Paul L. Caron

Saturday, April 18, 2009

Jones: Taxation of Profit Interests

Darryll K. Jones (Stetson) hsa published The Taxation of Profit Interests and the Reverse Mancur Olson Phenomenon, 36 Cap. U. L. Rev. 853 (2008).  Here is the Epilogue:

As of the end of summer, 2007, it became very apparent that efforts to reform the taxation of profit interests had died quietly, proving the triumph of politics over policy.72 The reality need not be entirely disheartening. It is only our naïveté that makes us believe that tax law, unlike every other area of law, is or ought to be entirely immune from politics. Discarding naïveté does not also require that we abandon the search for “fundamental truths” in tax law, if indeed there be any. The prolonged discussion of the taxation of profit interests, for example, has been useful in the short term for the identification of the polar opposites along a spectrum of fairness. That one opposite prevailed over the other as result of rent-seeking and rent extraction does not render that outcome useless. Politics, after all, are ephemeral and fleeting; when political motivations subside or, more likely shift, underlying fundamentals will ultimately prevail if those fundamentals have been sufficiently defined.

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