Yesterday's Congressional Tax Action

The Senate joined the House in unanimously approving The Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081):

• Bill
• House Press Release
• Senate Press Release
• House Staff Summary
• Senate Staff Summary
• Joint Committee on Taxation Summary
• Joint Committee on Taxation Revenue Estimate

The Senate (82-13) joined the House (316-108) in overriding President Bush's veto of the farm bill, The Heartland, Habitat, Harvest, and Horticulture Act of 2008 (H.R. 2419), thus enacting it into law:

• Bill
• Senate Press Release
• Senate Staff Summary
• Senate Farm Bill Tax Package Home Page
• Joint Committee on Taxation Revenue Estimate
• Conference Report

Law Review Reform

There has been a lot of interesting blogosphere discussion recently about law reviews:

• Balkinization:  Complaints About Law Review Submissions, And What Is Changing, by Brian Tamanaha
• Concurring Opinions:  Does Pre-Publishing on SSRN Promote or Reduce the Chances of Law Review Acceptance?, by Dave Hoffman
• Election Law Blog:  Placing Law Review Articles, by Rick Hasen
• First Movers:  Law Review Innovation:  The Peer-Assist System, by Anthony Ciolli (responding to my post yesterday, American Tax Idol? "Peer-In-Your-Face" Legal Scholarship)
• Leiter's Law School Reports:  The Yale Law Journal Claims to Have Blind Review of Manuscripts..., by Brian Leiter
• PrawfsBlawg:
  • An Open Letter to the Yale Law Journal: What is Your Real Policy?, by Jack Chin
  • Update: YLJ Submission Policy Revealed, by Jack Chin

Shorter Classes = More Learning

Chronicle of Higher Education:  Can Shorter Classes Mean More Learning?, by Paula Wasley:

A recent study by researchers at the University of Texas at Austin found that students rate shorter, intensive courses — in which a semester’s worth of material is taught at an accelerated rate — as more effective than traditional 15-week courses.

The students’ perceptions, gleaned from end-of-term evaluations of 130 conventional- and intensive-length courses on the Austin campus, support the findings of previous research, which showed that students learn as much in accelerated courses as in the full-length versions — and sometimes more.

See also the University of Texas press release.

Would a Porn Tax Hurt Sales?

The Freakanomics blog asks:  Would a Porn Tax Hurt Sales?:

A California state assemblyman has proposed dealing with the state’s huge budget shortfall by taxing pornography, including the production and sale of pornographic videos — by 25%. To an economist this initially sounds like a good idea: An ideal tax is one that doesn’t cause any change in behavior — doesn’t generate any excess burden on the economy. I believe the demand for pornography is quite inelastic, so I don’t expect sales to be reduced much if porn prices rise as producers try and succeed in passing this tax along to consumers.

But demand is only one side of the market: A tax only in California gives producers an incentive to move their operations elsewhere. ...  [The] tax might generate a substantial dead-weight loss, as a lot of production shifts to other states that don’t impose the tax.

Update:  The New York Times has more in Sex Sells, So Legislator Urges State to Tax It.

Court Grants Wesley Snipes Bail Pending Appeal of Tax Fraud Conviction

The Government suffered yet another setback in the Wesley Snipes case today, as U.S. District Judge William Terrell Hodges agreed to bail pending the appeal of his conviction on three misdemeanor tax fraud counts.  From the order:

Obviously, having denied the Defendants' motions asserting the issues he intends to raise on appeal, the Court is dubious as to the "substantiality" of those issues for purposes of appellate review.  Nevertheless, the Court recognizes that the offenses of conviction are misdemeanor offenses, not felonies, and that the time required for the disposition of appeal may well equal -- or nearly equal -- the length of the term of commitment imposed.  Additionally, the Court is not repared to say that the issues on appeal are patently frivolous or asserted merely for purposes of delay.

• Associated Press
• E! Online
• New York Post
• Reuters
• TMZ.com
• White Collar Crime Prof Blog

The Desirability of Temporary Tax Legislation

There is a great debate on Tax Vox Blog over the desirability of temporary tax legislation:

• Howard Gleckman (Tax Policy Center), The Tax Extenders Ride Again:

These tax benefits have become known as extenders—temporary provisions that expire every year or three. These are an annuity for lobbyists, who create the Coalition for the Extension of Thus and Such, and run up their billable hours by plugging these ideas in the corridors of Capitol Hill. But besides helping some suits make a few more boat payments, they have no discernable economic benefit. These provisions are, as a group, the worst kind of industrial policy

• George K. Yin (Virginia), Temporary Laws, Political Accountability, and Fiscal Restraint:

Howard Gleckman’s criticism of temporary legislation ... overlooks the impact of Congressional budget rules. When such rules are considered, a change in law on a temporary (rather than permanent) basis increases political accountability and arguably enhances fiscal restraint. ...

A draft paper on this topic is attached.  [Temporary-Effect Legislation, Political Accountability, and Fiscal Restraint]

• Howard Gleckman, Tax Extenders and Fiscal Restraint:

George argues that temporary tax cuts are a good idea because they force Congress to consider the costs and benefits of these measures before renewing them. This, reckoning, he says, imposes more political accountability on the system, not less. I’m not sold. George describes the system as it should be. But unfortunately, once down the Washington rabbit hole, nothing is what is seems. ...

John McCain argues that it is foolish to assume the "temporary" Bush tax cuts will ever expire. Thus, he insists, merely extending them should add nothing to the deficit. For him, temporary tax cuts were little more than political convenience. I wish Yin were right, but I’m afraid McCain’s view is closer to the truth, Washington-style.

Tax Advice for Indiana Jones

A Memo from the Office of Steven R. Lawlor, CPA, to Indiana Jones:

Professor Henry "Indiana" Jones Jr.
33 New Montgomery Street
San Francisco, California 94118

Dr. Jones,

We are in receipt of your Form 1040 for this past year, and there are several items on your tax return that the Internal Revenue Service would undoubtedly take issue with. These are items that, as your accountant, I would be greatly remiss in not bringing to your attention. While we appreciate your continued use of our qualified tax preparation team and we understand that your financial situation is far from straightforward, we are compelled to make note of the following issues:

Check out the memo -- it is quite funny.   (Hat Tip: Don't Mess With Taxes.) 

 

BNA Tax Management Advisory Board Meets Today on Compensation Planning

The BNA Tax Management Advisory Board meets today at 5:30 p.m. (followed by a reception at 7:00 p.m.) in the Conrad Suite of the Waldorf-Astoria Hotel in New York City on Compensation Planning to discuss these three papers:

• Change in Control Issues Under Section 409A, by Daniel L. Hogans (Morgan, Lewis & Bockius, Washington, D.C)
• Implications of the Supreme Court’s Decision in LaRue v. DeWolff, Boberg & Associates, by Linda K. Shore (Mayer Brown, Washington, D.C.)
• Participant Notices — Descriptions, Requirements, Mistakes and Purposes, by William E. Hansen (McDermott, Will & Emery, Washington, D.C.)

American Tax Idol? "Peer-In-Your-Face" Legal Scholarship

Cornell issued this press release yesterday, Professor Garvey Helps Create New Interactive Approach to Legal Scholarship:

In a radically new interactive approach to legal scholarship, more than 100 leading scholars are debating the fundamental questions of modern criminal law through a law professor’s version of the TV show American Idol.

Professor Stephen P. Garvey of Cornell Law School, along with Paul Robinson of Pennsylvania Law School and Kimberly Ferzan, professor and associate dean at Rutgers School of Law-Camden, are the guiding professors in a 10-month online effort to create a new method of processing scholarship. In this new project, called Criminal Law Conversations, authors of the top-rated essays can defend their ideas against criticism from the judges, who are other law professors. The essays that receive too few votes get kicked off the stage, which in reality is the University of Pennsylvania Law School Web site, which hosts the Criminal Law Conversations project.

The selected essays will be included in an Oxford University Press book to be published next year.

“Too often opposing advocates talk past each other,” said Paul Robinson, lead editor of Criminal Law Conversations. “You could say that this brings peer review to legal scholarship but it’s more like peer-in-your-face.”

