Paul L. Caron
Dean


Wednesday, April 8, 2020

Oh Presents Wealth Tax Design: Lessons From Estate Tax Avoidance Online Today At UC-Irvine

Jason Oh (UCLA) presents Wealth Tax Design: Lessons from Estate Tax Avoidance (with Eric Zolt (UCLA)) online at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua BlankVictor Fleischer, and Omri Marian:

OhPresidential candidates Elizabeth Warren and Bernie Sanders have both proposed ambitious new annual wealth taxes based on academic work by Emmanuel Saez and Gabriel Zucman. They project these proposals to raise trillions of dollars over the next ten years. Some critics challenge the Saez-Zucman approach to measuring wealth concentration. Other critics including Larry Summers and Natasha Sarin have used data from estate tax returns and the relatively small amount of revenue the estate tax raises to question the revenue projections of these proposals. This comparison can be useful only if one thinks carefully about specific estate tax strategies and how these strategies translate to an annual wealth tax. This article engages in that exercise. When one takes a closer look at estate tax avoidance and how it maps onto an annual wealth tax, a much more complex narrative emerges.

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April 8, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, April 7, 2020

Reck Presents Tax Evasion By The Wealthy: Measurement And Implications Online Today At Georgetown

Daniel Reck (London School of Economics) presents Tax Evasion by the Wealthy: Measurement and Implications (with John Guyton (IRS), Patrick Langetieg (IRS), Max Risch (Michigan) & Gabriel Zucman (UC-Berkeley)) online at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

ReckThis paper combines random audit data with new data on offshore bank accounts to estimate the size and distribution of individual income tax evasion in the United States. Evasion through offshore financial institutions is highly concentrated at the very top of the income distribution. Random audits virtually never detect this form of evasion. Data from random audits alone suggests an increasing rate of tax evasion through the income distribution up to the 99th percentile, but a sharp drop-off in the rate of evasion with income within the top 1 percent. Accounting for evasion through offshore financial institutions partly reverses this drop-off in the rate of evasion at the top, leading us to revise upwards random-audit estimates of the tax gap for very-high-income earners by 4 to 6 percentage points.

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April 7, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, April 3, 2020

Avi-Yonah Presents Tax Expenditures Online Today At British Columbia

Reuven S. Avi-Yonah (Michigan) and Nir Fishbien (S.J.D. 2020, Michigan) present Tax Expenditures and Horizontal Equity: A Lost Lesson from Stanley Surrey online at University of British Columbia Peter A. Allard School of Law as part of its Tax Law and Policy Workshop Speaker Series (poster) hosted by Wei Cui:

Avi-Yonah 2Tax expenditures are “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.’’ The concept of tax expenditures was coined by the first Assistant Secretary for Tax Policy, Stanley S. Surrey, in the late 1960s. The concept relies on the Haig-Simons definition of income (with certain adjustments) as the baseline, a deviation from which is considered a tax expenditure.

There are two basic problems with attempts to define tax expenditures against a Haig-Simons baseline. First, it is not clear why the Haig-Simons, and not other definitions of income, should be used as a baseline. Second, it is not clear why such deviations are normatively problematic. That, presumably, is why the literature now accepts the view we should just learn to live with the tax expenditures. Surrey would have disagreed, and this article represents an attempt to recapture his original view of tax expenditures and assess its present-day implications.

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April 3, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, April 2, 2020

Osofsky Presents Automated Legal Guidance Online Today At Duke

Leigh Osofsky (North Carolina) presents Automated Legal Guidance, 106 Cornell L. Rev. __ (2020) (with Joshua Blank (UC-Irvine)) online at Duke today as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

Osofsky (2019)Through online tools, virtual assistants and other technology, governments increasingly rely on artificial intelligence to help the public understand and apply the law. The Internal Revenue Service, for example, encourages taxpayers to seek answers regarding various tax credits and deductions through its online “Interactive Tax Assistant.” The U.S. Army directs individuals with questions about enlistment to its virtual guide, “Sgt. Star.” And the U.S. Citizenship and Immigration Services suggests that potential green card holders and citizens speak with its interactive chatbot, “Emma.” Through such automated legal guidance, the government seeks to provide advice to the public at a fraction of the cost of employing human beings to perform these same tasks.

This Article offers one of the first critiques of these new systems of artificial intelligence. It shows that automated legal guidance currently relies upon the concept of “simplexity,” whereby complex law is presented as though it is simple, without actually engaging in simplification of the underlying law. While this approach offers potential gains in terms of efficiency and ease of use, it also causes the government to present the law as simpler than it is, leading to less precise advice, and potentially inaccurate legal positions. 

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April 2, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, March 31, 2020

Satterthwaite Presents Tax Status As A Signal Online Today At Georgetown

Emily Satterthwaite (Toronto) presents Tax Status as a Signal online at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

Satterthwaite (2019)Can an entrepreneur’s choice of tax status act as a signal that conveys valuable private information about her firm in a real-world marketplace?There have been hints that this happens, but exactly how such signaling would work and whether it is normatively desirable has received little scholarly attention. Building on recent survey evidence that small-firm entrepreneurs may view voluntary value-added tax (“VAT”) registration as a way to secure reputational advantages, this paper applies the costly signaling model of Spence (1973) to propose a novel informational account of firms’tax status choices in the context of a VAT. It explores whether an entrepreneur’s choice to voluntarily VAT-register her small firm might function as a signal of the firm’s quality in much the same way that a job applicant’s investment in education can function as a signal of the applicant’s productivity.

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March 31, 2020 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, March 30, 2020

Polsky Presents Explaining Choice-Of-Entity Decisions By Silicon Valley Start-Ups Online Today At BYU

Gregg Polsky (Georgia) presents Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups online at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Polsky (2018)Perhaps the most fundamental role of a business lawyer is to recommend the optimal entity choice for nascent business enterprises. Nevertheless, even in 2018, the choice-of-entity analysis remains highly muddled. Most business lawyers across the United States consistently recommend flow-through entities, such as limited liability companies and S corporations, to their clients. In contrast, a discrete group of highly sophisticated business lawyers, those who advise start-ups in Silicon Valley and other hotbeds of start-up activity, prefer C corporations.

Prior commentary has described and tried to explain this paradox without finding an adequate explanation. These commentators have noted a host of superficially plausible explanations, all of which they ultimately conclude are not wholly persuasive. The puzzle therefore remains.

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March 30, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, March 27, 2020

Auerbach Presents U.S. Inequality And Fiscal Progressivity: An Intragenerational Accounting Online Today At British Columbia

Alan Auerbach (UC-Berkeley) presents U.S. Inequality And Fiscal Progressivity: An Intragenerational Accounting (with Laurence J. Kotlikoff (Boston University) & Darryl Koehler (Economic Security Planning)) online at University of British Columbia Peter A. Allard School of Law as part of its Tax Law and Policy Workshop Speaker Series hosted by Wei Cui:

Auerbach (2020)This study measures inequality and fiscal progressivity. It differs from prior such analyses by measuring inequality based on remaining lifetime spending rather than particular resources, like wealth and current income, that only partially determine lifetime spending, and by considering inequality and progressivity within generations.

