Paul L. Caron
Dean


Friday, September 27, 2019

Cauble: Presumptions of Tax Motivation

Emily Cauble (DePaul), Presumptions of Tax Motivation, 105 Iowa L. Rev. ___ (2020):

Rebuttable presumptions are scattered throughout the Internal Revenue Code and the Treasury Regulations. In many cases, they are employed in service of determining a taxpayer’s motive or state of mind. They are not, however, always utilized when motive or state of mind must be assessed. In some contexts, courts are called upon to examine all relevant facts and circumstances in order to divine a taxpayer’s state of mind – which facts are relevant and the weight to be accorded to various facts are not specified ahead of time except to the extent set forth in judicial precedent. At the other extreme, in yet another subset of situations in which tax outcome turns on motive or state of mind, tax law provides that a given fact establishes an irrebuttable presumption of a given motive. In between the two extremes, tax law makes use of a variety of tools including rebuttable presumptions. When a rebuttable presumption is at work, the proof of a specified fact is deemed to establish the existence of a given state of mind, unless the party who is disadvantaged by that state of mind determination presents sufficient evidence to overcome it.

In response to these challenges, several localities recently enacted or proposed taxes targeted directly at large businesses, with revenues allocated explicitly for a designated purpose. Localities are gravitating toward targeted taxes for several reasons. Some assert that the success of large employers within the locality contributed to, or even directly created, these challenges. Perhaps most importantly, targeted tax laws serve a clear expressive function. Depending on the locality’s primary objective, targeted taxes may be problematic and counterproductive.

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September 27, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, September 26, 2019

Tax Presentations At Today's 20th Global Conference On Environmental Taxation

Tax presentations at today's 20th Global Conference on Environmental Taxation in Cyprus, Greece:

BannerElena Belletti (Columbia), Environmental Taxation in Africa: Barriers and Policy Options:

Countries in Africa are among the most severely impacted by the effects of climate change and local pollution, with poorest households being the most vulnerable to environmental issues. Additionally, their public revenues often do not meet the 15% tax-to-GDP ratio, which is considered the minimum threshold to support development; and high inequality among the population poses a significant challenge to sustainable development. While environmental taxation would ideally contribute to tackling both those socioeconomic and environmental issues, countries in Africa often lack the necessary fiscal infrastructure to implement market-based instruments for environmental fiscal policy, and frequently face significant issues in shaping expenditure policies that would effectively offset some of the regressive effects of those instruments. Within this context, what are the options for those countries in the area of environmental fiscal policy, which would support the implementation of the Development Goals (SDGs)?

This paper provides an analysis of the current barriers faced by developing countries, least developed countries (LDCs) and other countries in special situations in Africa, both from the tax and from the public expenditure point of view, which pose challenges in the implementation of market-based instruments for environmental fiscal policy. Starting from this analysis, it then aims to provide a practical overview of which fiscal policy instruments could be practically implementable by those countries, while contributing to tackle some of the most prominent environmental issues in the continent; and which are the necessary conditions for those instruments to be successfully applied, while contributing to achieving the SDGs. The paper takes into consideration the potential for additional revenue mobilization through environmental taxation, the administrative feasibility of proposed options, and their effectiveness in tackling the most pressing environmental issues. It also analyses the suitability of those options against some of the social, economic and environmental objectives declared by those countries in national sustainable development strategies and in international agreements.

Robert Cairns, (McGill University, Canada), The Green Paradox, A Hoteling Cul de Sac:

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September 26, 2019 in Conferences, Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (1)

Challenges To Legal Education, Clinical Legal Education, And Clinical Scholarship

Peter A. Joy (Washington Univ.), Challenges to Legal Education, Clinical Legal Education, and Clinical Scholarship, 26 Clinical L. Rev. 237 (2019):

This essay analyzes the challenges to legal education and what those challenges may mean both to clinical legal education and to clinical scholarship. Since the Great Recession, several law schools have closed, some have merged, and still other law schools approved by the American Bar Association (ABA) have been found out of compliance with ABA Accreditation Standards and either have been directed to take specific remedial action, have been placed on probation, or have lost ABA-approval. While enrollment has rebounded at some law schools, other law schools have continued to experience much smaller entering classes than the entering class in Fall 2010. These developments should be part of the conversation about clinical legal education and clinical scholarship, and this essay examines the effects of the Great Recession on law schools’ budgets, staffing, law school admissions, and overall enrollment.

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September 26, 2019 in Legal Education, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Targeted Taxes: Localities Take Aim At Large Employers To Solve Homelessness And Transportation Challenges

Andrew D. Appleby (Stetson), Targeted Taxes: Localities Take Aim at Large Employers to Solve Homelessness and Transportation Challenges:

Many localities are facing unprecedented challenges — such as a dramatic rise in homelessness and insufficient transportation infrastructure — that have reached crisis levels. These localities are in a precarious position. If they do not solve these problems quickly, or if they impose overbearing and poorly designed taxes, there will be dire economic and social repercussions.

In response to these challenges, several localities recently enacted or proposed taxes targeted directly at large businesses, with revenues allocated explicitly for a designated purpose. Localities are gravitating toward targeted taxes for several reasons. Some assert that the success of large employers within the locality contributed to, or even directly created, these challenges. Perhaps most importantly, targeted tax laws serve a clear expressive function. Depending on the locality’s primary objective, targeted taxes may be problematic and counterproductive.

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

Reflections On Elitism After The Closing Of A Clinic: Justice, Pedagogy And Scholarship

Jennifer Lee Koh (UC-Irvine), Reflections on Elitism After the Closing of a Clinic: Justice, Pedagogy and Scholarship, 26 Clinical L. Rev. 263 (2019):

Western State Logo (2019)In this Essay, I reflect upon my experience directing the Immigration Clinic at Western State College of Law for nearly a decade, including my decision to close the Clinic after financial crisis put the law school’s ability to continue operating in serious jeopardy in the Spring of 2019. The Essay focuses on the themes of pedagogy and the viability of non-elite law schools, teaching and doing social justice in the clinical context, and the integration of theory, doctrine and practice in legal scholarship. By memorializing a portion of the Clinic’s work, the Essay seeks to give voice to stories that might otherwise go unheard during a time of institutional crisis.