Robinson with co-editors Ferzan, and Stephen Garvey, are guiding professors in a 10-month online effort in which, so far, 120 scholars are participating. They are nominating several dozen scholarly works for discussion, based on the relevancy and compelling nature of the pieces. The author of a nominated work will produce a 4,000-word core text that summarizes his or her thesis, to which four to 10 scholars will then write 800-word criticisms. The original author will reply to the critiques, with these “conversations” making up the published book. ...

The response has been so positive, Oxford University Press is considering applying this model to other areas of the law and other fields of scholarship.

If anyone starts a Tax Conversations, I have several folks in mind who could play the role of Simon!

AP: Snipes Seeks Bond As He Appeals Tax Convictions

Associated Press:  Snipes Seeks Bond As He Appeals Tax Convictions: 

Wesley Snipes must surrender to prison authorities June 3 if he isn't granted bail to appeal three federal tax convictions, defense lawyers said in a court filing. Snipes' attorneys plan to argue before the 11th U.S. Circuit Court of Appeals that the trial judge erred in several ways before and after his February conviction. U.S. District Judge William Terrell Hodges last month sentenced Snipes to three years in prison.

To be granted freedom during the appeal, the 45-year-old actor must prove that he has a substantial issue to raise and isn't a flight risk. His attorneys argue that Hodges gave the jury bad instructions and should have granted them an expanded pretrial hearing on their request to move the proceedings.

Prosecutors said Snipes had no major issues to raise and has demonstrated he could flee. In a Monday filing, U.S. Attorney Robert O'Neill said Snipes told the probation office he had less than $10,000 in liquid assets, but the actor surprised the government by producing $5 million in payment for back taxes at his sentencing.

Tax Court: Taxpayer Must File Tax Return in Order to Itemize Deductions

The Tax Court yesterday held that a taxpayer must file a tax return in order to itemize deductions, citing § 63(e)(2) ("Any election under this subsection shall be made on the taxpayer’s return, and the Secretary shall prescribe the manner of signifying such election on the return.").  See also § 63(e)(2) ("Unless an individual makes an election under this subsection for the taxable year, no itemized deduction shall be allowed for the taxable year. For purposes of this subtitle, the determination of whether a deduction is allowable under this chapter shall be made without regard to the preceding sentence.").  Jahn v. Commissioner, T.C. Memo. 2008-141 (5/21/08).

Obama's Tax Policy

A Look at Obama’s Tax Policy (Kansas City Star), by F. Patrick Brown:

[I]f Barack Obama is elected president, his tax policies will be enacted and deserve scrutiny. Here’s a summary of what to expect.

IRS Clears Rev. Wright's Church of Improperly Assisting Obama's Campaign

The United Church of Christ announced today that the IRS has cleared the church of allegations that it engaged in improper political intervention following an address by Barack Obama at its 2007 General Synod. The IRS concluded in its May 13 determination letter:

[The IRS determination outlined several steps taken by the church that indicated compliance with the law. The letter said the church's invitation to Obama came] well before he announced his candidacy and that [he] was invited to speak … in a non-candidate capacity, on how his personal faith intersected with his public life.  You further established that the United Church of Christ had verbally communicated to those in attendance that Senator Obama was there as a member of the church and not as a candidate for office, that the audience should not attempt to engage in any political activities, and that the church's legal counsel had advised Senator Obama's campaign on the ground rules for the speech. ...

Based on your response to the inquiry we have determined that the activity about which we had concern did not constitute an intervention or participation in a political campaign in violation of the requirements of section 501(c)(3), and that the United Church of Christ continues to qualify as an organization described in section 501(c)(3).

Press coverage:

• Associated Press
• Cleveland Plain Dealer
• Wall Street Journal
• Washington Post

Tax Angle in Numb3rs

The May 2 episode of the TV show Numb3rs (episode Atomic No. 33) involved a "new religious movement" that was trying to become accepted as a church so it could obtain tax-exempt status, in order to increase the take of the con artists who had taken over the leadership of the church.  See TV Guide's Episode Recap.  (Hat Tip:  Leandra Lederman.) 

      

Furman: Health Reform Through Tax Reform

Jason Furman (Brookings Institution) has published Health Reform Through Tax Reform: A Primer, Health Affairs, May/June 2008, Vol. 27, No. 3, p. 622.  Here is the abstract:

Tax incentives for employer-sponsored insurance and other medical spending cost about $200 billion annually and have pervasive effects on coverage and costs. This paper surveys a range of proposals to reform health care, either by adding new tax incentives or by limiting or replacing the existing tax incentives. Replacing the current tax preference for insurance with an income-related, refundable tax credit has the potential to expand coverage and reduce inefficient spending at no net federal cost. But such an approach by itself would entail substantial risks, so complementary reforms to the insurance market are essential to ensure success.

Garman: The New War Between the States: A Look at the Incentives to Recruit Foreign Automakers to the South

John J. Garman (Faulkner University, Thomas Goode Jones School of Law) has published The New War Between the States: A Look at the Incentives to Recruit Foreign Automakers to the South, DaimlerChrysler Corp. v. Cuno, and the European Union's Prohibition Against State Aid, 24 T.M. Cooley L. Rev. 313 (2007).   Here is the Introduction:

Already Reeling, Detroit Flails in Latest Effort to Reinvent Itself, screamed the headline from The New York Times. While the two largest American automakers continue to close plants, lay off workers, and struggle to stay out of bankruptcy, foreign automakers continue to expand production, build new plants, and hire more workers in the Southern United States. Southern states have been engaged in a new civil war against the North -- not fought with bullets and spilt blood, but with tax incentives and corporate welfare, the allure of which is so powerful that foreign automakers cannot resist the pull southward. While the incentives may be good for the states' economies by creating jobs, the incentives violate the Dormant Commerce Clause and the principles of free movement of capital. As a matter of public policy, the United States should follow the European Union (EU) model, which provides that such incentives violate “state aid” prohibitions. First, this Article discusses the United States Supreme Court case of DaimlerChrysler Corp. v. Cuno, where the Court declined to rule on the legality of economic-development incentives. Second, this Article addresses the EU's prohibition against similar incentives, known as "state aid" in EU parlance. Finally, this Article explores the incentives being provided in the South in order to recruit foreign automakers.

Jerry Springer's Commencement Address at Northwestern

The Chicago Tribune reprints the text of Jerry Springer's commencement address at Northwestern Law School.  Here is my favorite passage:

It is perhaps inevitable that we are inclined to always be judging others. But let me share this observation. I am not superior to the people on my show -- and you are not superior to the people you will represent. That is not an insult. It is merely an understanding derived from a life spent on the front lines of human interaction. We are all alike. Some of us just dress better -- or have more money -- or perhaps we were born into better circumstances of parental upbringing, health, brains and luck.

On this great day, when we honor your achievement, we might also say thank you to God in full recognition that whatever we achieve in life is 99 percent a gift -- as is living in America. And I know that from personal experience. You see, I am not the first lawyer in my family. My dad's brother was. His practice was cut short, as was his life -- in Auschwitz. My grandparents, uncles, aunts, cousins -- they met their end as well -- camp after camp -- Hitler turning my family tree into a single vine -- Mom and Dad, by the grace of God, surviving -- enabling them to bring my sister and me to America. ...

In one generation here in America -- my family went from near total annihilation to this ridiculously privileged life I live today because of my silly show.

(Hat Tip:  Pete Wentz.)

NLJ: D.C. Tax Practice Hot; Firms Gear Up for Major Tax Law Changes

From this weel's National Law Journal:  Law Firms Gear Up for Critical Tax Policy Changes; Top-Level Tax Attorneys Are Recruited in Preparation For Changes, by Lynne Marek:

Law firms in Washington are gearing up for what attorneys say could be a crucial debate over U.S. tax policy -- one that might usher in the most extensive tax code changes in the past 20 years. Firms are trying recruit top tax attorneys, especially from Capitol Hill and the Bush administration, building lobbying coalitions and educating clients about what's at stake. ...

Tax policy lawyers say landmark policy changes are likely to happen regardless of whether a Republican or Democrat wins the White House in November. They expect a larger Democratic majority in Congress and tax issues coming to a head, including the expiration of President Bush's tax cuts in 2010 and the need to revise the AMT, will spur the debate.

