Paul L. Caron
Dean


Wednesday, December 4, 2019

Schizer Presents Getting More Out Of Nonprofit Subsidies: Measuring Success And Better Disclosure Today At Penn

David M. Schizer (Columbia) presents Getting More out of Nonprofit Subsidies: Challenges in Measuring Success and the Need for Better Disclosure at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Schizer (2016)The U.S. nonprofit sector spends $2.54 trillion each year, and benefits from billions of dollars in tax subsidies. If this sector was a country, it would have the eighth largest economy in the world — behind Britain and France, and ahead of Brazil, Italy, Canada, and Russia. How can we encourage nonprofits to allocate resources more efficiently, so they pursue socially valuable missions with impactful and cost-effective programs? To answer these questions, this Article makes two contributions to the literature.

First, this Article breaks new ground in explaining why efficient resource allocation is harder at nonprofits. To account for this inefficiency, the literature invokes their inability to distribute profits; if no one can keep these profits, no one is motivated to maximize them. In contrast, this Article argues that inefficiencies can arise at nonprofits not only because charities cannot distribute profits but, more fundamentally, because they are not trying to earn profits to begin with. So instead of measuring success with profitability, which is fairly straightforward, nonprofits have to use proxies for social return that are hard to measure or unreliable (or both). This difficulty in tracking progress is familiar, but it has an important implication for governance that is new to the literature: when success is hard to measure, inefficient practices are less visible, and thus are harder to stop.

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December 4, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, December 3, 2019

Lockwood Presents The Optimal Taxation Of Lotteries Today At UC-Berkeley

Benjamin B. Lockwood (Wharton) presents The Optimal Taxation of Lotteries (with Hunt Allcott (NYU) & Dmitry Taubinsky (UC-Berkeley)) at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Lockwood 2Publicly-administered lotteries in the U.S. collect more than $70 billion annually in revenues, and are alternatively viewed as either a regressive tax on consumers who misunderstand their low expected value, or as a sensible way to raise revenue for public goods while generating consumer surplus. We study optimal lottery policy as a question of optimal taxation, in which lotteries are a taxed good whose consumers may be subject to behavioral biases. We derive a new sufficient statistics formula for the optimal regulation of product attributes, which guides our empirical analysis. We then estimate key statistics using historical lottery sales, prize data, and a large new nationally representative survey. Our findings suggest demand is highly responsive to ticket price and the expected value of top prizes, but not to the expected value of smaller prizes. We also estimate the share of lottery consumption that can be attributed to behavioral biases.

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December 3, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Blank Presents Progressive Tax Procedure Today At NYU

Joshua Blank (UC-Irvine) presents Progressive Tax Procedure (with Ari Glogower (Ohio State)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

6a00d8341c4eab53ef0240a4467a28200c-300wiAbusive tax avoidance and tax evasion by high-income and wealthy taxpayers pose unique threats to the tax system. These strategies undermine the tax system’s progressive features and distort its distributional burdens. Responses to this challenge generally fall within two categories: calls to increase IRS enforcement and proposals to target the specific strategies that enable tax avoidance and evasion by these taxpayers. For example, taxpayers who engage in certain tax shelter transactions or hold assets abroad face additional compliance obligations and potential tax penalties.

This Article presents the case for “progressive tax procedure” — means-based adjustments to the tax procedure rules as they apply to high-income and wealthy taxpayers. In contrast to the activity-based responses in current law, progressive tax procedure would tailor rules to the characteristics of the actors rather than their activities. Instead of focusing exclusively on specific potentially abusive activities, such as “reportable transactions,” progressive tax procedure would adjust tax procedure rules based on the taxpayer’s income or net assets. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies than other taxpayers.

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December 3, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Wednesday, November 27, 2019

Maynard Presents Converting Student Loans (And Other Aid Programs) To Cash Grants Today At Toronto

Goldburn P. Maynard Jr. (Louisville) presents Hold on to Your Student Loan . . . I’ll Take the Cash Instead at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Maynard (2019)The federal government has finally admitted what some knew and others suspected: the federal student loan program is veering into hot mess territory. At the end of January, the U.S. Department of Education’s (DOE) Office of Inspector General released its final audit report (OIG Report) regarding the cost of income-driven repayment (IDR) plans and loan forgiveness programs. The report gave a stark assessment: “Decision makers and others may not be aware of the growth in the participation in these IDR plans and loan forgiveness programs and the resulting additional costs. They also may not be aware of the risk that, for future loan cohorts, the Federal government and taxpayers may lend more money overall than is repaid from borrowers.“ Although federal student aid programs have been blessed by legislators and presidents and reauthorized over several decades the intricacies of their impact have been little known by those in Congress.

The OIG Report confirmed what scholars had warned about in previous years: the costs of the IDR and loan forgiveness programs had been vastly underestimated. Even more troubling is the fact that their benefits disproportionately accrue to borrowers with high incomes who attend expensive institutions. The intent of this federal program was both honorable and well-meaning, as most subsidies are, but the result should not be a surprise. Every policymaker worth her salt knows that government programs are subject to the law of unintended consequences. First developed by Robert K. Merton, the law of unintended consequences states that unanticipated or unintended effects invariably result from human action, most often government action in the form of legislation and regulation.

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November 27, 2019 in Colloquia, Legal Ed Scholarship, Legal Education, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, November 26, 2019

Paul Presents A Re-Examination Of The ‘Helen of Troy’ Regulations Today At NYU

Deborah L. Paul (Wachtell, Lipton, Rosen, and Katz, New York) presents Has Helen’s Ship Sailed? A Re-Examination of the ‘Helen of Troy’ Regulations at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Paul 4On January 5, 1994, Helen of Troy Corporation announced a special meeting of shareholders to vote upon an exchange agreement pursuant to which Helen of Troy Corporation would be acquired by Helen of Troy Limited. Helen of Troy Corporation was incorporated in Texas, while Helen of Troy Limited was organized in Bermuda. The Bermuda company was, in the words of the proxy, “formed to facilitate the change of domicile” of the Texas company.1 Three months later, on April 18, 1994, the Internal Revenue Service released Notice 94-462 causing shareholder gain to be recognized under Section 367(a) in outbound stock-for-stock transactions along the lines that Helen of Troy contemplated. The Internal Revenue Service (“IRS”) perceived a threat to the corporate tax base, stating that it had become “concerned that widely-held U.S. companies with foreign subsidiaries recently have undertaken restructurings for tax-motivated purposes.

The release of Notice 94-46 was a pivotal moment. Prior to that time, Section 367(a) had not expressly been used to protect against erosion of the domestic corporate tax base. By the same token, since that time, a host of protections against erosion of the domestic corporate tax base via corporate expatriations have been enacted or promulgated. The time is ripe to reexamine the role of Section 367(a) in protecting against corporate base erosion. ...

