Weekly SSRN Tax Article Review And Roundup: Layser Reviews Shanske's The Future Of SALT

This week, Michelle Layser (San Diego; Google Scholar) reviews Darien Shanske (UC-Davis; Google Scholar), The Future of SALT (?): Using and Improving Formulas for Apportioning Income, Residence and Intangibles, 78 Tax Law. __ (2025). 

Formulas are a common feature of state tax law. The quintessential example is the formulary apportionment of income earned by multistate corporations, but formulas are used in other contexts as well. Some states use formulas to determine how individuals should apportion their income when they work remotely. Formulas are used to apportion income earned by professional athletes (let’s go Padres!). Emerging digital sales tax laws use formulas to apportion advertising income earned by platforms like Facebook to the states where their customers live.

Formulas help solve a fundamental problem: it is often theoretically and practically impossible to determine, with absolute accuracy, where a taxpayer earned their income. Formulas provide a simple solution: estimate how much income was earned in a state based on proxies (like the location of customers, employees, or property) or time (the number of days an employee worked in each state). 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Cowing's Equity And Ownership In Affordable Housing

This week, Michelle Layser (San Diego; Google Scholar) reviews Adam Cowing (UC-Irvine), Equity and Ownership in Affordable Housing, 2024 U. Ill. L. Rev. 399.

In the U.S., homeownership is often essential for wealth building. For middle-income households, “home equity is the largest single financial asset,” and it accounts for 50-70% of net wealth. In 2022, the wealth gap between homeowners and renters reached a historic high, as the median wealth of homeowners rose to $85,000 and the median wealth of renters remained stable at $950. Tax-based homeownership subsidies are common (the mortgage interest deduction is one, and the exclusion of imputed rent is another), but none aim to make home ownership attainable for low-income families. Instead, tax subsidies like the Low-Income Housing Tax (LIHTC) credit (and proposed renters’ tax credits) have focused on providing affordable rental housing. Nevertheless, a new article by Professor Adam Cowing argues that the LIHTC has untapped potential to transform low-income tenants into homeowners.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Tahk's The Tax Separation Of Powers

This week, Michelle Layser (San Diego; Google Scholar) reviews Susannah Camic Tahk (Wisconsin), The Tax Separation of Powers.

The economic development tax incentives that I study rarely appear in Tax Court cases. Instead, they tend to be the subject of legislative activity. Congress amends laws like the low-income housing tax credit and new markets tax credit to adjust program size, extend deadlines, and tweak eligibility requirements. Legislators debate whether incentives like opportunity zones are helpful social and economic policy tools or wasteful giveaways. Every so often, a case will reference an economic development incentive, but it’s unusual. I had no idea that this was part of a larger trend. In a new article, Professor Susannah Camic Tahk argues that the Code sections the Tax Court reviews (the “judicial Code”) and those that receive attention from Congress (the “legislative Code”) have so little overlap that they constitute a substantive divide in the separation of powers. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Taxing Nannies By Kleiman, Sarkar & Satterthwaite

This week, Michelle Layser (San Diego; Google Scholar) reviews Ariel Jurow Kleiman (Loyola), Shayak Sarkar (UC Davis) & Emily Satterthwaite (Georgetown), Taxing Nannies: 

Nannies play an important role in the childcare system, helping many moderate-to-high income women pursue careers in fields like business, medicine, law, and politics. Research on the tax behavior of parent-hirers of nannies has raised significant concerns about noncompliance, and it would be easy to conclude that most nannies (and the parents they work for) prefer to keep their payments “under the table.” A new study by Professors Ariel Jurow Kleiman, Shayak Sarkar, and Emily Satterthwaite suggests that the tax reporting preferences of nannies and their employers are considerably more nuanced. While many nannies do prefer to receive pay under the table, others prefer formal employee status. The authors argue that understanding these preferences—and the reasons behind them—is key to crafting effective and equitable nanny tax reforms.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Elkins' Gregory v. Helvering — A Red Herring That Shaped Tax Jurisprudence

This week, Michelle Layser (San Diego; Google Scholar) reviews David Elkins (Netanya College School of Law), Gregory v. Helvering: A Red Herring that Shaped Tax Jurisprudence, 31 Berkeley Business L. J. ___ (2024)

Gregory v. Helvering (1935) is a classic tax abuse case that features a taxpayer who followed the letter, but not the spirit, of the law. The traditional reading of Gregory goes like this: Mrs. Gregory structured a transaction to formally comply with corporate reorganization rules, but not for business reasons. She did it exclusively for tax avoidance purposes. The Court was unimpressed by her motives and rejected her attempt at tax planning, and Gregory became the leading case in the field of anti-avoidance jurisprudence. As Professor David Elkin puts it, Gregory is the “intellectual godfather of all of the doctrines that seek to restrict tax-planning opportunities: business purpose, step transaction, substance over form, sham transaction, and economic substance.”

