Paul L. Caron
Dean


Sunday, August 25, 2019

Hemel: A Place For Place In Federal Tax Law

Daniel Hemel (Chicago), A Place for Place in Federal Tax Law, 45 Ohio N.U. L. Rev. ___ (2019):

This essay — which is based on remarks at the 42nd annual Ohio Northern University Law Review Symposium — examines the place of place-based provisions in federal tax law. It uses the opportunity zone provisions in the December 2017 tax law as a springboard for considering the successes and (mostly) failures of previous efforts at place-based taxation, and then goes on to imagine possibilities for more productive place-based tax policies. One possibility is to use past location as an indicator for ability to pay. A second is to set different rate structures in different geographic areas (i.e., more progressive rate structures in high-income areas and less progressive rate structures in low-income areas) in order to encourage residential integration. A third is to treat place of upbringing as an asset in a comprehensive inheritance tax regime.

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August 25, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #3, #4, and #5:

  1. [416 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  2. [144 Downloads]  The Substantive Canons of Tax Law, by Jonathan Choi (NYU)
  3. [116 Downloads]  The Superiority of the Digital Services Tax over Significant Digital Presence Proposals, by Wei Cui (University of British Columbia)
  4. [108 Downloads]  Partnership Audit Rules: After the Final Regulations, by Monica Gianni (California State University Northridge)
  5. [95 Downloads]  The Distributional and Tax Planning Consequences of the Tax Cuts and Jobs Act, by Jason Oh (UCLA)

August 25, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, August 24, 2019

Kwon: Statutory Interpretation Meets The Internal Revenue Code

Michelle M. Kwon (Tennessee), Custom-Tailored Law: When Statutory Interpretation Meets the Internal Revenue Code, 97 Neb. L. Rev. 1118 (2019):

When it comes to statutory interpretation, the traditional approaches fail to consider how the laws being interpreted by the courts were actually made. Instead, they tend to presume a uniform lawmaking process. In reality, the lawmaking process tends to be highly variable, both among, and even within, different areas of law. Traditional interpretive approaches also fail to consider the actual institutional capabilities of Congress or the courts. Textualist approaches give primacy to the words that Congress chose. By doing so, they implicitly assume that legislators accurately constructed the statutory text but pay no attention to whether the actual lawmaking process was reliable or trustworthy. By contrast, purposivist approaches idealize the role of judges by assuming they have the capacity to uncover the purposes that motivated lawmakers to enact what they did. But whether judges indeed have the capacity to discern Congress’s intent might be influenced by whether the interpreters are subject-matter specialists or generalists. In short, the traditional approaches are unsuccessful to the extent they fail to account for the quality of statutory texts or the quality of courts interpreting those texts.

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August 24, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, August 23, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Chaffee's Collaboration Theory And Corporate Tax Avoidance

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Eric C. Chaffee (Toledo), Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 93 (2019).

KimAlthough there is a famous tax quote by Justice Oliver Wendell Holmes, "I like to pay taxes. With them I buy civilization."; there is nothing wrong with taxpayers’ efforts to minimize their tax liability in manners the legislative body deems permissible. Such “tax minimization” is legally permissible and distinguished from “tax evasion,” which is the illegal nonpayment or underpayment of taxes. Then, what about the gray area between tax minimization and tax evasion, commonly referred to as “tax avoidance?” Is it permissible to pursue tax avoidance, where taxpayers reduce their tax obligations in a manner that technically complies with the law but violates the spirit of the law?

Eric C. Chaffee's new work, Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 91 (2019), is an effort to answer this difficult question in the corporate tax context. 

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August 23, 2019 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Thursday, August 22, 2019

Fox: Does Capital Bear The U.S. Corporate Tax After All?

Edward G. Fox (Michigan), Does Capital Bear the U.S. Corporate Tax After All? New Evidence from Corporate Tax Returns, 16 J. Empirical Legal Stud. ___ (2019):

This Article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957-2013, corporations had been subject to a hypothetical corporate cash flow tax — i.e., a tax allowing for the immediate deduction of investments in long-lived assets like equipment and structures — rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995-2013) differed little from that under the hypothetical cash flow tax.

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August 22, 2019 in Scholarship, Structuring a Tax Workshop Series, Tax | Permalink | Comments (0)

Abstract 'Spin': Nearly Half Of All Scholars Exaggerate Their Papers' Findings

Inside Higher Ed, Abstract ‘Spin’:

We’ve all been told not to judge a book by its cover. But we shouldn’t be judging academic studies by their abstracts, either, according to a new paper in BMJ Evidence-Based Medicine [Evaluation of Spin in Abstracts of Papers in Psychiatry and Psychology Journals]. The study — which found exaggerated claims in more than half of paper abstracts analyzed — pertains to psychology and psychiatry research. It notes that “spin” is troublesome in those fields because it can impact clinical care decisions. But the authors say that this kind of exaggeration happens in other fields, too.

“Researchers are encouraged to conduct studies and report findings according to the highest ethical standards,” the paper says, meaning “reporting results completely, in accordance with a protocol that outlines primary and secondary endpoints and prespecified subgroups and statistical analyses.”

Yet authors are free to choose “how to report or interpret study results.” And in an abstract, in particular, they may include “only the results they want to highlight or the conclusions they wish to draw.” ...

How often did articles’ abstracts exaggerate the actual findings? More than half the time, or 56 percent. Spin happened in 2 percent of titles, 21 percent of abstract results sections and 49 percent of abstract conclusion sections. Fifteen percent of abstracts had spin in both their results and conclusion sections.

In a word: spin. ...

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August 22, 2019 in Legal Ed News, Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Kysar: Critiquing (And Repairing) The New International Tax Regime

Rebecca M. Kysar (Fordham), Critiquing (and Repairing) the New International Tax Regime, 128 Yale L.J. F. 339 (Oct. 25 2018):

In this Essay, I address three serious problems created — or left unaddressed — by the new U.S. international tax regime. First, the new international rules aimed at intangible income incentivize offshoring and do not sufficiently deter profit shifting. Second, the new patent box regime is unlikely to increase innovation, can be easily gamed, and will create difficulties for the United States at the World Trade Organization. Third, the new inbound regime has too generous of thresholds and can be readily circumvented. There are ways, however, to improve upon many of these shortcomings through modest and achievable legislative changes, eventually paving the way for more ambitious reform. These recommendations, which I explore in detail below, include moving to a per-country minimum tax, eliminating the patent box, and strengthening the new inbound regime.

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

Tuesday, August 20, 2019

Chaffee: Collaboration Theory And Corporate Tax Avoidance

Eric C. Chaffee (Toledo), Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 93 (2019):

Tax revenue is the primary source of income for the government, yet corporations regularly engage in tax avoidance. Corporate managers and advisers commonly claim that the corporate form requires that they undertake this behavior because the nature of that form mandates it. Direct and indirect references are made to the classic case of Dodge v. Ford, as providing an edict that corporations must engage in unrelenting profit maximization that requires them to undertake aggressive tax avoidance.

