Paul L. Caron

Thursday, February 28, 2019

Batchelder Delivers Pugh Lecture Today At San Diego On Optimal Tax Theory And Distributive Justice

BatchelderLily Batchelder (NYU) delivers the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego today on Optimal Tax Theory and Distributive Justice:

The literature on taxation and transfers includes two prominent egalitarian and consequentialist theories of distributive justice: Dworkin’s theory of resource egalitarianism, and welfare egalitarianism as elaborated through optimal tax theory. Advocates of each approach deny any substantial similarity with the other. This essay challenges that claim. It explores the ways in which the two theories overlap and diverge, and concludes that the gap between them is narrower than most appreciate. While the concerns motivating the two theories are fundamentally different, the ideal policy design principles implied by each largely mimic the other.

The failure of most of the existing literature to identify this similarity has two sources. First, objections to welfare egalitarianism and optimal tax theory are often predicated on an incomplete portrayal of what these theories actually say. Once read broadly and deeply, it becomes clear that they have compelling responses to many of the criticisms of resource egalitarians and other non-welfarists—including objections that they would reward so-called utility monsters, ignore non-market-based contributions to society, require those with high earning potential to work nonstop, and treat those who cannot act in their self-interest unfairly.

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February 28, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Williamson Presents A Field Experiment Assessing Voter Registration At Tax Time Today At Indiana

WilliamsVanessa Williamson (Brookings Institution) presents Filer Voter: A Field Experiment Assessing Voter Registration at Tax Time at Indiana today as part of its Tax Policy Colloquium Series hosted by David Gamage:

The Filer Voter experiment assessed the effectiveness of conducting voter registration drives at sites providing free income tax preparation assistance to low- and moderate-income households in Cleveland, OH, and Dallas, TX. We find that the program doubled the likelihood of unregistered tax filers registering to vote, and that new registrants voted in the following election at slightly higher rates than the state average. Moreover, the program did not measurably slow the tax preparation process. If the experience of the Filer Voter pilot program in Dallas and Cleveland were replicated at VITA programs nationwide, we would expect about 115,000 unregistered eligible voters to register to vote, including 63,000 people who would not otherwise register. These results indicate that the Filer Voter model has substantial potential to increase civic engagement at low cost to voters, tax preparers, and government institutions.

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February 28, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Galle Presents The Tax Exemption For Charitable Property: An Empirical Assessment Today At Duke

Galle (2016)Brian Galle (Georgetown) presents The Tax Exemption for Charitable Property: An Empirical Assessment at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

I offer the first multi-jurisdictional assessment of the balance-sheet effects of the property-tax exemption for charitable property. I combine a manually-assembled dataset of property tax rates in over 4,000 municipalities with three large samples of firm-level administrative data, as well as hand-coded variations in the legal details of different states’ exemption regimes, to assemble a panel of more than 1 million firm-years.

As expected, exemption causes charities to utilize more real property as tax rates rise. I offer new theoretical contributions showing that this effect, previously described as an unwanted distortion, may be second-best efficient in the presence of an income tax with accelerated depreciation, and confirm empirically the predictions of this new theory.

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February 28, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Raskolnikov Presents Selective Incentives Today At Northwestern

Raskolnikov (2018)Alex Raskolnikov (Columbia) presents Selective Incentives (with Giuseppe Dari-Mattiacci (NYU) at Northwestern today as part of its Law and Economics Colloquium Series:

Many public and private regulators do not rely on mandates and cannot tailor their regulatory instruments to the characteristics of individual agents. Rather, they use selective incentives–a mix of carrots and sticks intended to induce some agents both to participate in the regulatory scheme and to comply with the regulator’s conditions for participation. We show that when the participation and the compliance decisions are considered jointly, we must revise long-held beliefs about the effects of rewards and punishments, the benefits of monitoring, and the interaction between the design of substantive rules and their enforcement.

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February 28, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

@SoCalTaxProf: 5,000 Twitter Followers And Counting


I recently crossed the 5,000 Twitter follower mark. I am not sure what, if anything, to make of it. I just hope that my social media work (blog, Twitter, Facebook, Instagram) has been helpful to at least some tax and legal education folks.

February 28, 2019 in About This Blog, Legal Education, Tax | Permalink | Comments (2)

Harvard Law Faculty Use Blogs To Expand Their Influence: 'The Audience And Impact Per Word Are Large Compared To Traditional Academic Work'

Harvard Law BulletinLaw’s Influencers: HLS Faculty Blogs on Law-Related Topics Are Reaching Key Audiences, Harvard Law Bulletin (Winter 2019):

Jack Goldsmith didn’t plan on building a behemoth. When the Harvard Law professor teamed up with University of Texas at Austin law professor Robert Chesney ’97 and Brookings Institution writer Benjamin Wittes to start the Lawfare blog in 2010, it was launched, he says, with “very modest ambitions and no planning.”

The trio wanted to use the platform as a way to elevate public conversations about national security. From the start, they tackled issues from cybersecurity to the state secrets privilege. It turned out that there was an audience hungry for the blog, which filled the space between slow-moving, rigorously vetted journal articles and one-off op-eds in general interest publications such as The New York Times.

Almost immediately, Lawfare took on a life of its own. “Our readership steadily grew,” Goldsmith says. “It came to include lots of people from government, including Congress, courts and the press.” ...

The Lawfare blog is a bright star, and it is also part of a larger constellation of faculty-linked blogs aimed at making an impact in their fields.