(Hat Tip:  ABA Journal.)

Chicago Grad Accused of Submitting Phony Law School Grades to Sidley Austin

ABA Journal:  U of C Law Grad Accused of Submitting Phony Grades to Sidley Austin, by Debra Cassens Weiss:

A lawyer who attended the University of Chicago Law School has been accused in an ethics complaint of lying about his grades when he applied for summer and full-time positions at Sidley Austin.

Loren Elliotte Friedman is accused in a complaint filed May 6 by the Illinois Attorney Registration and Disciplinary Commission. He was listed as an associate at Curtis, Mallet-Prevost, Colt & Mosle in New York on the firm’s website earlier today, but his name was removed this afternoon. Joseph Pizzurro, managing partner of Curtis, Mallet-Prevost, told ABAJournal.com that Friedman, a bankruptcy associate, disclosed the bar complaint to the law firm on Friday and submitted his resignation.

The complaint says Friedman altered transcripts of his law school grades in 20 classes to reflect better grades than he received.

Tax is not among the 20 courses in which he is alleged to have altered his grade.  See also Legal Profession Blog.

Former Tax Legislative Counsel Desmond Joins McKee Nelson

Last month, I blogged the news that Michael J. Desmond was leaving his position as Tax Legislative Counsel in the Treasury Department’s Office of Tax Policy.  McKee Nelson announced this week that he has rejoined the firm as a partner and chair of the firm's Tax practice.  From the press release:

For the past three and a half years, Mike has served as Tax Legislative Counsel in the U.S Treasury Department. In this role, Mike supervised a staff of lawyers and accountants that developed administrative guidance and provided legal advice and analysis on a broad range of federal tax law issues. In particular, he played a primary role in the development of new ethics and practice rules governing tax preparers, including lawyers and accountants, with respect to their interaction with the federal tax system. Mike also served as a spokesperson for the Treasury Department before the Congressional tax-writing committees, testifying before Congress on numerous occasions on a wide range of federal tax issues.

Mike originally joined the firm as an associate in 2000 and became a partner in 2004. Prior to joining McKee Nelson, he served as a trial lawyer with the Tax Division of the Justice Department, and as a law clerk to the Honorable Ronald S.W. Lew in the U.S. District Court for the Central District of California

Mike is an adjunct professor in Georgetown's graduate tax program, where he teaches Tax Practice Workshop.  He earned his B.A. (History & Political Science) from UC-Santa Barbara and his J.D. from Catholic.

Federal Jury in Chicago Convicts Six in $60 Million Aegis Tax Fraud

Press release from Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois: Six Principals of Former Aegis Company Comvicted of $60 Million Tax Fraud Conspiracy Following Three-Month Federal Trial:

A federal jury today convicted six defendants of a nationwide $60 million tax fraud conspiracy for participating in a nearly decade-long scheme to market and sell sham domestic and foreign trusts through The Aegis Company ... to some 650 wealthy taxpayer clients throughout the United States. The defendants essentially diverted income from businesses into sham trusts for clients, hiding hundreds of millions of dollars in income for those clients and resulting in a $60 million tax loss to the United States, making the case one of the largest of its kind. ...

The jury began deliberating last Wednesday following an 11-week trial before U.S. District Judge Charles R. Norgle in Chicago. The defendants were indicted in 2004, following a lengthy undercover investigation by IRS agents, code-named “Operation Trust Me” ...

All six defendants were found guilty today of one count of tax fraud conspiracy – specifically, conspiracy to defraud the United States by impeding the IRS in the collection of tax revenue and conspiracy to aid and assist the preparation and filing of false tax returns on behalf of Aegis clients. All six defendants were also found guilty of additional charges, while two of the six were also acquitted on some counts. Sentencings were scheduled for August and September.

Press and blogosphere coverage:

• ataxingmatter
• Chicago Sun-Times
• Chicago Tribune

More on Davis

Additional press and blogosphere coverage of Monday's 7-2 decision by the Supreme Court upholding Kentucky's exemption of interest on in-state municipal bonds while taxing interest on out of state bonds. Department of Revenue of Kentucky v. Davis, No. 06-666 (5/19/08) (blogged here):

• Dorf on Law (by Tax Prof Neil Buchanan)
• L.A. Times
• Legal Times
• Lexington Herald-Leader
• Motley Fool
• New York Sun
• New York Times
• PrawfsBlawg
• Wall Street Journal
• Washington Post

Sweet 16

Jayne, 16 years ago today you entered this world, enriching our lives beyond measure. The years have flown by, and my heart aches that we will never again play basketball in the driveway, hit baseballs in the park, or go to Fall Out Boy concerts together.  But the void is filled with a different kind of joy, as I watch you develop into a remarkable young woman.  I am secretly happy that your breathtaking beauty, buoyant intelligence, and exuberant personality are, thus far, intimidating to most of the boys in your sophomore class.

Although I am bursting with pride at your many academic and athletic accomplishments, I am prouder still of simply who you are and the person you are becoming.  Your recent mission trip to South Africa embodies your fervent faith, serving heart, and fortitude and maturity way beyond your years.

I have made more than my share of mistakes through these 16 years and in many ways have not been as good a father as you deserved. But I want you to know that I love you beyond measure and will be cherishing every day of these next two years before you leave our home to make your way in the world. I am especially looking forward to our upcoming vacation together in San Diego, and hoping it will be as memorable as our time together at the JH Ranch Father-Daughter coming-of-age camp (and our trips to Washington, D.C.)

I cherish the story you wrote in sixth grade, My Daddy, which I keep on a special shelf in my office:

Sometimes it is hard to let people go.  One moment, you are swinging them up in the air and giving them kisses, and the next moment they are gone.  A huge bit of your life, snipped away bit by bit. ...

Even though his work day is tiring, my Daddy always has time to hit balls in the park with me or to play basketball in the driveway until the sun sets and it grows dark and we can't see the basket anymore.  Then we meander inside and watch the news as I sit between my Daddy's knees, watching my life unfold.  Him growing older.  Me growing older.  My life beginning to unravel like a ball of yarn.  Snip by snip.  Bit by bit.

I remember him lifting me up high in the air and twirling me around in high arches as the salt water sprayed my fat little legs.  I watched him, trusting him, loving him.  He is my Daddy.  He swung me around like I was nothing and everything at the same time.  My hair static and free.  I was loving every minute of it.

I remember piggy back rides to my bedroom. Me feeling like I was on the top of the world, that I could touch the sun. My fingers brushing the top of the ceiling, as Daddy warned, "watch the fingerprints," even though I knew he didn't care.  It was wonderful to know that somebody out there was willing to stop and give me a lift to wherever I needed to go.

I remember Daddy pushing me on the swings, with each arc going a little higher.  In my mind, I could see myself touching the sky, with Daddy behind me, lifting me up.  "Look, Jayne, you're flying," yelled Daddy as the wind whipped my white hair.  I was free, more free than I had ever been in my entire life.

I remember soccer games with Daddy as coach.  The drills which seem so simple now caused me years of frustration.  Games that he made fun.  And as he passed me on to a new coach, I realized that as I grew older, I was letting go, snip by snip.

I remember playing baseball in the park.  Me hitting balls 2 feet in the air when I was lucky, which most of the time I was not.  My Daddy saying I was getting better.  A litter of brand new white balls behind home plate, the smell of sand in our noses.  All that was left was Daddy and me, and baseball, together.

I remember being with Daddy at the pool, begging him to go under -- that was the moment he became Dad, just Dad.  No longer a Superman figure afraid of nothing.  I saw his humanness and I balked.  I wasn't ready to say goodbye to Superman.  In my mind, I thought, this isn't Daddy.  Daddy's the one who kills spiders in the bathtub, and isn't afraid to check closets for monsters or to watch scary monsters.

Gradually, I began to realize, this is Dad.  Human, someone who makes mistakes and who is willing to risk anything for his family.  Yes, he isn't Superman.  He's someone better.  My Daddy.  As I go through my adolescent years, I am losing bits and pieces of my life.  I realize now that I can't touch the sky, and I'm almost as tall as my Daddy.  Sometimes, it's hard to let people go, like it was hard to let Superman go, and eventually my Daddy will have to let go of me.  I know that he is always there to hold on to as long as I need to, and there will always be a thread connecting me to him, no matter how far away I am.  My Daddy, my Superman, me and him, a team.

