Law, Society, And Taxation Panels

Law, Society, and Taxation panels at last week's 2024 Law & Society Association Annual Meeting in Denver:

Thursday:  

Tax, Ethics, and Charity (Neil Buchanan (Florida; Google Scholar), Chair/Discussant):

While tax law often seems to operate in something like a vacuum, occasionally front page news stories draw attention to questions about the law, its enforcement, and the effects of the law on taxpayers. When the affected taxpayers are notable public figures like Supreme Court Justices or the beneficiaries of tax exemptions like public charities, then the response is often more outraged. The papers on this panel explore some of the questions around the ethical bounds of tax law, with a particular focus on charitable entities and their expectations.

Richard Schmalbeck (Duke), Defining Charity: Declaratory Judgments of Exempt Status:

Until 1976, it was very difficult for an organization whose application for recognition of exempt status had been denied (or revoked) by the IRS to obtain judicial review of that determination. In most cases, such organizations would have no net income, and hence no income tax liability. Without such liability, they could not generate a case or controversy that would be ripe for adjudication. In addition, the anti-injunction act generally precluded an action for a declaratory judgment to the effect that the organization was entitled to exempt status. The only means routinely available would be to have a donor make a donation, and seek to deduct it. The validity of the deduction would depend on the exempt status of the recipient organization, which would then become an issue ripe for adjudication. But that route was usually unattractive. The IRS might not audit the donor's return. If it did audit the return, every issue that might be raised by that return would be on the table, and few donors would welcome that sort of scrutiny.

 

As a consequence, there were only a handful of decided cases involving the standards for qualification for exempt status during the first sixty-three years (1913-1976) of our modern income tax. But in 1976, Congress addressed this problem by adding section 7428 to the Internal Revenue Code. This section authorized, from that date forward, the U.S. Tax Court (and a few other specific courts) to review adverse determinations as to exempt status.

There followed an outpouring of judicial opinions on what sort of purposes are sufficiently "charitable" to meet the requirements of section 501(c)(3). In the years since, there have been over 100 such cases decided. This paper is a review of those decisions. It looks at how successful litigants have been, and what section 7428 has done to contribute to shaping the contemporary view of charity.

Benjamin Leff (American; Google Scholar), Getting Donor-Advised Fund Regulation Right:

Donor-Advised Funds ("DAFs") have been the subject of a very vigorous critical scholarship in the past two decades. In 2006, Congress enacted legislation that both formally recognized and defined DAFs for the first time, and subjected them to several new regulatory burdens. Even at the time, this modest legislation was viewed by DAF critics as insufficient to prevent DAF harms, but the chorus of those calling for DAF reform has grown louder over the years. There are two distinct branches of DAF critiques: the first focuses on temporal aspects of charitable giving and faults DAFs with delaying the use of charitable gifts. This branch is big and appears to be growing. The second branch includes literally everything else wrong with DAFs, and it is surprisingly small and quiet. This paper is part of the second branch of DAF criticism: it identifies several abusive uses of DAFs and advocates a number of strategies to try to stop the abuses or mitigate their harms. It defers any substantive discussion of the temporal aspects. This paper considers legislation, IRS regulatory action, IRS enforcement action, and industry self-regulation as possible ways to mitigate the harm from abusive uses of DAFs.

Omri Marian (UC-Irvine; Google Scholar), Taxing Justices’ Gift Receipts:

Last year, investigative journalists reported multiple occurrences where billionaires showered Supreme Court Justices with lavish gifts. Previously undisclosed luxury fishing trips, private jet travels, and yacht cruises, reignited popular and scholarly debates about Congress's role in regulating Justices' conduct. This article sheds light on an existing, yet often overlooked, instrument to regulate Justices' receipt of gifts: income taxation. The article makes the following contributions:

First, it shows that under current law many of the "gifts" uncovered in recent press stories, are — very likely — taxable income to the Justices. If the Justices did not report and pay tax on some of these gifts, they should be audited, and potentially subject to enforcement actions prescribed by the Internal Revenue Code.

Second, the article explains how income taxation of gifts can serve as a backstop for judicial misbehavior where the primary laws and guidelines on judicial ethics fail. Some (including a few of the Justices) argue that there is no constitutional basis for Congress to enforce limits on Justices' gift receipt and reporting. There is no such question in the context of taxation. Congress clearly has constitutional authority to require, and current law clearly demands Justices to report certain receipts on their income tax returns.

Third, the article explains when, as a policy matter, income taxation should be used to regulate Justices' behavior, and considers several tax law reforms — all clearly within Congress's constitutional power — to further improve income taxation as a last line of defense against judicial misconduct. Specifically, the article offers (1) to narrow the definition of tax exempt "gifts" when received by Justices, (2) to mandate annual audits of Justices' tax returns, and (3) to mandate the disclosure of Justices' tax returns. 

Joseph Thorndike (Tax Analysts; Google Scholar), The Business of Tax Collection: Tax Debt, Current Collection, and Paycheck Withholding During World War II (with Ajay Mehrotra (Northwestern; Google Scholar)):

Business leaders are often cast as self-interested elites, wielding political influence to mold laws in their favor. But during moments of national crisis, business has sometimes played a more constructive role–especially around taxation. This paper explores a case study focused on the machinery of tax collection.

During World War II, corporate elites helped transform the income tax from a narrow levy on the rich to a broad based tax on the middle class. Beardsley Ruml of the R.H. Macy Co. led a vigorous campaign to modernize tax collection. Ruml was determined to ease compliance for the millions of neophyte taxpayers Congress had added to the rolls during the early 1940s.

Ruml's plan combined paycheck withholding with a switch to "current collection." Since 1913, tax collection had been running a year behind; each year's taxes were paid in a lump sum at the start of the next year. Ruml and his allies wanted to put taxpayers on a current basis; by withholding taxes from paychecks throughout the year, people would pay as they earned – not months later.

Crucial to Ruml's plan was sweeping forgiveness of a full year's tax liability–a relief provision designed to prevent doubling up on tax payments during the transition. Forgiveness would leave the government's cash flow intact, Ruml said. More important, it would free Americans from their perpetual "tax debt."