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Zhang’s Eisner v. Macomber And The Future Of The Realization Requirement

This week, Michelle Layser (San Diego; Google Scholar) reviews Alex Zhang (Emory), Rethinking Eisner v. Macomber, and the Future of Structural Tax Reform, 92 Geo. Wash. L. Rev __ (2024).

Eisner v. Macomber is a staple of introductory tax law courses. Like many professors, I assign Macomber to illustrate the realization requirement, while downplaying its constitutional significance. For those who need a refresher, the taxpayer in Macomber was a shareholder of Standard Oil. The company distributed a pro rata common-on-common stock dividend that increased the taxpayer’s number of shares but did not change her proportionate interest in the company. The government attempted to tax the stock dividend as income under the Revenue Act of 1916, but the taxpayer challenged the law under the Sixteenth Amendment. The Court sided with the taxpayer, essentially holding that it is unconstitutional to tax accumulated profits until they have been “severed from the capital” through a realization event.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Moore v. United States And The Original Meaning Of Income By Brooks & Gamage

This week, Michelle Layser (San Diego; Google Scholar) reviews John R. Brooks (Fordham; Google Scholar) and David Gamage (Indiana-Maurer; Google Scholar), Moore v. United States and the Original Meaning of Income. 

One of the most fundamental concepts taught to income tax students is the realization requirement. In short, income generally is not subject to taxation until it is realized through a conversion into cash or property. But is realization a constitutional requirement? The Supreme Court is expected to provide an answer to that question next year in Moore v. United States. In that case, the Court has been asked to decide whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states. The taxpayers in Moore are challenging a provision of the Tax Cuts and Jobs Act of 2017 known as the Mandatory Repatriation Tax. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Predictive Analytics And The Tax Code By Soled & Thomas

This week, Michelle Layser (San Diego) reviews Jay A. Soled (Rutgers; Google Scholar) and Kathleen DeLaney Thomas (UNC; Google Scholar), Predictive Analytics and the Tax Code, 51 Fla. St. U. L. Rev. __ (2023).

I am obsessed with ChatGPT. If you haven’t seen it yet, I suggest that you finish grading and then go check it out (in that order). It is at once fascinating and terrifying, and it leaves little doubt that the artificial intelligence (AI) tools of the future will dramatically impact most aspects of the legal profession. And the future may not be so far off. In a forthcoming article, Professors Jay A. Soled and Kathleen DeLaney Thomas argue that today’s predictive analytics tools are already capable of fundamentally changing the application of the tax code’s civil tax penalty regime.

To demonstrate how, the authors begin with a review of current theory about taxpayer compliance and the civil tax penalty regime. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Revisiting The Tax Treatment Of Alimony By Davis, Soled & Soled

This week, Michelle Layser (San Diego) reviews Tessa R. Davis (South Carolina; Google Scholar), Amy H. Soled (Rutgers) & Jay A. Soled (Rutgers; Google Scholar), Revisiting the Tax Treatment of Alimony, 72 Kansas L. Rev. __ (2023):

Like many tax professors, I teach my students that the tax laws that exist today reflect choices about what, when, and who to tax. In many cases, lawmakers have options, and the best approach is not always obvious. The tax treatment of alimony is a case in point. When it comes to support payments made by a divorced person to a former spouse, Congress has three options: tax the recipient, tax the payer, or tax them both. For many years, the law allowed alimony payers to deduct the payments, and it required recipients to include alimony in their income. The Tax Cuts and Jobs Act changed the tax treatment of alimony by disallowing the deduction for alimony payers and allowing recipients to exclude the payments from income. But did the change reflect good policy?

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Household Asymmetric Risk Of Foreclosure From Tax Assessment Limit

This week, Michelle Layser (San Diego) reviews Sebastien Bradley (Drexel; Google Scholar), Da Huang (Utah; Google Scholar), Nathan Seegert (Utah; Google Scholar), Household Asymmetric Risk of Foreclosure From Tax Assessment Limit (Jan. 21, 2023).