House Unanimously Passes Military Tax Bill With Revenue Raisers

The House today approved The Heroes Earnings Assistance and Relief Tax Act of 2008 (H.R. 6081) by a 403-0 vote.

• Bill
• Press Release
• Staff Summary
• Joint Committee on Taxation Summary
• Joint Committ on Taxation Revenue Estimate

WSJ: The Economy, Not Tax Rates, Drives Tax Revenues; Revenues = 19.5% of GDP, Whether Rates Are 28%-91%

You Can't Soak the Rich (Wall Street Journal op-ed), by David Ranson:

Kurt Hauser is a San Francisco investment economist who, 15 years ago, published fresh and eye-opening data about the federal tax system. His findings imply that there are draconian constraints on the ability of tax-rate increases to generate fresh revenues. I think his discovery deserves to be called Hauser's Law, because it is as central to the economics of taxation as Boyle's Law is to the physics of gases. Yet economists and policy makers are barely aware of it. ...

On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated.

The chart nearby, updating the evidence to 2007, confirms Hauser's Law. The federal tax "yield" (revenues divided by GDP) has remained close to 19.5%, even as the top tax bracket was brought down from 91% to the present 35%. This is what scientists call an "independence theorem," and it cuts the Gordian Knot of tax policy debate.

The data show that the tax yield has been independent of marginal tax rates over this period, but tax revenue is directly proportional to GDP. So if we want to increase tax revenue, we need to increase GDP.

What happens if we instead raise tax rates? Economists of all persuasions accept that a tax rate hike will reduce GDP, in which case Hauser's Law says it will also lower tax revenue. That's a highly inconvenient truth for redistributive tax policy, and it flies in the face of deeply felt beliefs about social justice. It would surely be unpopular today with those presidential candidates who plan to raise tax rates on the rich – if they knew about it.

Doskow & Marshall: Prosecutorial Interference with the Right to Counsel and the KPMG Prosecution

Charles S. Doskow (La Verne) & Kevin S. Marshall (La Verne) have published Prosecutorial Interference with the Right to Counsel and the KPMG Prosecution: An Analysis from a Constitutional, Ethical, and Economic Perspective, 24 T.M. Cooley L. Rev. 195 (2007). Here is part of the Introduction:

This Article addresses the DOJ's conduct with respect to its interference with the right to counsel of KPMG's individually targeted employees. We analyze such conduct from (1) a constitutional perspective; (2) a professional-responsibility perspective; and (3) an efficiency perspective driven by notions of classical liberalism that underlie and permeate our adversarial system of justice, as well as our laissez-faire commercial republic. We conclude that such conduct violates of the Fifth and Sixth Amendments, challenges the professional responsibility of the Attorney General, and ultimately obstructs the perceived efficiencies of our adversarial system of justice.

Koko Taylor Asks Tax Court to Force IRS to Accept Her Offer in Compromise

From next week's Forbes:  Singing Tax Blues, by Janet Novack & William P. Barrett:

The Grammy-winning blues singer Koko Taylor turns 80 in September. She’s in extremely poor health, likely exacerbated by decades of the kind of raucous hard living ...  Her income has dropped precipitously, her expenses haven’t, and she has little savings or other hard assets besides a house in a Chicago suburb that Zillow.com figures is now worth only $280,000.

Nevertheless, the IRS says Taylor must pay $400,000 in back taxes, penalties and interest. Otherwise, she faces the possibility the G-men will grab most of her income, including royalties and Social Security, and maybe even her home. The feds rejected her offer to take out a reverse mortgage on that house and pay $200,000 plus up to 50% of any future net revenue, moves that would allow her to remain in her residence and live out her remaining time with her second husband. IRS personnel simply can’t believe a singer often called “Queen of the Blues” who still performs and has a fan base can’t ante up more scratch.

All this is detailed in the official record of two lawsuits Taylor filed in U.S. Tax Court to block IRS collection actions. Taylor’s lawyers are asking the court to order the agency to take their current offer. Such a mandate would be a rare rebuke to the IRS

Federal law allows overextended taxpayers to make an “offer in compromise” to settle for less than the full amount the IRS is owed. In 1998 Congress even broadened the grounds for such deals. Now they are permitted to promote “effective tax administration” even when the taxpayer might be able to come up with more cash. Among the factors to be considered: the health of the taxpayer and a diminished future ability to work.

But such compromises must be publicly disclosed. Not keen to be known as a soft touch, the IRS is reluctant to accept them. Last year the IRS sent 4.4 million notices to deadbeats that it might snatch their assets, a count up 650% from 2000. Over the same period the number of accepted compromises fell 63%, to 12,000. National Taxpayer Advocate Nina E. Olson thinks her employer is being too hard-nosed. ...

A ruling by L. Paige Marvel, the judge hearing both cases, could come by year’s end.

The Tax Court docket number is 014765-07L.  (Hat Tip:  Don't Mess With Taxes.)

Law Professor Hiring: Statistics on JD Placement

Dan Solove (George Washington) has a fascinating post on Law Professor Hiring: Statistics on JD Placement, which calculates the success rates of various schools in sending their graduates into law teaching jobs.  He obtaind data from the AALS on how many teaching applicants there were from each law school for 2006-08 and used Larry Solum's entry level hiring data (2006-07 data, 2007-08 data) to compute the success rate of the Top 29 schools.  The Top 10 are:

1. Yale:  45% (44 of 97)
2. Chicago: 43% (12 of 28)
3. Stanford:  41%  (15 of 37)
4. Illinois:  38% (3 of 8)
5. Harvard:  37% (46 of 126)
6. Minnesota:  36% (4 of 11)
7. Virginia:  35% (14 of 40)
8. Northwestern:  33% (6 of 18)
9. USC:  33% (2 of 6)
10. Columbia:  28% (19 of 68)

Dan also provides a listing of the schools by their U.S. News ranking, with the percentage of their graduates hired for 2006-07 and 2007-08 separately

Double Dipping in Conference Papers

Inside Higher Ed ask whether it is proper to present the same paper at more than one conference:  Double Dipping in Conference Papers, by Scott Jaschik:

If you are going to give a talk at a scholarly meeting, do you need new material?

That’s the question being debated in political science — as evidenced by a series of articles in the new edition of the journal PS: Political Science and Politics. While the journal finds a range of views on whether the trend is understandable or regrettable, the authors agree that it is real, and that attitudes appear generational. ...

While noting that the practice has become visible largely when reviewing job applications, [Nelson C. Dometrius, a professor of political science at Texas Tech University] wanted to quantify it, so he assembled 114 vitas from political science departments at seven regional universities. ...  He counted as “double” any paper with the same title or substantially the same title (although he notes from experiences that some who may be more ashamed of the practice try to hide it with substantially different titles for the same paper, so he may be undercounting).

In his sample, he found not a single case of double presentations prior to 1992. Then in the mid-1990s, he finds a paper or two a year, and by this decade it becomes fairly common — even if there is still a ton of new material out there. While double presentations are pretty much a non-factor for those who earned Ph.D.’s through 1985, the attitude is quite different now.

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Banks & Diamond: The Case for Direct Taxation

James Banks (MIT, Department of Economics) & Peter A. Diamond (MIT, Department of Economics) have posted The Case for Direct Taxation on SSRN.  Here is the abstract:

The traditional starting place for a study of tax reform is a definition of an ideal tax base, which is then adjusted in light of additional issues. After arguing briefly that this is not a good starting place, the essay reviews the optimal taxation literature inferences for tax base policy, focusing on three questions:

1. If there is annual non-linear (progressive) taxation of earnings, how should annual capital income be taxed -- not at all, linearly (flat rate, as in the Nordic dual income tax), by relating the marginal tax rates on capital and labour incomes (as in the US), or by taxing all income the same?
2. If there is annual non-linear taxation of earnings, should there be a deduction for net savings?
3. If there is annual non-linear taxation of earnings, is it worth having a more complex tax structure, particularly age-dependent tax rates? Would greater use of age-dependent rules in capital income taxation be worthwhile?