As explored in my co-authored piece with Professor Karie Davis-Nozemack [Georgia Tech), Corporate Tax Avoidance and Honoring the Fiduciary Duties Owed to the Corporation and Its Stockholders [58 B.C. L. Rev. 1425 (2017)], the “Dodge Mandate,” as it may be termed, is far from absolute.

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August 20, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, August 19, 2019

The Effect Of Tax Avoidance On Capital Structure Choices

Yoojin Lee (California State University, Long Beach), Terry J. Shevlin (UC-Irvine) & Aruhn Venkat (UC-Irvine), The Effect of Tax Avoidance on Capital Structure Choices:

In this study, we examine whether tax avoidance affects firm-level external financing choices. We hypothesize that firms marginally choose equity over debt because tax avoidance generates incremental cash flows but is likely risky. Consequently, we predict that tax avoidance induces a relative price increase in debt relative to equity. Our results are consistent with tax avoidance inducing firms to choose equity over debt. Importantly, our theory and results are distinct from the effects of marginal tax rates on capital structure (e.g., Modigliani and Miller 1963) and we control for marginal tax rates in all specifications. From an identification standpoint, we use path analyses, a plausibly exogenous 9th Circuit decision and cross-sectional tests to support our main results.

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August 19, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: A Lesson Of Interest

Tax Court (2017)Politicians love to brag about the voluntary nature of the U.S. tax system.  Back in 1862, the first Commissioner of Internal Revenue, George Boutwell, reported glowingly that, “sustained by the patriotic sentiments of the people, it is a matter for congratulation that the taxes assessed have, with few unimportant exceptions, been paid with cheerfulness...”  Those with boots on the ground had a different view: “Human nature must greatly change, before we shall find that patriotism is more universal than selfishness,” wrote the tax assessor Charles Emerson in 1867.

Good tax administration works with, rather than fights against, the selfishness of human nature.  One way to do that is by creating structural mechanisms that put taxpayers into a default posture of compliance.  Withholding is one of those.  Another way is to give taxpayers incentives to accurately comply with their reporting and payment obligations, incentives such as avoiding penalties and interest.

Enhancing taxpayer compliance is a central purpose of both penalties and interest.  See Policy Statement 20-1 in IRM 1.2.1.12 (08-01-2019).  Last week’s case of Jon D. Adams v. Commissioner, T.C. Memo. 2019-99 (Aug. 12, 2019) (Judge Urda) is an object lesson in how penalties and interest do that.  In particular the case illustrates how the difficulty in obtaining relief from interest, coupled with the very robust statutory interest rates, suggest that imposition of interest is more than just a mechanism to compensate the government for the lost time value of money; it is a compliance tool.

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August 19, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure | Permalink | Comments (3)

Sunday, August 18, 2019

The Taxation Of Religious Organizations In America

Grant M. Newman (J.D. 2019, Harvard), Note, The Taxation of Religious Organizations in America, 42 Harv. J.L. & Pub. Pol'y 681 (2019):

Christ taught his disciples to “[r]ender to Caesar the things that are Caesar’s, and to God the things that are God’s." The Supreme Court has, to an extent, rendered to God what is God’s by repeatedly acknowledging that it will not involve itself in the internal affairs of religious organizations. Nevertheless, the extent to which religious organizations remain vulnerable to involvement from other branches of government remains a pertinent question, especially with regards to the government’s power to tax.

This Note investigates the extent to which religious organizations are vulnerable to such involvement. A prime example of such involvement is Congress’ ability to use the Internal Revenue Code to the detriment of religious organizations. As it ensures that what is Caesar’s (i.e., taxes) is rendered to Caesar (i.e., the federal government), any policy of Congress and the Internal Revenue Service (I.R.S.) that thwarts the faithful from rendering to God what is God’s has the potential to impose a prohibitive burden on the operation of religious organizations. The potential to hinder the work of religious organizations through taxation is great. Indeed, “the power to tax involves the power to destroy.” Insofar as Congress retains the power to tax religious organizations, it likewise maintains the power to destroy.

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August 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Morals And Mentors: What The First American Law Schools Can Teach Us About Developing Law Students' Professional Identity

Benjamin V. Madison (Regent) & Larry O. Natt Gantt, II (Regent), Morals and Mentors: What the First American Law Schools Can Teach Us About Developing Law Students' Professional Identity, 31 Regent U. L. Rev. 161 (2019):

This article examines what the first American law schools can teach current legal educators about how best to develop law students’ professional identity. Drawing upon the seminal reports of Educating Lawyers and Best Practices for Legal Education, the article underscores legal educators’ responsibility to cultivate our students’ professional identity and instill in them the key normative values of the profession. Turning to the lessons we can learn from early American law schools, the article then discusses how legal educators in America, from colonial times through the late nineteenth century, sought to teach aspiring lawyers both legal analysis and the study of — and reflection on — ethical and moral principles underlying the law.

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August 18, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN Logo (2018)There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:

  1. [530 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
  2. [400 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  3. [170 Downloads]  Fixing the Five Flaws of the Tax Cuts and Jobs Act, by Kimberly Clausing (Reed College)
  4. [128 Downloads]  The Substantive Canons of Tax Law, by Jonathan Choi (NYU)
  5. [105 Downloads]  Recent Developments in Federal Income Taxation: The Year 2018, by Bruce McGovern (South Texas) & Cassady Brewer (Georgia State)

August 18, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, August 17, 2019

Tax, Technology And Privacy: The Coming Collision

Andrew Leahey (Tax LL.M. 2019, NYU), Tax, Technology and Privacy: The Coming Collision:

In the last decade a dominant storyline in the realm of technology and the law has been the rise of Big Data and the various state responses, or lack thereof, to concerns stemming from the same. At first, technology companies pursued methods of monetizing accumulated data almost by default — massive stores of data were a byproduct of other business ventures. Like early wildcat oil drillers that struck natural gas, the stores of data was seen more as a hindrance than anything else. Over time, oil companies found a use for natural gas and Silicon Valley found a use for our stores of data. The next trove of data is going to be found in our tax information. Let us insure that this time, from the outset, our privacy is kept front of mind.

August 17, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, August 16, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews The Property Tax Forty Years After Prop 13 and Alternative Local Government Revenues

This week, Ariel Jurow Kleiman (San Diego) reviews two recent articles on Californians’ perceptions of property taxes,by Ronald C. Fisher (Michigan State), Robert W. Wassmer (Cal State Sacramento), and Zachary Kuloszewski (Michigan State): Perspectives of the Property Tax Forty Years after Proposition 13 and Support for Alternative Local Government Revenues.