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September 26, 2019 in Legal Ed Scholarship, Legal Education, Scholarship, Tax Scholarship | Permalink | Comments (0)

Reviews Of Basic Income: A Radical Proposal For A Free Society And A Sane Economy

Reviews of Philippe Van Parijs (University of Louvain) & Yannick Vanderborght (Université Saint-Louis, Brussels), Basic Income: A Radical Proposal for a Free Society and a Sane Economy (Harvard University Press 2017):

Basic IncomeCaterina Calsamiglia (Institute for Political Economy and Governance) & Sabine Flamand (Universitat Rovira i Virgili), Book Review, 57 J. Econ. Lierature 644 (2019):

In order to clarify the potential impact of a basic income, we argue that any discussion on whether to adopt a basic income policy should be framed within the greater context of the transfer system as a whole. In particular, such discussion should consider separately the issues of (i) the desired income distribution to be achieved and (ii) the most efficient way of achieving it through a transfer system. Further, we stress the importance of the non-take-up phenomenon in current transfer systems and discuss the potential necessity of a basic income policy in the age of automation.

Juliana Bidadanure (Stanford), Income for All: The Idea of Universal Basic Income Is More Practical Than It Might Sound:

In times of economic austerity—when the welfare state is shrinking as an ideal and an institution; access to childcare, healthcare and education are increasingly contested as rights of all; and the paradigm of individual responsibility rules—it is easy for progressives to give up on big ideals. If we can’t even protect Planned Parenthood or affordable healthcare, pushing for anything more visionary seems based on mere wishful thinking. But for these same reasons, it may be more urgent than ever for progressives to propose radical utopias with the potential to federate otherwise divided societies. That’s the view that Philippe Van Parijs and Yannick Vanderborght take in their fantastically comprehensive book, Basic Income.

Marc Levinson (Wall Street Journal), Cash Handouts for Everyone:

“Basic Income,” by Belgian academics Philippe Van Parijs and Yannick Vanderborght, represents an attempt to lay out a systematic case for what would be a radical departure in public policy. This book, it must be said up front, it not an easy read. Messrs. Van Parijs and Vanderborght are ethicists, and their closely argued text has all the liveliness of a philosophical treatise. But “Basic Income” provides a rigorous analysis of the many arguments for and against a universal basic income, offering a road map for future researchers who wish to examine policy alternatives. ...

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September 26, 2019 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

The 'Pink Ghetto' Pipeline: Challenges And Opportunities For Women In Legal Education

Renee Nicole Allen (St. John's), Alicia Jackson (Florida A&M) & DeShun Harris (Memphis), The 'Pink Ghetto' Pipeline: Challenges and Opportunities for Women in Legal Education, 96 U. Det. Mercy L. Rev. 525 (2019):

The demographics of law schools are changing and women make up the majority of law students. Yet, the demographics of many law faculties do not reflect these changing demographics with more men occupying faculty seats. In legal education, women predominately occupy skills positions, including legal writing, clinic, academic success, bar preparation, or library. According to a 2010 Association of American Law Schools survey, the percentage of female lecturers and instructors is so high that those positions are stereotypically female.The term coined for positions typically held by women is “pink ghetto.” According to the Department of Labor, pink-collar-worker describes jobs and career areas historically considered “women’s work,” and included on the list is teaching. However, in legal education, tenured and higher-ranked positions are held primarily by men, while women often enter legal education through non-tenured and non-faculty skills-based teaching pipelines. In a number of these positions, women experience challenges like poor pay, heavy workloads, and lower status such as by contract, nontenure, or at will. While many may view this as a challenge, looking at these positions solely as a “pink ghetto” diminishes the many contributions women have made to legal education through the skills faculty pipelines. Conversely, we miss the opportunity to examine how legal education has changed and how women have accepted the challenge of being on the front line of educating this new generation of learners while enthusiastically adopting the American Bar Association’s new standards for assessment and student learning.

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September 26, 2019 in Legal Ed Scholarship, Legal Education, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Tax Incentives For Video Games Development And Compatibility With EU Law

Hristina Georgieva (Univ. of National and World Economy), Tax Incentives for Video Games Development. Video Games Tax Credit. Compatibility with EU Law.:

This article investigates the legal framework that is applied when tax credit is implemented as a financial mechanism for supporting developers and publishers of video games with cultural content. The article also examines the compatibility of this type of financial support with the EU law, mainly with the EU Treaty rules on state aid, and provides an overview of the two investigations undertaken by the European Commission, regarding the notifications made by France and the United Kingdom on tax credit granting for video games creation.

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

Identity Politics Is Failing Women In Legal Academia

Sahar F. Aziz (Rutgers), Identity Politics Is Failing Women in Legal Academia, 69 J. Legal Educ. ___ (2019): 

Journal of Legal Education (2018)Two universal truths about patriarchy: it’s global and it’s tenacious. As women in legal academia, we are not shielded from the consequences of this reality.

Starting from this premise, my contribution to this important (yet perennial) discussion on gender (in)equity in legal academia is framed around three points. First, formalistic identity politics grounded in immutable characteristics is failing our generation of women (and women of color in particular) in the legal profession, including in the academy. Second, women who have managed to overcome the hurdles imposed by patriarchy to reach official leadership positions are as subject to institutional capture and conflicts of interest as their male counterparts. Third, the politics of civility in law schools is a patriarchal tool deployed to constrain women’s ability and willingness to radically reform existing systems of inequality.

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September 26, 2019 in Legal Ed News, Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (3)

Wednesday, September 25, 2019

Abreu Presents A Taxpayer's Right To Rely On IRS Publications Today At Toronto

Alice G. Abreu (Temple) presents Relying on IRS Publications: A Taxpayer's Right (with Richard K Greenstein (Temple)) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Abreu (2019)The IRS takes the position that taxpayers are not entitled to rely on written statements that it makes in instructions to IRS forms and in Publications that are designed for the specific purpose of helping taxpayers meet their tax obligations. And the courts have approved that position, stating that “taxpayers rely at their peril” on IRS written statements in publications. We believe that the IRS position impugns the legitimacy of the agency and of the tax system; we can also show that it is unnecessary for the IRS to take such a position because in most of the cases in which the courts invoke the “reliance at peril” mantra, there was either no reliance, or the reliance was unreasonable. Invocation of the mantra therefore serves only to threaten the legitimacy of the tax system and the IRS. For those reasons alone, the IRS should announce that taxpayers can indeed rely on what it says in its publications and instructions to forms. If the IRS does not want to go that far, it can at least exercise its enforcement discretion to decline to enforce against taxpayers positions that run counter to those it has clearly expressed in publication or instructions to forms.