To estimate the distribution of remaining lifetime spending, we run the 2016 Federal Reserve Survey of Consumer Finances (after imputing missing data from other surveys) through The Fiscal Analyzer (TFA), a life-cycle consumption-smoothing program that incorporates remaining life-time resources, borrowing constraints and all major federal and state tax and transfer programs.

We find that inequality in wealth and income dramatically overstate inequality in remaining lifetime spending. For example, the richest 1 percent of forty year olds, where resources are measured as the sum of human plus non-human wealth, have 34.1 percent of the cohort’s total non-human wealth, but account for only 14.5 percent of the cohort’s total remaining lifetime spending. The poorest quintile of forty year olds own just 0.6 percent of the cohort’s wealth, but account for 7.3 percent of its remaining lifetime spending.

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March 27, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

De La Feria Presents The Impact Of Public Perceptions On VAT Rates Policy Online Today At Indiana

Rita de la Feria (University of Leeds) presents The Impact of Public Perceptions on VAT Rates Policy (with Michael Walpole (University of New South Wales)) online at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Rdlf-brazil2018The traditional view in VAT is that excluding certain products from its base decreases the natural regressivity of the tax. Whilst this traditionally view has been consistently put into question over the last thirty years by economic and legal evidence, public perceptions are still heavily influenced by it. Using the old European VAT system and the newer Australian VAT system as case studies we demonstrate how policy debates and changes as regards VAT rates have been heavily influenced by those public perceptions, against the evidence, and how industry groups, which would be set to lose out from specific policies, are able to use the information asymmetry subjacent to those perceptions to defend their interest in favour or against reform.

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March 27, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, March 26, 2020

Thomas Presents Taxing Nudges Online Today At Duke

Kathleen Delaney Thomas (North Carolina) presents Taxing Nudges at Duke yesterday as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

Thomas (2019)Governments are increasingly turning to behavioral economics to inform policy design in areas like health care, the environment, and financial decision-making. Research shows that small behavioral interventions, referred to as “nudges,” often produce significant responses at a low cost. The theory behind nudges is that, rather than mandating certain behaviors or providing costly economic subsidies, modest initiatives may “nudge” individuals to choose desirable outcomes by appealing to their behavioral preferences. For example, automatically enrolling workers into savings plans as a default rather than requiring them to actively sign up has dramatically increased enrollment in such plans. Similarly, allowing individuals to earn “wellness points” from attendance at a gym, redeemable at various retail establishments, may improve exercise habits.

A successful nudge should make a desired choice as simple and painless as possible. Yet one source of friction may counteract an otherwise well-designed nudge: taxation.

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March 26, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, March 25, 2020

Kamin Presents How Far To Go In Reforming Taxation Of Wealth? Online Today At UC-Irvine

David Kamin (NYU) presents How Far to Go in Reforming Taxation of Wealth? online at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua BlankVictor Fleischer, and Omri Marian:

Kamin (2018)Reforming the taxation of wealth of individuals is now one of the leading issues among progressive policymakers. It is being prominently discussed on the presidential campaign trail and in the halls of Congress, as a way of addressing our failure to effectively tax some of the richest Americans. Most of these proposals involve significant changes, but some go much further than others and involve more dramatic reforms. The more fundamental reform options come in two basic varieties—annual wealth taxation and accrual income taxation, sometimes known as mark-to-market income taxation. By contrast, the more incremental reforms focus on more targeted changes to the current system with a focus on two key areas: step-up in basis at death and estate and gift taxation. A key question then is how far to go in reforming the taxation of wealth.

This paper presents a qualified case for pursuing the fundamental reform options at least eventually, either annual wealth taxation or accrual taxation.

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March 25, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, March 23, 2020

Bearer-Friend Presents In-Kind Taxpaying: Lessons And Risks Online Today At BYU

Jeremy Bearer-Friend (George Washington) presents In-Kind Taxpaying: Lessons and Risks online at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

BearerFriend (2020)This Article examines non-cash remittance of tax obligations (ie; paying taxes "in-kind"). It begins by defining in-kind taxpaying, describing the early roots of in-kind taxpaying, and documenting the broad variety of inkind taxpaying in the US. It then discusses the lessons and risks of in-kind taxpaying. In doing so, this Article makes three contributions. First, it improves our definition of taxpaying by identifying the wide variety of inkind remittances that already occur in our current tax system, offering a taxonomy for how to understand in-kind remittances within a modern economy that relies primarily on cash taxes. Second, it refutes the presumption that in-kind remittance of tax obligations is not viable, thus expanding the tax tools available to local, state, and federal governments and demonstrating how narrow presumptions about tax remittance have predetermined core tax policy choices. Third, it confronts the substantial dangers of in-kind taxpaying, using these risks to propose new principles for limiting the design and administration of in-kind taxpaying.

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March 23, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, March 20, 2020

Polsky Presents Taxing Buybacks At Duke

Gregg Polsky (Georgia) presented Taxing Buybacks (with Daniel Hemel (Chicago)) at Duke yesterday as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

Polsky (2018)A recent rise in the volume of corporate share repurchases has prompted calls for changes to the rules governing stock buybacks. These calls for reform are animated by concerns that buybacks enrich corporate executives at the expense of productive investment. This emerging anti-buyback movement includes presidential candidates as well as academics and Republicans as well as Democrats. The primary focus of buyback critics has been on securities law changes to deter repurchases, with only passing mention of potential tax law solutions.

This article critically examines the policy arguments against buybacks and arrives at a mixed verdict. On the one hand, claims that buybacks reduce corporate investment and inappropriately reward executives turn out to be poorly supported. On the other hand, the article identifies legitimate tax-related concerns about the rising buyback tide. Buybacks exacerbate two of the U.S. tax system’s most severe flaws. The first is the “Mark Zuckerberg problem”: the effective nontaxation of firm founders on what is essentially labor income. The second is what we call the “Panama Papers problem”: the use of U.S. capital markets by investors in offshore tax havens to generate tax-free returns.

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March 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, March 19, 2020

Galle Presents Taxing (And Regulating) Mass Fundraising Online At BYU

Brian Galle (Georgetown) presented The Kindness of Strangers: Taxing (and Regulating) Mass Fundraising at BYU yesterday as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Galle (2020)This is another story about law and time. Once, the giving of gifts was an intimate act. A gift was a kiss or a handshake in another form: it built trust, cemented alliances, celebrated bonds of love and friendship. Today, money is Popped, it is Zelle’d; it is bundled by ActBlue or Gofundme. Transfers that are unearned by labor or mutual exchange now occur remotely between strangers, and at scales that were unimaginable a few decades ago. Law quite simply has not kept up. My focus here will be on the taxation of gifts, but my analysis will stretch from that humble subject to sweep in global inequality, campaign finance, and the legal architecture of crowdfunding.