During the pandemic, U.S. housing prices soared. In many cities, rising home prices can trigger higher assessed values for property taxation. But in California and 16 other states with assessment limits, laws limit how much appreciation cities can take into account for property tax purposes. That is good news for homeowners here in San Diego, where housing prices in March 2022 were up a whopping 29.9% from the previous year. Since California law caps the annual increase in assessed value at 2%, homeowners were protected from property tax spikes during that period.

Then came the fall. From April to September, prices in San Diego fell 5.2%, and they have continued to drop. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews The (Uncertain) Future Of Corporate Tax Shelters By Blank & Glogower

This week, Michelle Layser (San Diego) reviews Joshua D. Blank (UC Irvine) & Ari Glogower (Northwestern), The (Uncertain) Future of Corporate Tax Shelters, in Corporate Tax Research Handbook (Reuven Avi-Yonah, ed., Edward Elgar Publishing, forthcoming, 2023).

Last August, Congress approved a plan to provide the IRS with $80 billion in funding over the next 10 years. Though the details about how the IRS will use the funding are still unfolding, many of us hope the IRS will use the extra money to clamp down on abusive tax planning activities by high-income and corporate taxpayers. In recent years, lack of resources has hindered the agency’s capacity to police taxpayer abuses, and increased funding was desperately needed. But money alone may not be enough for the IRS to effectively fight taxpayer abuses. In a new book chapter focused on corporate tax shelters, Professors Joshua Blank and Ari Glogower argue that the IRS will also need new tools to identify abusive activities.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Reimagining The Tax System Through The Work Of Dorothy Day By Crawford & Afield

This week, Michelle Layser (San Diego; Google Scholar) reviews Bridget J. Crawford (Pace; Google Scholar) & W. Edward Afield (Georgia State; Google Scholar), Yesterday’s Protestor May be Tomorrow’s Saint: Reimagining the Tax System Through the Work of Dorothy Day, 76 Tax L. Rev. __(2023).

Political protests have become more frequent in recent years, but tax protests are nothing new. The Tax Revolt of the 1970s may be fresh in memory, but people have been protesting taxation since the earliest days of the Christian church. In fact, first century tax protests against the Roman Empire were so frequent that Jesus himself is said to have weighed in on the issue, telling the Pharisees they should “render unto Caesar what belongs to Caesar and to God what belongs to God.” A simplistic reading of this passage might suggest a Christian moral imperative to pay taxes. But as Professors Bridget Crawford and W. Edward Afield remind us, at least one prominent Catholic figure disagreed. Dorothy Day, the founder of the Catholic Worker movement, made conscientious tax protest a central part of her religious practice, setting her on a path toward sainthood.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Opportunity Zones: A Program In Search Of A Purpose By Eldar & Garber

This week, Michelle Layser (San Diego; Google Scholar) reviews Ofer Eldar (Duke; Google Scholar) and Chelsea Garber (J.D. 2023, Duke), Opportunity Zones: A Program in Search of a Purpose, 102 B.U. L. Rev. 1397 (2022).

When I give talks about place-based tax incentives, the discussion nearly always turns to an important question: What is the purpose of providing tax breaks for investment in low-income communities? Or, more directly, am I sure that the purpose of these laws is to benefit low-income residents? My answer: Not really (see here), but they tend to be sold as such, so it’s worth thinking about how they could be designed to advance that purpose. (Some of my thoughts about that are set forth in How Place-Based Tax Incentives Can Reduce Geographic Inequality, 74 Tax L. Rev. 1 (2020)).

That said, it is overwhelmingly clear that most place-based tax incentives are not designed to benefit low-income communities, and they may even harm them. 

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Michelle Layser Leaves Illinois For San Diego

USD School of Law Announces Addition of Michelle D. Layser to Tax Law Faculty:

The University of San Diego (USD) School of law is excited to announce that Professor Michelle D. Layser (JD/LLM) [Google Scholar] will be joining the tax law faculty at the start of the Fall 2022 semester. Professor Layser brings with her an extensive knowledge of the intersection of tax law and social policy.

Professor Layser is currently an Assistant Professor Law at the University of Illinois College of Law, where she has taught courses on partnership taxation, state and local taxation, business taxation, and affordable housing and community development law. Prior to that, Professor Layser taught at the Georgetown University Law Center where she served as a Law Research Fellow and taught a seminar course on taxation and social justice.