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September 25, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Prisinzano Presents Policy Evaluation Under The Penn Wharton Business Model Today At Pennsylvania

Richard Prisinzano (Pennsylvania) presents Policy Evaluation under the Penn Wharton Business Model at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Prisinzano

The speaker, Senior Economist at the Penn Wharton Budget Model, will discuss generally how the PWBM works as well as how it has been applied to estimate the impact of current tax policy proposals including: increasing tax rates on capital gains and dividends; increasing payroll taxes; integrating capital taxation; eliminating itemized deductions; and the packages of proposals put forth by two presidential campaigns. The speaker has provided a series of short papers, which are attached in one file below.

About the Penn Wharton Budget Model:
PWBM is a nonpartisan, research-based initiative that provides accurate, accessible and transparent economic analysis of public policy’s fiscal impact. Using the project’s research briefs and interactive budget tools enables analysis of legislation while it is drafted. PWBM serves as an honest broker at the intersection of business and public policy providing rigorous analysis without policy advocacy. PWBM works directly with policymakers and their staff to provide insight into the effects of policy changes. Our simulators and briefs are informed by the policy changes being debated on Capitol Hill.

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

The Role Of Contract Interpretation In Transfer-Pricing Law: Lessons From Canada

Amir Pichhadze (Deakin Law School), The Role of Contract Interpretation in Transfer-Pricing Law: Lessons from Canada, 65 Can. Tax J. 849 (2017):

The purpose of this article is to point out recent and significant developments that further support the author’s call to acknowledge the necessary role of contract interpretation in the process of delineating the actual controlled transaction when conducting a transfer-pricing analysis. The first development refers to recent cases in which Canada’s courts (1) have recognized the necessary role of contract interpretation in determining the true nature of a transfer-pricing arrangement, and (2) have exemplified the correct approach to identifying and applying the law of interpretation that governed the contractual terms. These cases ought to serve as an example to other courts, in Canada and around the world, when delineating the true nature of controlled transactions for the purposes of the transfer-pricing analysis. The second development is the explicit recognition by the Organisation for Economic Co-operation and Development, in its newly revised transfer-pricing guidelines, of the necessary role of contract interpretation in the transfer-pricing analysis.

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

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 September 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
1 Reuven Avi-Yonah (Michigan)  185,453 Reuven Avi-Yonah (Michigan) 11,720
2 Dan Shaviro (NYU) 118,935 Daniel Hemel (Chicago) 8,581
3 David Gamage (Indiana-Bloom.) 114,894 David Gamage (Indiana-Bloom.) 7,276
4 Lily Batchelder (NYU) 112,023 Dan Shaviro (NYU) 7,206
5 Darien Shanske (UC-Davis) 108,628 Darien Shanske (UC-Davis)  6,984
6 Cliff Fleming (BYU) 103,711 Ari Glogower (Ohio State) 6,574
7 Manoj Viswanathan (UC-Hastings) 100,671 Lily Batchelder (NYU) 6,296
8 David Kamin (NYU) 100,657 Manoj Viswanathan (UC-Hastings) 6,292
9 Rebecca Kysar (Fordham) 99,872 David Kamin (NYU) 6,209
10 Ari Glogower (Ohio State) 98,509 Rebecca Kysar (Fordham)  6,109
11 Michael Simkovic (USC) 43,366 Cliff Fleming (BYU) 6,068
12 D. Dharmapala (Chicago) 37,364 Bridget Crawford (Pace) 2,706
13 Paul Caron (Pepperdine) 35,825 Richard Ainsworth (BU) 2,666
14 Louis Kaplow (Harvard) 32,038 Michael Simkovic (USC) 2,571
15 Richard Ainsworth (BU) 28,101 Brad Borden (Brooklyn) 2,523
16 Ed Kleinbard (USC) 26,013 Kyle Rozema (Chicago) 2,352
17 Vic Fleischer (UC-Irvine) 25,612 D. Dharmapala (Chicago) 2,326
18 Jim Hines (Michigan) 24,617 Robert Sitkoff (Harvard) 2,145
19 Gladriel Shobe (BYU) 24,063 Kirk Stark (UCLA) 2,140
20 Ted Seto (Loyola-L.A.) 23,655 Ruth Mason (Virginia) 2,095
21 Richard Kaplan (Illinois) 23,475 Dennis Ventry (UC-Davis) 2,070
22 Brad Borden (Brooklyn) 23,180 Louis Kaplow (Harvard) 1,902
23 Robert Sitkoff (Harvard) 22,893 Hugh Ault (Boston College) 1,863
24 Katie Pratt (Loyola-L.A.) 22,428 Yariv Brauner (Florida) 1,645
25 Daniel Hemel (Chicago) 8,581 Margaret Ryznar (Indiana-Indy) 1,362

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September 25, 2019 in Scholarship, Tax, Tax Prof Rankings, Tax Rankings, Tax Scholarship | Permalink | Comments (0)

Capitalists In The Twenty-First Century

Matthew Smith (U.S. Treasury Department), Danny Yagan (UC-Berkeley), Owen Zidar (Chicago) & Eric Zwick (Chicago), Capitalists in the Twenty-First Century, 135 Q. J. Econ ___ (2019) (Stanford Policy Brief, Tax Avoidance at the Top):

How important is human capital at the top of the U.S. income distribution? A primary source of top income is private “pass-through” business profit, which can include entrepreneurial labor income for tax reasons. This article asks whether top pass-through profit mostly reflects human capital, defined as all inalienable factors embodied in business owners, rather than financial capital. Tax data linking 11 million firms to their owners show that top pass-through profit accrues to workingage owners of closely held mid-market firms in skill-intensive industries. Passthrough profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of pass-through profit as human capital income, we find that the typical top earner derives most of her income from human capital, not financial capital. Growth in pass-through profit is explained by both rising productivity and a rising share of value added accruing to owners.