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March 19, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, March 18, 2020

Kysar Presents Interpreting By the Rules Online At Georgetown

Rebecca M. Kysar (Fordham) presented Interpreting By the Rules online at Georgetown yesterday as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

Kysar (2018)A promising new school of statutory interpretation has emerged that tries to wed the work of Congress with that of the courts by tying interpretation to congressional process. The primary challenge to this process-based interpretive approach is the difficulty in reconstructing the legislative process. Scholars have proposed leveraging Congress’s procedural frameworks and rules as reliable heuristics to that end. This Article starts from that premise but will add wrinkles to it. The complications stem from the fact that each rule is adopted for distinct reasons and is applied differently across contexts. As investigation into these particularities proceeds, it becomes apparent that the complications are also rooted in something deeper—that Congress’s procedures are often hollow, even fraudulent. Congress, it turns out, breaks its own rules with impunity.

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March 18, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, March 11, 2020

Kim Presents The Digital Services Tax: A Cross-Border Variation Of The Consumption Tax Debate? At UC-Irvine

Young Ran (Christine) Kim (Utah) presented Digital Services Tax: A Cross-border Variation of Consumption Tax Debate? at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua BlankVictor Fleischer, and Omri Marian:

KimThe rise of highly digitalized businesses, such as Google and Amazon, has strained the traditional income tax rules on nexus and profit allocation. Traditionally, profit is allocated to market countries where consumers are located only if the business has physical presence. However, in the digital economy, profits can be easily generated in market countries without a physical presence, resulting in tax revenue loss for market countries.

In response, market countries have started imposing a new tax, called the digital services tax (“DST”), on certain digital business models, which has ignited heated debate across the globe. Supporters defend the DST, designed as a turnover style consumption tax, as an effective measure to make up the foregone revenue in the digital economy because it is not bound by the traditional rules of income taxation. Opponents criticize DST as “ring-fencing” or segregating certain digital business models, discriminating against American tech giants, and arguably imposing a disguised income tax. The debate has been focused on the imminent impact, such as who is the immediate winner and loser, but the discussion lacks efforts to understand the fundamentals of DST, especially with regard to the consumption tax aspect.

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March 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Ring Presents Falling Short In The Data Age Today At UCLA

Diane Ring (Boston College) presents Falling Short in the Data Age (with Shu-Yi Oei (Boston College)) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

Ring (2017)Humans are imperfect and do not always comply with the law, but the reality is that we are sometimes permitted to fall short of law’s requirements without consequences. This informal space to fall short and not be held accountable—which may arise from a confluence of information imperfections, resource constraints, politics, or luck—exists in addition to formal legal provisions that allow flexibility and discretion (such as tiered penalties or equitable provisions allowing leniency under specified circumstances). Fall-short spaces often pass unnoticed, but are in fact quite significant in intermediating the relationship between humans and the law.

This Article examines how the increasing access to data and information will change the availability and shape of law’s fall-short spaces. We introduce a taxonomy of how leeway arises, outlining the reasons it exists and the different ways it is deployed. Applying this taxonomy, we show how increasingly ubiquitous data and information have caused and will continue to cause the availability of leeway to contract, and we highlight the risk that we will see disparate contraction for different populations.

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March 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, March 10, 2020

Haslehner Presents A Framework For International Tax Reform Today At Florida

Werner Haslehner (ATOZ Chair for European and International Taxation, University of Luxembourg) presents Taxation and Value Creation: A Framework for International Tax Reform? at Florida today as part of its Tax Colloquium Series hosted by Yariv Brauner and sponsored by the Marshall M. Criser Distinguished Lecture Series:

HaslenherDigitalization of the global economy forces a rethink of the allocation of taxing rights along the lines of ‘value creation’. The current international tax system relies on a vast network of double taxation conventions (‘DTCs’) intended to allocate taxing rights between States and avoid double taxation. However, the system’s logic is rooted in the early 20th century and not fitting the modern global economy. Today, the traditional thresholds for giving taxing rights to ‘States of source’ hardly reflect the reality of business activity that strongly relies on intangible assets and the provision of remote services, which are not easy to pin down at any particular place. Calls for fundamental changes crystalized in the OECD and G20 initiated BEPS Project launched in 2013 to reform the international tax system with one overall objective: To “ensure that profits are taxed where economic activities take place and value is created.” Yet despite virtual unanimity on that objective and great number of measures already taken purportedly contributing to that objective, there is no clarity on its actual meaning. . . .

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March 10, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, March 9, 2020

Viswanathan Presents Retheorizing Progressive Taxation Today At BYU

Manoj Viswanathan (UC-Hastings) presents Retheorizing Progressive Taxation at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Viswanathan (2017)Tax progressivity is undeniably central to both the detailed analytics of tax policy and the rhetorical arguments commonly used in public discourse. Yet there are surprisingly inconsistent and inaccurate uses of this seemingly objective term. By theorizing progressivity’s constitutive elements and identifying its shortcomings, this Article offers a novel taxonomy of how progressivity is assessed and why contradictory assessments are common.

This Article argues that, as a theoretical matter, accurately characterizing tax provisions as progressive (or regressive) requires assessing their burdens beyond simply the tax payments remitted. By failing to account for effects such as economic incidence and inefficiency costs, traditional progressivity analyses are incomplete. Relatedly, since the spending side of the budget process is functionally indistinguishable from taxation, accurate progressivity analyses must also consider where tax revenues are spent.

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March 9, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, March 6, 2020

Grinberg Presents Against Destination-Based Income Taxation Today At British Columbia

Grinberg​Itai Grinberg (Georgetown) presents Against Destination-Based Income Taxation at the University of British Columbia Peter A. Allard School of Law as part of its Tax Law and Policy Workshop Speaker Series hosted by Wei Cui:

Proposals to reform the corporate international income tax system in the direction of a destination-basis residual profit allocation for the corporate income tax base are capturing the attention of both tax policymakers and tax academics. The tax administration and political economy challenges that would be raised by destination-based residual profit allocation of corporate income taxes remain underexplored. Importantly, some lessons can be learned from analogous experiences in and among the states of the United States and the provinces of Canada. This work in progress explores what can be learned from subnational experiences with destination-based income taxes.