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February 28, 2019 in Legal Education | Permalink | Comments (2)

Student Pleads Guilty To Hacking Into College's Computer System To Raise His Grades To Retain Conditional Scholarship

DOJ Logo (2016)Department of Justice, Student Pleads Guilty to Computer Fraud, Trying to Preserve Scholarship:

Michael Geddati, 20, of Memphis has pleaded guilty to computer fraud. U.S. Attorney D. Michael Dunavant announced the plea today.

According to the information presented in court, during the 2017-18 academic year, Michael Geddati was a freshman pre-med major at Rhodes College in Memphis. He received a scholarship valued at approximately $30,000 per semester. Continued receipt of the scholarship depended, in large part, on maintaining a particular grade-point average.

Beginning in approximately December 2017 and continuing through the spring semester, Geddati obtained credentials and passwords for instructors whose courses he was taking and then unlawfully accessed those instructors' accounts to downloaded exams and exam keys and change his official recorded grades.

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February 28, 2019 in Legal Education | Permalink | Comments (1)

Wednesday, February 27, 2019

Viswanathan Presents Hyperlocal Responses To The SALT Deduction Limitation Today At UCLA

Viswanathan (2017)Manoj Viswanathan (UC-Hastings) presents Hyperlocal Responses to the SALT Deduction Limitation, 71 Stan. L. Rev. Online ___ (2019) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh:

The Tax Cuts and Jobs Act, enacted in December 2017, places a $10,000 limit on the federal deduction for payments of state and local taxes (“SALT”). Several states with high numbers of adversely affected taxpayers have proposed or enacted legislative workarounds to this new cap. Much has been said about these state-level responses, but there has been little analysis of local-level effects or of how local governments could similarly respond. This essay addresses that gap by (1) statistically modeling the number of taxpayers affected by the SALT deduction limitation at a ZIP-code-by-ZIP-code (rather than state-by-state) level, and (2) proposing locality-based strategies relevant to taxpayers throughout the U.S., and not just those living in highly affected states.

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February 27, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Freedman Presents Rethinking Legal Taxonomies For The Gig Economy Today At Toronto

Freedman (2019)Judith Freedman (Oxford) presents Rethinking Legal Taxonomies for the Gig Economy: Tax Law, Employment Law, and Economic Incentives, 34 Oxford Rev. Econ. Pol'y 475 (2018) (with Abi Adams (Oxford) & Jeremias Prassl (Oxford)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Recent labour market changes, from an increase in the number of individuals running their own business to the fragmentation of traditional employment relationships into short-term, intermittent work for multiple engagers (“gigs”) have brought a host of challenges for regulators. The law struggles not least because long-established taxonomies used in tax and employment law are coming under increasing pressure. Legal regulation in these areas divides the labour market into a number of predetermined categories, to which benefits and obligations (rights and duties) are then attached. The tests determining into which category an individual falls are unclear and too easily manipulated. In particular, there is a real lack of clarity as to how categories in employment and tax law should map onto each other.

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February 27, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Leff: A Universal Basic Income Through The EITC

Benjamin M. Leff (American), EITC For All: A Universal Basic Income Compromise Proposal, 25 Wash. & Lee. J. C.R. & Soc. Just. ___ (2019):

Universal Basic Income ("UBI") is a concept that has recently begun to enter the popular political consciousness in the United States. It is defined as "a regular cash income paid to all, on an individual basis, without means test or work requirement." It is invoked for a wide variety of political and social purposes, but is almost always presented as radically different from existing governmental welfare and transfer systems. Once a UBI is disaggregated into discrete policy components, it is possible to imagine to what degree existing programs share the benefits (and detriments) of a UBI to a greater or lesser degree, and reforms could be made to make existing programs more "UBI-like," if that would be beneficial.

This Article re-envisions a UBI as a series of reforms to one of the largest existing governmental transfer program in the US: the Earned Income Tax Credit (EITC).

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February 27, 2019 in Scholarship, Tax | Permalink | Comments (1)

The Future Of Western State Is In Doubt As Law School Is Placed In Receivership And Students Cannot Access Federal Financial Aid

Western State LogoOrange County Register, Lack of Financial Aid Leaves Students at Western State College of Law and Argosy University Campuses Scrambling:

There are students at Western State College of Law in Irvine who have not received their federal financial aid for weeks, leaving them unable to pay their living expenses, several said.

“With each day it passes, you lose hope,” Sydney McGregor, a third-year student, said on Monday, Feb. 18. Her tuition has been paid, she said, but she has yet to receive this semester’s $16,400 loan for her living expenses. The semester started Jan. 14.

Financial aid has been delayed as options are sought for keeping the college and other campuses operated by Dream Center Education Holdings running, as well as dealing with millions of dollars of debt.

And it has become less likely the aid will arrive anytime soon. ...

Dream Center’s campuses, which also include the Argosy University system with locations in Santa Ana and Los Angeles, and the Art Institute campus in Hollywood, were placed under federal receivership in January. ...

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February 27, 2019 in Legal Education | Permalink | Comments (0)

Thomas: The EITC In The Age Of TurboTax

Jotwell (Tax) (2016)Kathleen DeLaney Thomas (North Carolina), Increasing EITC Take-Up in the Age of TurboTax, (JOTWELL) (reviewing Jacob Goldin (Stanford), Tax Benefit Complexity and Take-Up: Lessons From the Earned Income-Tax Credit (reviewed by Ari Glogower (Ohio State) here)):

One dilemma for policymakers is how to get people to take advantage of social welfare programs. In the case of the Earned Income Tax Credit (“EITC”), the goal is to encourage eligible individuals to claim the credit on their tax return. Take-up rates for the EITC are quite good (about 80% overall), but ideally would be higher. Typically the approach to increasing EITC take-up is information campaigns, like EITC awareness day. The conventional wisdom has been that the more people know about the EITC, the more likely eligible recipients are to claim it. But is it right that advance notice is important? If people use tax software that will automatically calculate the EITC for them, how important is it that they are made aware of the benefit ahead of time? Perhaps not very, as suggested by Jacob Goldin in his forthcoming article, Tax Benefit Complexity and Take-up: Lessons from the Earned Income Tax Credit.