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September 25, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Tuesday, September 24, 2019

Liu Presents The Real Effects Of Transfer Pricing Regulations Today At NYU

Li Liu (IMF) presents At A Cost: The Real Effects of Transfer Pricing Regulations (with Ruud De Mooij (IMF)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Liu PhotoUnilateral adoption of transfer pricing regulations (TPRS) may have a negative impact on real investment by multinational corporations (MNCs). This paper uses a quasiexperimental research design, exploiting unique panel data on domestic and multinational companies in 27 countries during 2006-2014, to find that MNC affiliates reduce their investment by over 11 percent following the introduction of TPRs. There is no significant reduction in total investment by the MNC group, suggesting that these investments are most likely shifted to affiliates in other countries. The impact of TPRs corresponds to an increase in the “TPR-adjusted” corporate tax rate by almost one quarter.

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

Oei Presents Falling Short In The Data Age At South Carolina

Shu-Yi Oei (Boston College) presented Falling Short in The Data Age (with Diane Ring (Boston College)) at South Carolina yesterday as part of its Tax Scholars Workshop Series hosted by Tessa Davis & Clint Wallace:

Oei (2018)This Article advances a descriptive claim about how relationships between laws, humans and governments are currently constituted, makes a series of predictions about how data will change that state of the world, and advances policy solutions to manage the fallout.

The descriptive claim is that for better or for worse, humans are often allowed to fall short of law’s requirements without consequence, and this space to fall short has been important in intermediating the relationship between humans and the law. This leeway to fall short—which comes about due to factors like luck, resource constraints, resource prioritization, or limited information—allows humans the space to be imperfect but, importantly, also allows laws and polities the space to be imperfect as well.

Our predictive claim is that the growing ubiquity of data and information will change the size, shape, and distribution of these fall-short spaces in ways that may be beneficial in some contexts but troubling in others. Specifically, we argue that data will cause fall-short spaces to shrink, and to shrink disproportionately for certain populations. We also argue that data will call fundamental aspects of law’s design (such as penalties) into question. We argue that, in certain situations, fall-short spaces serve a valuable function and that their loss is troubling.

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September 24, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Symposium: Mindfulness And Well-Being In Law Schools And The Legal Profession

Symposium, Mindfulness and Well-Being in Law Schools and the Legal Profession, 48 Sw. L. Rev. 199-412 (2019):

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September 24, 2019 in Legal Ed Conferences, Legal Ed Scholarship, Legal Education, Scholarship | Permalink | Comments (0)

Income Segregation And Intergenerational Mobility Across U.S. Colleges

Raj Chetty (Harvard), John N. Friedman (Brown), Emmanuel Saez (UC-Berkeley), Nicholas Turner (Federal Reserve Board) & Danny Yagan (UC-Berkeley), Income Segregation and Intergenerational Mobility Across Colleges in the United States (summary slides study website data mobility report cards for every college):

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

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September 24, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Taxing The Sharing Economy And Digital Platforms In China And The U.S.

Yue Dai (Shanghai University of Finance and Economics, School of Law), Taxing the Sharing Economy and Digital Platforms, 95 Tax Notes Int'l 511 (Aug. 5, 2019):

This article examines how companies like Uber and Airbnb present themselves to tax authorities, how different jurisdictions respond to and tax the sharing economy, and the unique challenges of taxing platform businesses in China, the United States, and around the globe.

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

Monday, September 23, 2019

Avi-Yonah & Fishbien Present Tax Expenditures, Horizontal Equity, And Stanley Surrey Today At Boston University

AFReuven Avi-Yonah (Michigan) and Nir Fishbien (Mich. SJD) present Tax Expenditures and Horizontal Equity: A Lost Lesson from Stanley Surrey at Boston University today as part of its Tax Policy Workshop Series hosted by David Walker:

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.

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September 23, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Layser Presents Evaluating Place-Based Investment Tax Incentives Today At Loyola-L.A.

Layser (2018)Michelle Layser (Illinois) presents More Than Jobs: Evaluating Place-Based Investment Tax Incentives at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

The new Opportunity Zones tax incentive introduced by the Tax Cuts and Jobs Act in 2017 is poised to be much larger than previous place-based tax incentives, and anti-poverty advocates worry that it may also be more destructive—fueling rapid development of neighborhoods that leads to gentrification and displacement. This Article provides a new theoretical framework for evaluating the potential benefits (or harms) associated with place-based tax incentives like Opportunity Zones. Under the framework, tax-subsidized projects are parsed as traditional economic development projects and community infrastructure projects. Using this framework as a guide, this Article employs spatial analytics and exploratory data analysis to visualize and explore original data about tax-subsidized projects. The analysis generates several new insights about place-based tax incentives that shed light on the likely impact of Opportunity Zones.

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

Yagan Presents Place-Based Redistribution Today At UC-Berkeley

YaganDanny Yagan (UC-Berkeley) presents Place-Based Redistribution at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Place-based redistribution is ubiquitous but has traditionally enjoyed little support among economists. We develop a class of spatial equilibrium models characterizing the equity-efficiency tradeoff that arises when taxes and transfers are indexed to location. Transfers from one region to another are found to be welfare improving under empirically plausible assumptions on preference heterogeneity, even in an environment with optimal place-blind income taxes. A calibration shows that optimal place-based redistribution may be substantial.

 

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

Lesson From The Tax Court: The Functional Definition Of 'Return'

Tax Court (2017)I have blogged before about the myth that our system of taxation is one of “self-assessment.”   Our system is better described as one of self-reporting.  It depends on taxpayers properly reporting their items of income and deductions.  The IRS can do the rest. 

Section 6011 requires taxpayers to self-report on “a return or statement according to the forms and regulations prescribed by the Secretary.”  The most common return is the Form 1040.  Taxpayers who fail to file returns or who file fraudulent or frivolous returns are subject to various consequences.  For example, the three year statute of limitations on the IRS to audit a tax year is only triggered when the taxpayer files a return. §6501(c).  If what is filed is not a return, then the IRS can assess the penalties imposed by §6651(a) for the failure to file a return.  