Major themes in Professor Layser’s research include the use of tax expenditures to deliver public goods, and the effects of these expenditures on economic and social inequality. Her work has been published in the Tax Law Review [How Place-Based Tax Incentives Can Reduce Geographic Inequality], the UC Irvine Law Review [A Spatial Analysis Of Place-Based Tax Incentives], the Wisconsin Law Review [The Pro-Gentrification Origins Of Place-Based Investment Tax Incentives And Community Oriented Reform], and the Indiana Law Journal [How Federal Tax Law Rewards Segregation] among other journals. Her most recent research, which explores how states can overcome constitutional barriers to place-based tax incentive reform, is forthcoming in the University of Pennsylvania Law Review. In addition to her scholarly publications, Professor Layser has also written various articles for the Illinois Institute of Government & Public Affairs, Law360, The Conversation, and the TaxProf Blog. Professor Layser has presented her work at institutions around the country.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Aprill's Governmental And Semi-Governmental Federal Charitable Entities

This week, Michelle Layser (Illinois; Google Scholar) reviews Ellen Aprill (Loyola-L.A.; Google Scholar), Governmental and Semi-Governmental Federal Charitable Entities (2022).

The federal tax deduction for charitable contributions is sometimes defended on the theory that charitable organizations provide public goods that may be under-produced by the government. This understanding of tax-exempt nonprofits imagines charities as existing in a sphere that is separate and distinct from the government. Professor Ellen Aprill challenges the conventional view, arguing that government and charities are better understood as “resting on a continuum rather than in separate spheres.”

Aprill begins by reviewing the basics of the charitable contribution deduction under I.R.C. § 170. Contributions to 501(c)(3) nonprofits, commonly called charitable organizations, are undoubtedly the most familiar deductible donations. But Aprill points out that section 170 also authorizes a deduction for contributions or gifts to the United States, provided that the gifts are used for “exclusively public purposes.” In other words, taxpayers can claim a charitable contribution deduction for gifts to the federal government itself. Congress can also authorize federal agencies to accept charitable deductions, and in some cases it has done so. In a sense, the federal government and its agencies represent an extreme end of the spectrum of what Aprill calls “federal charitable entities.”

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Layser: Financing Affordable Housing Through Opportunity Funds

Michelle D. Layser (Illinois; Google Scholar), Financing Affordable Housing Through Opportunity Funds, 19 Pitt. Tax Rev. __ (2022):

This Essay considers how the Opportunity Zones law could be amended to promote affordable housing development, and it evaluates whether policymakers should adopt such amendments. This Essay identifies several legal and practical barriers to the use of Opportunity Funds to finance affordable housing development, including through twinning with the LIHTC. These barriers include: substantial improvement rules that present barriers to affordable housing rehabilitation; basis rules that present barriers to new construction deals with low debt-to-equity ratios; strict timing rules that may not align with the realities of affordable housing construction; limits on nonqualified financial property holdings that may foreclose common affordable housing development structures; and differences in the identity and motivations of the investors who typically participate in Opportunity Zones deals versus LIHTC deals.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Field’s Taxpayer Choices, Itemized Deductions, And The Federal And State Tax Systems

This week, Michelle Layser (Illinois; Google Scholar) reviews Heather M. Field (UC Hastings; Google Scholar), Taxpayer Choices, Itemized Deductions, and the Relationship Between the Federal & State Tax Systems, 13 Col. J.Tax L. __ (forthcoming 2021).

Some of most significant changes implemented under the Tax Cuts & Jobs Act of 2017 (the “TCJA”) were an increased standard deduction and the scaling back of several itemized deductions. Together, the anticipated impact of these changes was to dramatically reduce the number of taxpayers who report itemized deductions on their tax returns. Proponents touted these changes as a simplification measure. But how well did it work?

In a new article, Professor Heather Field provides empirical evidence to suggest that itemization rates fell considerably more in some states than others, and in some states, the TCJA may have even complicated tax filing more than it simplified it. Field demonstrates that these geographic disparities can be traced to states’ different approaches to conformity with federal law. Not only do these findings have important implications for how we understand the impact of the TCJA, but they also show how state law can interact with federal law in ways that undermine federal policy.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews The Trouble With Targeting Tax Shelters By Blank & Glogower

This week, Michelle Layser (Illinois; Google Scholar) reviews Joshua D. Blank (UC-Irvine; Google Scholar) and Ari D. Glogower (Ohio State; Google Scholar), The Trouble with Targeting Tax Shelters, 74 Admin. L. Rev. __ (2022).