The key insight from Goldin’s article is that in the modern age, virtually anyone who files a tax return is presented with the opportunity to claim the EITC. This is because the vast majority of taxpayers—96 percent in 2015 according to Goldin—use assisted preparation methods (“APMs”) such as self-preparation software or a tax return preparer. Using either of those methods, it is extremely unlikely to fail to claim the credit accidentally. (Though, as Goldin notes, some taxpayers may consciously choose not to claim the credit even though they are eligible.) The paper’s main conclusion is logical yet important: people who are eligible for the EITC but who fail to claim it are generally people who fail to file returns at all. Thus, if policymakers want to increase EITC take-up, they must increase the filing rate.

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February 27, 2019 in Scholarship, Tax | Permalink | Comments (0)

The Emotional Toll Of Graduate School

Scientific American (2018)Scientific American, The Emotional Toll of Graduate School:

A recent Harvard study concluded that graduate students are over three times more likely than the average American to experience mental health disorders and depression [Paul Barreira, Matthew Basilico & Valentin Bolotnyy (Harvard), Graduate Student Mental Health:
Lessons from American Economics Departments]. The study, which surveyed over 500 economics students from eight elite universities, also concluded that one in 10 students experienced suicidal thoughts over a two-week period, a result consistent with other recent reports. While these findings are alarming to some, as a current graduate student myself, I regard them as hardly surprising. But to understand the struggles graduate students face, you have to understand the structure of graduate school itself.

Most people probably lump doctoral students into the same category as undergrads or students in professional schools such as law or medicine. The reality is their lifestyle and the nature of their work are fundamentally different. In the STEM fields where I have personal experience, as well as many other fields, graduate students are really hardly students at all. For most of their programs, which last over six years on average, they aren’t preparing for written exams, taking courses or doing any of the tasks usually associated with student life. Instead they are dedicating often over 60 hours a week towards performing cutting edge research and writing journal articles that will be used to garner millions of dollars in university research funding.

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February 27, 2019 in Legal Education | Permalink | Comments (4)

Tax Competition And The Ethics Of Burden Sharing

Ivan Ozai (McGill), Tax Competition and the Ethics of Burden Sharing, 42 Fordham Int'l L.J. 61 (2018):

Tax scholars have long suggested that tax competition should be mitigated because it reduces the collective revenues of countries, impairs their ability to redistribute wealth, and produces more regressive tax systems. Likewise, international organizations such as the OECD and the European Union increasingly move towards designing a global framework aimed at reducing tax avoidance and mitigating tax competition.

However, there is no comprehensive discussion on the costs that would arise from institutional reform designed to tackle tax competition. To the extent that any change in the international tax order will benefit some countries but also harm others, an ethical analysis of tax competition should include an examination of how to distribute the losses resulting from overall institutional reform. As international policy decisions tend to reproduce the present imbalance of the global power, the lack of an explicit discussion on how to share the costs arising from an institutional change might result in countries with less negotiating power bearing most of these costs.

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February 27, 2019 in Scholarship, Tax | Permalink | Comments (1)

WiFi Down For Five Days: 'Hell Is Real And It's Amherst College'

Amherst Logo (2019)Inside Higher Ed, No Email, No Wi-Fi, No Learning Management System:

Amherst College experienced a catastrophic technical mishap last week that left the campus without access to online services — for five days.

As IT staff scrambled to fix the problem, faculty and students suddenly found themselves without access to Wi-Fi, email, Moodle, accounting systems, card-scanning systems or any content hosted on the website.

That a scenario totally inconceivable on most modern campuses occurred at the wealthy private, liberal arts college in Amherst, Mass., was doubly surprising.

"How could this happen?" became a common refrain on campus. How could an elite college with a $2.2 billion endowment and that charges more than $50,000 in tuition a year fail to provide basic services, such as internet access?

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February 27, 2019 in Legal Education | Permalink | Comments (11)

Tuesday, February 26, 2019

Jones Presents The Labor Market Impacts Of Universal And Permanent Cash Transfers: Evidence From The Alaska Permanent Fund Today At Georgetown

JonesDamon Jones (Chicago) presents The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund (with Ioana Marinescu (Pennsylvania)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

What are the effects of universal and permanent cash transfers on the labor market? Since 1982, all Alaskan residents have been entitled to a yearly cash dividend from the Alaska Permanent Fund. Using data from the Current Population Survey and a synthetic control method, we show that the dividend had no effect on employment, and increased part-time work by 1.8 percentage points (17 percent). Although theory and prior empirical research suggests that individual cash transfers decrease household labor supply, we interpret our results as evidence that general equilibrium effects of widespread and permanent transfers tend to offset this effect, at least on the extensive margin.

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February 26, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

De Mooij Presents International Corporate Tax Avoidance: A Review Today At NYU

MoojRuud de Mooij (International Monetary Fund) presents International Corporate Tax Avoidance: A Review of the Channels, Magnitudes, and Blind Spots, 33 J. Econ Surveys ___ (2019), at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on the main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral, and corporate inversions. Moreover, it performs a meta-analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1%—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time.