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

Monday, November 25, 2019

Moon Presents Capital Gains Taxes And Real Corporate Investment Today At UC-Berkeley

Terry S. Moon (British Columbia) presents Capital Gains Taxes and Real Corporate Investment at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

MoonThis paper assesses the effects of capital gains taxes on investment by exploiting a unique institutional setting in Korea, where the capital gains tax rates vary by firm size. I use a difference-in-differences design that compares the outcomes of firms whose tax rates were reduced, due to an unanticipated reform in 2014, to the outcomes of unaffected firms. I find that firms whose capital gains tax rates dropped from 24 percent to 10 percent increased investment by 48 log points, with the implied medium-run elasticity of 2.6 with respect to the net of tax rate, and increased newly issued equity by 5 cents per dollar of lagged revenue. The effects of the tax cut were larger for firms that appeared more cash-constrained, suggesting that these firms faced a higher marginal cost of investment, and for firms that appeared to have more agency conflicts. Taken together, these findings are consistent with a class of the “traditionalview” models predicting that lower capital taxes spur equity-financed investment by increasing the marginal returns on investment.

November 25, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, November 22, 2019

Burke Presents The Factitious Allure Of Passthrough Parity At Northwestern

Karen C. Burke (Florida) presented The Factitious Allure of Passthrough Parity at Northwestern on Wednesday as part of its Advanced Topics in Taxation Colloquium Series hosted by Herbert Beller, David Cameron, Charlotte Crane, Sarah Lawsky, Ajay Mehrotra, Philip Postlewaite, and Jeffrey Sheffield:

Burke (2019)In 2017, Congress enacted § 199A, purportedly to maintain tax parity for corporate and noncorporate businesses. Despite concerns about mass conversions to the corporate form, upon closer examination § 199A appears largely to preserve the passthrough advantage, while raising issues concerning the relative tax efficiency of different passthrough types. Other factors, such as the use of partnerships to achieve an asset basis step-up with a single-level tax on sale of a business, are also likely to influence the choice of entity. Moreover, the 2017 Act encourages both corporate and noncorporate owner-managers to mischaracterize labor income as business income, thereby minimizing total income and employment tax exposure.

November 22, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (2)

Thursday, November 21, 2019

De La Feria Presents Tax Fraud And Selective Law Enforcement At Toronto

Rita De La Feria (University of Leeds School of Law) presented Tax Fraud and Selective Law Enforcement at Toronto yesterday as part of its James Hausman Tax Law and Policy Workshop Series:

De-la-FeriaThis article presents a new conceptual framework for research into tax fraud. Informed by research approaches from across tax law, public economics, criminology, criminal justice, and regulatory theory, its proposed analytical framework assesses the effectiveness, and the legitimacy, of current approaches to combating tax fraud. The last decade has witnessed significant intensification of antitax fraud policy within Europe, with an upsurge in both legislative and administrative measures that purportedly target tax fraud. Using VAT as a case study, it is argued that these measures display a fundamental misunderstanding of the phenomenon of tax fraud, and in particular of the various costs it carries, by concentrating upon combating the revenue costs of fraud, rather than the fraud itself. Whilst measures deployed to combat revenue costs, and those deployed to combat the tax fraud, will often coincide, this will not always be the case. In those cases where they do not coincide prevalence is consistently given to enforcement measures addressing revenue costs, rather than combatting the fraud itself, even where the effect is to aggravate other costs of tax fraud, such as distortions to competition, or tax inequity, or to create an incentive to future non-compliance.

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

Wednesday, November 20, 2019

Phillips & Nelson Present Macroeconomic Effects Of Reducing OASI Benefits Today At Penn

Kerk Phillips (CBO) & Jaeger Nelson (CBO) present Macroeconomic Effects of Reducing OASI Benefits: A Comparison of Seven Overlapping-Generations Models at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

CBOIn this paper we evaluate the effects of a reduction in Social Security’s Old-Age and Survivors Insurance (OASI) benefits using seven different quantitative general equilibrium overlapping-generations (OLG) models. We compare the effects of an anticipated one-third reduction in OASI benefits beginning in 2031 on an economy that maintains currently scheduled benefits. We find many of the models generate qualitatively similar results concerning budgetary and macroeconomic aggregates; however, the magnitude of the effects varies owing to the models’ structure and calibration strategies.

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November 20, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

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

Young Ran (Christine) Kim (Utah) presented The Digital Services Tax: A Crossborder Variation of Consumption Tax Debate at the University of Vienna yesterday as part of its Faculty Workshop Series hosted by Sabine Kirchmayr-Schliesselberger (University of Vienna) and Neil Buchanan (Florida):

KimAs highly digitalized business models, such as Google, Amazon, and Facebook, have been mainstreamed in the economy, the traditional profit allocation and nexus rules of taxation are further strained. Traditionally, profit is allocated to market countries when the business has physical presence there. However, highly digitalized business models can generate profits in market countries without physical presence. Thus, market countries, especially the EU, have started imposing a digital services tax (“DST”) on the gross revenue generated in jurisdictions with highly digital business models, which has ignited heated debate across the globe.

DST is criticized as “ring-fencing,” or segregating, certain digital business models, because it arguably imposes a disguised corporate income tax on the profits of only certain digital firms, which discriminates against American tech giants. However, while DST is politically driven, the criticism is largely based on practical concerns and focused on the imminent impact, such as who is the winner and loser in the short term, rather than considering DST theoretically. More importantly, there is little discussion of the consumption tax aspect of the DST. DST is a turnover tax, which is a subcategory of consumption tax levied on the gross revenue of a firm. However, strangely, there is little discussion of the theoretical value of DST as a consumption tax.

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November 20, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, November 19, 2019

Bankman Presents Mr. Smith Gets An Education: Why It Is So Hard To Get Easy Tax Filing Today At NYU

Joseph Bankman (Stanford) presents Mr. Smith Gets an Education: Why it is so Hard to get Easy Tax Filing at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

I Bankman (2016)magine that one day, you get a note in the mail from Visa saying that starting next month, Visa will no longer be sending itemized bills (or indeed, any bills at all) to its cardholders. Instead, it will be the responsibility of every Visa cardholder to keep a record of all purchases, and refunds charged or credited to their account during the month, along with late payments and late fees, interest accruing on unpaid balances, and then tote it all up at the end of the month to figure out how much they owe Visa. If cardholders inadvertently omit some charges and pay Visa too little, you’re informed, Visa will assess interest and penalties on the underpayment.

Why on earth would Visa do such a thing?, you wonder. After all, Visa already has all that information in its computers, which can automatically calculate from that information the net amount you owe. Why should individual cardholders duplicate that effort, at considerable annoyance and expense to themselves, and with the dead certainty of errors?