It thus becomes important to know: what constitutes a “return”? 

Two recent Tax Court cases teach that a “return” is not simply a form but is a form which serves a function.  In Seaview Trading, LLC v. Commissioner, T.C. Memo. 2019-122 (Sept. 16, 2019) Judge Ruwe held that a copy of a return sent to a Revenue Agent could not function as a “return.”  In George J. Smith and Sheila Ann Smith v. Commissioner, T.C. Memo. 2019-111 (Sept. 3, 2019) Judge Halpern held that taxpayers who filed a completely frivolous Form 1040 had still filed a “return.”  Details below the fold.

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September 23, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

Sunday, September 22, 2019

Efficiency Gains From Wealth Taxation

Fatih Guvenen (Minnesota), Gueorgui Kambourov (Toronto), Burhanettin Kuruscu (Toronto), Sergio Ocampo-Diaz (Minnesota) & Daphne Chen (Econ One), Use It or Lose It: Efficiency Gains from Wealth Taxation:

How does wealth taxation differ from capital income taxation? When the return on investment is equal across individuals, a well-known result is that the two tax systems are equivalent. Motivated by recent empirical evidence documenting persistent heterogeneity in rates of return across individuals, we revisit this question. With such heterogeneity, the two tax systems have opposite implications for both efficiency and inequality. Under capital income taxation, entrepreneurs who are more productive, and therefore generate more income, pay higher taxes. Under wealth taxation, entrepreneurs who have similar wealth levels pay similar taxes regardless of their productivity, which expands the tax base, shifts the tax burden toward unproductive entrepreneurs, and raises the savings rate of productive ones. This reallocation increases aggregate productivity and output

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September 22, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

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. [497 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  2. [359 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  3. [167 Downloads]  The Superiority of the Digital Services Tax over Significant Digital Presence Proposals, by Wei Cui (University of British Columbia)
  4. [144 Downloads]  The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, by Manoj Viswanathan (UC-Hastings)
  5. [131 Downloads]  Intergenerational Equity, Student Loan Debt, and Taxing Rich Dead People, by Victoria Haneman (Creighton)

September 22, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 21, 2019

Sports Gambling, Taxes, And Higher Education

Kathryn Kisska-Schulze (Clemson) & John T. Holden (Oklahoma State), Betting on Education, 81 Ohio St. L.J. ___ (2020):

Two recent changes to U.S. federal law threaten the viability of colleges and universities. President Trump’s signing of the Tax Cuts and Jobs Act (TCJA) into law at the close of 2017 signified a continued trend of decreasing funds previously available to higher education. National and state funding cuts are resulting in a cost-value educational crisis in the U.S., with tuition increasing, students needing to borrow more, and academic programs and faculty lines being cut. In addition, college athletic departments assert that the U.S. Supreme Court’s holding in Murphy v. National College Athletic Association, which declared that the Professional and Amateur Sports Protection Act (PASPA) unconstitutionally commandeered state legislatures into maintaining laws prohibiting sports wagering, could jeopardize the integrity of college sports. Only by examining the foundational relationships between gambling, taxation, and higher education in the U.S. is it evident that Murphy could actually be the catalyst for generating revenue back into colleges and universities rather than the apocalyptic threat some have predicted.

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September 21, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, September 20, 2019

Cohen & Viswanathan: Corporate Behavior And The Tax Cuts And Jobs Act

Nicholas Cohen (MIT) & Manoj Viswanathan (UC-Hastings), Corporate Behavior and the Tax Cuts and Jobs Act:

The Tax Cuts and Jobs Act of 2017 fundamentally altered United States tax law. TCJA supporters believed that the tax benefits afforded U.S. corporations would incentivize corporations to use their additional after-tax cash in ways beneficial to the U.S. economy. Our study, the first of its kind, uses corporation-by-corporation data from recent public filings to measure how the change in effective corporate tax rate affects various corporate behaviors. We find that the TCJA’s reduction in effective tax rate has no relationship to several corporate actions, including hiring new employees and making capital expenditures, two behaviors predicted by TCJA proponents.

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

Kaestner Fails: The Way Forward

Mitchell M. Gans (Hofstra), Kaestner Fails: The Way Forward, 11 Wm. & Mary Bus. L. Rev. __ (2020):

This past term, the Supreme Court applied the due process clause to prevent the states from closing down a tax strategy that employs out-of-state trusts. Many had hoped that the case would serve as a vehicle for the Court to overrule taxpayer-friendly precedents that make the strategy possible. But it failed. The question that emerges is whether the decision leaves the states with a path to address the strategy and thereby prevent it from being used to exacerbate issues of inequality.

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

Thursday, September 19, 2019

Hemel & Porter: Aligning Taxes And Spending — Theory And Experimental Evidence

Daniel Hemel (Chicago) & Ethan Porter (George Washington), Aligning Taxes and Spending: Theory and Experimental Evidence:

Under what circumstances will members of the public hold positive attitudes toward new or higher taxes? While some scholars have posited that the practice of “earmarking” — designating tax revenues for a particular purpose — can increase support for taxes, the existing literature has not identified the conditions under which earmarking will prove effective in this regard. Here, we draw upon previous research on consumer behavior to hypothesize that support for earmarked taxes will be stronger when such taxes satisfy the criterion of “source–use alignment” (i.e., when the connection between the revenue source and the use for which those revenues are earmarked accords with familiar consumer fairness norms). Evidence in support of this hypothesis comes from two experiments on a sample of US residents matched to Census data, in which subjects were randomly assigned to read descriptions of hypothetical earmarked taxes with varying levels of alignment. Individuals consistently expressed stronger support for earmarked taxes that achieved source – use alignment as compared to earmarked taxes that did not satisfy the source — use alignment criterion.

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

529 College Savings Plans Under The TCJA

Ross Riskin (American College of Financial Services), Tax Deductions V. Tax-Free Growth: A Closer Look at 529 College Savings Plans Under the TCJA, J. Multistate Tax'n & Incentives, Vol. 29, No. 6, Sept. 2019:

Now that investors can receive preferential federal income tax treatment when using 529 college savings plans to pay for qualified K-12 tuition expenses under the Tax Cuts and Jobs Act of 2017 (TCJA), it is important to determine whether the value of receiving and investing state income tax deductions provided for qualifying contributions made to this education savings vehicle is more beneficial than the value associated with tax-free growth, given the potential for shortened education planning time horizons. ...