StevensonTax experts are befuddled and frustrated by Americans’ diehard aversion to the property tax, which contravenes professional wisdom on the tax’s salutary qualities and hamstrings local governments’ ability to provide necessary and popular public services.  The rich trove of survey research sparked by the 1970’s property tax revolt, e.g., here and here, speaks to decades of such consternation.  Two recent papers by Fisher, Wassmer, and Kuloszewski use 2016 CalSpeaks surveys to add modern texture to this body of data.

In Support for Alternative Local Government Revenues, the authors conclude that the property tax revolt is “alive and well in California forty years after Proposition 13.”  To arrive there, they asked survey respondents to choose a preferred revenue source to either: 1) make up for a public revenue shortage, or 2) raise revenue to improve inadequate services.  (Side note, data on respondents’ opinions of the adequacy of various public services is interesting on its own.)  In both cases, only about 15% of respondents preferred to raise property taxes, compared to about 30% who preferred to raise the sales tax, and 42-52% preferring to raise fees.  Unsurprisingly, they find that those who self-identify as progressive are more likely to support raising revenue via property taxes, and less likely to support doing so via fees.  Those who identify as conservative are more likely to support fees over taxes.  Aside from ideology, they also find that most other personal characteristics (such as race or education) are not correlated with tax preferences.  Two exceptions to this are homeowners and people with income above $150K, both of whom are less likely to prefer the property tax over other revenue sources. 

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August 16, 2019 in Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (1)

Shanske: State Tax Administrators In An Age of Statutes

Darien Shanske (UC-Davis), State Tax Administrators: Please Do Your Part in Sending PL 86–272 Off Into the Sunset:

This is the story of an arbitrary and destructive interstate tax shelter, one created by the federal government. No, this is not about collecting the sales and use tax. That tax shelter is largely on its way out; it was created by the Supreme Court in 1967, embraced anew in 1992 and finally ended, by the Court, in 2018, in a case called Wayfair. The tax shelter I am talking about in this post was created in 1959, by Congress. It was meant to be temporary, but is still with us and it shields certain large multistate taxpayers from the state corporate income tax.

The law in question, PL 86–272, shields taxpayers from paying the corporate income tax if certain conditions are satisfied. In particular, the taxpayer must be engaged in selling only tangible personal property in the state and the only activity in the state must be “solicitation.” Leaving aside the wisdom and propriety of Congress creating a tax shelter at all, these requirements indicate how dated the statute is now — and how poorly thought through it always was. Why are only sellers of tangible person property given the benefit of this special rule? Why only solicitation? How is solicitation a proxy for whether it would be fair and reasonable to ask a taxpayer to pay the income tax? If one remember the statute’s vintage, then one can understand the focus on tangible personal property because that was a more important part of the economy. This also explains the emphasis on solicitation as this refers to a then much more common business model of relying on an in-state sales force, though it never made a lot of sense to give a break to taxpayers large enough to engage in only solicitation. ...

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August 16, 2019 in Scholarship, Tax, Tax News | Permalink | Comments (0)

Thursday, August 15, 2019

Grinberg: Reestablishing International Tax Order

Itai Grinberg (Georgetown), Stabilizing 'Pillar One': Corporate Profit Reallocation in an Uncertain Environment:

This paper is about how the world reestablishes international tax order.

The paper focuses on the OECD’s work on profit reallocation and asks whether this multilateral effort can be successful in stabilizing the international tax system. The analysis centers on the current leading concepts for reallocating profit among jurisdictions under what is known as “Pillar One” of the OECD work programme. To analyze whether any Pillar One concept can be turned into a stable multilateral regime, it is necessary to specify certain elements of what a proposal to reallocate profits might entail. Accordingly, this paper sets out two strawman proposals. One strawman uses a “market intangibles” concept that explicitly separates routine and residual returns. The other strawman may reach a similar result, but does not explicitly attempt to separate routine and residual returns. Instead, in current OECD parlance, it might be described as a “distribution-based” approach.

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August 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

How Popular Discontent Is Reshaping Higher Education Law

Ben Trachtenberg (Missouri), The People v. Their Universities: How Popular Discontent Is Reshaping Higher Education Law, 106 Ky. L.J. ___ (2020):

Surveys taken since 2015 reveal that Americans exhibit stark partisan divisions in their opinions about colleges and universities, with recent shifts in attitudes driving changes to higher education law. In recent years, Democrats have become slightly more positive about higher education. Concurrently, Republicans have become extremely more negative, and a majority of Republicans now tells pollsters that colleges and universities have an overall negative effect on the country.

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August 15, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (5)

Avi-Yonah & Fishbien: Tax Expenditures And Horizontal Equity — A Lost Lesson From Stanley Surrey

Reuven S. Avi-Yonah (Michigan) & Nir Fishbien (S.J.D. 2020, Michigan), Tax Expenditures and Horizontal Equity: A Lost Lesson from Stanley Surrey:

Tax expenditures are “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.’’ The concept of tax expenditures was invented by the first Assistant Secretary for Tax Policy, Stanley S. Surrey, in the late 1960s, and was codified by the Congressional Budget Act of 1974, which requires that a list of tax expenditures be included in the US budget. The tax expenditure budget relies on the Haig Simons definition of income as the base, while acknowledging the fact that not all deviations from Haig Simons are treated as tax expenditures.

The basic problem with attempts to define tax expenditures against a Haig Simons baseline is that it is not clear why such deviations are normatively problematic. Put bluntly, who cares whether a specific tax provision is a deviation from some theoretical definition of income by two long dead economists? That, presumably, is why most of the literature now accepts the Weisbach and Nussim view that the debate between Surrey and Bittker was meaningless, and we should just learn to live with the tax expenditures.

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August 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Social Media And Professional Norms For Lawyers, Judges, And Law Professors

Agnieszka McPeak (Duquesne), The Internet Made Me Do It: Reconciling Social Media and Professional Norms for Lawyers, Judges, and Law Professors, 55 Idaho L. Rev. 205 (2019):

Social media platforms operate under their own social order. Design decisions and policies set by platforms steer user behavior. Additionally, members of online communities set informal expectations that form a unique set of norms. These social media norms—like oversharing, disinhibition, and anonymity—become common online, even though similar conduct might be shunned in the real world.

For lawyers, judges, and law professors, a different set of norms apply to both their online and offline conduct. Legal ethics rules, codes of judicial conduct, workplace policies, and general professionalism expectations dictate behavior for legal professionals. Collectively, these professional norms set a higher bar—one that fundamentally clashes with ever-evolving social media norms. This conflict between social media and professional norms must be reconciled in order for lawyers, judges, and law professors to avoid online missteps.

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August 15, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Foreign Branch Income Issues In Transitioning From GILTI To FDII

Jeffery M. Kadet (University of Washington) & David Koontz, Transitioning From GILTI to FDII? Foreign Branch Income Issues, 164 Tax Notes 57 (July 1, 2019): 

In this article, Kadet and Koontz discuss certain issues that must be considered when a multinational analyzes whether it should transition certain operations conducted within a CFC (along with the associated income) into a domestic group member so as to achieve an FDII-qualifying structure. In doing so, there will likely be a need to move some key income-earning operations and functions to the United States to assure that the FDII foreign branch rule is not violated.