Champions of progressive taxation hated the idea of wholesale forgiveness, calling it a windfall for the rich. But Ruml was right about the politics. And his plan was crucial to the adoption of withholding and current collection. It certainly compromised standards of tax fairness. But it also eased the nation's transition from a "class tax" to a "mass tax," securing its postwar fiscal regime.  

Property Tax Justice (Greg Baltz (Rutgers), Chair): 

• Carlos Avenancio-Leon (UCSD; Google Scholar) 
• Julie Gilgoff (Indiana-McKinney; Google Scholar) 
• Martha Stark (NYU) 
• Heather Way (Texas; Google Scholar) 

Feudal and colonial systems have shaped U.S. property tax policies to reenforce the racial status quo. Our interdisciplinary discussion will highlight the settlor colonial origins of property taxation, progressing towards market-based tax schemes that are likewise used as tools for control. From the chronic over-assessment of Black and Latinx homeowners leading to disproportionate tax burden and foreclosure rates in these communities, to the profiteering of private investors who prey on tax delinquent homeowners, this panel will explore possibilities for radical change. The conversation will also contextualize judicial trends of nonintervention in Fair Housing Act challenges to taxation policies as compared to the wave of judicial intervention to strike down tax policies under the Takings Clause, as a similar tactic of hegemonic control.

International Tax (Neil Buchanan (Florida; Google Scholar), Chair/Discussant):

In an increasingly international world, countries must decide how to approach tax questions that cross international borders. To what extent should the tax system seek to encourage such transactions, or resist them? To what extent should countries be using the tax system to seek to impose order in the international order? What consequences do the various choices made in these scenarios have in any case? The papers on this panel each identify an area of international or cross border taxation and explore the possibilities and consequences in that area.

Borbala Kolozs (Corvinus University), Taxation of Crypto Assets in Europe:

The author of this paper wishes to elaborate on the tax treatment of crypto assets, including activities related to mining, trading, holding and purchasing goods with cryptocurrencies. The paper has a dominant focus on the Hungarian legislation but it also introduces briefly the most important rules of many other European countries. The paper also touches upon the position of the European Union and the relevant case law of the Court of Justice of the European Union is also going to be introduced. 

Cliff Fleming, Jr. (BYU), Which Is More Concerning in International Tax Policy, Business Activity Shifting or Passive Income Shifting and Should the U.S. International Income Tax System Incentivize Either?: 

Some international tax policy commentators have suggested that the U.S. international income tax system should be less concerned about business activity being shifted out of the U.S. to low-tax countries than about passive income being shifted out of the U.S. to low-tax countries. Indeed, the U.S. system is structured to reflect this view. This paper argues that this view is incorrect and, indeed, that business activity shifting should be more concerning than passive income shifting and that neither should be incentivized.

Optimal Tax Policy (Jennifer Bird-Pollan (Kentucky; Google Scholar), Chair/Discussant): 

At the heart of many discussions of tax policy is a question of whether the tax law achieves the right end, for all people affected by it, and how best to design the tax to achieve the desired ends. The papers in this session tackle these essential, and difficult, questions from a variety of angles, contemplating theories of tax and tax policy design. While each paper contemplates a different aspect of tax system design, the papers in this session are concerned with asking about both the theoretical justifications and the effects of particular tax decisions.

Maartje Van Mulken (Leiden University), Following the Movement of a Pendulum: Between Tax Objects and Fiscal Concepts and Principles: 

Globalization engenders tax objects, i.e., those entities which, despite their vagueness, move the international tax domain. Such an object is for instance the digital nomad and the permanent tourist. We give contours to these objects according to established fiscal concepts and principles, such as territoriality, nexus, residency. However, as the complexity of the world and the objects within it increases, it becomes more difficult to fit them into established narratives and formulations. Motivated by the practice of exploratory research, I take the position that the ever-changing landscape of globalization demands the deconstruction of outmoded fiscal principles and concepts. I reflect on what new metaphors might guide this deconstruction. I advance the metaphor of the pendulum as one way of reaching beyond the confines of the international tax system, i.e., to explore its limits and to transform these from within. Through the metaphor of the pendulum, I propose some building blocks for a method which fosters a dislocation that repeats itself regularly–a possible way to continuously look underneath the most rudimentary of fiscal principles and concepts and to reflect their construction as they move along with and adapt to the shifts of tax objects. By following the movement of the pendulum swinging between tax objects and fiscal concepts and principles, we can become aware of gaps; spaces where the fiscal concepts and principles fail and come to crisis. I argue that data can fill these gaps: they are the trigger that drives the pendulum, allowing it to move backward toward the tax object and forward toward the fiscal principle or concept. I draw attention to the international tax system, that is, to its limits and constraints, and I invite us back into what we think of as known territory to consider how and why some features of a tax object are seen as relevant, available or meaningful and why other data are deemed irrelevant, unavailable, unexplored or invisible. 

Lynn Lu (CUNY; Google Scholar), Major Questions about Taxing and Spending: 

Tax administration has undergone significant transformation as the dual missions of equitable revenue collection and regulation of behavior have grown more visible and more contested. Since Chief Justice Roberts's acknowledgement in NFIB v. Sebelius, 567 U.S. ___ (2012), that "taxes that seek to influence conduct are nothing new," courts have grappled with the extent to which tax should be excepted from general administrative principles. At the same time, facially neutral revenue rules have increasingly been proven to have disproportionate impact by race, gender, and household composition. Finally, targeting government benefits by economic status remains one potential avenue for remedying the racially disparate impact of other laws. The characterization of tax rules as regulatory versus revenue-generating thus holds increasing importance and has greater salience than ever.

Comparisons between regulation through taxation versus through federal spending continue to generate insights for remedying economic inequity in the U.S. Exploring the application of rational basis review, cost-benefit analysis, and empirical Critical Race Theory to government benefit programs (including the Earned Income Tax Credit and Temporary Assistance to Needy Families) shows how programs with distinct purposes have converged in light of the Supreme Court's refusal to enforce economic redistribution while at the same time assuming the existence of a social safety net. We have reached the point where some economic questions-including emergency relief to the economically distressed-are so "major" that the federal courts are powerless to intervene. Federal courts thus withhold judicial review on the one hand, while on the other, they uphold rationales for economic disparities that defy logic. Major questions hang in the air unanswered, leaving whole swaths of society unable to participate in democratic decision-making as they struggle for daily survival.