The subject of tax avoidance hit the headlines a couple weeks ago when news organizations began to publish analyses of the Pandora Papers. The leaked documents contain confidential records related to offshore accounts held by “130 Forbes billionaires, as well as celebrities, fraudsters, drug dealers, royal family members and leaders of religious groups around the world” (ICIJ). Among other things, analyses of the Pandora Papers illustrate the challenges governments face when trying to detect and deter abusive tax avoidance strategies used by the ultra-wealthy. Though the problem itself is not new, Professors Joshua Blank and Ari Glogower argue that a recent Supreme Court case, CIC Services, LLC v. Internal Revenue Service, may have made it even harder for the IRS to target tax shelters.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Kaye's The Low-Income Housing Tax Credit And Opportunity Zones

This week, Michelle Layser (Illinois; Google Scholar) reviews Tracy Kaye (Seton Hall), Ogden Commons Case Study: A Comparative Look at the Low-Income Housing Tax Credit and Opportunity Zone Tax Incentive Programs, 48 Ford. Urb. L.J. __ (forthcoming 2021).

Many tax experts, policy watchdogs, and anti-poverty advocates doubt the Opportunity Zones tax incentive will benefit low-income communities (see here, here, and here for just a few examples). Nevertheless, proponents of the incentive love to highlight success stories, in which the tax preference has been used to subsidize pro-social investment in distressed communities. Stories like Ogden Commons, a mixed-use affordable housing development in the North Lawndale neighborhood of Chicago, which is being funded, in part, using Opportunity Zone capital. Even the law’s harshest critics are forced to acknowledge that such examples exist. But are they evidence that the Opportunity Zones law will have a positive impact on low-income communities, after all?

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Woodcock's Antimonopolism As A Symptom Of American Political Dysfunction

This week, Michelle Layser (Illinois; Google Scholar) reviews Ramsi A. Woodcock (Kentucky; Google Scholar), Antimonopolism as a Symptom of American Political Dysfunction.

One of the biggest news stories of the year has focused on antitrust cases and bills targeting tech giants Amazon, Apple, Facebook and Google. Outside the academy, liberal progressives increasingly point to monopoly power held by BigTech as a source of growing income and wealth inequality (see here, here, and here).  Newly appointed chair of the Federal Trade Commission and Columbia Law Professor Lina Khan made a splash in 2016 with her Yale student note, which made a legal case for breaking up Amazon, inspiring a “‘hipster antitrust’ movement among young scholars who want to expand existing antitrust law to better target issues like corporate concentration and income inequality” (Vox).

But is antitrust law really a promising tool for redistributing income and wealth? Professor Ramsi A.Woodcock doesn’t think so.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Work Hours And Income Tax Cuts By Simkovic And Allen

This week, Michelle Layser (Illinois; Google Scholar) reviews Michael Simkovic (USC; Google Scholar) and Eric J. Allen (UC-Riverside; Google Scholar), Work Hours & Income Tax Cuts: Evidence from Federal-State Tax Interactions, 25 Fla Tax Rev. __ (2021).

When the Biden Administration announced its plans to increase both capital gains tax rates and ordinary income tax rates on high-income earners, opponents predictably responded that doing so would reduce economic growth. This objection is supported, in part, by the familiar theory that taxpayers respond to increased taxes on labor by simply working less. Conversely, tax cuts are expected to increase labor effort since the after-tax returns are greater. But the reality is more complicated. As Professors Michael Simkovic and Eric J. Allen explain, “[t]he effect of an income tax cut on work hours can be difficult to predict because tax cuts often produce two opposite effects: a substitution effect, which encourages work, and an income or wealth effect which discourages work.”

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Joondeph's The States’ Multiple Taxation Of Personal Income

This week, Michelle Layser (Illinois; Google Scholar) reviews Bradley W. Joondeph (Santa Clara), The States’ Multiple Taxation of Personal Income, 71 Case Western Res. Law. Rev. 121 (2020).

The COVID-19 pandemic has drawn renewed attention to the possibility that state tax regimes may result in multiple taxation of personal income. In a new article, Bradley Joondeph explores the constitutional significance of multiple taxation of personal income, and he concludes that multiple taxation isn’t actually that problematic. To prove his point, Joondeph begins with an overview of contexts in which courts have blessed state tax laws that result in multiple taxation. Joondeph describes two major sources of multiple taxation: conflicting apportionment methods and conflicting jurisdictional bases.