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August 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, August 14, 2019

Aprill: Revisiting Federal Tax Treatment Of States, Political Subdivisions, And Their Affiliates

Ellen P. Aprill (Loyola-L.A.), Revisiting Federal Tax Treatment of States, Political Subdivisions, and their Affiliates, 23 Fla. Tax Rev. ___ (2019):

Florida Tax Review (2018)Several provisions of the 2017 tax legislation, known as Tax Cuts and Jobs Act (TCJA), focused attention on federal taxation of states, their political subdivisions and their affiliates. Most prominently, TCJA limited the federal income tax deduction for state and local taxes to $10,000. States have sued and attempted work-arounds. Another provision, which imposes an excise tax of 21% on “excessive compensation” paid by certain entities not subject to income tax, inadvertently failed to subject to tax entities that are integral parts of states or political subdivisions or are themselves political subdivisions. Calls for a technical correction have so far gone unheeded.

More than twenty years ago, I wrote two articles about federal taxation of state governments, political subdivisions, and their affiliates. The Teacher’s Manual to a leading casebook on nonprofit organizations describes these two articles as “as much as anyone knows about this confusing patchwork and its ramifications.” The passage of time, changes in my own thinking and new developments call for my returning to this topic. I do so here. Moreover, far more than in my earlier work, I examine the applicable rules regarding charitable contribution deductions to these entities as well as discuss the special rules applicable to governmental charities and the category of charities that lessen the burdens of government.

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August 14, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Fostering And Assessing Law Student Teamwork And Team Leadership Skills

Neil W. Hamilton (St. Thomas), Fostering and Assessing Law Student Teamwork and Team Leadership Skills, 47 Hofstra L. Rev. ___ (2019):

Skills of teamwork and team leadership are foundational for many types of law practice, but how much instruction, supervised experience, assessment, and guided reflection on these two skills did each reader as a law student receive? Law schools’ formal curricula, in the author’s experience, historically have not given much attention to the development of these skills. There also has been little legal scholarship on how most effectively to foster law students’ growth toward later stages of teamwork and team leadership. Legal education must do better.

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August 14, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (1)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  This ranking includes downloads from two 30- and 35-page papers by 12 tax professors on the new tax legislation that garnered a lot of media attention (including the New York Times and Washington Post) and generated a massive amount of downloads (the papers are the most downloaded tax papers of all-time by over 200%).  See Brian Leiter (Chicago), 11 Tax Profs Blow Up The SSRN Download Rankings. (For some reason, Mitchell Kane (NYU) — the twelfth academic co-author of the two papers — is not included in the SSRN download rankings (although the downloads are included on his individual author page)).  Here is the new list (through August 1, 2019) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

    All-Time   Recent
Reuven Avi-Yonah (Michigan)  184,986 Reuven Avi-Yonah (Michigan) 12,878
Dan Shaviro (NYU) 118,783 Daniel Hemel (Chicago) 10,565
David Gamage (Indiana-Bl.) 114,647 David Gamage (Indiana-Bl.) 8,640
Daniel Hemel (Chicago) 113,015 Darien Shanske (UC-Davis)  8,555
Lily Batchelder (NYU) 111,898 Dan Shaviro (NYU) 8,305
Darien Shanske (UC-Davis) 108,497 Manoj Viswanathan (UC-Hastings) 7,627
Cliff Fleming (BYU) 103,607 Ari Glogower (Ohio State) 7,290
8 David Kamin (NYU) 100,506 David Kamin (NYU) 7,073
9 Manoj Viswanathan (UC-Hastings) 100,501 Lily Batchelder (NYU) 7,024
10  Rebecca Kysar (Fordham) 99,652 Cliff Fleming (BYU) 6,803
11  Ari Glogower (Ohio State) 98,391 Rebecca Kysar (Fordham)  6,735
12  Michael Simkovic (USC) 43,223 Richard Ainsworth (BU) 2,663
13  D. Dharmapala (Chicago) 37,181 Michael Simkovic (USC) 2,650
14  Paul Caron (Pepperdine) 35,672 Bridget Crawford (Pace) 2,591
15  Louis Kaplow (Harvard) 31,925 Brad Borden (Brooklyn) 2,495
16  Richard Ainsworth (BU) 27,900 Kyle Rozema (Chicago) 2,493
17  Ed Kleinbard (USC) 25,959 D. Dharmapala (Chicago) 2,335
18  Vic Fleischer (UC-Irvine) 25,557 Ruth Mason (Virginia) 2,221
19  Jim Hines (Michigan) 24,586 Robert Sitkoff (Harvard) 2,051
20  Gladriel Shobe (BYU) 24,043 Jacob Goldin (Stanford) 1,976
21  Ted Seto (Loyola-L.A.) 23,574 Louis Kaplow (Harvard) 1,856
22  Richard Kaplan (Illinois) 23,450 Hugh Ault (Boston College) 1,849
23  Brad Borden (Brooklyn) 23,022 Joe Bankman (Stanford) 1,716
24  Robert Sitkoff (Harvard) 22,713 Yariv Brauner (Florida) 1,635
25  Katie Pratt (Loyola-L.A.) 22,295 George Yin (Virginia) 1,558

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August 14, 2019 in Legal Education, Scholarship, Tax, Tax Prof Rankings, Tax Rankings, Tax Scholarship | Permalink | Comments (0)

Sander: Are Law Schools Engines Of Inequality?

Richard H. Sander (UCLA), Are Law Schools Engines of Inequality?, 48 J.L. & Educ. 243 (2019):

In Robin Hood in Reverse, Professor Aaron Taylor examined an important problem: how the cycle of rising law school tuition and expanding merit scholarships damages the pipeline of opportunity for aspiring lawyers and reinforces the social "eliteness" of legal education. Taylor directs the Law School Survey of Student Engagement (LSSSE), which gathers data on the experiences of thousands of law students each year, and he is in a good position to shed light on the important problems he examines. He advanced some bold claims which deserve careful consideration. Professor Taylor has generously shared with me the LSSSE data he used in his analysis. Working with these and other data, I evaluate Taylor's arguments and analyze what we can reliably say about how law school scholarship programs have evolved and how they function today.

My main conclusions are these:

(1) Taylor views the powers that be in legal education as seeking to maintain the legal profession as a preserve for socially privileged whites; he sees the reliance on the LS AT as a central mechanism for replicating the social exclusiveness of the profession. In contrast, I see law schools as increasingly focused on the rankings arms race, which has produced a variety of specific behaviors unhealthy for the legal academy as a whole.