Henry Ordower (St. Louis; Google Scholar), Taxation as Hybrid Law: Civil/Common Law Convergence: 

Globalization engenders tax objects, i.e., those entities which, despite their vagueness, move the international tax domain. Such an object is for instance the digital nomad and the permanent tourist. We give contours to these objects according to established fiscal concepts and principles, such as territoriality, nexus, residency. However, as the complexity of the world and the objects within it increases, it becomes more difficult to fit them into established narratives and formulations. Motivated by the practice of exploratory research, I take the position that the ever-changing landscape of globalization demands the deconstruction of outmoded fiscal principles and concepts. I reflect on what new metaphors might guide this deconstruction. I advance the metaphor of the pendulum as one way of reaching beyond the confines of the international tax system, i.e., to explore its limits and to transform these from within. Through the metaphor of the pendulum, I propose some building blocks for a method which fosters a dislocation that repeats itself regularly–a possible way to continuously look underneath the most rudimentary of fiscal principles and concepts and to reflect their construction as they move along with and adapt to the shifts of tax objects. By following the movement of the pendulum swinging between tax objects and fiscal concepts and principles, we can become aware of gaps; spaces where the fiscal concepts and principles fail and come to crisis. I argue that data can fill these gaps: they are the trigger that drives the pendulum, allowing it to move backward toward the tax object and forward toward the fiscal principle or concept. I draw attention to the international tax system, that is, to its limits and constraints, and I invite us back into what we think of as known territory to consider how and why some features of a tax object are seen as relevant, available or meaningful and why other data are deemed irrelevant, unavailable, unexplored or invisible. 

Author Meets Reader: For-Profit Philanthropy: Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving 

• Steven Dean (Boston University; Google Scholar), Author (with Dana Brakman Reiser (Brooklyn; Google Scholar)) 
• Henry Ordower (St. Louis; Google Scholar), Chair
• Giedre Lideikyte Huber (Geneva; Google Scholar), Reader
• Benjamin Leff (American; Google Scholar), Reader
• Joan Heminway (Tennessee; Google Scholar), Reader

In For-Profit Philanthropy, Dana Brakman Reiser and Steven A. Dean reveal that philanthropy law has long operated as strategic compromise, binding ordinary Americans and elites together in a common purpose. At its center stands the private foundation. The philanthropic innovations increasingly espoused by America's most privileged individuals and powerful companies prioritize donor autonomy and privacy, casting aside the foundation and the tools it provides elites to demonstrate their good faith. By threatening to displace impactful charity with hollow virtue signaling, these actions also jeopardize the public's faith in the generosity of those at the top.

Friday:

Taxation of For-Profit Transactions (Neil Buchanan (Florida; Google Scholar), Chair/Discussant):

Property transactions and other transactional exchanges are often at the heart of questions about tax. The panelists in this session explore different examples of transactional interactions and think through how the tax system will (or won't) respond to those transactions.

Sloan Speck (Colorado; Google Scholar), Collateral Tax Benefits in Crisis Relief: 

The U.S. income tax system has implicit insurance-like features. The federal government also provides more explicit insurance-like relief, particularly in the wake of economic crises and disasters. For businesses, this relief often operates principally through timing, and immediate benefits are tempered by anticipated future detriments. Subsidized loans and relaxed rules for net operating losses illustrate this type of timing relief. By contrast, relief for individuals typically is permanent; examples include stimulus payments, unemployment insurance, and tax deductions for casualty losses. This paper explores the historical dominance of timing-based crisis relief for businesses, including the ways in which timing intersects with both the total amount of relief provided on an after-tax basis and governmental control over the deployment of relief funds.

In addition, this paper addresses the design of permanent relief for businesses, which expanded radically during the COVID-19 pandemic through the Paycheck Protection Program and Employee Retention Tax Credit, as well as considerations for implementing timing relief with permanent aspects. Permanent relief for businesses presents intrinsic challenges because policymakers generally cannot make nominal (or statutory) subsidies equal real subsidies, after accounting for tax effects. For this reason, the collateral tax consequences of crisis relief are integral, rather than ancillary, to the construction of permanent relief. To the extent that Congress's response to future crises will track its COVID-19 programs, policymakers should incorporate tax considerations into the basic terms of any relief. By revealing this dynamic, this project challenges conventional distinctions between tax and non-tax relief and pushes towards a more holistic approach to taxation and spending in times of crisis. (This paper expands on a proposal that I submitted but ultimately did not present at LSA in 2022.) 

Luiza Silva (Universidade de São Paulo), Economic Decentralization: The Transnational Challenge in Defining Taxation for Crypto Assets: 

The U.S. income tax system has implicit insurance-like features. The federal government also provides more explicit insurance-like relief, particularly in the wake of economic crises and disasters. For businesses, this relief often operates principally through timing, and immediate benefits are tempered by anticipated future detriments. Subsidized loans and relaxed rules for net operating losses illustrate this type of timing relief. By contrast, relief for individuals typically is permanent; examples include stimulus payments, unemployment insurance, and tax deductions for casualty losses. This paper explores the historical dominance of timing-based crisis relief for businesses, including the ways in which timing intersects with both the total amount of relief provided on an after-tax basis and governmental control over the deployment of relief funds.

Jordan Barry (USC; Google Scholar), Tax and the Boundaries of the Firm (with Victor Fleischer (UC-Irvine; Google Scholar)): 

One of the most fundamental questions of economics is how firms decide what to produce themselves ("make") and what to purchase from other firms ("buy"). We analyze how income taxes distort firms' decisions along this and related dimensions. Three main effects emerge.