When taxing nonresidents, states may only tax income sourced to their state, but it is not always obvious where income should be sourced. The problem is especially pronounced in the context of multi-state corporations, and states have adopted different apportionment formulas for sourcing corporations’ income. These formulas often conflict in ways that result in multiple taxation, but the Supreme Court has long held that this is fine.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Ryznar's Extending The Charitable Deduction Beyond The COVID-19 Pandemic

This week, Michelle Layser (Illinois) reviews Margaret Ryznar (Indiana-Indianapolis), Extending the Charitable Deduction Beyond the COVID-19 Pandemic, 167 Tax Notes Fed. 463 (Apr. 20, 2020).

The Coronavirus Aid, Relief, and Economic Security (CARES) Act made two changes to the charitable contributions deduction: it increased the cap on deductible contributions for itemizers, and it created a new above-the-line deduction for charitable donations up to $300. While the first of these is limited to the 2020 tax year, the latter change is permanent and applicable to taxable years beginning in 2020. Professor Margaret Ryznar has argued that the new above-the-line deduction is good tax policy and supports its extension beyond the current pandemic.

In her brief essay, Ryznar comments on the value of the above-the-line charitable contribution deduction in two contexts. First, she considers the value of the deduction as a policy intervention during the COVID-19 pandemic. Ryznar notes that charities “seeking donations to help during the coronavirus pandemic range from procuring food for school children to locating equipment for hospitals” and argues that such charitable activities are “important supplements to the government response to the pandemic.”

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Evaluating Economic And Financial Policy Responses To The Coronavirus

This week, Michelle Layser (Illinois) reviews Hiba Hafiz (Boston College), Shu-Yi Oei (Boston College), Diane Ring (Boston College), & Natalya Shnitser (Boston College), Regulating in Pandemic: Evaluating Economic and Financial Policy Responses to the Coronavirus Crisis, Boston College Law School Legal Studies Research Paper No. 527 (March 2020).

News about the COVID-19 coronavirus pandemic has been breaking by the hour, and for people like me who can’t look away from it, the whole situation is positively overwhelming. Fortunately, a team of researchers at Boston College Law School have already pulled together an excellent working paper that provides an analytical framework to bring the key issues into focus. Their paper, which will be “continually updated to reflect current developments,” is a must read for tax and fiscal policy researchers and lawmakers.

The paper begins by describing a trifecta of policy objectives that are relevant to fight the pandemic. The first objective is to provide a social safety net and social insurance for unemployed workers. Unemployment claims are skyrocketing as supply chains are disrupted and businesses are ordered to shut their doors for the purpose of social distancing. The authors identify several choice-of-delivery questions. Should assistance be delivered directly via cash infusions like universal basic income? Should benefits be tied to work? Should aid be provided to individuals or to businesses (to help avoid layoffs)? A central goal of the paper is to explore how these questions might be answered without undermining the other two objectives.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Hoffer's Tax Theory & Feral AI

This week, Michelle Layser (Illinois) reviews Stephanie Hoffer (Ohio State), Tax Theory & Feral AI, Public Law & Theory Working Paper Series No. 524 (Jan. 16, 2020)

The robot invasion is upon us. It started out innocently enough, with cute little robots sweeping pennies from the sidewalk. But then people started abandoning their robots in misguided acts of performance art and neglect. Some of the robots they abandoned were digital creatures who lurked at the corners of the internet, going feral and getting smarter. They learned how to write novels and poetry. People bought the prose and verse that the robots had created. And no one paid taxes.

Fortunately, this horror story is fiction (for now). Variations of this hypothetical were presented in a new working paper by Professor Stephanie Hoffer. Hoffer imagines a world in which unowned, digital AI robots are running loose on the internet, creating new value and engaging in real economic transactions. She then invites her readers to join her as she moves through a thought experiment that considers a variety of problems associated with taxing feral AI.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Does Government Play Favorites? Evidence From Opportunity Zones

This week, Michelle Layser (Illinois) reviews Ofer Eldar (Duke) and Chelsea Garber (Duke), Does Government Play Favorites? Evidence from Opportunity Zones (Oct. 3, 2019).