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February 26, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

NY Times: A Modest 6-Part Proposal To Tax The Rich

New York Times:  Tax the Rich? Here’s a Modest Proposal, by Andrew Ross Sorkin:

Everyone, it seems, has ideas about new tax strategies, some more realistic than others. The list of tax revolutionaries is long. The short list includes Representative Alexandria Ocasio-Cortez, who wants a top tax rate of 70 percent on incomes above $10 million a year; Senator Elizabeth Warren, who wants a wealth tax; Senator Bernie Sanders, who wants an estate tax with a 77 percent rate for billionaires; and even Senator Marco Rubio, who recently proposed a tax on stock buybacks.

Whatever your politics, there is a bipartisan acknowledgment that the tax system is broken. Whether you believe the system should be fixed to generate more revenue or employed as a tool to limit inequality — and let’s be honest for a moment, those ideas are not always consistent — there is a justifiable sense the public doesn’t trust the tax system to be fair. ...

If you pay taxes, it’s hard not to feel like a patsy. ...

Over the past month, I’ve consulted with tax accountants, lawyers, executives, political leaders and yes, billionaires, and specific ideas have come up about plugging the gaps in the tax code, without blowing it apart.

None of these are as headline-grabbing as Ms. Ocasio-Cortez’s Green New Deal, nor will they evoke the emotional response of a sound bite about Ms. Warren’s wealth tax. But it could be that evolution has a better chance than revolution.

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February 26, 2019 in Tax | Permalink | Comments (1)

Should You Allow Laptops In Class? Here’s What The Latest Study Adds To That Debate

LaptopChronicle of Higher Education, Should You Allow Laptops in Class? Here’s What the Latest Study Adds to That Debate:

Point: Laptops are a menace, undermining how students take notes in class and distracting not only those using them but also their neighbors.

Counterpoint: Laptops are a lifeline, allowing students with disabilities to participate fully in class.

Plenty of professors have strong opinions about whether laptops belong in the classroom. They also pride themselves on holding opinions based on research. So a new paper investigating the difference between taking notes longhand or on a laptop was bound to attract attention. But that doesn’t mean it offers a definitive answer.

The paper, How Much Mightier Is the Pen Than the Keyboard for Note-Taking? A Replication and Extension of Mueller and Oppenheimer (2014), was published this week in Educational Psychology Review. As the title suggests, the authors tried to replicate a well known study that found that students who took notes by hand fared better on conceptual test questions than did those who typed notes on a laptop [The Pen Is Mightier Than the Keyboard: Advantages of Longhand Over Laptop Note-Taking]. Students who took notes on a laptop wrote more, and were more likely to write what a lecturer said verbatim, according to the original study. Perhaps, the authors of that study wrote, students taking notes on laptops did so “indiscriminately or by mindlessly transcribing content,” did not form a deep understanding of the material, and therefore did worse on the items that demanded such understanding.

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February 26, 2019 in Legal Education, Teaching | Permalink | Comments (4)

Pepperdine Seeks To Hire A Distinguished Practitioner In Residence In Real Estate Law

Pepperdine (2019)Geoffrey H. Palmer Endowed Distinguished Practitioner in Residence:

University School of Law is seeking candidates for the Geoffrey H. Palmer endowed distinguished practitioner in residence in real estate law, with teaching responsibilities in real estate finance, real estate transactions, and property law. The successful candidate is expected to contribute to the leadership of the Geoffrey H. Palmer Center for Entrepreneurship and the Law. Ideal candidates will have extensive experience in the practice of real estate law, especially in the California real estate market. Applicants with relevant publications in academic or practice journals are particularly encouraged to apply.

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February 26, 2019 in Legal Education | Permalink | Comments (0)

A Hilarious (In The Footnotes) Yet Serious (In The Text) Discussion Of Law Reviews And Law Professors

Joe Lawprofblawg (Anonymous Professor, Top 100 Law School) & Darren Bush (Houston), The Most Important Law Review Article You'll Never Read: A Hilarious (in the Footnotes) yet Serious (in the Text) Discussion of Law Reviews and Law Professors:

No! Stop! Go back! Reading the abstract is like taking the red pill in the Matrix.

In this article we discuss “the game.” “The game” is the quest for measuring scholarship success using metrics such as law review ranking, citation counts, downloads, and other indicia of scholarship “quality.” We argue that this game is rigged, inherently biased against authors from lower ranked schools, women, minorities, and faculty who teach legal writing, clinical, and library courses. As such, playing “the game” in a Sisyphean effort to achieve external validation is a losing one for all but a few. Instead, we argue that faculty members should reject this entrenched and virulent hierarchy, and focus on the primary purposes of writing, which are to foster innovation in a fashion that is both pleasing to the author and that improves society. We discuss this rigged game, and seek to reframe our academic life to focus on enhancing innovation and discourse. We would start by skipping abstract writing.

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February 26, 2019 in Legal Education, Scholarship | Permalink | Comments (2)

Simkovic: After Paying Elizabeth Warren's Ultra-High Net Worth Wealth Tax, How Much Would Billionaires Have Left To Live On?

Michael Simkovic (USC), After Paying Ultra-High Net Worth Wealth Taxes, How Much Would Billionaires Have Left to Live On?:

How much can someone investing passively, but with a high-risk tolerance, earn on their capital?

If history since the end of World War 2 is any guide, between 11 and 14 percent per year before taxes and inflation. After inflation, this comes to around 7 to 10 percent. With good tax planning, the rate of return net of income taxes, inflation, and fees could average around 6.5 to 9.5 percent per year.