First, intrafirm transactions allow firms to reduce their tax burdens, such as by shifting their income to lower-tax jurisdictions. This effect is inherent to an income tax. It makes firms bigger, encouraging them to "make" more and "buy" less. Second, implementing an income tax entails enacting many additional rules, none of which is inherent to an income tax. Many of these rules affect the boundary of the firm. Some expand it; others contract it. However, these expansions and contractions generally operate along different dimensions, and thus do not offset each other. Finally, income taxes encourage regulatory arbitrage transactions, which enable firms to achieve their desired tax treatment without changing the economic boundary of the firm. These transactions preserve the boundary of the firm, but also create complexity, opacity, and inefficiency.

Our analysis provides insight into many important and timely tax policy questions, including the relative value of corporate income taxes and VATs, the merits of the Tax Cuts and Jobs Act of 2017, and the OECD's ongoing Base Erosion and Profit Shifting Project.

Bridget Crawford (Pace; Google Scholar), Taxing Sugar (Not the Kind You Think): 

Paid companionate relationships (with and without a sexual element) are nothing new. What is new is the increasingly visible marketplace of "sugar dating," an arrangement pursuant to which one partner makes cash payments or property transfers to or for the benefit of the other in return for companionship. Although there is scant empirical information about sugaring relationships, anecdotal evidence suggests that sugaring relationships frequently (but not always) come with the expectation of sex. Typically (but not invariably) the monied partner tends to be older and male (hence the name "sugar daddy"); the less-monied partner/payee tends to be younger (hence the name "sugar baby") and female.

This paper investigates how parties in "sugaring" relationships talk about their tax obligations by studying online posts from the internet discussion forum Reddit.com. This internet-based "tax talk" reveals a reluctance on the part of many participants in sugaring relationships, but especially sugar babies, to characterize sugaring as a form of sex work. That reluctance undercuts the narrative of female empowerment that is equally salient in the data set. Paradoxically, deeply entrenched taboos against the provision of sexual services in return for compensation co-exist with stigma-free discussions of sugaring. Silence or even active confusion about the tax aspects of sugaring relationships operates to the long-term financial detriment of the participants in sugaring relationships as well as the government.

Dimensions of Justice: Legal Strategies in Historical Redress, Contemporary Reparations, and Systemic Equality (Jeremiah Chin (Boston University; Google Scholar), Chair/Discussant): 

This panel navigates legal landscapes across time and context, exploring the imaginative use of colonial taxation to entrench slavery and advocating for systemic changes in reparations movements. It scrutinizes settler colonial fiscal tactics, revealing how law intersects with dispossession and racialization. Shifting focus to contemporary issues, the panel explores disparities in liquor license cases, proposing administrative rulemaking for equity, and dissects how racist rhetoric shapes a political economy of food, perpetuating systemic oppression. Together, these presentations offer a nuanced exploration of legal strategies across historical, contemporary, and systemic dimensions, inviting a discourse on justice and equity.

Anthony Infanti (Pittsburgh; Google Scholar), Taxation and Slavery in Colonial America: 

This paper examines the political and legal structure of fiscal tactics of settler colonialism. Law has delimited and expanded the scope of dispossession of Indigenous nations in settler states like Canada and the US, and the paper places fiscal politics/policy in context with colonial legal tactics to examine how settler states seek to manage Indigenous nations and people through strategies of dispossession, racialization, and subjectification. In conversation with both Indigenous political and legal theory and critical race scholarship, the paper identifies fiscal tactics ranging from underfunding, punitive fiscal arrangements, taxpayer subject formation, and property relations. The paper theorizes both how different formal and informal legal strategies sediment settler colonial hierarchies and their affinities with other forms of racist legal and social organization in service of white political power.

Tax and Social Welfare (Hilary Escajeda (Mississippi College; Google Scholar), Chair/Discussant): 

The application of the tax laws may seem stark and technical at first glance, but a rich understanding of the tax laws makes clear that much complex social policy is implemented through the tax laws. The papers on this panel consider a variety of ways that state and federal tax laws and other benefit transfer provisions facilitated by the government operate in practice. The authors consider both the design inherent in the proposed tax scheme and the consequences of the various provisions in practice.

Michelle Drumbl (Washington & Lee), Refundable Tax Credits and Bankruptcy: What State Exemption Laws Reveal about the State of Social Welfare: 

For decades, low-income families have relied on the filing of individual income tax returns to claim critical social welfare benefits in the form of refundable tax credits, most notably the earned income tax credit and the child tax credit. Congress doubled down on the use of the Internal Revenue Service as a social benefit administrator during the COVID-19 pandemic, tasking the Service with the administration of three rounds of economic impact payments while also temporarily expanding the scope and availability of the child tax credit.

But what happens to those families when the social safety net is not enough to meet their financial obligations, and they must consider seeking a fresh start by filing bankruptcy?

This article at the intersection of tax law, bankruptcy law, and the social safety net, examines the ways in which state bankruptcy laws treat refundable tax credits when an individual debtor files for bankruptcy. There is no federal bankruptcy exemption available to protect a debtor's entitlement to refundable tax credits; the split in how state exemption laws include or exclude such credits results in inconsistency across the country depending on the state in which a debtor resides.

Nearly half of states allow debtors to protect their entitlement to the earned income tax credit or the child tax credit, either under an exemption explicitly naming those credits or under a general public assistance exemption.

Caselaw from the bankruptcy courts in these states has provided an interesting lens through which to view the tax-based social safety net, highlighting the evolving way in which law has come to view refundable tax credits.

The article concludes by considering how the states that provide bankruptcy exemptions for tax-based social benefits provide a model for other states to consider, and whether enactment of a federal exemption might be an appropriate and useful alternative protection for debtors.