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November 19, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Li Presents Arbitration Of International Tax Disputes At Boston College

Jinyan Li (Osgoode Hall) presented Arbitration of International Tax Disputes: A Rich Countries’ Game Ill-fit for Belt & Road Countries (with Nathan Jin Bao (Gowling WLG, Toronto), Sean Shanghua Hu & Wayne Wei Hu)) at Boston College yesterday  as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Jinyan-LI_NEWSROOMTax arbitration is considered by many to be an effective way of resolving tax disputes under tax treaties by pressuring the competent authorities to reach an agreement in a timely manner. Since its first adoption in the 1989 Germany-United States Tax Treaty, arbitration has been included in over 200 bilateral tax treaties, Article 25 of the OECD Model and United Nations Model (Alternative B) and Part VI of the Multilateral Instrument (MLI). Developing countries have generally resisted using arbitration out of sovereignty and other concerns. In this paper, the authors argue that arbitration, especially the “last best offer” or “baseball” style arbitration is a game for the rich countries. Drawing on existing literature and preliminary empirical research on tax disputes between Belt and Road Countries (about 130 countries participating in the China-led Belt and Road Initiative, purportedly representing over one half of the world population and 1/3 of global GDP), the authors explain that baseball arbitration is ill-fit for these countries for several reasons.

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November 19, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, November 18, 2019

Rubolino Presents Can Local Governments Implement A Progressive Income Tax? Today At UC-Berkeley

Enrico Rubolino (University of Essex) presents Can Local Governments Implement a Progressive Income Tax? at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

EnricoThis paper studies the effects of local income taxation on taxable income and within-country migration, using data from tax returns and all transfers of fiscal residence since the early 2000s in Italy. Over this period of tax decentralization, regions and municipalities have been granted greater power to set different tax rates across income brackets. Municipalities switching from a flat to a progressive income tax schedule experience a drop in their tax base, mostly due to a reduction in the income share held by the top percentile. This effect translates into a net-of-local tax taxable income (population stock) elasticity of 0.83 (0.74). Moving the fiscal residence from high- to low-tax places is the main driver of this response: a 1 percent increase in the net-of-tax differential within a province-pair raises outmigration by 1.6 percent. Despite the threat of repelling wealthy residents, these estimates imply that the benefit of additional revenues from adopting a progressive income tax significantly exceeds the cost of foregone income tax revenue due to tax-induced mobility.

November 18, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Blank Presents Progressive Tax Procedure Today At Loyola-L.A.

Joshua Blank (UC-Irvine) presents Progressive Tax Procedure (with Ari Glogower (Ohio State)) today at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto:

6a00d8341c4eab53ef0240a4467a28200c-300wiAbusive tax avoidance and tax evasion by high-income and wealthy taxpayers pose unique threats to the tax system. These strategies undermine the tax system’s progressive features and distort its distributional burdens. Responses to this challenge generally fall within two categories: calls to increase IRS enforcement and proposals to target the specific strategies that enable tax avoidance and evasion by these taxpayers. For example, taxpayers who engage in certain tax shelter transactions or hold assets abroad face additional compliance obligations and potential tax penalties.

This Article presents the case for “progressive tax procedure” — means-based adjustments to the tax procedure rules as they apply to high-income and wealthy taxpayers. In contrast to the activity-based responses in current law, progressive tax procedure would tailor rules to the characteristics of the actors rather than their activities. Instead of focusing exclusively on specific potentially abusive activities, such as “reportable transactions,” progressive tax procedure would adjust tax procedure rules based on the taxpayer’s income or net assets. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies than other taxpayers.

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November 18, 2019 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, November 14, 2019

Blank Presents Progressive Tax Procedure Today At San Diego

Joshua Blank (UC-Irvine) presents Progressive Tax Procedure (with Ari Glogower (Ohio State)) today at San Diego as part of its Tax Law Speaker Series:

6a00d8341c4eab53ef0240a4467a28200c-300wiDiscussions of progressive taxation in the United States—and of whether the rich pay enough in taxes—generally focus on the structure of the substantive tax law, such as the marginal rates, income brackets, deductions, and credits under the federal income tax. Despite recent reports of tax avoidance and noncompliance by high-income taxpayers, these discussions have not focused on the structure of the tax procedure rules, which govern the Internal Revenue Service’s administrative responsibilities and taxpayers’ compliance obligations.

This Article presents the case for a new system of “progressive tax procedure.” Currently, tax procedure rules—such as tax penalties and the statute of limitations—typically apply in a uniform manner to all taxpayers, irrespective of their income. Under progressive tax procedure, in contrast, these rules would vary depending on the taxpayer’s income. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies.

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November 14, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, November 13, 2019

Robinson Presents Negotiated Tax Havens Today At Penn

Leslie Robinson (Dartmouth) presents Negotiated Tax Havens (with Kevin Markle (Iowa)) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Robinson (2019)The intersection of state aid and international tax has acquired a high profile in Europe. In response, disclosure policies are being proposed. With no empirical evidence, these policies are predicated on rhetoric that pervasive practices by host country governments unfairly benefit foreign-owned companies. Using several novel data sources on tax relief granted in the EU, we find that both domestic- and foreign-owned companies benefit from tax concessions. Our evidence that tax avoidance is a joint production function of business and government suggests that any jurisdiction can operate as a tax haven for a company willing to negotiate. ...

Conclusion.  Overall, our results suggest that state aid offers tax benefits to both foreignowned and domestic-owned companies. Aid that is pre-approved appears more likely to benefit domestic-owned companies, perhaps because helping domesticowned companies is more likely to meet a broader EU objective than aiding foreign-owned companies. The recent trend towards enhanced disclosure of tax rulings as well as disclosure of aid granted at the level of the beneficiary are, in our view, necessary steps toward appropriate enforcement of state aid rules in the EU. However, because state aid does appear to benefit domestic-owned companies, the automatic exchange of tax rulings should cover all rulings, not just those issued to foreign-owned companies.

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November 13, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, November 12, 2019

LaPlante Presents The Effect Of Intellectual Property Boxes On Innovation And Effective Tax Rates Today At NYU

Stacie LaPlante (Wisconsin), The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates (with Tobias Bornemann (Vienna University of Economics and Business) & Benjamin Osswald (Wisconsin)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

LaplanteWe investigate whether and to what extent the adoption of an intellectual property box increases innovative activity and the extent to which different types of firms benefit financially. We examine the adoption of the intellectual property box in Belgium because it allows us to cleanly identify the impact on innovative activity and effective tax rates. Our results indicate an overall increase in innovative activity as proxied by patent applications, grants, and highly-skilled employment, at the expense of patent quality. We also provide evidence that firms with patents on average enjoy 7.2% to 7.9% lower effective tax rates, with the greatest financial benefits accruing to multinational firms compared to domestic firms

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November 12, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, November 11, 2019

Hayashi Presents State And Local Taxation Of Foreign Investment In Real Property Today At Loyola-L.A.