A family with $100,000,000 ($100 million) in wealth would pay an additional $1 million in taxes per year under Senator Elizabeth Warren’s ultra-high-networth tax proposal. That would reduce their after-tax disposable income to $5.5 million to $8.5 million per year.

To put this into context, according to the Survey of Consumer Expenditures, households in the top 10 percent of income earned an average of $189,000 after taxes and spent on average $143,000 in 2017. Even after paying Warren’s wealth tax, a household with $100 million in assets could spend 38 to 59 times as much as a relatively high-income household.

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February 26, 2019 in Scholarship, Tax | Permalink | Comments (3)

Judge Sides With ABA in Public Service Loan Fight—Mostly

ABA Logo (2016)Following up on my previous post, NY Times: ABA Sues Government For Retroactively Disqualifying Lawyers From Participation In Public Service Loan Forgiveness Program:, Judge Sides With ABA in Public Service Loan Fight—Mostly:

Some federal loan borrowers who were denied access to the Public Service Loan Forgiveness program could get a second chance to see their educational debt erased thanks to a closely watched lawsuit brought by the American Bar Association and several of its employees.

In a case expected to have wider implications than for just ABA employees, a federal judge Feb. 22 largely sided with the plaintiffs, who worked at—or hoped to work in—the ABA’s pro bono programs or other public interest organizations. Those plaintiffs had been informed by the U.S. Department of Education that they were not eligible for Public Service Loan Forgiveness because the ABA or their other organizations were not qualified employers. Several of the plaintiffs were initially told by their loan servicers that they qualified under the program, only to later be denied.

Judge Timothy Kelly of the U.S. District Court for the District of Columbia ruled that the Education Department had changed its eligibility requirements and interpretations midstream, without notice and that it must reconsider the applications of three of the four plaintiffs who were denied access to Public Service Loan Forgiveness.

“These changes were arbitrary and capricious because, in adopting the new standards, the Department failed to display awareness of its changed position, provide a reasoned analysis for that decision, and take into account the serious reliance interests affected,” Kelly wrote. ...

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February 26, 2019 in Legal Education | Permalink | Comments (0)

Monday, February 25, 2019

Zelenak Presents Cordell Hull’s Legacy And Changes To The Federal Income Tax Over Time Today At Cumberland

Zelenak BookLawrence Zelenak (Duke) presents Figuring Out the Tax: Cordell Hull’s Legacy and Changes to the Federal Income Tax Over Time at Cumberland today at its 2019 Cordell Hull Speaker's Forum:

While many of you may be aware that Cumberland School of Law alumnus, Cordell Hull, is known as the Father of the United Nations, you may not know that he was also the “Father of the Federal Income Tax.” Attendees seeking one hour of CLE credit will enjoy access to the first chapter of Zelenak’s recently released book, Figuring Out the Tax: Congress, Treasury, and the Design of the Early Modern Income Tax (Cambridge University Press 2018) [reviewed by Charlotte Crane (Northwestern) here].

The publisher's description of Figuring Out the Tax:

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February 25, 2019 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Second Mode Inclusion Claims In The Law Schools

Kenneth W. Mack (Harvard), Second Mode Inclusion Claims in the Law Schools, 87 Fordham L. Rev. (2018):

This paper assesses the recent proliferation of diversity and inclusion claims in law schools across the United States, often articulated by racial and ethnic minority students. On campus, and in the larger culture, the minority students’ claims are often seen as new, radical, and difficult to accurately describe and adequately remedy. At times, the protesters have described classroom and campus environments where language, symbols, and other forms of diffuse power operate to the systematic disadvantage of racial minorities, and these students have also asserted the desire to redistribute power and authority within the university.

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February 25, 2019 in Legal Education, Scholarship | Permalink | Comments (0)

Why The California Bar Is Asking Lawyers About Sexual Orientation

California, Why the California Bar Is Asking Lawyers About Sexual Orientation:

California’s state bar has added some probing new questions to a survey of its licensees in an attempt to fulfill its mission of supporting “greater access to, and inclusion in, the legal system.”

The voluntary survey, presented to attorneys when they log on to the bar’s website, asks members expanded questions about their gender and sexual orientations, including whether they identify as “two spirit,” a distinct gender status in Native American communities, and whether they are pansexual, asexual or another binary sexual identity.

The bar is also asking new questions about lawyers’ job satisfaction, including what might make them happier in their careers. The revamped survey first appeared last month.

Jonah Lamb, a bar spokesman, said the anonymized results will be used “to better understand the state of the legal profession in a time of rapid economic, technological and demographic change in California.”

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February 25, 2019 in Legal Education | Permalink | Comments (1)

NY Times: Don’t Fight The Robots. Tax Them.

New York Times:  Don’t Fight the Robots. Tax Them., by Eduardo Porter:

Many companies invest in automation because the tax code encourages it, not because robots are more productive.

When Bill Gates floated the idea of imposing a tax on robots a couple of years ago, Lawrence Summers, a former top economic adviser to President Barack Obama, called the Microsoft co-founder “profoundly misguided.” How do you even define a robot to tax it? And taxing innovation is a sure way to make a country poorer. Europe has also rejected the idea. In 2017 the European Parliament soundly defeated a draft motion, proposed by its committee on legal affairs, that recommended considering a tax on the owners of robots to fund retraining programs for workers displaced by the machines and shore up the finances of their social security system.

And yet properly constructed, a tax on automation may not be as destructive as it sounds. South Korea, the most robotized country in the world, instituted a robot tax of sorts in 2018 when it reduced the tax deduction on business investments in automation.