With the 2020 Census on the horizon, investors nationwide have been lobbying states to expand the areas designated for tax preferred investment under the federal Opportunity Zones law. In 2017, state governors selected 8,764 census tracts for Opportunity Zone designation. These tracts were selected from a pool of 30,981 low-income census tracts and 10,237 contiguous tracts that were eligible under the federal statute. Whether the IRS will permit states to expand or revisit their Opportunity Zone designations after the Census is yet to be seen. In the meantime, Professors Ofer Eldar and Chelsea Garber have provided a fascinating quantitative analysis of factors that may have driven the initial designation process.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Hemel's A Place For Place In Federal Tax Law

This week, Michelle Layser (Illinois) reviews Daniel Hemel (Chicago), A Place for Place in Federal Tax Law, 45 Ohio N.U. L. Rev. ___ (2019). 

Place-based investment tax incentives are nothing new, but they were dragged into the spotlight when Opportunity Zones were introduced through the 2017 Tax Cuts and Jobs Act. Depending on who you ask, OZs are either a long overdue solution to the complicated and administratively inefficient incentives of the past—poised to drive large sums of much-needed capital into otherwise disinvested communities—or a misguided law that may create more problems than it solves. Many academic observers, including myself, view OZs with skepticism. Some are so skeptical that they would recommend we abandon our experiment with place-based investment tax incentives altogether. But Professor Daniel Hemel, expanding on remarks given at the 42^nd annual Ohio Northern University Law Review Symposium, argues in his forthcoming essay that there is a place for “place” in federal tax law. I agree.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Blank & Osofsky's Legal Calculators And The Tax System

This week, Michelle Layser (Illinois) reviews a new work by Joshua D. Blank (UC-Irvine) and Leigh Osofsky (North Carolina), Legal Calculators and the Tax System, 15 Ohio St. Tech. L.J. ___ (2019).

The IRS has long attempted to aid wary taxpayers by publishing informal guidance that translates tax laws into more understandable statements. In previous work, Professors Joshua Blank and Leigh Osofsky have argued that such plain language guidance often oversimplifies complicated tax laws, opening the door to errors. They have called this characteristic “simplexity.” In their newest article on the subject, Blank and Osofsky identify another—potentially more serious—example of tax guidance that reflects simplexity: automated legal calculators like the IRS’s Interactive Tax Assistant.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Thimmesch's The Unified Dormant Commerce Clause

This week, Michelle Layser (Illinois) reviews Adam B. Thimmesch (Nebraska), The Unified Dormant Commerce Clause, 91 Temple L. Rev. ___ (2019).

Between South Dakota v. Wayfair and Franchise Tax Board of California v. Hyatt, this has been a big year for state tax law developments. First, Wayfair expanded state taxing authority by making it easier for states to impose tax collection obligations on online merchants. Then Hyatt expanded states’ sovereign immunity to protect them from lawsuits filed by nonresident taxpayers in other states. It seems clear that the playing field has been tilted in favor of state taxing power and that the legal landscape is changing for state tax law. But what exactly is the current state of the law itself?

To help answer this question, Professor Adam B. Thimmesch has revisited the touchstone case for evaluating state tax laws under the commerce clause, Complete Auto Transit, Inc. v. Brady (1977) to see what, if anything, in the doctrine is still relevant after Wayfair.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Barbieri's Lawmakers As Job Buyers

This week, Michelle Layser (Illinois) reviews Edward W. De Barbieri (Albany), Lawmakers as Job Buyers, 88 Fordham L. Rev. ___ (2019).

Economic development tax incentives have been in the headlines a lot lately, thanks mostly to Amazon, which almost located its east coast headquarters in Queens, New York City. Before the deal collapsed, Amazon was poised to receive roughly $1.2 billion in refundable tax credits from the state of New York. In addition, the company may have qualified for tax-subsidized financing through the new Opportunity Zones program. (Amazon insisted that it would not participate in the program). The public was outraged. But as Professor Edward W. De Barbieri reminds us, the practice of wooing companies through large tax breaks is nothing new—and it leaves a lot to be desired.

Barbieri begins by providing a comprehensive overview of the tools state and local governments use to attract businesses. He describes how state and local governments use property tax abatements, tax credits, private activity bonds, and land use regulation like tax increment financing districts to subsidize private companies and influence their location decisions. He explains how such subsidies can have a negative impact on state and local budgets, particularly when they fail—and they often do.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews The Constitutionality Of A National Wealth Tax

This week, Michelle Layser (Illinois) reviews Dawn Johnsen (Indiana–Bloomington) & Walter E. Dellinger III (Duke), The Constitutionality of a National Wealth Tax, 93 Ind. L.J. 111 (2018).

