Future (Oxford University Press 2019) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Keeping the economy strong will require addressing two distinct but related problems. Steadily rising federal debt makes it harder to grow our economy, boost our living standards, respond to wars or recessions, address social needs, and maintain our role as a global leader. At the same time, we have let critical investments lag and left many people behind even as overall prosperity has grown.

In Fiscal Therapy, William Gale, a leading authority on how federal tax and budget policy affects the economy, provides a trenchant discussion of the challenges posed by the imbalances between spending and revenue. America is facing a gradual decline as debt accumulates and delay raises the costs of action. But there is hope: fiscal responsibility aligns with both conservative and liberal goals and citizens of all stripes can support the notion of making life better for our children and grandchildren.

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October 17, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Elkins Presents The Merits Of Tax Competition Today In Singapore

Elkins (2018)David Elkins (Netanya) presents The Merits of Tax Competition in a Globalized Economy today at the Singapore Management University - Tax Academy Centre for Excellence in Taxation:

Since the turn of the current century, leading transnational organizations and academic scholarship have identified tax competition among countries as one of the scourges of the international tax regime. Both the EU and the OECD have warned that tax competition erodes the tax bases of Member States and impedes their ability to provide essential services. Commentators have argued that unrestrained competition is driving tax rates on mobile sources of income to (or close to) zero, a process that jeopardizes the very existence of the welfare state, exacerbates problems of global poverty, and deprives developing countries of funds that they desperately need in order to improve their physical infrastructure and human capital. Tax competition is also said to misallocate economic resources by driving investment to where the tax rate is lowest rather than to where the return on investment is highest.

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October 17, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Osofsky Reviews Wallace's Centralized Review Of Tax Regulations

Jotwell (Tax) (2016)Leigh Osofsky (North Carolina), Fleshing Out Centralized Review of Tax Regulations (JOTWELL) (reviewing Clinton Wallace (South Carolina), Centralized Review of Tax Regulations, 71 Ala. L. Rev. __ (2018)) (also reviewed by Ari Glogower (Ohio State) (here):

In a new article, Centralized Review of Tax Regulations, Clinton Wallace addresses the timely question of whether and how tax regulations should be subject to centralized review by the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget (“OMB”). While OMB review has become standard for “significant” or “economically significant” agency regulations, tax regulations have long avoided review even when they meet this standard, raising, yet again, the question of whether tax should be different than other areas of administrative law. In addition to helping us understand the historical lack of centralized review of tax regulations, Wallace’s paper does the important job of showing the inadequacy of the new framework for centralized review, and pushing us to recognize the complex questions that have to be answered to develop objective criteria for review. ...

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October 17, 2018 in Scholarship, Tax | Permalink | Comments (0)

Gender Equality In The Family And The Market

Hila Shamir (Tel Aviv University), Tsilly Dagan (Bar Ilan University) & Ayelet Carmeli (Tel Aviv University), Questioning Market Aversion in Gender Equality Strategies: Designing Legal Mechanisms for the Promotion of Gender Equality in the Family and the Market, 27 Cornell J.L. & Pub. Pol'y 717 (2018):

Post-industrial economies are at a crossroad. On the one hand countries are dealing with the crisis of unemployment and underemployment, developing strategies to increase labor market participation of all adults, and increase productivity. On the other hand, the same countries are responding to demographic concerns regarding an aging population and decreased birth ratios. These concerns, coupled with a growing demand for gender equality in the labor market, and better work/family balance, lead to the development of new tax and welfare policies around child care, as well as restructuring the workplace to fit the needs of workers with familial care obligations. A storm of new legislation, regulation and voluntary initiatives attempting to address child care, parental leaves, and the structure of the work day, are sweeping through developed economies, with significant innovation, variation, and experimentation.