The essay presents the Atkinson-Stiglitz and Chamley-Judd results that capital income should not be taxed, but concludes that the required conditions are too restrictive and not robust enough for policy purposes. Hence there should be some role for including capital income as a part of the tax base. The essay discusses some empirical underpinnings for two key elements in the conclusion - differences in savings propensities and the shape of earnings (and uncertainty about earnings) over the lifetime. The conclusion that capital income should be taxed does not lead to the conclusion that the tax base should be total income, the sum of labour income and capital income. The chapter leans toward relating marginal tax rates on capital and labour incomes as opposed to the Nordic dual tax. Also examined are age-dependent taxes (for example different taxation of earnings for workers of different ages).

U.S. Supreme Court Upholds Discriminatory Taxation of Municipal Bonds

The Supreme Court today, in a 7-2 decision, upheld Kentucky's exemption of interest on in-state municipal bonds while taking interest on out of state bonds.  Department of Revenue of Kentucky v. Davis, No. 06-666 (5/19/08).  Gregory Germain (Syracuse) and Bradley Joondeph (Santa Clara) offer detailed analysis of the decision below the fold:

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Tax Papers at American Law & Economics Association Annual Meeting

Here are the tax papers presented at last weekend's American Law & Economics Association 18th Annual Meeting at Columbia Law School:

• Lily L. Batchelder (NYU) & Surachai Khitatrakun (Urban Institute), Dead or Alive: An Investigation of the Incidence of Estate Taxes versus Inheritance Taxes
• Howard F. Chang (Penn), Immigration Restriction as Redistributive Taxation: Working Women and the Costs of Protectionism in the Labor Market
• Simeon Djankov (World Bank), Tim Ganser (Harvard), Caralee McLiesh (World Bank), Rita Ramalho World Bank) & Andrei Shleifer (Harvard), The Effect of Corporate Taxes on Investment and Entrepreneurship
• Brian D. Galle (Florida State), Federal Grants, State Decisions
• Michael Knoll (Penn), Business Taxes and International Competitiveness
• Alex Raskolnikov, Beyond Deterrence: Targeting Tax Enforcement with a Penalty Default
• Chris W. Sanchirico (Penn), Progressivity and Potential Income: Measuring the Effect of Changing Work Patterns on Income Tax Progressivity
• Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard), Bequest Puzzles in Economics: A Legal Perspective

A Tax Prof Dress Code?

I previously have blogged Tax Prof Eric Jensen's call for a dress code for law school faculty.  I received an email today with the university's rules for Summer Business Casual Attire:

Business casual attire is permissible during the period beginning the first Monday following spring commencement and ending the last Friday prior to the first day of classes for the autumn term. Business casual attire must be in good taste and positively reflect the image of the university. ...

Inappropriate summer business casual attire includes, but is not limited to the following:

• Halter tops, sheer tops, tube tops, tank tops, tee-shirts
• Blue Jeans, shorts, leggings, spandex, bib overalls, beachwear, work-out clothes
• Dresses or skirts shorter than four (4) inches above knee length, spaghetti-strap dresses without jacket, micro-mini skirts
• Sneakers, flip-flops, thong shoes, slippers

Conway: Money for Nothing and the Stocks for Free: Taxing Executive Compensation

Meredith R. Conway (Texas Wesleyan; moving to Suffolk) has published Money for Nothing and the Stocks for Free: Taxing Executive Compensation, 18 Cornell J. L. & Pub. Pol'y 383 (2008). Here is the abstract:

In the 1980s and 1990s, the public began to protest the large compensation packages executives were receiving. Average workers were struggling while executives got raises, even as the corporations they worked for failed. This disconnect between executive compensation and executive performance led Congress to attempt to curtail executive compensation. This article will examine the Congress's attempt to temper the amount of compensation through the tax code. These tax code provisions enacted by Congress to restrain excessive executive compensation in fact had the effect of increasing compensation for certain executives at a great cost to stockholders. In 1980, the average CEO made 42 times the average hourly worker's pay. By 1990, the average CEO made 107 times the average hourly worker's pay. In 1993, Congress enacted tax legislation intended to rein in excessive executive compensation. However, in 2000, the average CEO made 525 times the average hourly worker's pay. Compensation amounts that executives receive since the enactment of the tax provisions are increasing dramatically, not decreasing.

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Massachusetts Should Tax Harvard

Earlier this month, I blogged a pending proposal in Massachusetts to impose a 2.5% excise tax on college endowments in excess of $1 billion.  Although much of the commentary opposed the proposal, an op-ed in today's Inside Higher Ed by James D. Miller (Smith College, Department of Economics), Massachusetts Should Tax Harvard, supports the proposal:

Can you believe that the State of Washington actually wants to tax Microsoft? Doesn’t Washington realize that by taxing Microsoft it risks pushing the company to move its headquarters to a lower tax state? And even if Microsoft doesn’t pay taxes it still contributes to the state in many ways by, for example, promoting knowledge creation. Washington wants Microsoft to pay huge sums in taxes just because Microsoft earns astronomic profits. But Microsoft earned these profits through diligence and intelligence. Does Washington really want to punish Microsoft for its hard-earned success?

Washington State, of course, does tax Microsoft. And if Microsoft tried to get out of paying all taxes many college professors would curse the firm for displaying such naked greed. But Harvard University, the Microsoft of the educational world, feels itself entitled to tax exemption. ...

Taxes are like poison. Taking a lot is fatal, but exposure to small quantities only moderately harms health. The best way for a government to tax, therefore, is for it to spread around its tax poison broadly so no entity must consume too much of it. If Massachusetts is determined to collect a certain amount of taxes from organizations (such as corporations), then it will do less harm if it forces all organizations to pay a little than if it mandates that a subset pay a lot.

A tax on elite colleges would reduce inequality. Students who attend top schools have vastly higher lifetime incomes than other Americans do. And even if the tax reduced financial aid and so increased student borrowing, it would still reduce inequality because those who graduate from elite schools with large debts are much better off financially than are their peers who do not attend college. ...

Although I support taxing rich colleges, I believe there are better ways of doing it than through imposing a wealth tax on endowments. As [Greg] Mankiw wrote to me, many economists believe it inefficient for governments to tax savings. I would prefer if Massachusetts imposed a sales tax on tuitions. Such a tax might appeal to politicians who don’t begrudge elite colleges their huge wealth but do feel the schools should spend more of their capital on students by, for example, charging low tuitions.

ABA Tax Section Publishes Spring 2008 Issue of News Quarterly

The ABA Tax Section has published 27 News Quarterly No. 3 (Spring 2008):

• From the Chair (Stanley L. Blend) (pp. 3, 16)
• "Interview" with Ernest J. Brown (pp. 4-5)
• Ethics for the Tax Lawyer: Test Your Knowledge of the ABA's Model Rules (pp. 6-10)
• Points to Remember:
  • Antibribery Laws and the Tax Treatment of a CFC's Payments to Foreign Government Officials and Employees, by Kathryn Morrison Sneade (Miller & Chevalier, Washington, D.C.) (pp. 1, 11)
  • Uniformity Clause Limitations on State Taxation, by Steve R. Johnson (UNLV) (pp. 12-13)
  • Proposed S Corporation Regulations Close to Final, by Michael L. Griffin (Kreig Devault, Indianapolis, IN) (pp. 14-15)
  • Swallows Holding Update, by Kathryn Morrison Sneade (Miller & Chevalier, Washington, D.C.) (p. 16)
• Opinion Point:  Apology Payments (pp. 17-19)
• Publications, by Louis A. Mezzullo (Luce, Forward, Hamilton & Scripps, Rancho Santa Fe, CA) (p. 20)
• News Briefs (p. 21)
• CLE Calendar (p. 22)
• Section Meeting Calendar (p. 22)
• Tax Bites:  Revolution #10.35 (to the Tune of the Beatles' Revolution), by William J. Wilkins (Wilmer Cutler, Pickering Hale and Dorr, Washington, D.C.) (p. 23)
• Pro Bono Award Recipient:  Joseph Barry Schimmel (p. 24)

Hierarchy, History & Happiness in Legal Education

Michael L. Rustad (Suffolk) & Thomas H. Koenig (Northeastern) have posted A Hard Day's Night: Hierarchy, History & Happiness in Legal Education, 58 Syr. L. Rev. 261 (2008), on SSRN.  Here is the abstract:

This Article presents a social history of the struggles of Boston's nontraditional students to break into the legal profession by studying in evening law schools. Suffolk Evening Law School was founded in 1906 as a counter-hegemonic institution, explicitly dedicated to the democratization of legal education by challenging the pedagogy and recruitment practices of Harvard and the other elite day schools. Twenty-first century graduates of the most prestigious day law schools continue to thrive in a relatively charmed legal environment, but the legal hierarchy has been destabilized by a growing emphasis upon achievement over ascription. Suffolk's evening law students, for example, often have a competitive advantage in fields such as intellectual property because the leading Boston law firms recruit disproportionately from the software engineers, biotechnology researchers, and other scientists who work as patent agents by day and study law at night. While the evening law school movement of the early twentieth century did much to replace ascription with meritocracy, the equal opportunity revolution remains incomplete because of the continuing influence of the legal stratification system upon the careers of the alumni of low ranking law schools.