Andrew Hayashi (Virginia) presents Bullion in the Sky: State and Local Taxation of Foreign Investment in Real Property at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto:

Hayashi (2019)The current protectionist moment is characterized not only by national restrictions on immigration and international trade. Cities have played their part, adopting direct restrictions and taxes on foreign ownership of real property and imposing taxes on second homes and vacant properties that indirectly burden foreign investment. Although these laws are new, they draw from a well of suspicion regarding foreign ownership that is very old. We provide economic and historical context for the current wave of local restrictions on foreign owners of real property and evaluate the legality of such restrictions under U.S. law. We then assess the policy merits of these laws within an economic framework that highlights the role that law can play in helping individuals manage the wide variety of economic risks that they face. We describe the circumstances under which local restrictions on foreign property ownership can help or hurt local residents.

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November 11, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, November 8, 2019

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

Young Ran (Christine) Kim (Utah) presented The Digital Services Tax: A Crossborder Variation of Consumption Tax Debate at BYU yesterday as part of its Faculty Workshop Series:

KimAs highly digitalized business models, such as Google, Amazon, and Facebook, have been mainstreamed in the economy, the traditional profit allocation and nexus rules of taxation are further strained. Traditionally, profit is allocated to market countries when the business has physical presence there. However, highly digitalized business models can generate profits in market countries without physical presence. Thus, market countries, especially the EU, have started imposing a digital services tax (“DST”) on the gross revenue generated in jurisdictions with highly digital business models, which has ignited heated debate across the globe.

DST is criticized as “ring-fencing,” or segregating, certain digital business models, because it arguably imposes a disguised corporate income tax on the profits of only certain digital firms, which discriminates against American tech giants. However, while DST is politically driven, the criticism is largely based on practical concerns and focused on the imminent impact, such as who is the winner and loser in the short term, rather than considering DST theoretically. More importantly, there is little discussion of the consumption tax aspect of the DST. DST is a turnover tax, which is a subcategory of consumption tax levied on the gross revenue of a firm. However, strangely, there is little discussion of the theoretical value of DST as a consumption tax.

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November 8, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, November 6, 2019

Kysar Presents Unravelling The Tax Treaty Today At Pennsylvania

Rebecca Kysar (Fordham) presents Unravelling the Tax Treaty, 103 Minn. L. Rev. ___ (2019), at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Kysar (2018)Coordination among nations over the taxation of international transactions rests on a network of some 2,000 bilateral double tax treaties. The double tax treaty is, in many ways, the roots of the international system of taxation. That system, however, is in upheaval in the face of globalization, technological advances, taxpayer abuse, and shifting political tides. In the academic literature, however, scrutiny of tax treaties is largely confined to the albeit important question of whether tax treaties are beneficial for developing countries. Surprisingly little consideration has been paid to whether developed countries, like the United States, should continue to sign tax treaties with one another, and no formal revenue or economic analyses of the treaties has been undertaken by the United States government. In fact, little evidence or theory exists to support entrance into tax treaties by the United States, and examination of investment flows indicates the treaties may even lose U.S. revenues. Problematically, the treaties also thwart reforms of the antiquated and broken international tax system. The trajectory of the recent U.S. tax legislation illustrates this phenomenon.

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November 6, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, November 5, 2019

Fleurbaey Presents Optimal Income Taxation Theory And Principles Of Fairness Today At NYU

Marc Fleurbaey (Princeton) presents Optimal Income Taxation Theory and Principles of Fairness at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Marc_Fleurbaey2The achievements and limitations of the classical theory of optimal labor-income taxation based on social welfare functions are now well known. Even though utilitarianism still dominates public economics, recent interest has arisen for broadening the normative approach and making room for fairness principles such as desert or responsibility. Fairness principles sometimes provide immediate recommendations about the relative weights to assign to various income ranges, but in general require a careful choice of utility representations embodying the relevant interpersonal comparisons. The main message of this paper is that the traditional tool of welfare economics, the social welfare function framework, is flexible enough to incorporate many approaches, from egalitarianism to libertarianism.

November 5, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Glogower Presents Progressive Tax Procedure Today At UC-Hastings

Ari Glogower (Ohio State) presents Progressive Tax Procedure (with Joshua Blank (UC-Irvine)) at UC-Hastings today as part of its Tax Speakers Series hosted by Heather Field and Manoj Viswanathan:

Glogower (2019)Discussions of progressive taxation in the United States—and of whether the rich pay enough in taxes—generally focus on the structure of the substantive tax law, such as the marginal rates, income brackets, deductions, and credits under the federal income tax. Despite recent reports of tax avoidance and noncompliance by high-income taxpayers, these discussions have not focused on the structure of the tax procedure rules, which govern the Internal Revenue Service’s administrative responsibilities and taxpayers’ compliance obligations.

This Article presents the case for a new system of “progressive tax procedure.” Currently, tax procedure rules—such as tax penalties and the statute of limitations—typically apply in a uniform manner to all taxpayers, irrespective of their income. Under progressive tax procedure, in contrast, these rules would vary depending on the taxpayer’s income. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies.

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November 5, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Monday, November 4, 2019

McCaffery Presents Thomas's Taxing Nudges Today At Loyola-L.A.

Kathleen Delaney Thomas (North Carolina) was scheduled to present Taxing Nudges at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto:

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.

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November 4, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Matray Presents Higher Dividend Taxes, No Problem! Evidence From Taxing Entrepreneurs In France Today At UC-Berkeley

Adrien Matray (Princeton) presents Higher Dividend Taxes, No Problem! Evidence From Taxing Entrepreneurs in France (with Charles Boissel (HEC Paris)) at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Matray 3We exploit a large increase in the dividend tax rate in France that affected three-quarter of firms to estimate the effect of dividend taxation on corporate policies. Using administrative data covering the universe of firms and employees, we find in a differences-in-differences setting that affected firms swiftly cut dividends, both at the extensive and intensive margin, with an implied elasticity of around -0.5. Part of the resulting cash retention is used to increase investment and employment, with a positive elasticity around +0.30. The rest is accumulated as liquidity and used to extend credit to customers. Newly-taxed entrepreneurs do not appear to engage in income shifting to evade tax increase.

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November 4, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, November 1, 2019

Glogower Presents Progressive Tax Procedure Today At Boston College

Ari Glogower (Ohio State) presents Progressive Tax Procedure (with Joshua Blank (UC-Irvine)) at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Glogower (2019)Discussions of progressive taxation in the United States—and of whether the rich pay enough in taxes—generally focus on the structure of the substantive tax law, such as the marginal rates, income brackets, deductions, and credits under the federal income tax. Despite recent reports of tax avoidance and noncompliance by high-income taxpayers, these discussions have not focused on the structure of the tax procedure rules, which govern the Internal Revenue Service’s administrative responsibilities and taxpayers’ compliance obligations.

This Article presents the case for a new system of “progressive tax procedure.” Currently, tax procedure rules—such as tax penalties and the statute of limitations—typically apply in a uniform manner to all taxpayers, irrespective of their income. Under progressive tax procedure, in contrast, these rules would vary depending on the taxpayer’s income. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies.