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October 17, 2018 in Legal Education, Tax | Permalink | Comments (0)

Bar Exam Failure Is A Harbinger Of Professional Discipline

Following up on my previous post,  WSJ: Deans Push To Lower California Bar Pass Score, But Lawyers With Lower Scores Are More Likely To Be Disciplined Or Disbarred:  Jeffrey S. Kinsler (Founding Dean, Belmont), Is Bar Exam Failure a Harbinger of Professional Discipline?, 91 St. John's L. Rev. 883 (2017):

[T]his Article promised to substantiate two theses: (1) The more times it takes a lawyer to pass the bar exam the more likely that lawyer will be disciplined for ethical violations, particularly early in the lawyer’s career; and (2) The more times it takes a lawyer to pass the bar exam the more likely that lawyer will be disciplined for lack of diligence—including noncommunication—and/or incompetence. With regard to the first thesis, the evidence in this Article establishes a link between bar failure—particularly repeated failure—and subsequent professional discipline. As to the second thesis, the evidence in this Article shows that lawyers who fail the bar exam are not only more likely to be disciplined, but that they have an even greater likelihood of being disciplined for client neglect and/or incompetence. In addition, this Article demonstrates that lawyers who fail the bar exam are more likely to face severe discipline—disbarment or suspension—than lawyers who pass the bar exam on the first attempt.

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October 17, 2018 in Legal Education | Permalink | Comments (10)

Grewal: The Proposed SALT Regulations May Be Doomed

Andy Grewal (Iowa), The Proposed SALT Regulations May Be Doomed, 103 Iowa L. Rev. Online ___  (2018):

The IRS recently followed through on its promise to address state strategies designed to avoid the new state & local tax deduction limits. Although programs adopted by blue states sparked the IRS’s interest, the proposed regulations address both blue and red state programs. This has, predictably, led to IRS criticism from all sides. But the IRS was right to step in here. Revenue and policy concerns easily justify administrative guidance on the state strategies.

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October 17, 2018 in Scholarship, Tax | Permalink | Comments (3)

An Empirical Analysis Of 'Public Interest Drift' In Law School

John Bliss (Harvard), From Idealists to Hired Guns? An Empirical Analysis of "Public Interest Drift" in Law School, 51 UC Davis L. Rev. 1973 (2018):

Recent commentaries on American legal education have questioned whether law students are prepared to seek out satisfying, publicregarding, and financially viable careers in a changing profession. To these debates, this Article offers an empirical perspective on how students approach job-path decisions during law school. I address this issue through a five-year multi-method study of a subset of the law student population — elite-school students who state preferences for jobs in the public-interest sector at the beginning of law school but by their second year decide to pursue positions in large private law firms. A widely circulated hypothesis in popular and academic discourses suggests that implicit lessons of the first-year curriculum steer these students away from public-interest career goals, inducing a widespread “public interest drift.” However, skeptical commentators have speculated that the survey findings showing this drift phenomenon may be inaccurate and exaggerated. This Article responds to the skeptical position by empirically exploring the descriptive limits of the drift effect through a qualitative study of students’ experiences.

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October 17, 2018 in Legal Education, Scholarship | Permalink | Comments (3)

The TCJA Shifted The Benefits Of Tax Expenditures To Higher-Income Households

Howard Gleckman (TaxVox), The TCJA Shifted The Benefits Of Tax Expenditures to Higher-Income Households:

Until the Tax Cuts and Jobs Act (TCJA), people across the income distribution could say they benefited from the tax code’s many targeted tax benefits. But, according to a new analysis by the Tax Policy Center, the benefits of many itemized deductions have shifted from middle-income households to those with higher incomes.

Mortgage

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October 17, 2018 in Tax | Permalink | Comments (1)

Tuesday, October 16, 2018

Lederman Presents Information Matters In Tax Enforcement At San Diego

Lederman (2018)Leandra Lederman (Indiana) presented Information Matters in Tax Enforcement (with Joseph Dugan) at San Diego yesterday as part of its Tax Law Speaker Series hosted by Jordan Barry and Miranda Perry Fleischer:

Most legal and economics scholars recognize that the government needs information about taxpayers’ transactions in order to determine whether their reporting is honest, and that third-party reporting helps the government obtain that information. Yet, a recent paper by Professor Wei Cui [Taxation Without Information: The Institutional Foundations of Modern Tax Collection] asserts that “modern governments can practice ‘taxation without information.’” Cui’s argument rests on two premises: (1) “giving governments effective access to taxpayer information through third parties does not explain the success of modern tax administration” because, he argues, other important taxes, such as the value added tax (VAT), do not involve information reporting; and (2) modern tax administration succeeds because business firms are “sites of social cooperation under the rule of law,” fostering compliance. As this Essay argues, the literature demonstrates that Cui is wrong on both points.