TaxProf Blog Weekend Roundup

Saturday:

• Goodbye, Class of 2008
• NTA Spring Symposium
• Blogging as a Feminist Legal Method
• The Great Tax Cut Delusion and the Decline of Good Government in America

Sunday:

• Top 5 Tax Paper Downloads
• Tate: Marilyn Monroe's Legacy: Taxation of Postmortem Publicity Rights
• Law School Commencement Speakers (Updated)
• Mirkay: Reevaluating the 501(C)(3) Exemption of Religious Organizations that Discriminate

Top 5 Tax Paper Downloads

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

1.  [413 Downloads]  Deduction Ad Absurdum: CEOs Donating Their Own Stock to Their Own Family Foundations, by David Yermack (NYU, Stern School of Business)  [blogged here]

2.  [273 Downloads]  Backdating, by Jeffrey L. Kwall (Loyola-Chicago) & Stuart Duhl (Harrison & Held, Chicago)  [blogged here]

3.  [142 Downloads]  Perpetuities, Taxes, and Asset Protection:  An Empirical Assessment of the Jurisdictional Competition for Trust Funds, by Robert H. Sitkoff (Harvard) & Max M. Schanzenbach (Northwestern)  [blogged here]

4.  [135 Downloads]  Taxation as a Global Socio-Legal Phenomenon, by Allison Christians (Wisconsin), Steven Dean (Brooklyn), Diane M. Ring (Boston College) & Adam H. Rosenzweig (Washington University)  [blogged here]

5.  [115 Downloads]  Recent Developments in Federal Income Taxation: The Year 2007, by Martin J. McMahon, Jr. (Florida), Ira B. Shepard (Houston) & Daniel L. Simmons (UC-Davis)  [blogged here]

Tate: Marilyn Monroe's Legacy: Taxation of Postmortem Publicity Rights

Joshua C. Tate (SMU) responds to Mitchell M. Gans (Hofstra), Bridget J. Crawford (Pace) & Jonathan G. Blattmachr (Milbank, New York), Postmortem Rights of Publicity: The Federal Estate Tax Consequences of New State-Law Property Rights, 117 Yale L.J. Pocket Part 203 (2008) (blogged here), in Marilyn Monroe's Legacy: Taxation of Postmortem Publicity Rights, 117 Yale L.J. Pocket Part ___  (2008).  Here is the abstract:

Mitchell Gans, Bridget Crawford and Jonathan Blattmachr argue that recent state legislation recognizing postmortem publicity rights fails to take into account the likely estate tax consequences. This response explains that, although Gans, Crawford, and Blattmachr are correct that making publicity rights devisable could have adverse tax consequences for some estates, those consequences are not as far-reaching as might be imagined, and the legislative solution they propose will not in fact solve the problem. Estate tax will not be levied on the estates of long-deceased celebrities like Marilyn Monroe (the subject of the recent California legislation with which Gans, Crawford, and Blattmachr lead their piece), and the analogy to wrongful death benefits misconstrues the case law on that subject. Gans, Crawford, and Blattmachr are employing the specter of federal death taxes - which have applied to devisable publicity rights in California since 1985, and are irrelevant to the recent legislative reforms there - in an attempt to frighten state legislatures into unnecessarily restricting testamentary freedom.

Law School Commencement Speakers (Final)