(2) Taylor treats "race" and "class" almost interchangeably; in his view, law school policies are unfair to racial minorities and low-SES students in very similar ways. As I show, however, law school policies break out in dramatically different ways depending on whether we use a "race" lens or a "class" lens. We cannot understand these policies without recognizing this distinction.

(3) Although Taylor's conclusions are sweeping, his LSSSE data cover only the past few years, and his quantitative analysis relies primarily on crosstabulations. I bring in historical data from the 1990s and use regression analysis to isolate how specific factors operate when we control for other relevant variables. Both of these steps greatly enhance our understanding of the underlying patterns.

(4) Many of Taylor's conclusions go beyond what his data actually show. And it is striking how many gaps exist in the LSSSE data, compared to other databases on legal education generated in the 1990s and early 2000s. I try to distinguish (a) what we can reasonably infer from contemporary data from (b) what we can only make guesses about, pending the development of better sources.

In the final section of the paper, I build on these insights to attempt a general diagnosis of what ails our current policies, and to suggest steps we might take to fix things.

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August 14, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (3)

Learning To Love Pro Bono: A Practical Recipe For Engaging Law Students

Alissa Gomez (Houston), Learning to Love Pro Bono: A Practical Recipe for Engaging Law Students:

In April 2019, our Lawyering Skills & Strategies Department at the University of Houston Law Center brought together law students, faculty, practitioners, and UH law librarians, to help low-income clients across Texas using the virtual legal advice platform provided by the ABA’s Free Legal Answers website. Launched in September 2016, Free Legal Answers allows members of the public who income-qualify to post civil legal questions to a secure website and have those questions answered by a licensed attorney in their state. Pairing law students with practitioners, faculty, and law librarians, we were able to answer several real-time client questions, in the span of less than three hours, on issues ranging from family law and landlord-tenant to consumer disputes. The experience brought legal research and writing to life for our law students, and helped remind everyone about the importance of pro bono service to our profession.

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August 14, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (1)

A Global Financial Transaction Tax: Theory, Practice And Potential Revenues

Atanas Pekanov & Margit Schratzenstaller (Austrian Institute of Economic Research), A Global Financial Transaction Tax — Theory, Practice and Potential Revenues:

This study presents in detail the concept of a financial transaction tax (FTT) and the theoretical and empirical evidence in favour and against introducing it, the potential revenues, different implementation designs and its ability to correct various market failures. We analyse the benefits and challenges of introducing a tax on financial transactions, putting special focus on the introduction of such a tax on a world-wide scale. For a number of reasons, international cooperation is deemed a central prerequisite for an efficient FTT. The purpose of the tax is to raise substantial revenues and help dampen excessive financial market speculation and market volatility. An FTT would ensure that the financial sector contributes more substantially to government revenues. In its optimal form, the tax would be broad-based and there will be no financial instrument types exempted. In a second step, we analyse from a political economy perspective the prospects, the current status, and the lessons learnt from the European discussion on the implementation of an FTT. Finally, we calculate the revenue potential of a global FTT and report how much revenues would accrue to specific countries. We estimate that the tax, if imposed globally and taking into account still evasion, relocation and lock-in effects, can bring significant revenues — between 237.9 and 418.8 billion $ annually.

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August 14, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, August 13, 2019

Smith: Exploiting The Charitable Contribution Deduction's Hypersalienc

Eric Smith (Weber State), Exploiting the Charitable Contribution Deduction's Hypersalience, 2019 Utah L. Rev. ___:

Hypersalience describes the cognitive error that occurs when taxpayers are highly aware of a tax provision generally, but fail to correctly perceive its associated limitations. The charitable contribution deduction provides a strong example of hypersalience as taxpayers have general awareness that tax benefit follows charitable giving, but often fail to understand the deduction’s limits—most notably the standard deduction’s preclusion to any direct tax benefit for charitable giving. As cognitive error drives inaccurate perception of the tax law, the question arises: what, if anything, should the government do to correct taxpayer understanding?

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August 13, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Should We Tax Soda? An Overview Of Theory And Evidence

Hunt Allcott (NYU), Benjamin Lockwood (Wharton) & Dmitry Taubinsky (UC-Berkeley), Should We Tax Soda? An Overview of Theory and Evidence, 33 J. Econ. Persp. 202 (2019):

Taxes on sugar-sweetened beverages (SSBs) are growing in popularity and have generated an active public debate. Are they a good idea? If so, how high should they be? Are such taxes regressive? Americans and some others around the world consume a remarkable amount of SSBs, and the evidence suggests that this generates significant health costs. Building on recent work by Allcott, Lockwood, and Taubinsky (2018) and others, we review the basic economic principles for an optimal sin tax on SSBs. The optimal tax depends on (1) externalities: uninternalized costs to the health system from SSB consumption; (2) internalities: costs consumers impose on themselves by overconsuming sweetened beverages due to poor nutrition knowledge or lack of self-control; and (3) regressivity: how much the financial burden and the internality benefits from the tax fall on the poor. We then summarize the empirical evidence on the key parameters that determine how large the tax should be, which suggests that SSB taxes can be welfare enhancing. We end with seven concrete suggestions for policymakers considering an SSB tax. First, tax grams of sugar, not ounces of soda. Second, focus on counteracting externalities and internalities, not on minimizing SSB consumption. Third, design soda taxes to reduce consumption among people generating the largest externalities and internalities. Fourth, make taxes consistent across geographic boundaries. Fifth, use caution when pre-allocating tax revenues. Sixth, when judging regressivity, consider internality benefits, not just who pays the taxes. Finally, our read of the evidence is that taxing soda is probably a good idea.

Soda

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August 13, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Dharmapala & Khanna: Stock Market Reactions To India's 2016 Demonetization: Implications For Tax Evasion, Corruption, And Financial Constraints

Dhammika Dharmapala (Chicago) & Vikramaditya Khanna (Michigan), Stock Market Reactions to India's 2016 Demonetization: Implications for Tax Evasion, Corruption, and Financial Constraints, 16 J. Empirical Legal Stud. 281 (2019):

On November 8, 2016, the Indian government made a surprise announcement that certain currency notes (representing 86% of the currency then in circulation) would no longer be legal tender (although they could be deposited in banks over a limited period). The stated reason for this sudden “demonetization” was to combat tax evasion and corruption associated with “unaccounted-for” cash. We compute abnormal returns for different subsamples of firms — defined by industry, ownership structure, and other characteristics — on the Indian stock market around this event. There is little evidence that sectors thought to be associated with greater tax evasion or corruption experienced significantly different returns. However, we find substantial positive returns for banks and for state owned enterprises (SOEs).