Michelle Layser (San Diego; Google Scholar), Renters' Tax Credits:  

America is facing an affordable housing crisis that current policies have failed to mitigate. Even before the COVID-19 pandemic, half of American renters were rent burdened, paying more than one-third of their income on rent. For this reason, Renters' Tax Credit (RTC) proposals are gaining traction in Washington and in policy circles. Proponents hope that RTCs will provide much-needed public assistance to low-income tenants, but there has been no sustained research to examine the approach, which is radically different from other major tax-based welfare programs. Unlike most existing tax-based welfare laws, an RTC would integrate in-kind benefits into the tax system. This Article considers the implications of that approach, as well as an alternative that would convert the benefits to unrestricted cash transfers. In doing so, it argues that the decision to cash out an in-kind benefit would fundamentally change the nature of the policy intervention. For reasons to be explained, all tax-based in-kind welfare benefits are rooted in a public-private partnership approach that relies on private markets to deliver benefits to needy recipients. This is a fundamentally different social welfare strategy than cash-based benefits like the Earned Income Tax Credit or Child Tax Credit. This Article explores these differences through a case study of the evolution of American housing policy, the recent failures of the Housing Choice Voucher Program, and current RTC proposals. Ultimately, it argues that an RTC may have advantages over cashing out if the primary policy goal is to expand access to housing. However, if the primary policy goal is to assist rent-burdened tenants, then cashing out of housing vouchers may be a more efficient and equitable approach. The analysis not only provides essential context for policy debates about RTCs, but also highlights the urgent need for clarity in policy goals.

Kerry Ryan (St. Louis), Taxation of Liminal Workers: 

This article first identifies a group of workers (students, patients, prisoners, differently-abled persons, and welfare (TANF) workers) who experience liminality along various vectors (space, temporally, identity, compensation, volition, jobs, and markets). Second, the article claims that this disparate group of liminal workers form a coherent doctrinal group for tax purposes. What ties these workers together is the inability of the normal tax regime to properly assess the tax consequences of these workers' labor during spells of liminality. Our tax system is largely based on distinctions and classifications that put taxpayers into boxes and assign tax results based on the boxes so assigned. Liminal workers, on the other hand, are either at the boundary of a particular tax regime or in that in-between space between tax classifications. The current approach is to ignore the liminality of the work (or the worker) and attempt to use existing rules (or create new ones on an ad hoc basis) to force, what is by definition non-categorizable, into an existing tax category. The article will argue that we need a new approach to deal with liminal workers that is more equitable, efficient, and administrable than the current method.

Saturday: 

Tax Legislation and Administration (Amanda Brown (Centers for Disease Control and Prevention, ASRT Contractor), Chair/Discussant): 

Tax law is, among other things, law, and the papers on this panel explore the way that the legal and administrative boundaries around legislation affect the design of tax law and the consequences of those choices on the law itself. Because tax law sits at the intersection of legislation and case law, the presentations on this panel think about the different affects of these different sources of law, and how those interested in improving the tax law can work within these constraints.

Tessa Davis (South Carolina; Google Scholar), The Emergence of Tax Law: 

In The Emergence of Tax Law, I am investigating the process of tax training with the support of computational textual analysis. Specifically, I am using term frequency analysis, concordances, and topic modeling to analyze the texts: leading tax textbooks (measured by adoption) since the 1940s (approximately 75 texts make up the corpus). JD tax training is, for many, the first step in their process of knowledge acquisition and the social process of becoming a tax attorney. What we teach students-the language we use, the topics we emphasize, and the framing of the materials-starts the socialization of a student as a tax attorney. The Emergence of Tax Law is the beginning of a pseudo-ethnography of tax and (hopefully) the start of a series of articles that explores how we turn law students into tax law students.

Allen Micheal Wright (UC-Berkeley),  The Invention of Land Banking: From Organizational Prototype to State Legislation: 

This project examines the rise of "land banking" in America. It contributes to the long and contentious study of urban redevelopment and its effects on class and ethnoracial inequality in the US. As quasi-governmental organizations created to intervene in declining urban property markets, land banks are empowered by law to acquire, hold and transfer distressed properties, making them key players in urban redevelopment in over 250 cities nationwide. What are the origins of land banking, and how has it evolved over time?

Early proponents of land banking believed that these organizations would be empowered to exercise the authority of eminent domain. Instead, they exercise the power of tax foreclosure. What led to this surprising result? By process tracing archival sources, this paper reveals that early land banking advocates were not neoliberal ideologues but progressives who thought the government should expand affordable housing. It then shows how the progressive vision for land banking of the 1950s and 60s was later co-opted by city governments trying to regain control over urban redevelopment in the 2000s and 2010s.

Susan Morse (Texas; Google Scholar), The Truth About Safe Harbors: 

Safe harbors are everywhere in law, especially in tax law. Safe harbors have a modest, gentle appearance. They provide by rule that particular facts comply with the law and will result in no penalty. They are otherwise silent.

This modest appearance conceals safe harbors' powerful capacity to cause harm. This Article confronts the deceptive qualities of safe harbors. It explains that the implementation of safe harbors can harm those outside safe harbor boundaries, by treating their behavior as illegal even though the safe harbor does not say so. This collateral harm is especially likely when intermediaries implement safe harbors, because of monitoring costs, risk and uncertainty aversion, and multiple stakeholders.

Safe harbors' deception arises in part from the incremental way in which safe harbors develop the law. Safe harbors' deception does not automatically invalidate them. But plaintiffs can claim standing to challenge a safe harbor if the facts show causation. When a lawmaker intentionally uses a safe harbor to produce an illegal result, a court should invalidate the safe harbor even though the safe harbor on its face does not break the law.

Tax, Sustainability, and the Environment (Jennifer Bird-Pollan (Kentucky; Google Scholar), Chair/Discussant): 

Tax has been used historically to incentivize particular behaviors, and one area where this has been seen extensively in responses to the environmental crisis. The papers on this panel explore various ways tax has been and could be used to create change in the environmental arena. Each paper identifies an area of the law that could be affected by tax, and then explores what role changes in the tax law could or have played in that area.

Roberta Mann (Oregon), Policies to Reduce Climate Emissions from Farms: New Zealand Farm Levy and California Compared: 

Countries must reduce emissions of greenhouse gases substantially to keep global temperature targets in reach and limit risks of destabilizing the world's climate. Most attention has focused on carbon dioxide produced by burning fossil fuels, but it is also critical to cut methane emissions-not least because methane has a more powerful near-term warming effect than CO2 and cutting methane emissions would have a more immediate impact on the climate.

Forty percent of global methane emissions come from agricultural activities, with the majority of agricultural emissions coming from raising cattle. Methane emissions from agriculture would likely be reduced if farmers produced more food from plants and less from livestock, but few countries provide any incentive for taking action.