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October 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

NY Times: Budget Deficit Jumps 17% in 2018, Due To Declining Corporate Tax Revenues Following The Trump Tax Cuts

New York Times, Budget Deficit Jumps Nearly 17% in 2018:

The federal budget deficit swelled to $779 billion in fiscal year 2018, the Treasury Department said on Monday, driven in large part by a sharp decline in corporate tax revenues after the Trump tax cuts took effect.

The deficit rose nearly 17 percent year over year, from $666 billion in 2017. It is now on pace to top $1 trillion a year before the next presidential election, according to forecasts from the Trump administration and outside analysts. The deficit for the 2018 fiscal year, which ended Sept. 30, was the largest since 2012, when the economy and federal revenues were still recovering from the depths of the recession.

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October 16, 2018 | Permalink | Comments (6)

The Top 3% Of U.S. Taxpayers Pay 50% Of Income Taxes

Bloomberg, Top 3% of U.S. Taxpayers Paid Majority of Income Taxes in 2016:

Individual income taxes are the federal government’s single biggest revenue source. In fiscal year 2018, which ended Sept. 30, the individual income tax is expected to bring in roughly $1.7 trillion, or about half of all federal revenues, according to the Congressional Budget Office.

Bloomberg looked into the 2016 individual returns data in detail for some additional insights illustrated in the charts below:

  • The top 1 percent paid a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent).
  • The top 50 percent of all taxpayers paid 97 percent of total individual income taxes.

Bloomberg 1

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October 16, 2018 in Tax | Permalink | Comments (7)

St. Louis Faculty Object To $50 Million Donor's Involvement In Hiring, Research Grants

SLUInside Higher Ed, Letting the Donor Decide:

Saint Louis University administrators and faculty where thrilled when a wealthy local couple — Jeanne and Rex Sinquefield — donated $50 million to the institution. The gift would allow university leaders to pursue bold and ambitious goals for the next decade and "accelerate SLU’s rise as a world-class research university."

Faculty and administrators alike agreed the infusion of cash could draw attention to the region and recognition of it as an emerging research hub. They also believed it would lure more scholars and students to the university.

The mutual excitement by the administration and the professors fostered a spirit of optimism and collaboration on campus, and a sense of shared aspirations. But the honeymoon ended almost as soon as it had begun after faculty members learned that the generous gift came with questionable and, to many, troubling strings attached: specific stipulations about faculty hiring and research funding that faculty leaders say violate university policies and academic integrity and freedom.

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October 16, 2018 in Legal Education | Permalink | Comments (2)

Johnston: We Need A Tax Police To Go After The Likes Of Donald Trump

David Cay Johnston, We Need Tax Police – And They Should Go After the Likes of Donald Trump:

When the New York Times exposed decades of tax cheating and “outright fraud” by the sitting president, it prompted people to ask important questions about the corrupt practices of the Trump family. The answers are central to the future of America.

Where was the Internal Revenue Service? How did the Trumps get away with decades of schemes the Times said allowed them to evade close to a half-billion dollars of income and gift taxes? Is Donald Trump continuing these practices? Is that why he refuses to make his own tax returns public? Can anything be done about it?

I’m in a unique position to answer those questions. I am the Times’ former tax reporter, the journalist who has covered Trump longer than anyone else, more than 30 years. ...

Congress, which makes tax law, has never properly supported the IRS, which I like calling the Tax Police Department.

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October 16, 2018 in IRS News, Tax | Permalink | Comments (7)

Tennessee Higher Ed Commission Rejects Transfer Of Valparaiso Law School To Middle Tennessee State University

ValpoMTSUTHEC Votes Down Proposal to Transfer Valparaiso Law School to MTSU:

Middle Tennessee State University’s president said he was very disappointed by the Tennessee Higher Education Commission’s decision Monday to deny the proposed transfer of Valparaiso University’s School of Law to the Murfreesboro campus.