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August 13, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Monday, August 12, 2019

Burke: Exploiting The Medicare Loophole

Karen C. Burke (Florida), Exploiting The Medicare Loophole, 21 Fla. Tax Rev. 570 (2018):

Florida Tax Review (2018)Section 1411 imposes a 3.8 percent surtax on investment income of high earners that mirrors Medicare taxes on earned income. The enactment of the net investment income tax highlights gaps in the employment tax rules for passthrough entities — particularly limited partnerships, S corporations, and limited liability companies. This article considers how businesses can be structured to allow active high-income owner-employees of passthrough entities to avoid all three of the 3.8 percent Medicare taxes (SECA, FICA and section 1411). Part I considers the anachronistic limited partner exception to the SECA tax and the well-known S corporation loophole under the FICA tax, as well as the failure of section 1411 to reach active business income that avoids these employment taxes. Part II considers the recent Renkemeyer case, which has reignited the employment tax debate and threatens to upend structures used in investment and real estate funds to shelter management fees from all of the 3.8 percent taxes.

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August 12, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: Know The Difference Between IRAs And 401(k)s

Tax Court (2017)Every year I lecture on the time value of money.  Part of the lecture compares a normal taxed savings account funded with after-tax dollars to a tax-free retirement account funded with pre-tax dollars.  At the end of my assumed 40-year investment period the difference astonishes the students and drives home my main point about the time value of money.

The effectiveness of my point does not depend on which type of tax-deferred retirement account is being used.  I figure most of my students will make use of a traditional IRA, or Roth, or spousal, or will be able to make use of a 401(k) plan or a 408(k) SEP plan.  It does not matter which type of plan they use: the power of tax deferral works in all of them.

But the type of retirement plan can make a huge difference to the treatment of early withdrawals.  That is the lesson from last week’s case of Lily Hilda Soltani-Amadi and Bahman Justin Amadi v. Commissioner, T.C. Summary Opinion 2019-19 (Aug. 8, 2019) (Judge Armen).  The taxpayers there had made an early withdrawal from their 401(k) plan to help buy their first home.  The distribution would have been penalty-free had it come from an IRA.  But it came from a 401(k) and so, while permitted, it carried with it the §72(t) 10% penalty.  Details below the fold.

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August 12, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (4)

Sunday, August 11, 2019

The Top Five New Tax Papers

SSRN Logo (2018)There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #2 and #5:

  1. [527 Downloads]  The President's Tax Returns, by Andy Grewal (Iowa)
  2. [374 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  3. [158 Downloads]  Fixing the Five Flaws of the Tax Cuts and Jobs Act, by Kimberly Clausing (Reed College)
  4. [122 Downloads]  Back to Basics: Rethinking Normative Principles in International Tax, by Shay Shimon Moyal (S.J.D. 2020, Michigan)
  5. [122 Downloads]  The Substantive Canons of Tax Law, by Jonathan Choi (NYU)

August 11, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, August 10, 2019

Has College Gotten Too Easy?

The Atlantic, Has College Gotten Too Easy?:

AtlanticWhen Jeff Denning, an economist at Brigham Young University, started looking closely at the data on college-completion rates, he was a bit perplexed by what, exactly, was driving this uptick. He and some of his BYU colleagues noticed that a range of indicators from those two decades pointed in the direction of lower, not higher, graduation rates: More historically underrepresented groups of students (who tend to have lower graduation rates) were enrolling, students appeared to be studying less and spending more time working outside of school, and student-to-faculty ratios weren’t decreasing. “We started thinking, What could possibly explain this increase?” Denning told me. “Because we were stuck with not being able to explain anything.”

Stuck, that is, until they started looking at what was happening with students’ GPAs. Despite the aforementioned trends among the college-going population, students were, on average, earning higher grades in their first year of college. “[GPAs are] going up, and as best we can tell, there’s not a good reason that they’re going up, in terms of student behavior or preparation or anything like that,” Denning said.

If grades are improving but there’s no reason to think that students have become better students, an interesting possibility is raised: The unassuming, academic way Denning puts it in a recent paper (co-authored with his BYU colleague Eric Eide and Merrill Warnick, an incoming Stanford doctoral student) is that “standards for degree receipt” may have changed. A less measured way of saying what that implies: College may have gotten easier.

Jeffrey T. Denning, Eric R. Eide & Merrill Warnick (BYU), Why Have College Completion Rates Increased?:

College completion rates declined from the 1970s to the 1990s. We document that this trend has reversed—since the 1990s, college completion rates have increased.

Figure 2

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August 10, 2019 in Legal Ed News, Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (3)

Friday, August 9, 2019

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews McCaffery's A Better Hope For Campaign Finance Reform

This week, Mirit Eyal-Cohen (Alabama) reviews Edward J. McCaffery (USC), A Better Hope for Campaign Finance Reform.

Mirit-Cohen (2018)

McCaffrey begins this Article with a gloomy picture of American politics—”dark money” has made the identity of mega-givers and the degree of their political contributions opaque. Referring to 2016 presidential and congressional election biggest givers, he blames the social and political issues in the U.S. to the role of money in politics. Many wealthy donors are spending huge sums to influence democratic politics—to buy politicians or political offices or laws. McCaffery has little hope of changing these facts of human nature.  He demonstrates how legislative, judicial and regulatory actions have failed in solving this problem. But not to worry because he has a plan. McCaffery proposes to utilize the tax system to reduce campaign spending by raising the pre-tax costs of political expenditures. Similar to other Pigouvian models like the cigarettes tax, raising the costs of harmful political activities through taxation will reduce their occurrence. He claims that political contributions is another example where taxation is more efficient in reducing undesired behavior than other regulatory measures or public education campaigns. Yet, his proposal is not exclusive to political campaign contributions. Here, too, he advances his longtime proposal to switch from an income-based to consumption-based tax system, also known as a progressive spending tax. In fact, he admits that there would be no change in the tax treatment of campaign contrition—there will be no provision in the reformed consumption tax system that is specific to political expenditures, other than rules similar to today’s disallowing them as ordinary business deductions or as charitable contributions.

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August 9, 2019 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

McCaffery: A Better Hope For Campaign Finance Reform

Edward J. McCaffery (USC), A Better Hope for Campaign Finance Reform:

There is too much money in American politics, and too much of it comes from too few citizens. Mega-donors like Sheldon Adelson or Tom Steyer make $100 million political expenditures every election cycle. Attempts to limit such large political contributions have failed at every level: judicially, legislatively, and administratively. Much of the academic literature has joined the real world’s sense of despair. This Article takes a new tack. By changing our tax system from an income to a consistent progressive spending tax, the true cost of political expenditures by mega-donors could increase tenfold.

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August 9, 2019 in Scholarship, Tax | Permalink | Comments (0)

New Technology, The Death Of The BigLaw Monopoly, And The Evolution Of The Computer Professional

Michael Guihot (Queensland), New Technology, the Death of the BigLaw Monopoly, and the Evolution of the Computer Professional:

Much has been written recently about new technology disrupting the traditional law firm model of providing legal services. Susskind and Susskind predicted the failure of professions, including the legal profession, due in large part to the external pressure of disruptive technology. However, concentrating blame on the technology is misguided; it blames the tool used to disrupt rather than the root causes of the disruption. In short, computers do not kill lawyers.