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

Wednesday, September 18, 2019

Brauner Presents The True Nature Of Tax Treaties Today At Toronto

Yariv Brauner (Florida) presents The True Nature of Tax Treaties at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

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

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

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

Shaviro: Digital Service Taxes

Daniel Shaviro (NYU), Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents:

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

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

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September 18, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Cooper: Lessons From The State Death Tax Credit And The SALT Deduction

Jeffrey A. Cooper (Quinnipiac), Red States, Blue States: Lessons from the State Death Tax Credit and the 'SALT' Deduction, 73 Tax Law. ___ (2020):

ABA Tax Lawyer (2019)Since 1861, every version of the federal income tax has included a deduction for state and local taxes (often referred to by its popular acronym “SALT”). Since this provision, the “SALT deduction,” minimizes the effect of state and local taxes on taxpayers, it offers greater benefits to those living in states that impose the highest tax burden — the high-tax “blue” states. In 2017, the Tax Cuts and Jobs Act marked a major shift in this long-established federal policy toward state taxes. Among its many provisions, the Act capped the SALT deduction at $10,000 per married couple, providing no Federal tax offset for amounts paid in excess of that amount.

In this article, I attempt to address two questions raised by this turn of events. First, how will states respond to this change in federal law? Second, does the capping of the SALT deduction represent a major shift in federal-state relations, an unprecedented attack on blue states, or is it simply politics as usual?

My novel approach to the subject is to consider these questions by exploring the similarities and contrasts between the income tax SALT deduction and the estate tax state death tax credit, which was established in 1924 and repealed in 2001. Viewing the 2017 legislation within this broader historical context more reveals trends and patterns, providing greater insight than would a study of the SALT deduction in isolation.

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September 18, 2019 in ABA Tax Section, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, September 17, 2019

Schanzenbach Presents Safety Net Investments In Children Today At NYU

Diane Whitmore Schanzenbach (Northwestern) presents Safety Net Investments in Children (with Hilary W. Hoynes (UC-Berkeley)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

SchanzIn this paper, we examine what groups of children are served by core childhood social safety net programs—including Medicaid, EITC, CTC, SNAP, and AFDC/TANF—and how they have changed over time. We find that virtually all gains in spending on the social safety net for children since 1990 have gone to families with earnings, and to families with income above the poverty line. These trends are the result of welfare reform and the expansion of in-work tax credits. We review the available research and find that access to safety net programs during childhood improves outcomes for children and society over the long run. This evidence suggests that the recent changes to the social safety net may have lasting negative effects on the poorest children.

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

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

Young Ran (Christine) Kim (Utah) presented Digital Services Tax: A Cross-border Variation of Consumption Tax Debate? yesterday at San Diego as part of its Tax Law Speaker Series:

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

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

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

American Taxation Association Journal Of Legal Tax Research Call For Papers

The American Taxation Association Journal of Legal Tax Research Call for Submissions:

ATAThe ATA Journal of Legal Tax Research (JLTR), a double-blind peer-reviewed journal, publishes creative and innovative studies that employ legal research methodologies that logically and clearly:

  • Identify, describe, and illuminate important current tax issues including the history, development, and congressional intent of specific provisions
  • Propose improvements in U.S., state and local, or foreign tax systems, and unique solutions to tax or fiscal problems
  • Critically analyze proposed or recent tax law changes from both a technical and a policy perspective
  • Discuss improvements in tax compliance, tax complexity, or tax policy
  • Provide critical discussions for strategically structuring transactions, considering tax and non-tax ramifications
  • Critically analyze recent or proposed legislative or regulatory changes
  • Critically analyze similarities and differences between tax accounting and financial accounting issues
  • Critically analyze similarities and differences between U.S. and other tax regimes

Legal tax research articles in all areas are appropriate for the journal, including state and local taxation, international taxation, estate and gift tax law, and federal income taxation.  Manuscripts analyzing tax issue of countries other than the U.S., particularly if it includes a comparison to U.S. tax law, are also encouraged. 

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

Monday, September 16, 2019

Gordon Presents Fiscal Democracy In The States: How Much Spending Is On Autopilot? Today At Loyola-L.A.

Tracy Gordon (Urban Institute) presents Fiscal Democracy In The States: How Much Spending Is On Autopilot? (with Megan RandallC. Eugene Steuerle & Aravind Boddupalli) at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Ted Seto: 

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

Tax Paper Presentations Today At UC-Berkeley

Tax paper presentations at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

Antoine Ferey (Ph.D Candidate (Economics), CREST – École Polytechnique, Paris, France)), Optimal Income Taxation and Tax Complexity with Taxpayers Misperceptions (with Jérémy Boccanfuso (Ph.D Candidate (Economics), Paris School of Economics):

Ferey

We analyze optimal income taxation and tax complexity – defined as the features of a tax system preventing agents from correctly internalizing taxes in their choices – in a Mirrlees economy where agents misperceive taxes. We capture tax complexity along two dimensions – the number of tax instruments and the design (e.g. salience) of each instrument – and demonstrate how these factors shape the overall complexity of an integrated tax system. Tax complexity is a desirable feature of tax systems to the extent that it induces misperceptions which reduce the efficiency costs of taxation and allow an inequality-averse government to increase taxes and redistribution towards poor households. However, misperceptions generate utility misoptimization costs which are heterogeneous across taxpayers: more able workers are relatively more stricken and thus willing to pay more attention to the tax schedule. The possibility to dedicate time and energy to study the tax schedule and to turn to tax advisors give rise to an optimal level of tax complexity that we characterize. Preliminary estimations indicate that the monetary equivalent for internalizing the US income tax system was $2,364 in 2016, whereas our estimate for the optimal level of complexity is around $1,100. Because richest households resort to tax advisors, it is the upper middle class who loses the most from this tremendous complexity.