“We regret that the Tennessee Higher Education Commission did not approve our proposal to establish a college of law to provide the citizens of Middle Tennessee and surrounding areas an accredited, public law school,” said MTSU President Sidney A. McPhee.

Commissioners voted 8 to 5 to deny MTSU’s proposal. The governing boards of both MTSU and Valparaiso earlier this month had endorsed the transfer.

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October 16, 2018 in Legal Education | Permalink | Comments (2)

Rozema: The Unrecognized Relationship Between Tax Law And Public Assistance

Kyle Rozema (Chicago), The Unrecognized Relationship Between Tax Law and Public Assistance:

Lawmakers enact tax laws to raise revenue, redistribute resources, and change behavior. The ability of a tax law to serve its goals depends on how individuals respond to the tax law, and how individuals respond to the tax law can depend on how it interacts with other laws. This article unearths unrecognized connections between the operations of tax law on the one hand and the voluntary nature of public assistance programs on the other.

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October 16, 2018 in Scholarship, Tax | Permalink | Comments (0)

73% Of All Faculty Positions Are Non-Tenure Track

Inside Higher Ed, A Non-Tenure-Track Profession?:

Some 73 percent of all faculty positions are off the tenure track, according to a new analysis of federal data by the American Association of University Professors [Data Snapshot: Contingent Faculty in US Higher Ed]. ...

AAUP

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October 16, 2018 in Legal Education | Permalink | Comments (1)

Monday, October 15, 2018

Brockmeyer Presents Taxation, Information, And Withholding Today At UC-Berkeley

BrockmeyerAnne Brockmeyer (World Bank) presents Taxation, Information, and Withholding: Evidence from Costa Rica (with Marco Hernandez (World Bank)) at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

This paper studies the compliance effect of tax withholding on firms, which is commonly used in developing countries. While a growing literature argues that third-party reporting of tax liabilities is a key mechanism for ensuring tax compliance, and a reason why tax capacity grows along the development path, the literature has ignored the fact that third-party reporting is often associated with tax withholding. Withholding is irrelevant if the tax withheld is fully credited against a taxpayer’s liability, but can increase compliance in the presence of costly reclaim, low salience of enforcement or extensive margin compliance gaps.

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October 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Pomerleau Presents Indexing Capital Gains To Inflation Today At UC-Irvine

PomerleauKyle Pomerleau (Tax Foundation) presents Indexing Capital Gains to Inflation: Is It Worth It? at UC-Irvine today as part of its Tax Policy Colloquium Series:

Republican lawmakers and the Trump administration have reintroduced the idea of adjusting the basis of capital gains to inflation. Proponents of capital gains indexing argue that taxing individuals for an increase in the price level is unfair. They also argue that indexing capital gains would unlock capital, which would result in significant economic growth. It is true that indexing capital gains to inflation would increase the incentive to invest and results in a slight boost to the size of the economy. However, the effect would be much smaller than proponents argue. At the same time, it would reduce revenue and make the tax code slightly less progressive.

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October 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Glogower Presents A Constitutional Wealth Tax Today At Loyola-L.A.

Glogower (2016)Ari Glogower (Ohio States) A Constitutional Wealth Tax at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katie Pratt:

A wealth tax could address rising inequality and more accurately tailor the tax system to taxpayers’ economic differences. These reasons to tax wealth may not matter, however, if a wealth tax is unconstitutional. This Article considers the possibilities for the design of a constitutional wealth tax. In particular, this Article argues that, if the Supreme Court were to find a traditional tax on wealth is foreclosed under the Constitution, Congress could instead tax wealth indirectly, by adjusting a taxpayer’s income tax liability on account of her wealth. This Article describes three methods for making this adjustment (collectively, “Wealth Integration” methods): A taxpayer’s wealth could affect her base of taxable income (the “Base Method”), the applicable rate schedule (the “Rate Method”) or the availability of credits against tax (the “Credit Method”).

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October 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Manhire Presents An Alternative Approach To Tax Gap Analysis Today In London

Manhire (2018)Jack Manhire (Texas A&M) presents Constraints on IRS Control: An Alternative Approach to Tax Gap Analysis, 12 Int’l J. L. & Pol. Sci. ___ (2018) at the World Academy of Science, Engineering, and Technology’s 20th International Conference on Tax Law and Regulations today in London, England.