• Akron:  Bedford Biles
• Albany:  Jeanine Pirro (TV legal analyst; former District Attorney, Westchester County, New York)
• American:  Stephen Breyer (Justice, U.S. Supreme Court)
• Baltimore:  Ted Turner (media mogul)
• Boston College:  Michael Mukasey (Attorney General, United States)
• Boston University:  Niki Tsongas (Member, U.S. Congress)
• Brooklyn:  George Bundy Smith (Partner, Chadbourne & Parke; retired Judge, New York Court of Appeals)
• BYU:  Matthew Durant (Justice, Utah Supreme Court)
• Campbell:  William Suter (Clerk, U.S. Supreme Court)
• Capital:  Jennifer Brunner (Secretary of State, Ohio)
• Cardozo:  Dennis Jacobs (Chief Judge, U.S. Court of Appeals, 2d Circuit)
• Case Western:  Stephen Ellis (Partner, Tucker, Ellis & West) (former Ohio Attorney General Mark Dann was disinvited)
• Catholic:  Samuel Alito (Justice, U.S. Supreme Court)
• Chapman:  Erwin Chemerinsky (Dean, UC-Irvine Law School)
• Charleston:  Jan Crawford Greenburg (Legal Correspondent, ABC News)
• Chicago-Kent:  Lisa Madigan (Attorney General, Illinois)
• Cincinnati:  Billy Martin (Partner, Sutherland Asbill & Brennan)
• Columbia:  Cynthia McFadden (Co-anchor, ABC News)
• Connecticut:  Chase T. Rogers (Chief Justice, Connecticut Supreme Court)
• Cornell:  John Blume (Professor, Cornell)
• Cumberland:  Lee Rosenthal (Judge, U.S. District Court)
• CUNY:  Juan Gonzales (Journalist, New York Daily News)
• Drake:  Robert Ray (former Governor, Iowa)
• Duquesne:  Richard Thornburgh (former Governor, Pennsylvania; former Attorney General, United States)
• Duke:  William Neukom (President, ABA; Partner, Kirkpatrick & Lockhart Preston, Gates Ellis)
• Faulkner:  Harold Frend See (Justice, Alabama Supreme Court)
• Florida State:  Neil Gorsuch (Judge, U.S. Court of Appeals, 10th Circuit)
• Fordham:  Rich Ross (President, Disney Channels Worldwide)
• George Washington:  Daniel K. Inouye (Member, U.S. Senate)
• Georgia:  John Barrow (Member, U.S. House of Representatives)
• Georgia State:  Robert Benham (Justice, Supreme Court of Georgia)
• Golden Gate:  Lee Baxter (former Judge, California Superior Court)
• Harvard:  Cory Booker (Mayor, Newark, NJ)
• Hofstra:  Adam Liptak (Reporter, New York Times)
• Houston:  William H. Neukom (President, ABA; Partner, Kirkpatrick & Lockhart Preston, Gates Ellis)
• Indiana-Bloomington:  Richard Lugar (Member, U.S. Senate)
• John Marshall (Chicago):  Jonathan Turley (Professor, George Washington; TV legal analyst)
• La Verne:  Thomas Girardi (Founding Partner, Girardi & Keese)
• Lewis & Clark:  John Lewis (Member, U.S. Congress)
• Loyola-L.A.:  David W. Burcham (Executive Vice President & Provost, Loyola)
• Loyola-New Orleans:  Scott Turow (legal novelist)
• LSU:  Bobby Jindal (Governor, Louisiana)
• Maine:  Frank Coffin (Senior Judge, U.S. Court of Appeals, 1st Circuit)
• Miami:  Carolyn Lamm (Partner, White & Case)
• Michigan State:  Marilyn Kelly (Justice, Michigan Supreme Court)
• Minnesota:  Tim Pawlenty (Governor, Minnesota)
• New England:  Larry Lucchino (President & CEO, Boston Red Sox)
• New York Law School:  Dennis Archer (Chairman, Dickinson Wright; former ABA President and Detroit Mayor)
• New York University:  Anne Milgram (Attorney General, New Jersey)
• North Dakota:  Ralph Erickson (Judge, U.S. District Court)
• Northern Kentucky:  Wil Schroder (Justice, Kentucky Supreme Court)
• Northeastern:  Stephen Breyer (Justice, U.S. Supreme Court)
• Northwestern:  Jerry Springer (TV show host; former Mayor, Cincinnati)
• Notre Dame:  A.J. Bellia (Professor, Notre Dame; winner, Teacher of the Year award)
• Ohio Northern:  Mike DeWine (former Member, U.S. Senate)
• Oregon:  Elden Rosenthal (Founding Partner, Rosenthal & Greene)
• Pace:  Theodore Jones (Judge, New York Court of Appeals)
• Pacific McGeorge:  Doris Matsui (Member, U.S. Congress)
• Penn State:  Michael Apfelbaum (Partner, Apfelbaum, Apfelbaum & Apfelbaum)
• Pennsylvania:  Bill Richardson (Governor, New Mexico)
• Pepperdine:  Kurt L. Schmoke (Dean, Howard)
• Pittsburgh:  Debra Todd (Justice, Pennsylvania Supreme Court)
• Quinnipiac:  Barry R. Schaller (Justice, Connecticut Supreme Court)
• Richmond:  Henry Hudson (Judge, U.S. District Court)
• Roger Williams:  Linda Greenhouse (former Supreme Court Reporter, New York Times)
• St. Mary's:  Tom Corbett (Attorney General, Pennsylvania)
• San Diego:  Thomas O'Brien (U.S. Attorney, Central District of California)
• Santa Clara:  Phyllis Hamilton (Judge, U.S. District Court)
• Seton Hall:  Michael A. Chagares (Judge, U.S. Court of Appeals, 3d Circuit)
• South Dakota:  Stephanie Herseth Sandlin (Member, U.S. Congress)
• Santa Clara:  Phyllis Hamilton (Judge, U.S. District Court)
• SMU:  Antonio Garza, Jr. (U.S. Ambassador to Mexico)
• South Texas:  Richard Anderson (CEO, Delta Airlines)
• Stanford:  Joe Bankman (Tax Prof, Stanford; winner, Hurlbut Award for Excellence in Teaching)
• Suffolk:  H. Thomas Wells, Jr. (President-elect, ABA; Founding Member, Maynard, Cooper & Gale)
• Syracuse:  Stephen Tober (Board of Governors, ABA)
• Tulsa:  Brad Henry (Governor, Oklahoma)
• UC-Berkeley:  Mary Schroeder (former Chief Judge, U.S. Court of Apeals, 9th Circuit) & Anne Joseph O'Connor (Professor, UC-Berkeley)
• UC-Davis:  Gavin Newsom (Mayor, San Francisco)
• UC-Hastings:  Willie Brown (former Mayor, San Francisco)
• UCLA:  Morgan Chu (Partner, Irell & Manella)
• USC:  Erwin Chemerinsky (Dean, UC-Irvine Law School)
• University of St. Thomas:  Edward Toussaint Jr. (Chief Judge, Minnesota Court of Appeals)
• Vanderbilt:  Nicholas Zeppos (Chancellor, Vanderbilt)
• Vermont:  Madeleine May Kunin (former Governor, Vermont)
• Virginia:  Timothy Finchem (Commissioner, PGA Tour)
• Wake Forest:  Jim Talent (Fellow, Heritage Foundation; former Member, U.S. Senate)
• Washburn:  Dennis Moore (Member, U.S. Congress)
• Washington & Lee:  William Webster (former U.S. District Judge, CIA Director, and FBI Director)
• U. of Washington:  Sherman Alexie (author)
• Western New England:  Reena Raggi (Judge, U.S. Court of Appeals, 2d Circuit)
• Whittier:  Linda Sánchez (Member, U.S. Congress)
• Widener (Delaware):  Theodore McKee (Judge, U.S. Court of Appeals, 3d Circuit)
• Widener (Harrisburg):  Roger Gregory (Judge, U.S. Court of Appeals, 4th Circuit)
• William & Mary:  Sandra Day O'Connor (retired Justice, U.S. Supreme Court)
• William Mitchell:  David B. Sentelle (Chief Judge, U.S. Court of Appeals, D.C Circuit)
• Wisconsin:  Thomas Barrett (Mayor, Milwaukee)
• Yale:  Kenji Yoshino (Professor, Yale)

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Mirkay: Reevaluating the 501(C)(3) Exemption of Religious Organizations that Discriminate

Nicholas A. Mirkay (Widener) has posted Losing Our Religion: Reevaluating the 501(C)(3) Exemption of Religious Organizations that Discriminate on SSRN.  Here is the abstract:

Religious organizations occupy an enviable legal stature in American society, receiving over 200 exemptions and other regulatory breaks in federal legislation over the last 18 years alone. Religious organizations enjoy numerous federal as well as state and local tax exemptions representing hundreds of billions of dollars in foregone revenue. The propriety of these lucrative tax exemptions must be questioned when religious organizations engage in discrimination against members of society. As illustrated in real-life occurrences contained in pages 3 and 4 of the article, ostensibly widespread discrimination by such organizations exists not only with respect to employment, but more importantly in providing services or engaging in activities for which the organization was originally granted tax-exempt status (e.g., education). The primary bases for such discrimination are currently sexual orientation and marital status.

In a prior article published in the Wisconsin Law Review, I proposed a solution to the problem of discrimination by charitable organizations (a term commonly interpreted to include religious organizations) - enact a broad and well-defined nondiscrimination condition on tax exemption under Section 501(c)(3) of the Internal Revenue Code. Inherent in that proposal is the notion that discrimination by charitable organizations is intrinsically incompatible with such organizations' purpose and mission. Although my prior article briefly addressed the constitutional and other difficulties inherent in applying a nondiscrimination requirement to religious organizations, it acknowledged the necessity of additional and more thorough discussion on the issue - thus, the focus of this Article. Accordingly, this Article examines the propriety and constitutionality of subjecting religious organizations to a nondiscrimination requirement and crafting a more narrow church exception to that requirement. It proposes statutory and regulatory amendments to prevent certain church-affiliated organizations from avoiding the nondiscrimination requirement.

Goodbye, Class of 2008

The University of Cincinnati College of Law sent off the Class of 2008 into the world today at our graduation ceremony.  They are our 175th graduating class, making us the fourth-oldest conitnuously operating law school in the country.

It is always a reflective day for the faculty, as we watch with pride as each of the graduates march confidently across the stage to collect his or her diploma from the dean.  It is hard to believe that almost three years have passed since I welcomed 1/3 of them to law school in my week-long Introduction to Law course.  Highlights of the ceremony were:

• The address by William R. (Billy) Martin, head of Sutherland's White Colar Criminal Defense Practice and University of Cincinnati College of Law Class of 1976.  Billy regaled us with lessons he has learned from his many high profile cases, including his representation of Larry Craig, Allen Iverson, Monica Lewinsky's mother, Michael Vick, and Jayson Williams.  (For more on his career, see profiles in the Cleveland Examiner, Law Crossing, Wall Street Journal and Wikipedia.)
• The Class of 2008's selection of Max Huffman as the receipient of the Nicolas Longworth, III Alumni Achievement Award.  I got to know Max as a student (Class of 1998) and as a colleague while he served as our Visiting Assistant Professor of Law during 2005-2007.  He will be starting this fall as tenure-track visiting professor at Indiana University-Indianapolis School of Law.  It is great to see a former student (especially one as talented as Max) enter the legal academy (with the added bonus that Indianapolis is only 110 miles from Cincinnati).
• The recognition of two institutional pillars at the College who are retiring this year:
  • Bill Rands, a tax professor here for 30 years.  Bill was a wonderful mentor when I began my teaching career at Cincinnati, and is a dear friend.
  • Barb Watts, our Associate Dean of Academic Affairs, who is retiring after 27 years.  Barb has an incredibly broad portfolio -- she serves as both our Associate Dean for Acadenic Affairs and our de facto Dean of Students, and handles both jobs with enormous skill and good cheer.