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November 1, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, October 31, 2019

Zolt Presents Corporate Responsibility To Pay Taxes At Toronto

Eric M. Zolt (UCLA) presented Corporate Responsibility to Pay Taxes at Toronto yesterday as part of its James Hausman Tax Law and Policy Workshop Series:

Zolt (2020)We are trying something new. Instead of the traditional paper-presentation-and-Q&A format, we are using a case study to raise issues related to the obligations of corporations to pay taxes in countries where they operate.

The primary reading for the session is a Harvard Business School case study prepared by three INSEAD professors: Did Apple Pay Too Little Tax? Appealing the EU Ruling on Illegal State Aid. ...

In preparing for class discussion on the case study, we have asked the students to respond to the following questions:

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October 31, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, October 30, 2019

Grewal Presents The President’s Tax Returns Today At Pennsylvania

Andy Grewal (Iowa) presents The President’s Tax Returns, 27 Geo. Mason L. Rev. __ (2020), at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Grewal (2019)For around 40 years, U.S. Presidents and major-party Presidential candidates have publicly released their personal income tax returns. However, during the last election cycle, Republican candidate Donald Trump broke from this recent tradition and did not disclose them. This nondisclosure ultimately did not imperil his candidacy, and he became the 45th President of the United States.

But calls for the President’s tax returns continued. Many Democratic legislators believed that the President’s tax returns could contain important information related to his apparent conflicts of interest and his foreign connections. However, for two years, the Republican-controlled Senate and House of Representatives declined to pursue those returns.

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October 30, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Drumbl Presents Tax Credits For The Working Poor: A Call For Reform Today At San Diego

Michelle Lyon Drumbl (Washington & Lee) presents Tax Credits for the Working Poor: A Call for Reform (Cambridge University Press (2019)) at San Diego today as part of its Tax Law Speaker Series:

Tax CreditsThe United States introduced the earned income tax credit (EITC) in 1975. Today it is the most significant earnings-based refundable credit in the Internal Revenue Code. The United States is the oldest example of a country using its domestic revenue system to deliver and administer social welfare benefits to lower-income individuals or families, but this approach is no longer unique to the United States: a number of other countries, including New Zealand and Canada, have experimented with or incorporated analogous credits into their tax systems. These other countries imported the concept from the United States. Might the United States be able to improve upon the administration of its EITC by importing the experiences and lessons learned in other countries?

Tax Prof reviews:

From the unique lens of a tax justice warrior working on the frontlines fighting poverty, Michelle Lyon Drumbl details the troubled history of US refundable tax credits and compares similar international programs to reimagine relief for America's vulnerable working families. A must read for anyone engaged in critical rethinking of economic justice policies.
Francine J. Lipman - University of Nevada, Las Vegas

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October 30, 2019 in Book Club, Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (2)

Tuesday, October 29, 2019

Friedman Presents Income Segregation And Intergenerational Mobility Across Colleges In The U.S. Today At NYU

John N. Friedman (Brown) presents Income Segregation and Intergenerational Mobility Across Colleges in the United States (with Raj Chetty (Harvard), Emmanuel Saez (UC-Berkeley), Nicholas Turner (Federal Reserve Board) & Danny Yagan (UC-Berkeley)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

BrownWe construct publicly available statistics on parents’ incomes and students’ earnings outcomes for each college in the U.S. using de-identified data from tax records. These statistics reveal that the degree of parental income segregation across colleges is very high, similar to that across neighborhoods where children grow up. Differences in post-college earnings between children from low- and high-income families are much smaller among students who attend the same college than across colleges. Colleges with the best earnings outcomes predominantly enroll students from high-income families, although a few mid-tier public colleges have both low parent income levels and high student earnings. Linking these income data to SAT and ACT scores, we analyze how changes in the college admissions process would affect segregation and intergenerational mobility.

Equalizing application, admission, and matriculation rates across parental income groups conditional on test scores would increase the fraction of middle-class students at the most selective colleges substantially but leave the fraction of low-income students unchanged — suggesting that there is a “missing middle” at the most selective colleges. Income segregation across colleges would be fully eliminated by a “need-affirmative” policy that gives lower-income applicants a boost in test scores similar to that implicitly given to legacy students at elite private colleges. Assuming that differences in students’ earnings conditional on test scores and parent income reflect colleges’ causal effects — an assumption consistent with prior estimates — such a policy would reduce intergenerational income persistence among college students by one-third.

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October 29, 2019 in Colloquia, Legal Ed News, Tax, Tax Scholarship | Permalink | Comments (1)

Brooks Presents Built To Fail: Risk And Robustness In Policymaking At Boston University

John R. Brooks (Georgetown) presented Built to Fail: Risk and Robustness in Policymaking at Boston University yesterday as part of its Tax Policy Workshop Series hosted by David Walker:

Brooks (John)Policymaking is an exercise in decision-making under uncertainty‹legislators and other policymakers frequently must make a best guess about likely outcomes when deciding whether or not to engage in a particular policy, and any policy comes with some risk of failure. A number of theoretical and practical approaches to that exercise have developed over the years, attempting to give policymakers reasoned decision procedures for managing risk, yet we seem to again and again implement policies that result in catastrophic outcomes, such as the Iraq War, the regulatory choices that led to the financial crisis, the Chicago School approach to antitrust, and the tax reforms of the 1980s. This Article argues that large downside risks need to be taken more seriously by policymakers, and need to be more central to the scholarship on policy decision-making. In particular, this Article examines four theoretical approaches to decision-making under uncertainty‹cost-benefit analysis, incrementalism, the precautionary principle, and optimal search‹and argues that they can be reconciled by combining an experimentalist approach to relatively small risks with a special weight and high degree of caution for large downside risks.

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October 29, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, October 28, 2019

Brunson Presents Paying For Gun Violence Today At Loyola-L.A.

Sam Brunson (Loyola-Chicago) presents Paying For Gun Violence, 104 Minn. L. Rev. ___ (2019), at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto  (reviewed by David Elkins (Netanya) here):


NewtestGun violence is an outsized problem in the United States. Between a culture that allows for relatively unconstrained firearm ownership and a constitutional provision that ensures that ownership will continue to be relatively unchecked, it has proven virtually impossible for politicians to address the problem of gun violence. And yet, gun violence costs the United States tens of billions of dollars or more annually. These tens of billions of dollars are negative externalities—costs that gun owners do not bear themselves, and thus that are imposed on the victims of violence and on taxpayers generally.

What can we do about these costs? One way to reduce them would be to pass meaningful laws, laws that would reduce the likelihood of gun violence. In light of both the culture and the Constitution of the United States, though, such legislation seems improbable. Lawmakers face significant limitations on their ability to regulate firearms directly. If they cannot prevent gun violence, though, they can at least cause gun owners to internalize the costs. Where direct regulation is difficult, they can turn instead to a Pigouvian tax.