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March 6, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, March 5, 2020

Oh Presents Wealth Tax Design: Lessons From Estate Tax Avoidance Today At Duke

Jason Oh (UCLA) presents Wealth Tax Design: Lessons from Estate Tax Avoidance (with Eric Zolt (UCLA)) at Duke today as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

OhPresidential candidates Elizabeth Warren and Bernie Sanders have both proposed ambitious new annual wealth taxes based on academic work by Emmanuel Saez and Gabriel Zucman. They project these proposals to raise trillions of dollars over the next ten years. Some critics challenge the Saez-Zucman approach to measuring wealth concentration. Other critics including Larry Summers and Natasha Sarin have used data from estate tax returns and the relatively small amount of revenue the estate tax raises to question the revenue projections of these proposals. This comparison can be useful only if one thinks carefully about specific estate tax strategies and how these strategies translate to an annual wealth tax. This article engages in that exercise. When one takes a closer look at estate tax avoidance and how it maps onto an annual wealth tax, a much more complex narrative emerges.

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March 5, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, March 4, 2020

Ryan Presents Employment-Related Taxation Of Prison Labor Today At Indiana

Kerry Ryan (St. Louis) presents Employment-Related Taxation of Prison Labor at Indiana-Bloomington today as part of its Faculty Workshop Series:

RyanPrison labor raises questions about the employment tax treatment of certain types of workers that differ in kind from those usually addressed by other tax scholars. Most existing scholarship assesses whether a particular type of paid worker, for example a gig economy worker, is an employee or an independent contractor. This determination is generally based on the level of control the payor exercises over the payee—too much control and the worker will be deemed an employee rather than an independent contractor. Differing tax consequences flow from the characterization of work relationships under the control test.

Prison labor is a broad term that encompasses a variety of jobs, job settings, and employers. This chapter will focus on two of these forms of inmate work: maintenance and prison industrial. In particular, it will analyze how the IRS characterizes these job assignments for employment tax purposes. While some inmates qualified as employees, others did not. Arguably, these latter prison workers also do not meet the requisite standard for self-employment. Prison labor thus raises an intriguing issue—whether certain paid workers are simply outside the boundaries of the dual employer-independent contractor employment-related tax regime.

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March 4, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Olson Presents The Taxpayer Advocate's Final Report To Congress Today At Toronto

Nina E. Olson (Center for Taxpayer Rights; former U.S. Taxpayer Advocate) presents The Taxpayer Advocate's Final Report to Congress at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Olson (2018)IR-2019-119, National Taxpayer Advocate Nina Olson Delivers Her Final Report to Congress:

National Taxpayer Advocate Nina E. Olson today released her 37th and final report to Congress in advance of her previously announced retirement on July 31. In the preface, Olson reflects on her 18 years in the job and provides her assessment of the key challenges facing the IRS and the Taxpayer Advocate Service (TAS) in the coming years. The report also presents a review of the 2019 filling season.

“I am enormously grateful for the opportunity I have had to advocate on behalf of our nation’s taxpayers,” Olson wrote. “Amazingly, despite the challenges of complying with our multi-million-word tax code, more than 150 million individual taxpayers and more than 10 million business entities do their civic duty every year by filing income tax returns with the IRS. That is an extraordinary achievement and one we should not take for granted.”

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March 4, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, March 3, 2020

Fox Presents A Case For Higher Corporate Tax Rates Today At Georgetown

Edward Fox (Michigan) presents A Case for Higher Corporate Tax Rates (with Zachary Liscow (Yale)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

FoxDespite the huge stakes, there is little scholarly discussion of the appropriate corporate tax rate. Where there is analysis, discussion focuses overwhelmingly on increasing international competition, which suggests lower corporate tax rates. We try to add some balance to the discussion by elaborating on reasons for higher corporate tax rates. In particular, two recent changes militate in favor of higher taxes on corporations: first, changes in the American economy leading to the rise of rents and, second, recent changes in tax law (and potential future changes) making the corporate tax more efficient. Other arguments favor higher rates as well. Although we cannot say what that rate should be, we offer the reasons favoring a higher rate and describe reforms that could help ease the adoption of higher, efficient taxes on corporate profits. We suggest that, at minimum, proponents of lower corporate tax rates present an incomplete picture and that the “lower corporate tax rates” conclusion is a non-obvious one.

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March 3, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, March 2, 2020

Lederman Presents The Fraud Triangle And Tax Evasion Today At BYU

Lederman (2018)Leandra Lederman (Indiana) presents The Fraud Triangle and Tax Evasion at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

The “fraud triangle”—a theory of why people commit fraud—is the preeminent framework for analyzing fraud in the accounting literature. It developed out of studies of fraudsters, including inmates convicted of embezzlement. The three components of the fraud triangle are (1) an incentive or pressure (usually financial), (2) opportunity, and (3) rationalization.

There is a separate, extensive legal literature on tax compliance and evasion. The fraud triangle is largely absent from this legal literature, although tax evasion is a type of fraud. This Article rectifies that oversight, analyzing how using the fraud triangle as a lens can inform the legal literature on tax compliance.

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March 2, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, February 28, 2020

Thomas Presents Taxing Nudges Today At Colorado

Kathleen Delaney Thomas (North Carolina) presents Taxing Nudges at Colorado today as part of its Faculty Colloquium Series:

Thomas (2019)Governments are increasingly turning to behavioral economics to inform policy design in areas like health care, the environment, and financial decision-making. Research shows that small behavioral interventions, referred to as “nudges,” often produce significant responses at a low cost. The theory behind nudges is that, rather than mandating certain behaviors or providing costly economic subsidies, modest initiatives may “nudge” individuals to choose desirable outcomes by appealing to their behavioral preferences. For example, automatically enrolling workers into savings plans as a default rather than requiring them to actively sign up has dramatically increased enrollment in such plans. Similarly, allowing individuals to earn “wellness points” from attendance at a gym, redeemable at various retail establishments, may improve exercise habits.

A successful nudge should make a desired choice as simple and painless as possible. Yet one source of friction may counteract an otherwise well-designed nudge: taxation.

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February 28, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Serrato Presents Unintended Consequences Of Eliminating Tax Havens Today At British Columbia

Juan Carlos Suárez Serrato (Duke) presents Unintended Consequences of Eliminating Tax Havens​ at the University of British Columbia Peter A. Allard School of Law today as part of its Tax Law and Policy Workshop Speaker Series hosted by Wei Cui:

SuarezEliminating firms’ access to tax havens can have unintended consequences for their domestic economic activity. We study a policy that limited profit shifting by US multinationals and show it raised the tax cost of domestic investment. Firms affected by the policy responded by reducing investment and domestic employment. Firm-level responses were amplified to local labor markets through the establishment networks of profit-shifting firms. More exposed local labor markets experienced declines in employment, income, and home values and saw increases in government transfers. Policy proposals that limit profit shifting should therefore consider effects on economic activity in addition to tax revenue.