A tax authority wants to take actions it knows will foster the greatest degree of voluntary taxpayer compliance to reduce the "tax gap." This paper suggests that even if a tax authority could attain a state of complete knowledge, there are constraints on whether and to what extent such actions would result in reducing the macro-level tax gap. These limits are not merely a consequence of finite agency resources. They are inherent in the system itself. To show that this is one possible interpretation of the tax gap data, the paper formulates known results in a different way by analyzing tax compliance as a population with a single covariate. This leads to a standard use of the logistic map to analyze the dynamics of non-compliance growth or decay over a sequence of periods.

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October 15, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Presser: Make Law Profs And Law Students Great Again

MAGATennessee Star op-ed:  Making Law Professors and Law Students Great Again, by Stephen B. Presser (Northwestern; author, Law Professors: Three Centuries of Shaping American Law (West 2017)):

It was little noticed, and of little effect, but more than 2,000 professors signed a letter urging the U.S. Senate not to confirm Brett Kavanaugh to the United States Supreme Court. Given that he is the best qualified nominee in some time, having graduated from Yale and Yale Law School and having served a clerkship with Justice Anthony Kennedy and for more than a decade on the nation’s second highest court as the author of opinions embraced by the Supreme Court itself, this is curious.

This cri de coeur from the professors tells us more about them than about Kavanaugh, and it tells us about the diseased state of jurisprudence in the law schools. ...

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October 15, 2018 in Legal Education | Permalink | Comments (4)

Lesson From The Tax Court: Using CDP To Stop The Collection Train

Tax Court (2017)I am not a fan of the Collection Due Process (CDP) provisions Congress stuffed into the Code in 1998.  I call them “Collection Delay Process.”  It’s not that I favor taxpayer abuse!  But I think the source of abuse is rarely bad-acting IRS employees.  Bulk processing is generally the culprit.  The combination of computer-processing and over-whelmed employees creates an assessment process that runs over taxpayers who do not understand how to stop it or slow it down and who cannot afford to hire lawyers to do that for them.  And then, the end of that assessment process starts the engine of the collection train.  CDP is designed to keep the train from going down the wrong collection track before it leaves the station.  But CDP is a badly designed mechanism.  That was my conclusion in 2009, after I studied almost 1,000 CDP cases.  I have seen nothing in the past 10 years to change my mind.  

Those who disagree with me point to cases like the one I’m blogging about today: James Loveland Jr., and Tina C. Loveland v. Commissioner, 151 T.C. No. 7 (Sept. 25, 2018), a reviewed decision written by Judge Buch.  This is one of the rare cases where the Tax Court found that the IRS had abused its discretion in deciding to proceed with collection.  Here it looks like CDP prevented the collection train from running over the Lovelands.  The case provides a good lesson for what works, and what does not work, about CDP.  Keith Fogg also has a good post on this case over at Procedurally Taxing, explaining why it is a reviewed opinion.

The case is also an interesting lesson about Tax Court Procedure.  While the case is ostensibly a ruling on an IRS motion for Summary Judgment, Judge Buch effectively grants Summary Judgment to the taxpayers...who never asked for it.  This disposition—while sensible enough---is apparently an unwritten rule of Tax Court procedure.  At least I did not see a rule.  Nothing in 121.  Maybe I missed it.  But I think the Court is silently borrowing from Federal Rules of Civil Procedure 56.

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October 15, 2018 in Bryan Camp, New Cases, Tax Practice And Procedure | Permalink | Comments (0)

White Americans Gain The Most From Trump’s Tax Cuts

New York Times, White Americans Gain the Most From Trump’s Tax Cuts, a Report Finds:

The tax cuts that President Trump signed into law last year are disproportionately helping white Americans over African-Americans and Latinos, a disparity that reflects longstanding racial economic inequality in the United States and the choices that Republicans made in crafting the law.