NTA Spring Symposium

The National Tax Symposium has concluded its two-day Annual Spring Symposium and State-Local Tax Program in Washington, D.C.  Tax Prof speakers included:

• James R. Hines Jr. (Michigan), Reconsidering the Taxation of Foreign Income
• Daniel Shaviro (NYU), The Optimal Relationship Between Taxable Income and Financial Accounting Income: Analysis and a Proposal (blogged here)

For a list of all of the speakers and their topics, see the program.

Blogging as a Feminist Legal Method

From a University of Pennsylvania Law School press release:

Alison I. Stein, a student at the University of Pennsylvania Law School, ... will present her paper – Women Lawyers Blog for Workplace Equality: Blogging as a Feminist Legal Method – at the Joint Annual Meetings of Law and Society Association and Canadian Law and Society Association, May 30 in Montreal. ...

"From cattle ranchers to diamond merchants to third-wave feminists … groups of people opt out of the legal system – and instead use personalized and informal methods of rights assertion – as a means of ‘overcoming the ineffectiveness’ of state-sponsored laws,” writes Stein. ... 

[W]hile nearly one half of all law school graduates since 1992 have been women, only about 15% of law firm partners are female and women comprise only 25% of tenured law school professors, the career goal that Stein has set for herself. ...  Female lawyers turn to blogging because the law’s ability to vindicate their rights is limited, their grievances are born out of institutional biases or mindsets, and because the anonymity of blogging lets them give voice to their complaints without risking their reputations.

(Hat Tip:  Above the Law.)  The abstract of the paper is below the fold:

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The Great Tax Cut Delusion and the Decline of Good Government in America

Bryan D. Jones (University of Washington, Center for American Politics and Public Policy) & Walter Williams (University of Washington, Center for American Politics and Public Policy) have published The Politics of Bad Ideas: The Great Tax Cut Delusion and the Decline of Good Government in America (Longman, 2008).  From the publisher's description:

According to political scientist Bryan D. Jones and policy analyst Walter Williams, tax cuts are bad for the American people. In their new book, ... they draw on in-depth research and insightful analysis to argue that tax cuts without spending limits have harmed the government’s long-term fiscal stability, and explain why, despite evidence to the contrary, people keep believing that reducing taxes will create economic growth.

Jones and Williams zero in on two tax-cut theories: supply-side economics – which postulates that tax cuts stimulate the economy by putting more money in people’s pockets, which they in turn spend on goods and services; and starve-the-beast policies – which claim that government programs will shrink if there is less revenue from taxes to spend.

Walking readers through the numbers and factual evidence – from the post-World War II golden years through George W. Bush’s presidency – they argue that tax cuts don’t “pay for themselves” or cause “government to get smaller”, as proponents have claimed. Instead, they prove that tax cuts have consistently resulted in bigger government and increased deficits. “As government has grown, taxes have been cut, and revenue has declined,” say the authors. “The result has been massive borrowing and a basic deterioration in the fiscal balance sheet.”

The authors note that despite overwhelming evidence to the contrary, politicians and the American public continue to put faith in the power of tax cuts to stimulate economic growth. Jones and Williams believe that the usual suspects – including self-centered voters, partisan advantage, interest groups and lobbyists, and right-wing activists – are partly responsible, but they argue that institutional failure is the root cause. “These bad ideas were once kept in check by a firm commitment to factual analysis and the construction of an institutional framework that made it costly to ignore the evidence,” they say. “Today, all this has collapsed.”

Pressure Builds on Cindy McCain to Release Her Tax Returns

Last week, I blogged Cindy McCain's refusal to release her separate tax returns, even if her husband is elected President.  Media and blogosphere pressure is building on Mrs. McCain to release her returns:

• Huffington Post
• L.A. Times
• New York Observer
• Reuters
• Washington Post
• Washington Times #1
• Washington Times #2
• DNC Press Release

Ayers Applauds Chicago's Ban on Laptops in the Classroom

I previously blogged Dean Saul Levmore's decision to pull Internet access out of the University of Chicago's law school classrooms (as well as Doonesbury's great take on the issue).  Ian Ayres (Yale), who launched the anti-laptops in the classroom movement in 2001 with his New York Times op-ed, applauds Chicago's laptop ban on Freakonomics:

In praising Levmore, I should be clear that there is no good a priori argument against multitasking. The case is at best an empirically-informed hunch about what is the best way to teach. I see some power to a parentalism argument that teachers should ban surfing because it impedes students’ ability to learn.

Law students are adults who generally can decide for themselves what is in their best interest — but I still don’t think it would be a good idea to have beer or magazines available in class. As someone who has played way too much Minesweeper in my day, I think some activities are just a bit too tempting.

Still, I’m worried that my own weakness is leading me to take away the rights of others. My sainted father brought me up short when, after reading my original oped, he said, “I thought you were a liberal?”

The “negative externalities” of surfing provide a stronger basis for switching the default:

The laptop screen is a billboard that is very visible to other students sitting behind the gamer. Surfing and game playing in particular can be very distracting — both visually and in the signal they send to others that you don’t care about class. Multitasking also makes students less present as participants in class discussion. Surfing doesn’t stop students from taking notes, but it degrades the quality of their attention. ...

In recent years, I’ve tried to balance student liberty with my negative externality concern by allowing surfing, but only in the back row of class. In the back row, at least, it isn’t a visual distraction. And I view these back-benchers as virtually a step away from non-attendance.

But what’s still missing is basic information on how much surfing is going on. (Levmore claims, “Every teacher underestimates the amount of Internet surfing going on,” in his or her classroom.) The content of the laptop screen is visible to the class, but remains a mystery to the professoriate. I still hear colleagues tell me that surfing is not a problem in their class because they walk around the room.

In a world where alt -tab quickly shifts between windows, it is a fantasy to think that walking around is a sufficient deterrent. ...

But even here, students push back that the implicit contract was also that professors would not teach badly. Some students see surfing as a medication to reduce the annoyance of poor pedagogy. Indeed, some clever students have even argued that surfing has a positive externality — Ayres and Levitt and Wolfers will have better incentives to teach well if they have to compete for students’ attention.

(Hat Tip: Brian Leiter.)

Brunner & Pech: Optimum Taxation of Inheritances

Johann K. Brunner & Susanne Pech (both of University of Linz, Department of Economics) have posted Optimum Taxation of Inheritances on SSRN.  Here is the abstract:

We incorporate the fact that inheritances create a second distinguishing characteristic of individuals, in addition to earning abilities, into an optimum income taxation model with bequests motivated by joy of giving. We show that a tax on inheritances and a uniform tax on all expenditures including bequests are equivalent and that either is desirable, according to an intertemporal social objective, if on average high-able individuals have larger inherited endowments than low-able. We demonstrate that such a situation results as the outcome of a process with stochastic transition of abilities over generations, if all descendants are more probable to have their parent's ability rank than any other.

Tax Court Refuses to Reconsider § 6015(f) Ruling in Ewing

A fractured Tax Court yesterday refused to reconsider its holding in Ewing v. Commissioner, 122 T.C. 32 (2004), holding that the determination of whether a taxpayer is entitled to innocent spouse relief under § 6015(f) is made in a trial de novo that may include evidence introduced at trial that was not included in the administrative record.  Porter v. Commissioner, 130 T.C. No. 10 (5/15/08).

• The majority opinion was written by Judge Haines and joined by Judges Colvin, Cohen, Swift, Wells, Foley, Vasquez, Gale, Thornton, Marvel, Goeke, and Wherry
• Judge Vasquez concurred in an opinion joined by Judges Swift and Wells
• Judge Thornton concurred in an opinion joined by Judges Colvin, Swift, Wells, Gale, and Marvel
• Judge Goeke concurred in an opinion joined by Judges Colvin, Swift, Foley, Marvel, Wherry, and Kroupa
• Judge Wherry concurred in an opinion joined by Judges Colvin, Swift, Foley, Gale, Marvel, Goeke, and Kroupa
• Judges Halpern and Holmes dissented

For those of you scoring at home, the number of opinions joined by the Judges were:

1. Cohen, Haines, Halpern, Holmes, Thornton
2. Vasquez, Wherry
3. Foley, Gale, Wells
4. Colvin, Goeke, Marvel
5. Swift