Conclusion
This paper studies the repeal of §936 as a natural experiment that limited the ability of firms to shift profits to affiliates in Puerto Rico. We use two complementary research strategies to test theoretical predictions that limits to profit shifting raise the effective cost of capital and reduce the domestic activities of exposed firms. Exploiting firm-level exposure to §936, we show that exposed firms lowered their investment and employment in the US. The establishment networks of these firms give rise to spatial variation in exposure to §936. This variation reveals that firmlevel effects were amplified into persistent declines in employment growth for more exposed local labor markets. Overall, we find that reducing the attractiveness of Puerto Rico as a tax haven also reduced employment and investment in firms and regions exposed to §936.

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February 28, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Monahan Presents How Did States Change Their Individual Income Tax In Response To The TCJA? Today At Minnesota

Amy Monahan (Minnesota) presents How Did States Change Their Individual Income Tax in Response to the TCJA? at Minnesota today as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

Monahan (2020)Nearly every state incorporates the federal tax code into its individual income tax system. This widespread practice has been justified as necessary for states to have simple and efficient tax systems. Yet, tying a state’s revenue laws to the federal tax code also leaves states vulnerable to the revenue effects of federal changes and may distort state legislative decisionmaking. The Tax Cuts and Jobs Act (TCJA) provides an excellent opportunity to study how these dynamics impact state tax policymaking. Prof. Monahan will present the results of a study examining how those states with the tightest conformity to federal tax law responded to the TCJA. She will offer suggestions for how states can move past the idea that state individual income tax systems must be tied to the federal tax code.

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February 28, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, February 26, 2020

Blank Presents Automated Legal Guidance Today At SMU

Joshua Blank (UC-Irvine) presents Automated Legal Guidance, 106 Cornell L. Rev. __ (2020) (with Leigh Osofsky (North Carolina)) at SMU today as part of its Faculty Forum Series

6a00d8341c4eab53ef0240a4467a28200c-300wiThrough online tools, virtual assistants and other technology, governments increasingly rely on artificial intelligence to help the public understand and apply the law. The Internal Revenue Service, for example, encourages taxpayers to seek answers regarding various tax credits and deductions through its online “Interactive Tax Assistant.” The U.S. Army directs individuals with questions about enlistment to its virtual guide, “Sgt. Star.” And the U.S. Citizenship and Immigration Services suggests that potential green card holders and citizens speak with its interactive chatbot, “Emma.” Through such automated legal guidance, the government seeks to provide advice to the public at a fraction of the cost of employing human beings to perform these same tasks.

This Article offers one of the first critiques of these new systems of artificial intelligence.

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February 26, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Maag Presents How Earnings And Child Tax Credit Proposals Impact Income Inequality And Vulnerable Children Today At UCLA

Elaine Maag (Tax Policy Center) presents Boosting Wages or Helping Children? Understanding How New Earnings and Child Tax Credit Proposals Impact Income Inequality and Vulnerable Children (with C. Eugene SteuerleRobert McClelland) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

MaagThe earned income tax credit (EITC) and child tax credit (CTC) provide substantial benefits to working families with children. The EITC also provides modest benefits to workers without custodial children, often called “childless workers” for tax purposes. Because the amount of credit childless workers can qualify for is modest, almost all benefits from both credits flow to families with children. Together, the credits lift almost 9 million people out of poverty each year (Fox 2019).

Policymakers are looking to build on the success of these credits and further address the joint issues of income inequality between very high-income people and everyone else (Congressional Budget Office 2019) - fueled in part by wage stagnation (Mishel et al 2018) and relatively poor outcomes for low-income children (Duncan, Ziol-Guest, and Kalil 2010; Ratcliffe 2015). Coupled with the CTC increase that was enacted in 2017 being set to expire after 2025, legislators are considering the next phase of work and child subsidies.

We analyze four expansions to the credits:

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February 26, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, February 25, 2020

Lockwood Presents The Optimal Taxation Of Lotteries Today At Georgetown

Benjamin B. Lockwood (Wharton) presents The Optimal Taxation of Lotteries: Who P(l)ays and Who Wins? (with Hunt Allcott (NYU) & Dmitry Taubinsky (UC-Berkeley)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

Lockwood 2The average American household spends $665 per year playing state-run lottery games. There is a long-standing debate as to whether these lotteries are a regressive “tax on people who are bad at math” or a “win-win” that generates both consumer surplus and government revenues. We study optimal lottery policy through the lens of optimal taxation, where lotteries are a taxed good whose consumers may be subject to behavioral biases. We derive new sufficient statistics formulas for optimal pricing and attributes of a government-provided good. We then estimate the key parameters using lottery prizes and sales data and a large new nationally representative survey. Individual-level lottery expenditures are highly correlated with survey measures of innumeracy and poor statistical reasoning, but our observable measures of behavioral bias statistically explain only about 15 percent of lottery purchases for the average household. We estimate that lottery demand is highly responsive to ticket prices and jackpot amounts, but not to smaller prizes.

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February 25, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Altshuler Delivers Lecture On The International Tax Landscape: Past, Present And Future Today At San Diego

Rosanne Altshuler (Rutgers) delivers the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego today on The International Tax Landscape: Past, Present and Future:

Altshuler (2020)The Tax Cut and Jobs Act made major changes to the system the United States uses to tax the cross-border income of U.S. corporations. Professor Altshuler will discuss what motivated the changes, what the landscape looks like today, and what we might we expect in future reforms.

About the Richard Crawford Pugh Lecture on Tax Law & Policy
The Richard Crawford Pugh Lecture on Tax Law & Policy brings a distinguished practitioner, judge or government official who has played a significant role in shaping U.S. and international tax policy to the law school each year to discuss current and developing tax law and policy trends. The endowed lecture was established in 2009 in honor of the long and illustrious career of USD's Professor of Law Emeritus Richard Crawford Pugh.

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February 25, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, February 24, 2020

Zelenak Presents Design Of Personal Tax Expenditures Today At BYU

Lawrence A. Zelenak (Duke) presents Giving Credits Where Credits are (Arguably) Due: A Half Century’s Evolution in the Design of Personal Tax Expenditures at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

Zelenak (2016)In the late 1960s, when Stanley Surrey introduced the concept of tax expenditures and the federal government began producing tax expenditure budgets, personal tax expenditures in the form of deductions (for nonbusiness interest, charitable donations, state and local taxes, and medical expenses) equaled roughly 1.2 percent of GDP and personal tax expenditures in the form of credits were virtually nonexistent. Although Surrey was critical of all tax expenditures, he had particular scorn for tax expenditures in the form of deductions, which he characterized as upside-down subsidies. He explained that converting deduction tax expenditures to credits would make them less objectionable, by eliminating their upside-down character. Over the ensuing half century, Congress has shifted from deductions to credits–gradually for decades, with a dramatic acceleration of the shift in 2017. Today, in sharpest contrast with the Surrey era, major tax expenditures in the form of personal credits equal roughly 1.27 percent of GDP, while major deduction expenditures have fallen to about 0.62 percent. This article describes this fundamental transformation of a significant fraction of the national economy, first from a big-picture perspective, and then with detailed accounts of the evolution of the major personal tax expenditures.