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October 28, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (2)

Friday, October 25, 2019

Oei Presents Falling Short In The Data Age Today At Cornell

Shu-Yi Oei (Boston College) presents Falling Short in the Data Age (Diane Ring (Boston College)) at Cornell today as part of its Faculty Workshop Series:

TesttwoHumans 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 fall-short spaces, outlining the various reasons they exist and the different ways in which they are deployed. Applying this taxonomy, we show how increasingly ubiquitous data and information will cause some fall-short spaces to contract (and in fact is already doing so) and highlight the risk that data will generate disparate contraction of fall-short spaces for different populations.

Building on these observations, we articulate a bounded defense of fall-short spaces. We argue that, while fall-short spaces may compromise rule-of law-values, raise separation of powers concerns, and provide incentives for bad laws to stay on the books indefinitely, there are also contexts in which they serve a valuable function and where their loss might be problematic. We articulate potential policy solutions to help manage the challenge of contracting fall-short spaces in the data age, including data silos, limitations on data collection, and redesign of underlying laws for the data age.

October 25, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Brown Presents Tax Policy: A Tool to Support Sustainable Growth Today At Boston College

Karen Brown (George Washington) presents Tax Policy: A Tool to Support Sustainable Grow at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Brown (Karen)In the spring of 2019, the World Bank launched the Human-Centered Business Model ("HCBM") that takes corporate social responsibility to a different level by supporting a system in which governments may account for consequences to constituents when businesses operate without reference to a set of minimum guidelines. It seeks to incorporate a common set of corporate goals covering economic, social, and environmental sustainability based on a core set of values to create a coherent business ecosystem. The paper provides an overview of the goals of the Fiscal Pillar (Pillar Four) of the HCBM project. It offers options for governments to design tax regimes that support efficiency and sustainable growth in their economies while providing incentives for enterprises to operate with attention to core principles as well as the considerable costs of doing business in a manner that does not serve sustainable goals.

October 25, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, October 24, 2019

Fleming Presents Is Unilateral Formulary Apportionment Better Than The Status Quo? Today At Michigan

J. Clifton Fleming (BYU) presents Is Unilateral Formulary Apportionment Better Than the Status Quo? (with Robert Peroni (Texas) & Stephen Shay (Harvard)) today at Michigan:

FlemingIt’s doubtful that the world’s large-economy countries will adopt formulary apportionment in a coordinated movement that yields a uniform regime. The more likely scenario is that a formulary apportionment adopter will be a unilateral actor winding up with a system that does not mesh well with the systems of its major trading partners.

This paper points out that formulary apportionment does not require adoption of a territorial system. Formulary apportionment can be used in a worldwide regime to identify foreign-source income for foreign tax credit purposes. Thus, the unilateral adoption issue, with its uncoordinated results, is relevant even for countries that contemplate maintaining some form of worldwide taxation with a limited foreign tax credit.

This paper’s principal purpose is to examine and evaluate the factors that any country must consider when contemplating replacement of the arm’s-length approach with formulary apportionment. Among those factors are:

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October 24, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, October 23, 2019

Vella Presents Residual Profit Allocation By Income Today At Pennsylvania

John Vella (Oxford) presents Residual Profit Allocation by Income (with Michael Devereux (Oxford), Alan Auerbach (UC-Berkeley), Michael Keen (IMF), Paul Oosterhuis (Skadden) & Wolfgang Schön (Max Planck)) (reviewed by Young Ran (Christine) Kim (Utah) here) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Vella (2019)This paper is a draft chapter of a forthcoming book on the taxation of international business profit by the authors of this paper, to be published by Oxford University Press. The group has been meeting regularly for five years, to identify and discuss the key problems of the existing international tax system, and to develop potential options for reform. The book will study two proposals for reform in depth. One is the destination based cash flow tax – a draft chapter on this proposal has already been released. The second proposal – for a form of residual profit allocation - is presented here.

We refer to the proposal set out in this paper as a Residual Profit Allocation by Income, or RPA-I. The RPA-I allocates the right to tax routine profit to the country where functions and activities take place. It allocates the right to tax residual profit to the market, or destination, country where sales are made to third parties.

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October 23, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, October 22, 2019

Oei And Ring Present Falling Short In The Data Age Today At NYU

Shu-Yi Oei (Boston College) and Diane Ring (Boston College) present Falling Short in the Data Age at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Oei Ring (2018)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.

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October 22, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, October 21, 2019

Wallace Presents Democracy-Enhancing Tax Policy Today At Loyola-L.A.

Clint Wallace (South Carolina) presents Democracy-Enhancing Tax Policy at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

Wallace (2019)This paper contests the pervasive notion that democratic governance and good tax policy (however defined) are in conflict, and places the impulse to avoid or constrain democratic forces in tax policy making as a symptom of a more fundamental challenge: a lack of attention to the actual and potential role of taxation in promoting a flourishing democratic community. 

I offer two theoretical arguments in response to this notion and impulse. First, I argue that democracy demands broad participation in tax policy making. This point connects tax scholarship with an important element of democratic theory, the principle of affected interests. Second, I argue that an inclusive tax policy process should have as a central goal non-domination, both in decisionmaking procedures and in substantive policies. This argument is grounded in theoretical work on competitive models of democracy, which recommends a fluid, iterative decisionmaking process, open to challenge and subject to revision, with conditions that promote democratic legitimacy. 

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

Wong Presents The Financial Burden Of Property Taxes Today At UC-Berkeley

Francis Wong (Ph.D. Economics 2020, UC-Berkeley) presents The Financial Burden of Property Taxes at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Wong

Financial hardship resulting from rising property tax burdens is a common complaint among homeowners, but very little evidence exists evaluating its quantitative importance. Standard frictionless models do not allow for financial strain generated by property taxation because under normal conditions liquid housing wealth sufficiently covers the cost of property taxes. This paper leverages a novel merge between property records, mortgage servicing data, and credit bureau data to demonstrate that relatively small increases in property taxes lead to increases in mortgage default and decreases in consumption. Event study estimates around the month in which homeowners' monthly property tax payments are increased to reflect their new property assessment imply that a $100 monthly tax increase leads to a 1% increase in mortgage delinquency and reduces auto consumption by $28. Moreover, homeowners generally do not draw on their home equity to pay property tax bills. These results contradict the predictions of standard models and imply the existence of important frictions in property taxation.