New Zealand plans to be the first country to introduce emissions pricing for agriculture. If enacted as proposed, the emissions levy will begin in 2025 at the 'lowest price possible' to achieve the outcome of a 10% reduction in methane emissions compared with 2017 by 2030. Money raised will be recycled into incentivizing good practice, and the agriculture sector will help to oversee the allocation of funds.

In contrast to New Zealand, most other countries, rather than taxing agricultural pollution, provide significant subsidies to agriculture, including subsidizing the use of fossil fuels used in agriculture. In the United States, farms have been called "the last great tax shelter," with farming-related tax subsidies providing benefits to farmers that are not available to other businesses. However, the state of California has taken significant action to curb methane pollution from farms.

This paper will focus on the proposed taxation of methane emissions from farming in New Zealand, comparing California's efforts at reducing methane emissions.

Tracey Roberts (Cumberland; Google Scholar), The ESG Case for a Carbon Tax: 

To avoid catastrophic climate change, renewable energy must increase exponentially, and fossil fuel use must decline as dramatically. This requires engagement of the private sector. To date the European Union has advanced €1 trillion to promote a green pandemic recovery. Likewise, the United States has provided a combined $470 billion for green initiatives under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. When these funds were advanced, neither the authorizing legislation nor funding mechanisms delineated the eligibility requirements for private partners. Now that the financial system is awash with public and private resources for green projects, the European Commission and the U.S. Securities and Exchange Commission have both issued proposed rules for investment companies attracting private capital to "green" projects. Over the prior two decades numerous private governance organizations have developed their own accountability criteria to steer the private sector toward sustainability. Those schemes have since expanded governance and social criteria as well as environmental standards (together Environmental Social and Governance or "ESG" standards). Currently, the SEC and the EC are scrutinizing climate finance transactions for advancing incorrect, misleading, false, and fraudulent statements about their green claims. Some activities have been labeled as "greenwashing," marketing ecological engagement to cover for dirty energy operations. This article makes three contributions. First, it compares the types of regulatory activities occurring in the US and the EU to strengthen and tighten these rules. Second, it identifies gaps in the proposed regulatory structures, critiques existing enforcement mechanisms, and clarifies the potential for waste that may put the green transition at risk. Finally, it shows how these failings advance the case for the carbon tax, a superior instrument to spur private investment and combat climate change.

Giedre Lideikyte Huber (Geneva; Google Scholar), Taxation and Sustainable Development: The Changing Role of Tax Law Norms: 

Traditionally, Western tax systems have been designed primarily to avoid creating barriers to economic growth. Without being completely neglected, ecological and societal considerations were only secondary in those reflections. However, over the last two decades, this perception has changed (Schratzenstaller, 2015). It is now widely accepted that tax norms can exert a considerable influence on production and consumption decisions, as well as on labor supply and demand, and thus on the sustainability of economies and societies. Not only certain aspects of sustainability, like climate protection, started to be considered at least as (or even more) important as economic growth, but the very notion of economic prosperity and growth has become increasingly associated with sustainability (Mumford/Gunnarsson 2019).

As a result, the links between tax norms and sustainable development goals (SDGs) have become the subject of discussion, within intergovernmental organizations such as World Bank and the United Nations. In addition, the academic interest in links between certain SDG and taxes have risen sharply. However, save from rare examples, tax aspects related to sustainability are still mainly studied in isolation. This is especially true in Switzerland, where the links between taxation and certain SDGs started to be researched in depth only relatively recently (and mainly in relation to subjects such as climate protection and gender equality).

The overall objective of this article is to provide the first comprehensive overview on where the tax policy discourse stands in Switzerland in relation to sustainability, how it has developed during the last decades and to make a comparative assessment (notably with the EU). It will critically assess this subject in the light of the Swiss Sustainable Development Strategy 2030. More broadly, it will overview the changing legal discourse around the role of tax law norms in helping to achieve sustainable economies.

Tax, AI, and Machine Learning (Susan Morse (Texas; Google Scholar), Chair/Discussant): 

Just like all other areas of law, the tax law faces new and different challenges in contemplating how best to respond to the worlds of artificial intelligence and crypto-currencies. The papers on this panel investigate these challenges and others and propose solutions that solve some of the most intractable elements of the problems. At the same time, additional potentially as yet unconsidered difficulties are also identified.

Hilary Escajeda (Mississippi College; Google Scholar), Generative AI as Property: 

Savvy treatment of generative AI systems requires a general understanding of AI technology and the interplays between tax and intellectual property law doctrines and precedents. For instance, the 2022 Federal Circuit Court of Appeals held in Thaler v. Vidal that only a human--not an AI software system or other artificial entity--can be a patent inventor. Similarly, in August 2023, U.S. District Court Judge Beryl A. Howell observed that since "human ownership is a bedrock requirement of copyright," a work autonomously generated by an AI system is not copyrightable. By contrast, the Internal Revenue Code (I.R.C.) does not require human involvement for machine-created outputs to be property. Specifically, I.R.C. § 367(d)(4)'s definition of "intangible property" recognizes as property "any other item . . . not attributable to tangible property or the services of any individual."

This Essay examines how tax law's nimbleness may inspire analogous updates to intellectual property laws so that they may agilely address AI-generated property.

Young Ran (Christine) Kim (Cardozo; Google Scholar), Is Litigation Financing a Loan for Tax Purposes? An Algorithmic Answer: 

Applying machine learning to legal scholarship may start with simple questions with binary answers (e.g., yes/no, true/false). Further, questions with statistical answers involving distributions (e.g., valuation of property derived from multiple appraisals) or probabilities (e.g., transfer pricing study) may also be particularly suitable for adopting machine learning technology. This project goes beyond those familiar areas and aims to test machine learning on a more complicated legal question. In tax law, complex tax analysis of structural planning is not considered a good area for machine learning yet. Yet, a more limited question involving facts and circumstances test that can be answered with probability may be an area where machine learning can expand and contribute significantly to the legal industry. Among various potential questions, this paper explores the nature of litigation finance contracts, an issue that has recently left many legal experts puzzled.