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February 24, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Kleiman & Barry Present The Arbitrary Foreign Tax Credit At San Diego

Ariel Kleiman (San Diego) & Jordan Barry (San Diego) presented The Arbitrary Foreign Tax Credit at San Diego last Friday as part of its Faculty Colloquium Series:

Kleiman BarryThe foreign tax credit allows taxpayers a dollar-for-dollar offset against U.S. tax liability for foreign income taxes paid abroad. It is a cornerstone of the U.S.’s international tax architecture. Unfortunately, careful analysis reveals that it is surprisingly arbitrary, in two ways.

First, the concept of an income tax is indeterminate, since economically identical levies can be decomposed into multiple combinations of income taxes and other taxes, with the income tax element varying in size. Thus, when considering whether, and to what extent, a levy is an income tax, there is not one “economically correct” answer. Second, policy rationales underlying the foreign tax credit fail to justify limiting it to income taxes only, as current regulations require. Rather, faithfully following purported policy justifications would require expanding creditability to other, non-income taxes. Thus, the credit’s design is strategically arbitrary, as it fails to achieve the goals that the credit is meant to pursue.

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February 24, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, February 20, 2020

Liscow Presents Equality, Taxation, And Law & Economics Today At Indiana

Zach Liscow (Yale) presents Equality, Taxation, and Law and Economics in the 21st Century at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Liscow (2017)Inequality is one of the defining issues of our time. Orthodoxy among public policy scholars, prominently including those in law and economics, has long been that the most effective means of addressing inequality is through taxes and transfers—in other words, cash. Given the choice between cash and in-kind legal changes, goods, or services, cash seems better because it lets the recipient choose what to get and the payer choose what to give up. So the law should ignore equity and let its distributive alibi, taxes, address those concerns.

Unfortunately, our standard approach is deeply at odds with social reality, so it yields bad policy prescriptions that fail to address or even magnify inequality. Ordinary people don’t think about policy like economists do, fungibly trading off redistribution through one means or another. Instead, people view policies through their own internal norms. For tax policy, the poor are deemed to not deserve free cash and the rich are deemed to deserve a decent share of their income, thwarting sufficient redistribution through taxation. A democracy where Congress is attentive to such views will need to look elsewhere to achieve distributive justice.

The Article turns standard economics prescriptions on their heads.

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February 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Oei Presents Falling Short In The Data Age Today At Northwestern

Shu-Yi Oei (Boston College) presents Falling Short in the Data Age (with Diane Ring (Boston College)) at Northwestern today as part of its Advanced Topics in Taxation Colloquium Series hosted by Herbert Beller, David CameronCharlotte Crane, Sarah LawskyAjay MehrotraPhilip Postlewaite, and Jeffrey Sheffield:

Oei (2019)Humans are imperfect and do not always comply with the law, but the reality is that we are sometimes permitted to fall short of law’s requirements without consequences. This informal space to fall short and not be held accountable—which may arise from a confluence of information imperfections, resource constraints, politics, or luck—exists in addition to formal legal provisions that allow flexibility and discretion (such as tiered penalties or equitable provisions allowing leniency under specified circumstances). Fall-short spaces often pass unnoticed, but are in fact quite significant in intermediating the relationship between humans and the law.

This Article examines how the increasing access to data and information will change the availability and shape of law’s fall-short spaces. We introduce a taxonomy of how leeway arises, outlining the reasons it exists and the different ways it is deployed. Applying this taxonomy, we show how increasingly ubiquitous data and information have caused and will continue to cause the availability of leeway to contract, and we highlight the risk that we will see disparate contraction for different populations.

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February 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, February 19, 2020

Satterthwaite Presents Toward A Signaling Account Of Voluntary VAT Registration Today At UCLA

Emily Satterthwaite (Toronto) presents Toward a Signaling Account of Voluntary Value-Added Tax Registration at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

Satterthwaite (2019)In most jurisdictions, “small suppliers” (typically defined as businesses with annual turnover less than a specified “registration threshold”) are not required to register for, collect, or remit value-added tax (“VAT”). Registration thresholds typically are coupled with another VAT design feature: exempt small suppliers are offered the option to register. Existing studies have shown that, due to the ability to offer and claim credits for VAT paid on inputs, a small supplier’s likelihood of voluntarily registering grows stronger as it becomes more embedded in formal, VAT-registered supply chains. Recently, however, a novel explanation for voluntary VAT registration has surfaced: small supplier entrepreneurs may view voluntary registration as a way to secure reputational advantages. This paper explores the conceptual underpinnings of such an explanation for voluntary VAT registration through the lens of the costly signaling model (Spence 1973).

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February 19, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Gale Presents Raising Revenue With A Progressive Value-Added Tax Today At UC-Irvine

William Gale (Tax Policy Center) presents Raising Revenue with a Progressive Value-Added Tax at  UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua BlankVictor Fleischer, and Omri Marian:

Gale (2020)To raise revenue in a progressive, efficient, and administrable manner, this chapter proposes a new national consumption tax: a broad-based credit-invoice value-added tax (VAT). The proposal comes with several qualifications: the VAT should complement, not substitute for, new direct taxes on the wealth or income of affluent households; to ensure the policy change is progressive, the VAT should be coupled with adjustments to government means-tested programs to account for price level changes, and with a universal basic income (UBI) program; to avoid having the VAT depress the economy, revenues should be used to raise aggregate demand in the short run and the Federal Reserve should accommodate the tax by allowing prices to rise. A 10 percent federal VAT that funded a UBI equal to 20 percent of the federal poverty line would be highly progressive (with net income rising among the bottom forty percent and not changing in the middle quintile) and would still raise more than 1 percent of GDP in net revenue. VATs are a proven success, existing in 168 countries. VATs have been proposed by both Democrats and Republicans in recent years. Concerns about small businesses, vulnerable populations, and the states can be easily addressed.

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February 19, 2020 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Tuesday, February 18, 2020

Dean Presents A Constitutional Moment For Cross-Border Taxation Today At Boston College

Steven Dean (NYU) presents A Constitutional Moment for Cross-Border Taxation at Boston College yesterday  as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Dean (2020)For nearly a century, the taxation of cross-border transactions proved remarkably stable. But in the wake of the financial crisis, the consensus underlying that stability has finally fractured. In the United States, the austerity that followed the great recession prompted calls for tax law changes at or beyond the limits of Congressional authority. The taxation of cross-border transactions finds itself at a similar crossroads, but with fewer signposts. Pivotal questions about the assumptions at the heart of the taxation of cross-border transactions have entered the public discourse. An unprecedented popular focus and extraordinary actions by governments and intergovernmental actors have signaled the start of a constitutional moment for cross-border taxation. A window of opportunity exists for revising the basic law governing cross-border taxation, but a conservative countermobilization works to preserve the status quo.