There are two sound arguments for taxing robots.

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February 25, 2019 in Tax | Permalink | Comments (4)

Lesson From The Tax Court: Drawing The Line

Tax Court (2017)Tax law often involves line drawing.  Doyle v. Commissioner, T.C. Memo. 2019-8 (Feb. 6, 2019) (Judge Holmes) teaches two line-drawing lessons, one about the §104(a)(2) exclusion for payments received on account of physical injury and the other about “above-the-line” vs. “below-the-line” deductions. 

Mr. Doyle was a whistle-blower who sued his former employer after it fired him.  The parties settled the case without trial.  The former employer agreed to pay Mr. Doyle a total of $350,000 for lost wages and another $250,000 for emotional distress.  The payments were each split evenly between 2010 and 2011.  For each year the employer sent Mr. Doyle a W-2 for $175,000 and a 1099-MISC for $125,000.  In addition, Mr. Doyle paid some amount in attorneys fees.

The issue litigated in Tax Court was about the $125,000 emotional distress payments in each year.  It appears Mr. Doyle’s tax return preparer, one Herbert Hunter, took what can only be described as a bizarre reporting position.  No.  Wait.  It can also be described more kindly as “weird.”  That’s how Judge Holmes puts it.  A Judge with a less generous disposition might use the word “fraudulent.”

You be the judge.  To deal with the $125,000 payments for emotional distress, Mr. Hunter created a fake Schedule C, with a “999999” NAICS code (“unclassified establishment”).  On the 2010 Schedule C he reported the $125,000 payment, and then zeroed it out by two offsetting deductions: one for $23,584 for “legal and professional services,” and one for $101,416 for “personal injury.”  Mr. Hunter prepared the 2011 in much the same way, only then the deduction for legal fees was $33,000.  ”Weird”?  “Bizarre”?  “Fraudulent”?  Take your pick.  

By the time Mr. Doyle got to Tax Court, he at least had an attorney who understood the difference between an exclusion and a deduction.  One issue was whether the emotional distress payments were excludable under §104(a)(2).  The resolution of that issue is one of the line-drawing lessons today. 

But there was a second issue in the case, one that teaches a second line-drawing lesson. Mr. Doyle’s attorney, one Steven G. Early, seems to have totally missed the second issue, involving the proper place to deduct attorneys fees.  Judge Holmes missed that as well.  Sadly, I must confess I also missed it.  But Professor Gregg Polsky caught it (and I thank him for bringing it to my attention).  So I will pass that lesson on to you.  Keep reading. 

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February 25, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (3)

USA Today Mistakenly Included Syracuse As One Of 18 Law Schools That Would Fail The ABA's Proposed 75% Bar Passage Within 2 Years Accreditation Standard

Syracuse (2018)Following up on my previous posts:

Syracuse University College of Law Mistakenly Included in USA Today List of Poor Bar Passage Performers:

A Jan. 24, 2019, USA Today article entitled Law schools where too many graduates fail the bar exam may face tougher sanctions, mistakenly included Syracuse University College of Law in a list of 18 schools that would not satisfy the ABA’s proposed new 75% bar passage standard if the standard were applied to their 2015 bar passage rates. In fact, not only did Syracuse’s bar passage rate of 82.6% for 2015 graduates clearly exceed the proposed standard, its bar pass rates for the classes of 2016 and 2017 are even stronger, surpassing 90%.

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February 25, 2019 in Legal Education | Permalink | Comments (0)

The Joy (And Pain) Of Senior Discounts

Over the weekend, I went to the same car wash I have gone to for 7 years and the charge was $2 less than normal. I checked the receipt, and it showed a $2 "senior discount." I felt a little bit like this woman:

February 25, 2019 | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, February 24, 2019

Wealthy, Successful, And Miserable: Why Harvard B-School 'Also Rans' Often End Up Happier Than Top Graduates

Harvard Business SchoolNew York Times, Wealthy, Successful, and Miserable:

The upper echelon is hoarding money and privilege to a degree not seen in decades. But that doesn’t make them happy at work.

My First charmed week as a student at Harvard Business School, late in the summer of 2001, felt like a halcyon time for capitalism. AOL Time Warner, Yahoo and Napster were benevolently connecting the world. Enron and WorldCom were bringing innovation to hidebound industries. President George W. Bush — an H.B.S. graduate himself — had promised to deliver progress and prosperity with businesslike efficiency.

The next few years would prove how little we (and Washington and much of corporate America) really understood about the economy and the world. But at the time, for the 895 first-years preparing ourselves for business moguldom, what really excited us was our good luck. A Harvard M.B.A. seemed like a winning lottery ticket, a gilded highway to world-changing influence, fantastic wealth and — if those self-satisfied portraits that lined the hallways were any indication — a lifetime of deeply meaningful work.

So it came as a bit of a shock, when I attended my 15th reunion last summer, to learn how many of my former classmates weren’t overjoyed by their professional lives — in fact, they were miserable. I heard about one fellow alum who had run a large hedge fund until being sued by investors (who also happened to be the fund manager’s relatives). Another person had risen to a senior role inside one of the nation’s most prestigious companies before being savagely pushed out by corporate politics. Another had learned in the maternity ward that her firm was being stolen by a conniving partner.

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February 24, 2019 in Tax | Permalink | Comments (1)

Don’t Abolish Billionaires

One Billion DollarsFollowing up on my previous posts:

New York Times op-ed:  Don’t Abolish Billionaires, by Will Wilkinson:

Billionaires are in notably bad odor with many people on the left. Socialists have long held that large stores of private wealth are tantamount to violence against those in need. But regular nonradical folks not on the left are fed up, too. Howard Schultz’s potential independent White House bid is simply infuriating, and it’s maddening to feel helplessly tangled in the gilded web of global intrigue emanating from the president, his plutocrat dictator pals and America’s retail overlord, the philandering Jeff Bezos.