One may consider that litigation financing is similar to loans. Surprisingly, litigation financing with a straightforward loan structure is relatively less common. Much commercial funding takes the form of a sale/purchase of an interest in the judgment or an assignment of a claim using derivatives, such as prepaid forward contracts. On such a modern litigation financing structure, the Tax Court recently held that it is not a loan for tax purposes because an essential term of repayment is that it is contingent on the result of the claim. However, the distinction between loans and sales for tax purposes is not as clear as the Tax Court decision suggested. To answer the question of whether litigation financing is a loan or sale, this paper collects diverse forms of litigation financing agreements and compares their financial terms to test the computational and textual analysis using machine learning. This article also explores the implications of this exercise for tax and broader scholarship.

Amanda Parsons (Colorado; Google Scholar), Taxing Data in a Cash-Based Tax System: 

The explosion of the data economy has generated enormous amounts of value and wealth for companies and their investors. Unfortunately, much of this value and wealth has escaped taxation. Applying our existing tax system to these business models often yields tax results that are incongruent with the underlying normative goals of our tax system.

In response to these and other perceived failures, some tax scholars have concluded that a tax system with income as its only base is not viable. Instead, the data itself should serve as the tax base. This essay agrees that looking to data as a tax base could be a promising step forward but identifies a key flaw in many data tax proposals-while these proposals change the tax base, they do not change the form of payment. Data-collecting companies are still expected to pay their tax liabilities with cash. This is first a conceptual error. Requiring a data tax to be paid with cash fails to recognize that data is a distinct value form that cannot be reliably measured in monetary terms. Second, these data tax proposals ignore dominant business models of the data economy, which often eschew direct and immediate monetization of data in favor of growing user bases with the hopes of achieving greater profits in the future. If a data tax requires payment in cash, it will likely push companies towards greater monetization of data in order to generate cash flow to cover the tax and, therefore, risk exacerbating, rather than mitigating, datafication's harms.

The essay concludes by evaluating one possible data tax design that would avoid this flaw-a per se data tax. A per se data tax would require data-collecting companies to remit data sets to governments to satisfy their tax liabilities. Governments could either use the data internally, grant access to certain parties such as researchers, or place the data in the public domain. These approaches would allow the value creation from the data economy to be shared by society more broadly.

Sunday: 

Social Safety and Tax Equity (Joseph Thorndike (Tax Analysts; Google Scholar), Chair/Discussant): 

To what extent is the tax code intended to provide a level of equity and stability for all members of the society funded by that tax system? And to what extent does it achieve any such goals? The papers on this panel explore the complementary questions of what tax law does to curb accumulation of wealth and what it does to support those who suffer from financial instability unsupported by social offers of assistance.

Alex Zhang (Emory; Google Scholar), Fiscal Citizenship and Taxpayer Privacy: 

In response to record inequality, policymakers have called for not only substantive tax reform but also transparency in the tax records of the wealthy and the powerful. A dramatic illustration was the fight over former President Trump's tax returns. Far more consequential is the leak of thousands of taxpayers' records to Pro Publica in 2021, which reveal substantial tax avoidance by the ultra-wealthy.

These events foreground the question whether individual tax information should be public records or kept confidential. The Tax Reform Act of 1976 establishes a general rule of confidentiality. But transparency has prevailed before: during the Civil War, in 1924, and during the Great Depression. Today, Finland, Norway, and Sweden allow public disclosure of individual income and wealth tax information. In this debate, current scholarship has a clear focus: whether publicity aids tax compliance, and if it does, whether compliance gains outweigh the intrusion into a generalized notion of taxpayers' right to privacy.

This paper argues that the choice between tax privacy and transparency implicates more than tax compliance. It depends on the dynamic relationship between taxpayers and a state that aspires to egalitarianism. Building on the existing literature on fiscal citizenship, this paper constructs an analytical model, positing that taxpayers play four main roles as they interact with the fiscal apparatus of a democratic regime: as reporters, funders, stakeholders, and legislative partners. The values of privacy and transparency have distinct valences within each role. This typology of taxpayers' fiscal interactions with the state suggests that public disclosure is more appropriate for ultra-wealthy taxpayers in times of high economic inequality. This paper thus contributes to the fiscal-citizenship literature and aims to help policymakers design public-disclosure regimes that cohere with the norms implicit in our fiscal social contract with the state.

Phyllis Taite (Oklahoma; Google Scholar), Tax Policy in a Space of Uncertainty: 

The Tax Cuts and Jobs Act introduced and supercharged tax policies that overwhelmingly favored the wealthiest taxpayers. As 2025 is approaching and the next presidential election is upon us, we must be strategic and vocal about the changes we want to see with tax laws. There are some provisions from the TCJA that should remain, be reformed, and abolished. This paper will analyze key provisions of the TCJA and identify whether they should remain, be reformed, or abolished based on the benefits and burdens to taxpayers, policy justifications, and impact on inequalities.

Ajay Mehrotra (Northwestern; Google Scholar), The Intellectual Origins of the Modern International Tax Regime: Edwin R.A. Seligman, Economic Allegiance, and the League of Nations’ 1923 Report: 

In March 1923, a group of prominent political economists and tax law experts gathered in Geneva, Switzerland to discuss the post-WWI framework for a new regime of international taxation. Commissioned by the League of Nations, these fiscal experts produced a comprehensive report that gradually became the intellectual foundation of the modern international tax regime. Several accounts of the 1923 Report credit Sir Josiah Stamp of England as the primary author. Relying on archival materials and other primary sources, this article contends that Edwin R.A. Seligman of the United States played an equally important role in revising the Report, and thus helping to establish a new international tax regime.

As a Progressive-Era American political economist, Seligman was part and parcel of a zeitgeist which was challenging the dominant laissez-faire notions of law and political economy prevalent at the time. As an international realist, Seligman also harbored his own biases about modernization and the role of the United States in establishing a new post-WWI global order. While scholars have noted Seligman's influence over U.S. tax law and policy, his pivotal role in drafting the 1923 Report has only recently been acknowledged. This article seeks to build on this recent scholarship by investigating how Seligman's background, experiences, and ideas – particularly his analysis and advocacy of the concept of "ability to pay" and "economic allegiance" – shaped the 1923 Report. And hence the subsequent development of the modern international tax regime.