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February 18, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, February 17, 2020

Morse Presents Two Papers On Artificial Intelligence Today At Florida

Susan C. Morse (Texas) presents two papers at Florida today:

Morse (2018)When Do Tax Compliance Robots Follow the Law?, 1 Ohio St. Tech. L. J. ___ (2020) (symposium), as part of Florida's Tax Colloquium Series hosted by Yariv Brauner:

Algorithmic tax compliance robots, such as TurboTax, have long implemented the tax law using systems that make centralized legal decisions without direct user control. These robots generally follow the government’s interpretation of the substantive tax law. But they appear to break other laws, like taxpayer data protection requirements under the Free File agreement with the IRS. They also do little to encourage taxpayer honesty.

This Essay argues that market incentives explain this difference. Sometimes the market may encourage overcompliance, through risk-averse interpretations of substantive tax law. Sometimes market incentives encourage illegal actions by a tax compliance robot, as in the case of taxpayer data violations. Sometimes the market encourages undercompliance through the tacit cooperation between tax compliance robot and the user, as in the case of user fraud.

Artificial Intelligence as Customary Law, as part of Florida's Marshall M. Criser Distinguished Lecture Series:

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February 17, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, February 13, 2020

Roin Presents The Case For (And Against) Surrogate Taxation Today At Duke

Julie Roin (Chicago) presents The Case For (And Against) Surrogate Taxation, 39 Va. Tax Rev. 239 (2019), at Duke today as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

Roin (2020)The 2017 Tax Cut and Jobs Act significantly revised long-standing rules regarding the tax treatment of many employer-provided in-kind benefits. Instead of including the value of these benefits in the recipients’ taxable income, for the most part the new rules disallow employers a deduction for the cost of providing the affected benefits. This article argues that the two components of this legislative scheme – relying on cost of provision as the measure of taxable income and on imposing the nominal tax obligation on providers rather than recipients – are distinct policy decisions. It argues that the better approach would be to require employers to allocate their costs of providing benefits among recipients of those benefits.

IV. The Bottom Line  Surrogate taxation has been lauded as the “second best” mechanism for dealing with a perennial tax policy dilemma: how to tax in-kind benefits provided by employers. This analysis certainly seems to have been accepted by Congress; the TCJA’s treatment of formerly tax-advantaged fringe benefits seems to adopt this approach whole heartedly. This article attempts to undercut some of the enthusiasm for this approach. In particular, it suggests that if the goal is to drive such benefits out of the system—to cause employers to move further in the direction of cash compensation, and to reduce the social inefficiencies of those benefits that remain—it may be better to force employers to allocate the costs of providing those benefits to their employee recipients.

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February 13, 2020 in Colloquia, Scholarship | Permalink | Comments (0)

Lang Presents Double Taxation Conventions​ And The Law's Regulation Of Its Own Interpretation Today At British Columbia

Michael Lang (Head of the Institute for Austrian and International Tax Law, WU Vienna University of Economics and Business) presents Can Law Regulate its Own Interpretation? The Example of Double Taxation Conventions​ at the University of British Columbia Peter A. Allard School of Law as part of its Tax Law and Policy Workshop Speaker Series hosted by Wei Cui:

Lang 3One cannot overestimate the importance of interpretation provisions. They are an attempt to put limits to the powers of judges in interpretation. In doing so, they emphasise individual aspects that need to be taken into account for interpretation. However, they by no means conclusively regulate the approach to be taken in interpretation. After all, this would have been impossible: Thinking processes cannot be subjected to a detailed regulation.

Against this background, one must also relativize the interpretation rules found in the VCLT. In the case of double taxation conventions, it is already questionable as to whether a legal basis exists for regarding them as binding rules at all. In addition, they are limited to highlighting individual aspects of the interpretation of international law treaties. Moreover, they can by all means be adequately used for a given subject. Accordingly, subsequent agreements between the Contracting Parties and a subsequent practice are only of minor significance—if any—in the case of tax law treaties. 

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February 13, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, February 12, 2020

Hellwig Delivers Annual Tax Lecture Today At San Francisco

Brant J. Hellwig (Dean, Washington & Lee) delivers the annual E.L. Wiegand Visiting Fellow Lecture at San Francisco today on The Tax Plight of the High-Salary Employee after the 2017 Tax Legislation:

HellwigPrior to the enactment of the 2017 Tax Cuts and Jobs Act, employees stood at modest tax disadvantage in comparison to independent contractors and individuals who successfully converted labor into a return on equity. The 2017 legislation, however, made matters significantly worse in relative terms for the high-salary employee. This presentation will explore this development through an analysis of the limitations on the deductibility of business-related expenses, the effective marginal rates that apply to labor income in the employment and self-employment sectors (focusing on the effect of IRC § 199A), and the effective marginal rates that apply to earnings generated through business entities.

Prior E.L. Wiegand Visiting Fellow Lectures:

February 12, 2020 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Agrawal Presents Wealth Taxation And Mobility Today At UCLA

David Agrawal (Kentucky) presents Paraísos Fiscales, Wealth Taxation, and Mobility at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Kirk Stark and Jason Oh:

DraThe recent reintroduction of the wealth tax in Spain resulted in regional governments exercising their powers to change wealth tax rates. Although most regions levied top tax rates of in excess of 2.5%, Madrid did not tax wealth, resulting in a tax haven internal to Spain. This decentralized wealth taxation provides us with a unique opportunity to study the mobility of taxable wealth. We exploit administrative data on individual wealth tax returns, along with longitudinal data on individual capital income tax returns and residential locations. Exploiting a generalized difference‐in‐differences design, we find that regional wealth taxes substantially influence the location of taxable wealth.

By four years following the decentralization, the share of wealth tax filers and the share of taxable wealth in Madrid declined by approximately 7%. Then, exploiting an individual location choice model, we find that a one percentage point increase in the net‐of‐tax rate for a given region increases the probability of relocating wealth to that region by 8 percentage points. The effect of wealth taxes on mobility are largest for older individuals, but does not depend on the amount of real estate wealth. We provide suggestive evidence that the relocation of wealth is driven by tax evasion rather than real relocation. Our results have important policy implications for the structure of wealth taxes as recently proposed in several countries.