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August 9, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Todd: Phantom Income And Domestic Support Obligations

Timothy M. Todd (Liberty), Phantom Income and Domestic Support Obligations, 67 Buff. L. Rev. 365 (2019):

The tax code is designed to raise government revenue. Domestic support obligations (DSOs) — namely, child support and spousal support — are designed to ameliorate the financial burdens that arise upon divorce. To determine the amount of domestic support obligations, statutes often refer to commonly used taxation concepts, such as “income.”

Courts determining domestic support obligations have been confronted with the question of how to treat “phantom income” — that is, amounts that are includible as gross income under the federal tax code but that have not resulted in any actual current cash receipt. Individuals obligated to make domestic support payments have argued that phantom income should not be included when calculating or modifying such obligations because the individual’s ability to pay has not materially changed. This Article analyzes the intersection of federal tax law and domestic support obligations concerning phantom income.

This Article considers several solutions — judicial and legislative — to address the phantom income issue in the domestic support context.

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August 9, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, August 8, 2019

Wallace: Tax Policy And Our Democracy

Clint Wallace (South Carolina), Tax Policy and Our Democracy, 118 Mich. L. Rev. ___ (2019) (reviewing Camille Walsh (Washington), Racial Taxation: Schools, Segregation, and Taxpayer Citizenship, 1869–1973 (University of North Carolina Press 2018), and Anthony C. Infanti (Pittsburgh), Our Selfish Tax Laws: Toward Tax Reform That Mirrors Our Better Selves (MIT Press 2018)):

Racial SelfishTwo new books explore the many ways in which U.S. tax policies and tax systems have promoted social injustices and continue to do so. In Racial Taxation, Camille Walsh provides a vivid depiction of the under-scrutinized fiscal history of elementary through secondary education in the United States, from the post-Reconstruction era until San Antonio Independent School District v. Rodriguez. In Our Selfish Tax Laws, Anthony Infanti details how existing U.S. Federal tax policies manifest problematic power structures that exclude and disadvantage many if not most taxpayers. Together, these books dissect a variety of flawed tax structures and reveal that tax discrimination grounded in race, gender, heteronormativity, differences in physical ability, and, pervasively, power dynamics, are not a malignant tumor on an otherwise healthy body, but rather are a systemic, pathological affliction on the entire U.S. fiscal state. This essay reviews Walsh’s and Infanti’s work, and builds on the authors’ rich historical and analytical contributions to ask: how can tax policy be reformed so that, rather than betraying and undermining the foundations of American democracy, it works to strengthen democratic institutions and their connection with members of a democratic society?

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August 8, 2019 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Mindful Engagement And Relational Lawyering

Susan L. Brooks (Drexel), Mindful Engagement and Relational Lawyering, 48 Sw. L. Rev. ___ (2019):

Mindful engagement is a relational approach to mindfulness, and a mindful approach to being relational, in law and in life. It is about cultivating habits of mind and practices that can inform a wholehearted approach to lawyering, which means bringing our emotional and bodily awareness as well as our analytical minds fully into our work. Mindful engagement contemplates the interconnection and integration of engagement with oneself, with others interactively, and with communities and larger social institutions and systems.

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August 8, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Fiscal Democracy In The States: How Much Spending Is On Autopilot?

Tracy Gordon, Megan Randall, C. Eugene Steuerle, Aravind Boddupalli (Tax Policy Center), Fiscal Democracy in the States: How Much Spending is on Autopilot?:

Governors, lawmakers, and journalists often decry constitutional and statutory formulas, federal grant requirements, and court rulings they think excessively limit state budget decisions.

Some observers estimate as much as 70 percent of state spending is “on autopilot,” meaning these constraints are in place before proposals or negotiations begin.

But measuring predetermined state budget commitments is far from straightforward. The federal government explicitly defines “tax expenditures” and “mandatory spending” and reinforces these concepts through the annual budget process. In contrast, few states rigorously and transparently assess the long-term cost of tax breaks and spending programs that are either fixed in size or will grow automatically without policy changes.

In this report, we perform a first-of-its-kind analysis of how much spending was restricted or partially restricted in CaliforniaFloridaIllinoisNew YorkTexas, and Virginia from 2000 to 2015.

Key findings

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August 8, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Walker: Employer Losses And Deferred Compensation

David I. Walker (Boston University), Employer Losses and Deferred Compensation:

Most large public companies offer their executives the opportunity to defer the receipt and taxation of their salary or other current compensation until retirement or some other future date, and equity compensation, which also entails deferral of pay and taxation, constitutes a large fraction of the typical executive pay package. Conventional wisdom holds that employer net operating losses (NOLs) improve the joint economics of deferred and equity compensation (henceforth together "deferred compensation") for the parties. However, empirical studies provide little evidence of an association between employer NOLs and deferred compensation use. This paper focuses on two potential explanations for this apparent disconnect. First, this paper shows that the relationship between employer NOLs and the attractiveness of deferred compensation is more complex and less predictable than is generally recognized, that a large NOL position does not necessarily produce a larger driving force for use of deferred compensation, and that in some cases employer NOLs can actually result in poorer deferred compensation economics. As a result, some employers and executives may rationally choose to ignore employer NOLs when making compensation decisions. Second, even if companies are sensitive to the existence of employer NOLs when making compensation decisions, it is not clear that research methods currently in use would detect the sensitivity.

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August 8, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, August 7, 2019

Gamage: Five Key Research Findings On Wealth Taxation For The Super Rich

David Gamage (Indiana), Five Key Research Findings on Wealth Taxation for the Super Rich:

This essay summarizes five key findings from the author’s in-progress research evaluating the potential of wealth tax reform proposals for taxing the super rich. These five key findings are as follows:

  1. The existing U.S. tax system does a very poor job of meaningfully taxing the super rich.
  2. There are only two approaches for reform that could plausibly succeed in making it so that the U.S. tax system would meaningfully tax the super rich: wealth taxation and mark-to-market taxation (sometimes known as “accrual” taxation).
  3. Piecemeal reforms to the existing tax system that some have argued for as “progressive alternatives” to wealth tax reforms should be thought of as complements to wealth taxation rather than as competitors.
  4. Much of the public criticism of wealth tax reform proposals ignores recent legal scholarship on valuation methodologies and other implementation design options, to the extent that this criticism mostly only applies to outdated, “straw man” versions of how a modern wealth tax might be implemented.
  5. Concerns about the Supreme Court striking down wealth tax reforms as unconstitutional can be addressed by including fallback options in the wealth tax legislation.