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

Friday, October 18, 2019

Book Presents Administrative Burdens, Sludge, And Individual Taxpayer Rights Today At Florida

Leslie Book (Villanova) presents Administrative Burdens, Sludge, and Individual Taxpayer Rights (with Keith Fogg (Harvard)) at Florida today as part of its Tax Colloquium Series:

Book (2019)The tax system designed by Congress imposes significant administrative burdens on taxpayers. Decisions by the IRS regarding how it administers the tax laws can add to the burdens imposed by Congress. The administrative burdens are consequential and hurt some people, especially lower or moderate-income individual taxpayers, more than others. While the IRS strives to measure and reduce the time and money that taxpayers spend to comply with their tax obligations, the IRS does not consider the effect that administrative burdens have on taxpayer rights, including the right to be informed, the right to pay no more than the correct amount of tax, and the right to a fair and just tax system. In this article, building on the work of public administration scholars Pamela Herd and Don Moynihan, we discuss the concept of administrative burdens and reveal specific examples of how IRS actions and inaction have burdened taxpayers and jeopardized taxpayer rights.

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October 18, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, October 17, 2019

Kleiman Presents Tax Limits And The Future Of Local Democracy Today At Northwestern

KleimanAriel Jurow Kleiman (San Diego) presents Tax Limits and the Future of Local Democracy, 133 Harv. L. Rev. ___ (2019), at Northwestern today as part of its Advanced Topics in Taxation Colloquium Series hosted by Herbert Beller, David Cameron, Charlotte Crane, Sarah LawskyAjay MehrotraPhilip Postlewaite, and Jeffrey Sheffield:

Property tax limits are state-level laws that place caps on local governments’ tax rates and revenue. These statutory limits, which put pressure on already strapped cities and counties in forty-six states, present an inexorable dilemma for local policymakers. On the one hand, they may cause cuts to vital services, bankruptcy, and reliance on regressive revenue sources. At the same time, however, tax limits may reflect genuine concerns about government profligacy and nonresponsiveness. While much research has focused on the first side of the dilemma—examining the laws’ fiscal consequences—this Article explores the second, probing how tax limits affect the distribution of political power between local voters and policymakers.

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October 17, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Wednesday, October 16, 2019

Kane Presents The Global Battle To Capture Multinational Enterprise Profits Today At Pennsylvania

Mitchell Kane (NYU) presents Collecting the Rent: The Global Battle to Capture MNE Profits, 72 Tax L. Rev. ___ (2019) (with Joseph Bankman (Stanford) & Alan Sykes (Stanford)) (reviewed by David Elkins (Netanya) here) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Kane (2018)Multinational enterprises (MNEs) often earn substantial profits, or "economic rents." Often, these MNEs are domiciled in the United States, and the rents derive from ownership of intellectual property. These MNEs have structured their affairs to pay little taxes to countries outside the United States or otherwise to share their rents in these countries. Apple and Microsoft, for example, may earn roughly half their profits outside the United States but do not pay significant amounts of taxes to any foreign country.

The European Union and other countries have responded to this state of affairs with new tax legislation, antitrust actions, and other policies that have the effect of, and perhaps the intention of, capturing a greater share of MNE rents for their treasuries or citizens. To date, these policies are discussed in separate literatures focused on a particular policy domain (tax, antitrust, and so on). This paper offers the first unified or comparative analysis of the issue.

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October 16, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Shaviro Presents Digital Service Taxes Today At Toronto

Daniel Shaviro (NYU) presents Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Shaviro (2018)In recent decades, a number of fantastically successful, mainly American, multinational entities (MNEs) — led and epitomized by the “Four Horsemen,” Apple, Amazon, Facebook, and Google — have risen to global economic hyper-prominence. While their market capitalizations and profits are high, reflecting that they earn substantial rents or quasi-rents, their aggregate global taxes are generally quite low, reflecting their ability to create stateless income.

Often, these MNEs are technology companies, like the Four Horsemen – but not always. Starbucks, for example, enjoys high global profits and low taxes despite its following a classic brick-and-mortar retail business model. This reflects that, like its more obviously high-tech peers, it relies on valuable intellectual property that helps it in creating both global pretax profitability and stateless income.

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October 16, 2019 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink | Comments (0)

Tuesday, October 15, 2019

Liscow Presents Democratic Law And Economics Today At NYU

Zachary Liscow (Yale) presents Democratic Law and Economics at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Liscow (2017)Law and economics typically analyzes ideal policies, ignoring real-world institutions and constraints. It is helpful for real-world political actors, though, to have guidance for the real world, which this Article provides for policymakers setting policy with distributional impacts. Current guidance not considering real-world constraints may significantly hamper policymakers’ effectiveness at addressing today’s crisis of inequality. Critique of law and economics is widespread, but, to provide an alternative framework for policymaking, one needs to start with an account of its failures that can provide such an alternative framework. This Article provides such an account of the failures and an alternative framework.

This Article explores a major dissonance between expert and lay policy views: the set of tax prescriptions required by law and economics is sharply at odds with ordinary citizens’ psychology about taxes. While standard economic reasoning views taxes solely as a system of incentives and redistribution, many ordinary people also think of taxes as rewarding desert—as recent rigorous survey experiments, advances in the economics of taxation, and decades of experience show. Desert-based tax views limit redistribution, since the poor are deemed to not deserve free cash and the rich are deemed to deserve some of their income. A democracy where Congress is attentive to such tax views will need to look elsewhere to achieve distributive justice.

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October 15, 2019 in Colloquia, Scholarship, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, October 14, 2019

Fox Presents The Uneasy Case For Higher Business Taxes Today At Loyola-L.A.

Edward Fox (Michigan) presents The Uneasy Case for Higher Business Taxes at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

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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October 14, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thursday, October 10, 2019

Fleming Presents Is Unilateral Formulary Apportionment Better Than The Status Quo? Today In Vienna

Cliff Fleming (BYU) presents Is Unilateral Formulary Apportionment Better Than the Status Quo? (with Robert Peroni (Texas) & Stephen Shay (Harvard)) at the Institute for Austrian and International Tax Law of the Vienna University of Economics and Business:

FlemingIt’s doubtful that the world’s large-economy countries will adopt formulary apportionment in a coordinated movement that yields a uniform regime. The more likely scenario is that a formulary apportionment adopter will be a unilateral actor winding up with a system that does not mesh well with the systems of its major trading partners.

This paper points out that formulary apportionment does not require adoption of a territorial system. Formulary apportionment can be used in a worldwide regime to identify foreign-source income for foreign tax credit purposes. Thus, the unilateral adoption issue, with its uncoordinated results, is relevant even for countries that contemplate maintaining some form of worldwide taxation with a limited foreign tax credit.