Presidential Candidate and Senator Elizabeth Warren recently proposed a wealth tax on household net worth over $50 million, prompting observers from across the political spectrum to question whether the proposed tax was constitutional (see here, here and here). Critics point to a constitutional requirement that would be impossible to satisfy without serious geographic inequities. But Professors Dawn Johnsen and Walter Dellinger argue that a national wealth tax may not trigger such requirements after all—precisely because they would be impossible to satisfy without such inequities.

The requirement at issue is the “apportionment requirement” imposed by Article I, § 2 of the U.S. Constitution. That provision states that “direct Taxes shall be apportioned among the several States . . . according to their respective Numbers.” In other words, “direct taxes” must be apportioned among the states based on population size. For example, consider two states with the same population but residents with different net worth. The first state has a large number of wealthy residents, and the second has only a few. An apportioned wealth tax would require both states to render the same aggregate amount of tax. So the few wealthy residents of the poorer state would be unfairly burdened, forced to pay proportionately more than the wealthy taxpayers in the wealthier state.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Erbsen's The Constitutional Connection Between State Tax Authority And Personal Jurisdiction

This week, Michelle Layser (Illinois) reviews Allan Erbsen (Minnesota), Wayfair Undermines Nicastro: The Constitutional Connection Between State Tax Authority and Personal Jurisdiction, 128 Yale L.J.F. __ (2019).

With the holiday season in full swing, most people tax professors have spent at least some time shopping on the internet and contemplating the impact of South Dakota v. Wayfair. By now, we’re all well versed in the basics. Wayfair is a milestone tax law case that sets forth a new interpretation of the Commerce Clause that permits states to enforce sales and use tax collection obligations against out-of-state online merchants. Right? Well, sort of.

According to Professor Allan Erbsen, labels like “tax law case” aren’t particularly helpful, and the doctrinal impact of Wayfair may extend well beyond the territorial borders of tax law—or even Commerce Clause jurisprudence. Erbsen argues that Wayfair’s Commerce Clause holding justifies reconsideration of the Court’s 2011 decision in J. McIntyre Machinery v. Nicastro, a Due Process case that had nothing to do with tax.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Medical Necessity — A Higher Hurdle for Marginalized Taxpayers?

This week, Michelle Layser (Illinois) reviews Julie Furr Youngman (Washington & Lee) & Courtney D. Hauck (J.D. 2021, Columbia), Medical Necessity: A Higher Hurdle for Marginalized Taxpayers?, 51 Loy. L.A. L. Rev. ___ (2018).

Many recent advancements in transgender rights have been followed by setbacks. Obama era rules that protected transgender patients from discrimination have been rolled back, and just last week the Trump administration announced plans to define gender for federal civil rights laws as biological, immutable and determined at birth. Now a new article by Julie Furr Youngman and Courtney Hauck warns that a 2010 U.S. Tax Court case that upheld the medical expense deduction for gender affirmation surgery may come back to haunt the transgender community if its dicta is interpreted as requiring proof of medical necessity. (Note: For definitions and terms preferred by the transgender community, please see the National Center for Transgender Equality.)

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Crawford's Tax Talk And Reproductive Technology

This week, Michelle Layser (Illinois) reviews Bridget Crawford (Pace), Tax Talk and Reproductive Technology, 100 B.U. L. Rev. ___ (2019).

As the U.S. fertility industry explodes, there is plenty of talk about surrogate miscarriages, freezer failures, unwieldy donor family trees, problems with privacy and anonymity, and the physical and emotional tolls of egg and sperm donation. What’s missing from the conversation? According to Professor Bridget Crawford, the answer is “tax talk.” Crawford’s article, which focuses on how egg donors talk about taxes with each other and their fertility clinics, is an empirically grounded exploration into the ways that talking about tax (or failing to do so) reflects and reinforces cultural norms.

The article begins by recounting the facts of a 2015 tax court case called Perez v. Commissioner. In that case, the taxpayer Nichelle Perez had received fees for her “time, effort, inconvenience, pain, and suffering in donating her eggs.” Perez earned her fees. She underwent a series of painful hormone injections that resulted in pain, bruising and burning. She submitted to general anesthesia and an invasive egg removal procedure that left her cramped, bloated, nauseous, fatigued and moody.

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