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August 7, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Haneman: Intergenerational Equity, Student Loan Debt, And Taxing Rich Dead People

Victoria J. Haneman (Creighton), Intergenerational Equity, Student Loan Debt, and Taxing Rich Dead People:

Once upon a time, there was a generation of indentured servants called Millennials. They were beautiful and mysterious and clever and feckless, in the way that all young people can sometimes be. The Millennials had dreams of future careers in which they were near-mystical, all-powerful protectors of the planet, brunching on avocado toast, driving in electric cars, and eradicating golf courses from the earth. Droves of Millennials applied to universities, believing that a diploma was a barrier for entry to advance the careers of which they dreamt. Most were confronted with a conundrum: borrow to subsidize the dream career, with decades of (potentially unaffordable) payments when they were finally employed. The Generation Who Stole the World, commonly referred to as the Baby Boomers, had decided that unlimited access to debt was the most economically sound approach by which to offer equal opportunity in higher education — and the delectable irony of this tale is that the availability of debt caused (or at the very least, accompanied) the skyrocketing of costs. A vicious cycle resulted in an entire generation of educated Millennials having mortgaged their futures, and visibly sagging under the weight of the chains of their debt.

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August 7, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Tuesday, August 6, 2019

Cui: The Superiority Of The Digital Service Tax Over Significant Digital Presence Proposals

Wei Cui (University of British Columbia), The Superiority of the Digital Service Tax over Significant Digital Presence Proposals:

Responding to calls for reallocating taxing rights over multinationals’ profits to reflect the place of user value creation, the OECD recently announced a Program of Work to implement international tax reform. I use the European Commission’s 2018 proposal to introduce the “significant digital presence” concept into income tax treaties as an example of the type of approach the OECD favors, and argue that it is inferior to recently proposed digital services taxes (DSTs). DSTs directly address the question of where profits should be allocated and taxed, while SDP proposals subordinate this vital question to superfluous treaty conventions. Global tax coordination deserves better focal points.

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August 6, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Kahn: Return Of An Employee’s Claim Of Right Income

Douglas A. Kahn (Michigan), Return of an Employee’s Claim of Right Income, 163 Tax Notes 1819 (2019):

This brief article explains how the 2017 repeal of the miscellaneous itemized deduction affects the operation of section 1341 on an employee’s return of claim of right income.

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August 6, 2019 in Scholarship, Tax | Permalink | Comments (0)

Camp: The Sharp Corners Of ACA Premium Tax Credit Provisions

Bryan Camp (Texas Tech), The Sharp Corners of ACA Premium Tax Credit Provisions, 163 Tax Notes 2001 (June 24, 2019):

The Tax Court has started issuing more and more opinions dealing with disputes over the proper application of the Premium Tax Credit Provisions in §36B. Those opinions show that the Court views §36B as containing no wiggle room to deal with reasonable taxpayer errors in calculating their Premium Tax Credit (PTC). Multiple times one sees the Court writing phrases such as “We are not unsympathetic to petitioners’ plight; however, we are bound by the statute,” and “we cannot ignore the law to achieve an equitable end.”

The Court's doggedly textualist reading results in taxpayers getting hit with really big deficiencies, even when the error is someone else’s fault. Recent cases have done this, turning receipt of lump sum SSDI payments into a “gotcha” game that even reasonable taxpayers will lose if they make the §86(e) election to attribute a lump sum payment ratably over prior years.

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August 6, 2019 in Scholarship, Tax | Permalink | Comments (1)

Monday, August 5, 2019

Morse Reviews Fleischer & Hemel's The Architecture Of A Basic Income

Jotwell (Tax) (2016)Susan Morse (Texas), The Policy Maker’s Guide to a Universal Basic Income (JOTWELL) (reviewing Miranda Perry Fleischer (San Diego) & Daniel J. Hemel (Chicago), The Architecture of a Basic Income, 86 U. Chi. L. Rev. __  (2019) (reviewed by David Elkins (Netanya) here)):

Miranda Fleischer and Daniel Hemel have written a terrific article, The Architecture of a Basic Income, about a universal basic income, or UBI. They offer concrete policy advice grounded in philosophical priors. They successfully separate questions about fundamental policy design from questions about political packaging. Their paper should become a go-to resource for the increasing swell of interest in UBI policy. ...

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August 5, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Lesson From The Tax Court: Appeals Is Still Part Of The IRS, Really!

Tax Court (2017)I find it useful to think of tax administration as comprising two overarching functions: (1) determining tax liabilities and (2) collecting tax liabilities.  The IRS Office of Appeals (“Appeals”) supports both functions by mediating disputes between taxpayers and either the IRS exam function or collection function.  In Aldo Fonticiella v. Commissioner, T.C. Memo. 2019-74 (June 13, 2019), Judge Gerber teaches us that even though Appeals has a different (and wider) set of powers that often allow it to settle disputes without litigation, it still functions as an integral part of the IRS, no matter how many times Congress puts “Independent” in its title.

Taxpayers unhappy with Appeals look for creative ways to avoid its decisions.  In 2011, one such taxpayer argued that all Appeals work product violated the U.S. Constitution.  His theory was that Appeals Officers were “Officers of The United States” within the meaning of the U.S. Constitution.  That meant they had to be appointed by the President with the consent of the Senate.  Because they were not, they could not wield any power over taxpayers.  That made all their work illegal and without effect.  In Tucker v. Commissioner both the Tax Court (135 T.C. 114, 2010) and the D.C. Circuit (676 F.3d 1129, 2012) rejected the argument.  Not a single judge agreed with the taxpayer.

Creativity begets creativity.  In Fonticiella, Judge Gerber considers and rejects a companion argument, that Appeals is a “de facto independent agency” whose very existence is an affront to the U.S. Constitution.  While that is a loser argument today, it may become a winner eventually as Congress keeps trying to transform Appeals into a mini-me Tax Court.  The recently enacted Taxpayer First Act, P.L. 116-25, moves in that direction, although not far enough, IMHO, to affect the rationale for Judge Gerber’s decision.  You can read more about it below the fold.

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August 5, 2019 in Bryan Camp, IRS News, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

Sunday, August 4, 2019

Fall 2019 Law Review Article Submission Guide

SubmissionsNancy Levit (UMKC) & Allen Rostron (UMKC) have updated their incredibly useful document, which contains two charts for the Fall 2019 submission season covering 203 law reviews.

The first chart (pp. 1-52) contains information gathered from the journals’ websites on:

  • Methods for submitting an article (such as by e-mail, ExpressO, regular mail, Scholastica, or Twitter)
  • Any special formatting requirements
  • How to request an expedited review
  • How to withdraw an article after it has been accepted for publication elsewhere

The second chart (pp. 53-59) contains the ranking of the law reviews and their schools under six measures:

  • U.S. News: Overall Rank
  • U.S. News: Peer Reputation Rating
  • U.S. News: Judge/Lawyer Reputation Rating
  • Washington & Lee Citation Ranking
  • Washington & Lee Impact Factor
  • Washington & Lee Combined Rating

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August 4, 2019 in Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)