February 12, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, February 11, 2020

Liu Presents Exploring Residual Profit Allocation Today At Georgetown

Li Liu (IMF), Exploring Residual Profit Allocation (with Sebastian Beer, Ruud de Mooij, Shafik Hebous, Michael Keen) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Brian Galle:

Liu 2Schemes of residual profit allocation (RPA) tax multinationals by allocating their‘routine’profits to countries in which their activities take place and sharing their remaining ‘residual’profit across countries on some formulaic basis. They have recently and rapidly come to prominence in policy discussions, yet almost nothing is known about their impact on revenue, investment and efficiency. This paper exploresthese issues, conceptually and empirically. It finds residual profits to be substantial, but concentrated in a relatively few MNEs, headquartered in few countries. The impact on tax revenue of reallocating excess profits under RPA, while adverse for investment hubs, appears beneficial for lower income countries even when the formula allocates by destination-based sales.

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February 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Pistone Presents International Tax Nexus In The Digitalized Economy Era Today At British Columbia

Pasquale Pistone (WU Vienna University of Economics & Business; Academic Chair, International Bureau of Fiscal Documentation (IBFD), Netherlands) presents International Tax Nexus: New Challenge in the Era of the Digitalized Economy at the University of British Columbia Peter A. Allard School of Law as part of its Tax Law and Policy Workshop Speaker Series hosted by Wei Cui:

Pistone 3Tax nexus determines whether a country has the jurisdiction to tax. Over the past decades, countries have expanded the personal and objective nexus for tax purposes, including on anti-tax avoidance grounds. The global business models of the digitalized economy challenge the validity of the concepts and criteria that determine the tax nexus, questioning a possible need for their reconsideration. Several States are exercising their source-based tax jurisdiction on business income regardless of the existence of a permanent establishment on their territory. The analysis of such cases constitutes the starting point to test whether the permanent establishment concept still constitutes a reliable proxy for source-based taxation of business income.

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February 11, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, February 10, 2020

Schizer Presents Countering Inefficiency At Nonprofits With Better Disclosure Today At Boston University

David Schizer (Columbia) presents Innovation or Stagnation? Countering Inefficiency at Nonprofits With Better Disclosure at Boston University today as part of its Tax Policy Colloquium hosted by David Walker:

Schizer (2019)U.S. nonprofits spend $2.54 trillion every year. While some are laboratories of innovation, others are stagnant backwaters. This Article breaks new ground in explaining why nonprofits tend to operate inefficiently and in proposing a response: better disclosure. The literature attributes this inefficiency to a nonprofit’s inability to distribute profits; since managers and board members cannot keep a surplus, they have less reason to maximize it. This Article argues that the problem is not just motivation, but also information: measuring success is harder at nonprofits. Instead of tracking profitability, they use metrics that are less reliable or harder to measure (or both). When performance is harder to track, incompetence and self-interested practices are less visible, and thus are harder to prevent.

Board members and major donors can press management to operate more efficiently, but only if they have the right information. Yet mandatory disclosure under current law focuses on governance and solvency, rather than on the nonprofit’s work. To fill this gap, nonprofits should share data and analysis on the importance of their mission and on the impact and cost-effectiveness of their programs.

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February 10, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Scharff Presents Revisiting Local Income Taxes Today At San Diego

Erin Scharff (Arizona State) presents Constraining States and Protecting the Local Fisc at San Diego today as part of its Tax Law Speaker Series hosted by Jordan Barry, Miranda Perry Fleischer, and Ariel Jurow Kleiman:

Scharff (2017) It has been decades since legal scholarship has seriously explored the role of local income tax laws in municipal finance, but recent federal and state court cases are changing the laws related to municipal income taxation. At the same time, local governments are increasingly searching for new sources of revenue, especially as they face increasing pension obligations and increasing maintenance costs on aging infrastructure. Among the political left, there has been a resurgence in interest in progressive taxation. So far, however, this political moment has not resulted in significant efforts to reform local tax policy, no doubt in large part due to the limited authority local governments often have under state law, but this may be changing. Meanwhile, there are also efforts at the state level to undermine local income taxes in Ohio, a state where local governments have long relied on such taxes.

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February 10, 2020 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Clausing Presents Fixing Five Flaws Of The Tax Cuts And Jobs Act Today At BYU

Kimberly A. Clausing (Reed College; moving to UCLA), presents Fixing Five Flaws of the Tax Cuts and Jobs Act at BYU today as part of its Tax Policy Colloquium Series hosted by Cliff Fleming and Gladriel Shobe:

The tax legislation commonly referred to as the Tax Cuts and Jobs Act (Public Law 115-97) came into effect in 2018. The new tax law was flawed in five important ways. First, the law generates large deficits that will reduce the ability of government to fund important priorities in the future; these deficits also risk justifying a more tepid fiscal response to the next recession.

Clausing 1

Second, after more than 35 years of increasing income inequality, the tax law moves the tax system in a regressive direction.

Clausing 4

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February 10, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, February 7, 2020

Monahan Presents Against State Individual Income Tax Conformity At Duke

Amy Monahan (Minnesota) presented Against State Individual Income Tax Conformity at Duke yesterday as part of its Tax Policy Workshop Series hosted by Richard Schmalbeck and Lawrence Zelenak:

Monahan (2020)Nearly every state incorporates the federal tax code into its individual income tax system. This widespread incorporation has many supporters and has been justified on the basis that it is necessary in order for states to have a simple and efficient tax system. This article argues that the benefits of incorporation are overstated and that such incorporation results in either a loss of state sovereignty or the needless complication of the state tax legislative process, all while increasing revenue volatility. It buttresses these arguments through a novel examination of how states that tightly conformed to the federal individual income tax responded to the recently enacted Tax Cuts and Jobs Act which, for these states, would have both raised state taxes and changed the distribution of state tax burdens in a way that disadvantaged large families.

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February 7, 2020 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink | Comments (0)

Shobe Presents Economic Segregation And The Local Tax Deduction Today At Florida

Shobe (2018)Gladriel Shobe (BYU) presents Economic Segregation and the Local Tax Deduction at Florida today as part of its Tax Colloquium Series hosted by Yariv Brauner:

Economic segregation has increased over the past half century. The trend of rich localities getting richer while poor localities get poorer is particularly concerning because it limits upward mobility and perpetuates intergenerational income inequality. This Article makes the novel argument that the state and local tax deduction rewards, and likely contributes to, economic segregation. It arrives at that conclusion by showing that the “local tax deduction” provides a greater subsidy, per capita, for wealthy, economically segregated localities because only those localities have a critical mass of wealthy taxpayers who claim the deduction. This allows wealthy localities, but not poor localities, to provide services at a costless than face value to their residents. This Article argues that the deduction’s subsidy for wealthy localities rewards and likely contributes to economic segregation because it provides an incentive for the wealthy to segregate into wealthy, subsidized localities over less segregated and less subsidized localities.

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February 7, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)