Thanks at least in part to Bernie Sanders and the sizzling rise of Alexandria Ocasio-Cortez, this dry wick has met a spark. Enthusiasm for radical leveling is whistling out of the hard-left fringe and blossoming into a mainstream mood.

Ms. Ocasio-Cortez’s policy adviser, Dan Riffle, contends that “every billionaire is a policy failure” (that’s the tagline on his Twitter handle) because “the acquisition of that much wealth has bad consequences” and “a moral society needs guardrails against it.” He’d like to see the 2020 Democratic primary contenders answer a question: Can it be morally appropriate for anyone to be a billionaire”?

It’s a compelling litmus test. I’d also like to watch would-be Democratic nominees take it. However, I hope that they would stick up for the idea that it can be morally kosher to bank a billion and that the existence of virtuous three-comma fortunes is a sign not of failure but of supreme policy success.

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February 24, 2019 | Permalink | Comments (4)

Snow In Malibu

It has been quite a few months in Malibu. Following the fires in November, we have faced rains and mudslides on some of the canyon roads near campus.  On Thursday, there was snow in Malibu:

Marv 3

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February 24, 2019 in Legal Education, Tax | Permalink | Comments (2)

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. [575 Downloads]  Spiritus Ex Machina: Addressing the Unique BEPS Issues of Autonomous Artificial Intelligence by Using 'Personality' and 'Residence', by Lucas de Lima Carvalho (University of Sao Paulo)
  2. [445 Downloads]  Ten Reasons to Prefer Tax Partnerships Over S-Corporations, by Bradley Borden (Brooklyn)
  3. [337 Downloads]  The Impact of Soda Taxes: Pass-through, Tax Avoidance, and Nutritional Effects, by Stephen Seiler (Stanford), Anna Tuchman (Northwestern) & Song Yao (Minnesota)
  4. [324 Downloads]  The Proposed Section 163(j) Regulations, by David Miller, Sejin Park, Mani Kakkar & Sean Webb (Proskauer)
  5. [295 Downloads]  A Constitutional Wealth Tax, by Ari Glogower (Ohio State)

February 24, 2019 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 23, 2019

This Week's Ten Most Popular TaxProf Blog Posts

ABA Delays Decision On Tougher Bar Passage Accreditation Standard, Considers Regulating The Growing Number Of Non-J.D. Programs

ABA Logo (2016)ABA Journal, ABA Legal Ed Council Delays Decision on Stricter Bar-Passage Standards:

The ABA’s legal education council has delayed a decision on whether to implement a stricter bar-passage standard for accredited law schools, prolonging a years-long debate of the hot-button issue.

On Friday, during a meeting in Marina del Rey, California, the council of the Section of Legal Education and Admissions to the Bar announced it would defer acting on the proposed change and take up the issue again during its next meeting, scheduled for May 16-18 in Chicago. The proposed bar passage change, which has been under consideration for years, would require 75 percent of a school’s bar takers to pass within two years of graduation, rather than the five years allowed under the current Standard 316. ...

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February 23, 2019 in Legal Education | Permalink | Comments (1)

IRS Investigator Charged With Leaking Records Of Trump Lawyer Michael Cohen

IRS Logo 2New York Times, I.R.S. Employee Charged With Leaking Confidential Records of Trump Lawyer Michael Cohen:

Federal prosecutors in San Francisco on Thursday charged an employee of the Internal Revenue Service with illegally leaking banking records connected to Michael D. Cohen, President Trump’s former personal lawyer and fixer.

Prosecutors said that in his role working for the investigative unit of the I.R.S., John C. Fry, an employee of the agency since 2008, had access “to various law enforcement databases” and had used them to search for records related to Mr. Cohen multiple times. He then gave the information to Michael Avenatti, the lawyer for the adult film actress Stephanie Clifford, also known as Stormy Daniels, who has claimed to have had an affair with Mr. Trump, according to the prosecutors. ...

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February 23, 2019 in IRS News, Tax | Permalink | Comments (2)

St. Thomas Law School (Miami) Renamed For 11th Circuit Judge Peter Fay

St. Thomas (Miami) LogoDaily Business Review, St. Thomas Law School Renamed for US Court of Appeals Judge Peter Fay:

The St. Thomas University School of Law will be renamed to honor Senior U.S. Circuit Judge Peter Fay of the U.S. Court of Appeals for the Eleventh Circuit, the dean of the school, Tamara Lawson, announced Wednesday.

At a reception at Boies Schiller Flexner attorney Steve Zack’s Miami Beach home, Lawson announced the renaming of the Miami-based law school with Fay, his son Michael and wife Pat, in attendance. Miami Beach Mayor Dan Gelber and numerous legal and nonlegal luminaries were also present.

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February 23, 2019 in Legal Education | Permalink | Comments (0)

Friday, February 22, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Glogower's A Constitutional Wealth Tax

This week, Hayes Holderness (Richmond) reviews Ari Glogower (Ohio State), A Constitutional Wealth Tax:

Holderness (2017)As media coverage, politicians, commenters, and last week’s SSRN Roundup indicate, wealth taxation is hot right now. As various arguments emerge about the constitutionality of a wealth tax in the U.S., Ari Glogower presents a new view on the question in A Constitutional Wealth Tax. At the core of his argument, Glogower invokes substance-over-form reasoning: wealth is already constitutionally taxed indirectly through the income tax, so there should not be a problem taxing wealth directly.