Nancy Shurtz (Oregon; Google Scholar), Work Requirements and a New Tax Policy Inequity under the Fiscal Responsibility Act of 2023: 

On June 3, 2023, Congress enacted the Fiscal Responsibility Act (FRA) of 2023. In addition to green-lighting the U.S. Treasury to finance ongoing federal government debt through the 2024 calendar year, the legislation imposes spending freezes on social safety net programs and require all "able-bodied persons" in the 18-to-55 age bloc to meet mandatory work requirements or risk relinquishing federal aid, including food stamps. This legislation proposes nothing on the revenue-generation side of the deficit equation, including no rollbacks of the 2017 Trump-era tax cuts for corporations and high-income earners, and no provisions for increased retrieval of unpaid taxes through more vigorous enforcement of taxation collection laws, which is estimated to represent between 200-and-600 billion dollars in lost revenue annually. . My paper will explore the mainstays of current tax benefits, such as the EIC, the DC, and the numerous trickle-down subsidies that inadequately deal with the continuing 'wealth gap" in the U.S., including the acute housing crisis. It examines what "fiscal responsibility" should mean and explores the specific new "work requirement" aspects of the FRA. To wit: what does "able-bodied" mean, what does "work" mean, and how are the exceptions to the proposed restrictions defined? It examines the history of the Personal Responsibility and Work Opportunity Act of 1996, utilizing detailed analyses from the Brookings Institute and other assessment studies of this type of legislation. Lastly, the paper examines other direct implications of the FRA; specifically, how draconian requirements that ignore aggregate economic conditions will inevitably result in more "able-bodied" adults becoming unemployed, impoverished, vulnerable to health calamities, and subject to higher levels of homelessness, criminal behavior, and the calamities that accompany all of these factors.

Tax, Constitutionality, and Democracy (Jennifer Bird-Pollan (Kentucky; Google Scholar), Chair/Discussant): 

The crisis in democracy has its consequences inside the world of tax just as it does outside of tax law. The papers on this panel consider how the destabilization of democracy in all its forms and the consequences of those changes will affect the existence of tax law. Are there ways to resist these democratic challenges, or to operate within the tax law as a tool of resistance to the new world of democratic instability?

David Gamage (Missouri-Columbia; Google Scholar), After Moore: The Present and Future of the Constitutional Law of Taxation: 

The U.S. Supreme Court will be hearing oral arguments in the case of Moore v. United States on December 5th, 2023, and a decision is expected probably in June of 2024. Many commentators have suggested that this case is the most important tax law case in over a century. Depending on how the Court decides, as much as a third of existing tax law could be struck down as unconstitutional. This paper will analyze potential routes for the future of the constitutional law of taxation and what these possible routes mean for various tax reform proposals, including wealth tax reform proposals, mark-to-market income tax reform proposals, and others.

Blaine Saito (Ohio State; Google Scholar), Democratic Equality, Justice, and Taxation: 

Democracy is in trouble around the world, and that creates other problems. After all, democracy and equality have a strong interlinked relation, feeding off each other in a positive feedback loop. Additionally, through deliberation and aggregation, democracy is an epistemically superior form of governance. Taxation, because of its reach and ability to handle power and redistribution, is one part of this puzzle.

Recent scholars have started to focus more on the concept of democracy and taxation, advocating for new criteria, substantive changes to the law, and procedural changes to how policies get made. This article develops a working conception of democratic equality. In doing so, it draws on democratic theorists to put forward two key notions. First, that procedures in policy making should, to the greatest extent possible, treat people as equals in relation with each other. Second, outcomes in tax and other governmental policies should foster the capabilities of people to act in all aspects of civil society to the greatest extent possible without badges of honor or dishonor.

The piece then examines how on the margins, how changing substantive tax provisions and the development of procedures can advance and hinder these notions of democratic equality. The analysis also is bounded by the existence of current institutions, but it shows how rethinking some of these changes can actually help push the tax system and society in a better direction.

Neil Buchanan (Florida; Google Scholar), Society, Democracy, Truth, and Law: 

If modern liberal democracy collapses in the near future, in the US and perhaps elsewhere, what will lawyering look like? Without the rule of law, what will legal systems, including tax systems, look like? How should we prepare ourselves and our students for a post-rule-of-law legal world, either in their own countries or -- if they are lucky enough to live in countries that have held onto pluralist democracy with genuine constraints on power -- in legal interactions with other countries that have become autocratic states?

Luis Calderon Gomez (Cardozo; Google Scholar), Taxation's Limits:

While countless pages have been devoted to the question of why people should pay tax, its obverse has gone largely unnoticed: why should some people and organizations not pay tax? Our tax system exempts from ordinary income taxation a wide and diverse array of people and organizations engaged in significant economic activity-from mothers providing childcare services for their family, to charities operating animal shelters and foreign consular activities-seemingly without an explanation.

This Article develops a normative theory that rationalizes and justifies broad swathes of tax exemptions. Rather than conceiving exemptions as subsidies or individual deviations from a normative base explainable by ordinary politics, the Article argues that exemptions are best understood as recognitions that taxation should have limits. These limits are not arbitrary; they are reflective of deeper collective socio-political judgments about the scope of the State and the public sphere.

The limits theory best explains and justifies three of the most significant exemption regimes-exempting the nuclear family, other sovereigns, and charities. The nuclear family perhaps occupies the center of the private sphere; its location demands its exemption given its intimate and private-not public-character. The exemption for other sovereigns is buttressed in notions of comity and federalism, cautioning against the taxation of a public sphere by others. Lastly, charities' orientation towards purposes aligned with the public sphere and their character as private autonomous associations justify their exclusion from the ordinary limits of taxation, which do extend to businesses that strive to do good and do well. The collective socio-political judgments grounding these exemptions are neither novel nor idiosyncratic; in fact, they are traceable to the work of political theorists of all stripes, from Rawls' liberalism to Nozick's libertarianism and communitarianism à la Walzer or MacIntyre.