The finding comes from a new analysis of the $1.5 trillion tax cut using an economic model built by the Institute on Taxation and Economic Policy, a liberal think tank, and released in a joint report with Prosperity Now, a nonprofit focused on helping low-income Americans attain wealth and financial stability [Race, Wealth and Taxes: How the Tax Cuts and Jobs Act Supercharges the Racial Wealth Divide]. It is the first detailed analysis of the law to break down its effects by race.

White Americans earn about 77 percent of total income in the United States, but they are getting nearly 80 percent of the benefits of the individual and business tax cuts generated by the new law, the analysis found. African-Americans received about 5 percent of the benefits, despite earning 6 percent of the nation’s income. Latinos got about 7 percent, although their share of all income is 8 percent.

TCJA

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October 15, 2018 in Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, October 14, 2018

NY Times: Jared Kushner Paid No Federal Income Tax For Years

New York Times, Kushner Paid No Federal Income Tax for Years, Documents Suggest:

Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

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October 14, 2018 in Tax | Permalink | Comments (6)

Universities Claim To Value Public Engagement In Scholarship, But Do Not In Practice

PublicChronicle of Higher Education, Do Universities Value Public Engagement? Not Much, Their Policies Suggest:

Scholarly work that serves the public is the kind of thing that, theoretically, universities want faculty members to pursue. But a new study of the language used by more than 100 colleges in their tenure-and-promotion criteria shows little evidence that such scholarship is valued in a way that advances faculty careers [How Significant Are the Public Dimensions of Faculty Work in Review, Promotion, and Tenure Documents?].

And because of that, faculty members are given incentives mostly to pursue research that fits in an established framework.

"There’s a very entrenched culture that exists around how we review successful academics," said Juan P. Alperin, the lead author of a report on the study and an assistant professor in the publishing program at Simon Fraser University, in Canada, who studies scholarly communications. "We want this kind of work to be valued on par with the other quantifiable research outputs that are dominant."

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October 14, 2018 in Legal Education | Permalink | Comments (0)

NY Times: It’s Getting Harder To Talk About God

GodNew York Times op-ed:  It’s Getting Harder to Talk About God, by Jonathan Merritt (author, Learning to Speak God From Scratch: Why Sacred Words Are Vanishing — And How We Can Revive Them (2018)):

More than 70 percent of Americans identify as Christian, but you wouldn’t know it from listening to them. An overwhelming majority of people say that they don’t feel comfortable speaking about faith, most of the time.

During the Great Depression, the playwright Thornton Wilder remarked, “The revival in religion will be a rhetorical problem — new persuasive words for defaced or degraded ones.” Wilder knew that during times of rapid social change, God-talk is often difficult to muster.

We may have traded 1930s-level poverty and hunger for a resurgence in racism, sexism and environmental cataclysm, but our problems are no less serious — or spiritually disorienting. While many of our most visible leaders claim to be religious, their moral frameworks seem unrecognizable to masses of other believers. How do we speak about God in times like these when God is hard to spot?

As a student of American Christianity and the son of a prominent megachurch pastor, I’ve been sensing for some time that sacred speech and spiritual conversation are in decline. But this was only a hunch I had formed in response to anecdotal evidence and personal experience. I lacked the quantitative data needed to say for sure.

So last year, I enlisted the Barna Group, a social research firm focused on religion and public life, to conduct a survey of 1,000 American adults. This study revealed that most Americans — more than three-quarters, actually — do not often have spiritual or religious conversations. ...

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October 14, 2018 in Legal Education, Tax | Permalink | Comments (3)

The Top Five New Tax Papers

SSRN Logo (2018)This week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. [491 Downloads]  Compelled Subsidies and the First Amendment, by William Baude (Chicago) & Eugene Volokh (UCLA)
  2. [243 Downloads]  The Charitable Contribution Strategy: An Ineffective SALT Substitute, by Andy Grewal (Iowa)
  3. [208 Downloads]   The Death of the Income Tax (or, the Rise of America's Universal Wage Tax), by Edward McCaffery (USC)
  4. [194 Downloads]  Taxing the Robots, by Orly Mazur (SMU)
  5. [185 Downloads]  The International Provisions of the TCJA: Six Results after Six Months, by Reuven Avi-Yonah (Michigan)

October 14, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 13, 2018

This Week's Ten Most Popular TaxProf Blog Posts