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February 22, 2019 in Hayes Holderness, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (1)

Weekly Legal Education Roundup

Tax Policy In The Trump Administration

Value Creation As The Fundamental Principle Of The International Corporate Tax System

Michael P. Devereux (Oxford) & John Vella (Oxford), Value Creation As the Fundamental Principle of the International Corporate Tax System, Eur. Tax Pol’y F. Pol’y Paper (2018):

It is now widely taken as axiomatic that the existing international corporate tax system is based on the principle that corporate profits are taxed where value is created (the “value creation principle”). There also appears to be widespread agreement, at least amongst policymakers, that the system should be based on this principle. This policy paper disputes both these descriptive and normative claims.

February 22, 2019 in Scholarship, Tax | Permalink | Comments (0)

36 Law Schools Now Accept The GRE For Admissions (The Latest Are Dayton, South Carolina)

GREDayton and South Carolina are the latest law schools to accept the GRE (joining American, Arizona, Boston University, Brooklyn, Buffalo, BYU, Cardozo, Chicago, Chicago-Kent, Columbia, Cornell, Florida State, George Mason, Georgetown, Harvard, Hawaii, John Marshall (Chicago), Massachusetts, Northwestern, Notre Dame, NYU, Pace, Pennsylvania, Pepperdine, St. John's, Suffolk, Texas, Texas A&M, UC-Davis, UCLA, USC, Virginia, Wake Forest, and Washington University).

Georgia and Penn State (University Park) allow students enrolled in a dual degree program at the university to submit the GRE. (George Washington has rescinded its use of the GRE because it has not done a school-specific validation study.)  A non-U.S. law school — Hamd Bin Khalifa University Law School (Qatar), in partnership with Northwestern — also accepts the GRE.

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February 22, 2019 in Legal Education | Permalink | Comments (0)

Liscow & Paez: Inequality Snowballing

Zachary D. Liscow (Yale) & Daniel Giraldo Paez (Yale), Inequality Snowballing:

The underpinning of economic analysis of the law has long been the goal of efficiency. This Article shows how efficient legal rules can sow the seeds of their own vicious cycles: repeated application over time of statically efficient legal rules can lead to rules that become increasingly adverse to the poor, which the Article calls "snowballing."

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February 22, 2019 in Scholarship, Tax | Permalink | Comments (0)

Journal Of Legal Education Publishes New Issue

Journal of Legal Education (2018)The Journal of Legal Education has published Vol. 67, No. 4 (Summer 2018):

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February 22, 2019 in Legal Education, Scholarship | Permalink | Comments (0)

In Times of Chaos: A Law School Response Blueprint Post-Natural Disaster

Jeffrey R. Baker (Pepperdine), Christine E Cerniglia (Stetson), Davida Finger (Loyola-New Orleans), Luz E. Herrera (Texas A&M) & JoNel Newman (Miami), In Times of Chaos: A Law School Response Blueprint Post-Natural Disaster:

In 2017 and 2018, an onslaught of domestic natural disasters created acute, critical needs for legal services for people displaced and harmed by storms and fires. Hurricanes Harvey, Irma, Maria and Michael pounded Texas, Florida, and Puerto Rico, displacing millions from their homes. Wildfires burned throughout California and tested the capacity of pro bono and legal aid systems across the state. The authors have direct experience with surviving natural disasters and providing coordinated, collaborative pro bono and legal aid relief for disaster recovery.

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February 22, 2019 in Legal Education, Scholarship | Permalink | Comments (0)

Thursday, February 21, 2019

Oei Presents Tax Law's Workplace Shift Today At Duke

Oei (2018)Shu-Yi Oei (Boston College) presents Tax Law's Workplace Shift (with Diane Ring (Boston College)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

On December 2017, Congress passed major tax reform, including new § 199A of the Internal Revenue Code. This new provision grants independent contractors and other passthrough taxpayers—but not employees or corporations—a potential deduction equal to 20% of their qualified business income. This deduction will affect tens of millions of taxpayers and may be a significant boon to those eligible. Critics argue that the deduction may cause a large-scale workplace shift in favor of independent contractor jobs, as workers seek to take the new deduction. Such a shift could cause workers who leave traditional employment to lose important employee protections and benefits, leaving them more vulnerable.

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February 21, 2019 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

U.S. News Updates FAQ On Law School Scholarly Impact Rankings To Address Inclusion Of Non-Doctrinal Faculty

U.S. News Law (2019)Following up on my previous post, U.S. News FAQ: Law School Scholarly Impact Rankings:  U.S. News has updated the FAQ with this new paragraph:

Which faculty will be included in the scholarly impact rankings?
US News is requesting from each law school a list of all fall 2018 full-time tenured and tenure-track faculty. US News is also requesting that each law school identify each of these faculty members as doctrinal faculty, clinicians, librarians, legal writing faculty, or externship instructors. US News is still evaluating whether and how non-doctrinal faculty will be included in the rankings. At the time the rankings are published U.S. News will publish a methodology (see below), including a description of which faculty were included in the scholarly impact analysis.

Prior coverage of the U.S. News Faculty Scholarly Impact Rankings:

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February 21, 2019 in Law School Rankings, Legal Education | Permalink | Comments (3)

Journal Of Legal Education Publishes New Issue

Journal of Legal Education (2018)The Journal of Legal Education has published Vol. 67, No. 3 (Spring 2018):

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February 21, 2019 in Legal Education, Scholarship | Permalink | Comments (0)