Malka Guillot (Postdoctoral Research Fellow, Center for Law and Economics, ETH Zürich), Who Paid the 75% Tax on Millionaires? Optimisation of Salary Incomes and Incidence in France:

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

Zwick Presents Top Wealth In The United States — New Estimates And Implications For Taxing The Rich At NYU

Eric Zwick (Chicago) presented Top Wealth in the United States: New Estimates and Implications for Taxing the Rich (with Matthew Smith (U.S. Treasury Department) & Owen Zidar (Princeton)) at NYU last week as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Zwick (2019)This paper uses administrative tax data to estimate top wealth in the United States. We build on the capitalization approach in Saez and Zucman (2016) while accounting for heterogeneity within asset classes when mapping income flows to wealth. Our approach reduces bias in wealth estimates because wealth and rates of return are correlated. Overall, wealth is very concentrated: the top 1% holds as much wealth as the bottom 90%. However, the “P90-99” class holds more wealth than either group after accounting for heterogeneity. Relative to a top 0.1% wealth share of more than 20% under equal returns, we estimate a top 0.1% wealth share of [15%] and find that the rise since 1980 in top wealth shares falls by [half]. Top portfolios depend less on fixed income and public equity, depend more on private equity and housing, and more closely match the composition reported in the SCF and estate tax returns. Our adjustments reduce mechanical revenue estimates from a wealth tax and top capital income shares in distributional national accounts, which depend on well-measured estimates of top wealth. Though the capitalization approach has advantages over other methods of estimating top wealth, we emphasize that considerable uncertainty remains inherent to the approach by showing the sensitivity of estimates to different assumptions.

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

Lesson From The Tax Court: Administrative File Notes Are Not Ex-Parte Contact

Tax Court (2017)Tax collectors have an tough and lonely job.  I know.  I collected taxes for Arlington County, Virginia shortly after law school.  And when I was in IRS Office of Chief Counsel, my clients were Revenue Officers (ROs), the IRS employees whose dolorous job is to collect unpaid taxes. 

When a taxpayer receives a CDP hearing, ROs are prohibited from making ex part contacts with anyone in Appeals about the substance of the collections under review.  If the RO wants to communicate with anyone in Appeals about matters that are not ministerial, administrative, or procedural, they must give taxpayers an opportunity to participate in the discussion. Rev. Proc. 2000-43, §3, Q&A-6.   If they violate the ex-parte prohibition, then the CDP hearing becomes tainted and the ex part nature of the contact must either be cured or else the case be reassigned.  Rev. Proc. 2012-18, §2.10(1).

Not every communication from an RO to Appeals is a prohibited ex parte contact.  Last week’s case of Jason Stewart and Kristy Stewart v. Commissioner, T.C. Memo 2019-116 (September 10, 2019) (Judge Kerrigan) teaches a lesson in what does not constitute a prohibited communication from an RO to the Settlement Officer in a CDP hearing.  Details below the fold.

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September 16, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax News, Tax Practice And Procedure | Permalink | Comments (1)

Tax Uniformity As A Requirement Of Justice

Charles Delmotte (NYU), Tax Uniformity as a Requirement of Justice:

Barbara Fried takes the view that uniform taxation — that is, a single rate applicable to all income levels — cannot be defended on any grounds of justice. She goes further by saying that, of all possible rate structures, it might be “the hardest one” to ground in “a” theory of fairness. Using the contractarian-constitutional perspective advanced by John Rawls and James Buchanan, this article argues that tax uniformity can be seen as a requirement of justice. After modelling how the political world realistically decides to distribute tax shares (self-interested parties act under a majority constraint), I show how the uniformity principle could emerge from the constitutional contract. In other words, rational individuals would choose uniformity as a procedural constraint under a “veil of uncertainty”; that is, with limited knowledge regarding their positions under the future application of the rule.

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September 16, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (2)

Sunday, September 15, 2019

Founders’ Fortunes And Philanthropy: A History Of The U.S. Charitable Deduction

Vox, The Charitable Deduction Is Mostly for the Rich. A New Study Argues That’s by Design.:

In the early 20th century, legislators carved out a tax break to help megaphilanthropists. It still shapes our tax law today. ... [A] a new paper published this week in Business History Review argues that throughout its 100-year history, the charitable deduction was always aimed primarily at benefiting the rich.

Nicolas J. Duquette (USC), Founders’ Fortunes and Philanthropy: A History of the U.S. Charitable-Contribution Deduction, 93 Bus. Hist. Rev. 553 (2019):

Since 1917, tax filers in the United States who itemize tax deductions have been able to subtract gifts to eligible charities from their taxable income. The deduction is especially valuable to successful entrepreneurs who donate corporate stock.

Founders

Such philanthropy was seen as a close substitute for government spending until after the mid-twentieth century. In the 1950s and 1960s, high tax rates catalyzed the formation of large foundations from industrial fortunes and precipitated a national debate about the legitimacy of such giving. The midcentury debate preceded increased oversight of charities and foundations and a shift in the way U.S. lawmakers regarded the contribution deduction—from a subsidy by philanthropists of public goods government would otherwise provide to an implicit public cost.

Nicolas J. Duquette (USC), Highlighting The (Elitist) History Of The Charitable Contribution Income Tax Deduction:

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September 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

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 #4:

  1. [484 Downloads]  Five Key Research Findings on Wealth Taxation for the Super Rich, by David Gamage (Indiana)
  2. [341 Downloads]  An Introduction to Tax Careers for J.D.s, by Heather Field (UC-Hastings)
  3. [155 Downloads]  The Superiority of the Digital Services Tax over Significant Digital Presence Proposals, by Wei Cui (University of British Columbia)
  4. [131 Downloads]  The Qualified Small Business Stock Exclusion: How Startup Shareholders Get $10 Million (Or More) Tax-Free, by Manoj Viswanathan (UC-Hastings)
  5. [96 Downloads]  Cannabis Businesses and Passthrough Deduction Availability, by Daniel Rowe (Green Hasson & Janks, Los Angeles)

September 15, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 14, 2019

BEPS And The Emerging Global Approach To Taxing Multinational Enterprises

Jinyan Li, Jin Bao & Huaning (Christina) Li (York University, Osgoode Hall Law School), BEPS and the Emerging Global Approach to Taxing Multinational Enterprises, in Symposium, Re-Imagining Tax for the 21st Century: Inspired by the Scholarship of Tim Edgar):

The G20/OECD Base Erosion and Profit Shifting (BEPS) Project aimed at revising existing tax rules to align the taxation of profit with the location of economic activities and value creation (the “value creation principle”). It has received much commentary in literature and general debates and has been regarded as “the most significant re-write of the international tax rules in a century”, an opportunity to “rebuild a healthy scheme for allocating taxation rights”, having the potential to significantly alter the contours of the international tax regime, transforming the international tax regime, signaling a “new struggle over international taxation”, or representing the “emergence of a new international tax regime”. The OECD claimed that the revised rules represent “the first substantial – and overdue – renovation of the international tax standards in almost a century”.