This paper’s principal purpose is to examine and evaluate the factors that any country must consider when contemplating replacement of the arm’s-length approach with formulary apportionment. Among those factors are:

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October 10, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Wednesday, October 9, 2019

Peroni Presents Expanded Worldwide Versus Territorial Taxation After The TCJA Today At Pennsylvania

Robert Peroni (Texas) presents Expanded Worldwide Versus Territorial Taxation After the TCJA, 161 Tax Notes 1178 (Dec. 3, 2018) (with Cliff Fleming (BYU) & Stephen Shay (Harvard)) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Peroni (2015)In the run up to enactment of the 2017 Tax Cuts and Jobs Act (TCJA) one of the principal U.S. tax policy issues was how foreign-source, active-business income of U.S. multinational enterprises (MNEs) should be taxed by the United States if the system of deferring U.S. tax on active income of a foreign subsidiary was ended. Should active foreign income be taxed under a territorial or exemption system—i.e. bear no residual U.S. tax—or should it be subjected to expanded worldwide taxation—i.e. current taxation at regular U.S. rates coupled with a credit for foreign income taxes paid or accrued, but limited to the U.S. tax on the foreign-source income as measured for U.S. tax purposes.

The opposing sides were not without common ground. Both agreed that the existing U.S. system for taxing the foreign-source, active-business income of U.S. MNEs needed to be changed because it generally did not impose U.S. tax until the active income of foreign subsidiaries was repatriated, either through dividends or by sale of subsidiary stock at a price reflecting accumulated foreign-source income. This was problematic for the advocates of territoriality because it required payment of a U.S. tax before CFC earnings could be directly accessed by U.S. parent corporations when no home country tax would have to be paid by MNEs from some competitor countries. It was unacceptable to worldwide taxation advocates because the resulting deferral of U.S. tax effectively created a preferential tax rate for CFC income that encouraged U.S. MNEs to locate operations in, and engage in income shifting to, low-tax foreign countries. The two sides were, however, at loggerheads over whether the foreign-source, active-business income of U.S. MNEs should bear a current U.S. tax at regular rates, subject to a limited foreign tax credit, or should bear no U.S. tax at all. Neither view prevailed in the TCJA.

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October 9, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Tuesday, October 8, 2019

Pratt Presents The Curious State Of Tax Deductions For Fertility Treatment Costs Today At NYU

Katherine Pratt (Loyola-L.A.) presents The Curious State of Tax Deductions for Fertility Treatment Costs, 28 S. Cal. Rev. L. & Soc. Just. 261 (2019) (reviewed by Sloan Speck (Colorado) here), at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Pratt (2017)The federal tax treatment of assisted reproductive technology (ART) expenses incurred by intended parents is unclear. This lack of clarity in the tax law is curious because millions of intended parents have incurred ART expenses, which typically are quite large, over the past 40 years. ARTs include in vitro fertilization (IVF), intracytoplasmic sperm injection (ICSI), egg donation, and surrogacy. This Article addresses the question of whether various categories of taxpayers can classify the costs of specific types of ART expenses as tax deductible “medical care,” taking into account new developments in the law, including the 2017 federal appellate court decision in Morrissey v. United States.

Part I of this Article outlines the contours of the income tax deduction (and related tax benefits) for “medical care,” incorporating the statutory definition of “medical care” and the interpretation of that definition by the Internal Revenue Service (IRS) and courts. Part II applies the “medical care” definition to expenses incurred by different-sex married couples for specific types of reproductive medical care and ancillary payments. We begin our analysis with this cohort of intended parents because the IRS seems to have had such taxpayers in mind when it initially provided informal advice to taxpayers who incurred fertility treatment costs. Part II then extends the analysis to same-sex couples and unmarried individuals, focusing primarily on the U.S. Tax Court decision in Magdalin v. Commissioner, and briefly summarizing Longino v. Commissioner. In both cases, the court denied fertile unmarried men a medical expense deduction for ART expenses. Part II considers the implications of Magdalin for medically infertile men, married and unmarried women, and married different-sex couples. Part II also articulates a novel argument men could make for deducting some ART costs, notwithstanding Magdalin and Longino.

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October 8, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Monday, October 7, 2019

Kim Presents The Digital Services Tax: A Cross-Border Variation Of The Consumption Tax Debate? Today At Loyola-L.A.

Young Ran (Christine) Kim (Utah) presents The Digital Services Tax: A Crossborder Variation of Consumption Tax Debate at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

KimAs highly digitalized business models, such as Google, Amazon, and Facebook, have been mainstreamed in the economy, the traditional profit allocation and nexus rules of taxation are further strained. Traditionally, profit is allocated to market countries when the business has physical presence there. However, highly digitalized business models can generate profits in market countries without physical presence. Thus, market countries, especially the EU, have started imposing a digital services tax (“DST”) on the gross revenue generated in jurisdictions with highly digital business models, which has ignited heated debate across the globe.

DST is criticized as “ring-fencing,” or segregating, certain digital business models, because it arguably imposes a disguised corporate income tax on the profits of only certain digital firms, which discriminates against American tech giants. However, while DST is politically driven, the criticism is largely based on practical concerns and focused on the imminent impact, such as who is the winner and loser in the short term, rather than considering DST theoretically. More importantly, there is little discussion of the consumption tax aspect of the DST. DST is a turnover tax, which is a subcategory of consumption tax levied on the gross revenue of a firm. However, strangely, there is little discussion of the theoretical value of DST as a consumption tax.

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October 7, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Friday, October 4, 2019

Brauner Presents The True Nature Of Tax Treaties Today In Vienna

Yariv Brauner (Florida) delivers the 2019 Klaus Vogel Lecture at Vienna University today on The True Nature of Tax Treaties:

Brauner (2019)Tax treaties are the building blocks of the international tax regime. Much scholarship has been devoted to them, peaking with Professor Klaus Vogel’s Magnum Opus on Double Tax Conventions. Yet, almost a century after modern tax treaties were formalized into a model, and the derivatives of that model, now over 3000 of them, dominate the tax consequences of cross-border trade and investment, there are still many unanswered fundamental questions, which roots are in the lack of a clear understanding of the true nature of tax treaties. The purpose of this article is to begin filling that void. ...

The article examines tax treaties from four different perspectives: tax treaties as creatures of international law, Tax exceptionalism as reflected in tax treaties, Tax treaties as a consequence of international negotiations, and multilateralism in a world of bilateral tax treaties.

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October 4, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, October 2, 2019

Hemel Presents Phaseouts Today At Pennsylvania

Daniel Hemel (Chicago, visiting at Harvard) presents Phaseouts at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Hemel (2019)The Internal Revenue Code is replete with tax benefits that phase out with income. While phaseout provisions are widespread, their effects are little understood. Some commentators have suggested that phaseouts reduce the revenue costs and increase the progressivity of tax benefits. Other leading tax law scholars have assailed these provisions for adding complexity to the Code and for confusing taxpayers about the rates that apply to them. This article presents a comprehensive evaluation of phaseouts and arrives at a more nuanced view. The notions that phaseouts reduce cost and increase progressivity turn out largely to be accounting illusions. At the same time, the implications of phaseouts for tax system complexity and taxpayer comprehension are more ambiguous than their critics charge. Phaseouts are appropriate when the externalities or internalities generated by an activity depend on the actor’s income. Most—though not all—of the phaseouts in the Internal Revenue Code are plausibly justified on these grounds.

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October 2, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)