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

Friday, September 13, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Osofsky's Agency Legislative Fixes

This week, Sloan Speck (Colorado) reviews a new work by Leigh Osofsky (North Carolina), Agency Legislative Fixes, 105 Iowa L. Rev. __ (2020).

Speck (2017)In Agency Legislative Fixes, Leigh Osofsky develops a framework for understanding and analyzing agency actions to correct technical and drafting errors in legislation. Osofsky motivates this framework primary through various examples from the December 2017 tax legislation known as the Tax Cuts and Jobs Act. In addition, Osofsky alludes to a number of other high-profile legislative mistakes in the Affordable Care Act, the Dodd-Frank Act, and elsewhere. Osofsky adeptly interweaves her tax-oriented story with academic work on legislation and administrative law, yielding a rich critique of Treasury’s current practices in handling gaps between Congress’s presumptive or purported intent and prevailing interpretations of statutory text, as enacted. Osofsky concludes by addressing several possible reforms, including an interesting proposal to adjust the revenue baseline in budget reconciliation to account for erroneous scores attributable to congressional mistakes.

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September 13, 2019 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Batchelder & Kamin: Taxing the Rich: Issues and Options

Lily L. Batchelder (NYU) & David Kamin (NYU), Taxing the Rich — Issues and Options:

The U.S. economy exhibits high inequality and low economic mobility across generations relative to other high-income countries.

BK1

The U.S. will need to raise more revenues in order to reduce these disparities, finance much-needed new services and investments, and address the nation’s long-term fiscal needs. This paper outlines policy options for raising a large amount of revenues primarily from the most affluent, first discussing potential incremental reforms and then focusing on four main options for more structural reform: (1) dramatically increasing the top tax rates on labor and other ordinary income, (2) taxing the wealthy on accrued gains as they arise and at ordinary rates, (3) a wealth tax on high-net-worth individuals, and (4) a financial transactions tax.

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September 13, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (4)

Minors And Digital Asset Succession

Natalie M. Banta (Drake), Minors and Digital Asset Succession, 104 Iowa L. Rev. 1699 (2019):

Minors who die in the United States hold a property interest in an asset that did not exist when the law established eighteen as the age of legal capacity to devise. These assets are digital assets: email, social networking, documents, photos, text messages, and other forms of digital media. Minors use these assets with a fluidity and ease unrivaled by older generations. Under the current law, minors have no right to decide what happens to their digital property at death. Despite the fact that minors have the capacity to contract with online businesses, make health care decisions, marry, have sex, and seek employment, minors are denied one of the most basic rights of property ownership — the right to devise. This Article is the first to explore how minor capacity law should change to accommodate the changing nature of property and grant minors the right to devise their digital assets.

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

The Peripatetic Nature Of EU Corporate Tax Law

Christiana HJI Panayi (Queen Mary University of London), The Peripatetic Nature of EU Corporate Tax Law:

This article examines some aspects of the European Union’s corporate tax set-up which correspond to aspects of a country’s corporate tax regime. The overarching question is whether there is such a thing as EU corporate tax law. This article seeks to address this in the context of the following issues: the existence of a uniform tax base and tax rates;the existence of anti-abuse rules and a transfer pricing regime; and, finally, the existence of a common tax administration and its powers. The article questions whether the peripatetic development of EU corporate tax law is suitable for the EU or whether it undermines its long-term objectives.

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

Thursday, September 12, 2019

Polsky Presents Two Tax Papers Today At Florida

Polsky (2018)Gregg Polsky (Georgia) presents two papers today at Florida:

There's a Problem With Buybacks, But It's Not What Senators Think, 162 Tax Notes 765 (Feb. 18, 2019) (with Daniel Hemel (Chicago)), as part of the Tax Colloquium Series:

In a deeply divided Washington, one of the few issues on which leading lawmakers on both sides of the aisle appear to agree is that corporations should be discouraged from buying back their stock from shareholders. This short article argues that, while this anti-buyback sentiment is misguided, there nevertheless are good tax policy arguments for reforming the tax treatment of buybacks. The article recommends adoption of a 1969 proposal made by Professor Marvin Chirelstein that would recharacterize (for tax purposes) buybacks as a pro rata cash dividend, followed by sales of shares from the shareholders who participate in the buyback to the shareholders who do not.

Taxing Residential Solar as part of the Marshall M. Criser Distinguished Lecture and Workshop Series (with Ethan Yale (Virginia)):

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

Osofsky: Agency Legislative Fixes

Leigh Osofsky (North Carolina), Agency Legislative Fixes, 105 Iowa L. Rev.  ___ (2019):

Legislative drafting mistakes can upset statutory schemes. The Affordable Care Act was nearly undone by such mistakes. The recent Tax Cuts and Jobs Act is rife with them. Traditional legal scholarship has examined whether courts should help resolve Congress’s mistakes. But courts have remained stubbornly resistant to fixes outside of the legislative process.

In the face of legislative error and judicial inaction, administrative agencies have taken it upon themselves to fix legislative drafting mistakes. This Article provides the first comprehensive analysis of these “agency legislative fixes.” It identifies features and complexities of such fixes, which are not captured by existing scholarship. It also describes the behind-the-scenes, post-legislative dialogue between Congress and agency officials about such fixes, which is frequently hidden from public view. The Article shows that agencies routinely fix legislative drafting mistakes in a manner that is nontransparent and motivated by factors external to the legal framework.

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September 12, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)