Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Weisbach's An APA For Tax

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews a new work by David A. Weisbach (Chicago; Google Scholar), An APA For Tax.

The Administrative Procedure Act (APA) is a cornerstone of administrative law in the United States, providing a framework for the procedures and processes that federal agencies must follow. Its relevance to tax law has become increasingly significant as tax administration faces new challenges and reforms. This Article is one more piece in a series of articles, where scholars supporting tax exceptionalism (e.g. Caron, Lederman, Puckett, Weisbach, Walace, Zelenak, and others) debate anti-tax exceptionalism colleagues (e.g. Abreu & Greenstein, Hickman, Hoffer, Johnson, Infanti, Walker, and others) on the question of whether Treasury (and the IRS as its extension) violates the requirements of administrative law as laid out by the APA.  

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July's Tax Reflections With Reuven Avi-Yonah

Reuven S. Avi-Yonah (Michigan; Google Scholar):

Taxing the Superrich After Moore, 184 Tax Notes 61 (July 1, 2024): 

Avi-Yonah proposes how to tax the wealthiest members of society in a constitutional manner in the wake of the Moore v. United States decision.

Taxation With Realization After Moore, 184 Tax Notes 69 (July 1, 2024):

Avi-Yonah considers the future of challenges to the realization requirement in light of the U.S. Supreme Court’s recent decision in Moore v. United States.

Should Large Corporate Mergers Be Subsidized?, 184 Tax Notes 295 (July 8, 2024): 

Avi-Yonah examines the history of tax-free corporate reorganizations.

Preventing Inversions, 184 Tax Notes 509 (July 15, 2024): 

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Florida Tax Review Publishes New Issue

The Florida Tax Review has published Vol. 26, No. 2 (Spring 2023):

• Noah Smith-Drelich (Chicago-Kent; Google Scholar), Food Tax Substitution Effects, 26 Fla. Tax Rev. 1 (2023) 
• Beverly Moran (Vanderbilt), How Federal Government Policy Helped Create Retirement Insecurity, 26 Fla. Tax Rev. 56 (2023) 
• Daniel J. Hemel (NYU; Google Scholar), The Passthrough Entity Tax Scandal, 26 Fla. Tax Rev. 87 (2023) 
• Edward J. McCaffery (USC; Google Scholar), The Paradox of Taxing the Rich, 26 Fla. Tax Rev. 130 (2023) 

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St. Louis Symposium: Teaching Legal Research, Writing, Communication, And Feedback

Symposium, Teaching Legal Research, Writing, Communication, and Feedback, 68 St. Louis U. L.J. 399-556 (2024): 

• Ellie Margolis (Temple; Google Scholar), Doing Less—Reflections on Cognitive Load and Hard Choices in Teaching First-Year Legal Writing, 68 St. Louis U. L.J. 399 (2024)
• Katrina Lee (Ohio State; Google Scholar), The Adaptable Legal Writer, 68 St. Louis U. L.J. 419 (2024)
• Brenda D. Gibson (Wake Forest; Google Scholar), Teamwork Makes a Dream Work: Collaboration in the Legal Writing, 68 St. Louis U. L.J. 431 (2024)
• Sylvia Lett (Arizona), Flattening the Learning Curve for International J.D. Students, 68 St. Louis U. L.J. 441 (2024)
• Olympia Duhart (Nova), Better Together: Building Community in the LRW Classroom, 68 St. Louis U. L.J. 459 (2024)

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Journal Of Economic Perspectives Symposium: The Tax Cuts And Jobs Act Of 2017

Symposium, The Tax Cuts And Jobs Act Of 2017, 38 J. Econ. Persp. 3-136 (2024): 

William G. Gale (Brookings Institution; Google Scholar), Jeffrey L. Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute), Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, 38 J. Econ. Persp. 3 (2024) (reviewed here by Sloan Speck (Colorado; Google Scholar)): 

The Tax Cuts and Jobs Act (TCJA) of 2017 introduced sweeping changes to individual and corporate taxation. We summarize the major provisions, trace the origins of the Act, and compare it to previous tax changes. We also examine the effects on the government budget, economic activity, and distribution of resources. Based on evidence through 2019, we find that the TCJA clearly raised federal debt and increased after-tax incomes, disproportionately increasing incomes for the most affluent. Its effects on GDP and median wages seem modest at best, although clear counterfactuals are difficult to identify. The impact on investment is less certain, and research is only recently emerging that addresses this question. Empirical analysis of longer-term effects may prove difficult due to the disruptions created by the COVID-19 pandemic starting in 2020.

Jon Bakija (Williams College; Google Scholar), The US Individual Income Tax: Recent Evolution and Evidence, 38 J. Econ. Persp. 33 (2024):

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Haneman: Tax Sheltering Death Care

Victoria J. Haneman (Creighton; Google Scholar), Tax Sheltering Death Care: 

Death is not free. Funeral, burial, or cremation costs are the third largest category of expense over the lifetime of the average American, while poverty paradoxically remains the fourth leading cause of death. Many are unable to shoulder the often-exorbitant cost of death care without being forced to beg, borrow, or simply abandon human remains. Sufficient resources exist to ensure that everyone is laid to rest with dignity in the United States, but those resources are not evenly distributed. This is a conversation about affordable and humane disposition of remains as a right versus a privilege. It is a discussion made more difficult because several underlying issues are colliding in one space: consumer behavior is aberrational because of a desire to render death invisible; the funeral industry has an outsized voice in its own regulation; there are no reliable and broadly accessible death care prepayment instruments; and, expanding the (arguably inadequate) social safety net in the U.S. is usually an idea that meets with resistance. 

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Delmotte: Redistribution Without Romance

Charles Delmotte (Michigan State; Google Scholar), Redistribution without Romance: 

Various tax scholars advocate for higher taxes on the wealthy to curb their influence on public policy. This "political economic" case for redistribution has recently gained extra traction through the Law and Political Economy (LPE) movement. While both tax and non-tax scholars defer to the tax system to implement higher taxes on the wealthy and reduce their political influence, the current literature lacks a comprehensive model of how this system operates. 

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Grimmelmann Reviews Lawsky's Coding the Code: Catala And Computationally Accessible Tax Law

James Grimmelmann (Cornell; Google Scholar), When Law Is Code (JOTWELL) (reviewing Sarah B. Lawsky (Northwestern; Google Scholar), Coding the Code: Catala and Computationally Accessible Tax Law, 75 S.M.U. L. Rev. 535 (2022)):

Sarah B. Lawsky’s Coding the Code: Catala and Computationally Accessible Tax Law offers an exceptionally thoughtful perspective on the automation of legal rules. It provides not just a nuanced analysis of the consequences of translating legal doctrines into computer programs (something many other scholars have done), but also a tutorial in how to do so effectively, with fidelity to the internal structure of law and humility about what computers do and don’t do well.

Coding the Code builds on Lawsky’s previous work on formal logic and its advantages for statutory interpretation. (Formal logic, sometimes called “symbolic” or “mathematical” logic, involves the precise and rigorous analysis of symbolic expressions representing arguments, such as “p & ¬q” to mean “p is true and q is not true”.) In her 2017 A Logic for Statutes, [21 Fla. Tax Rev. 60 (2017) (reviewed by Alice Abreu (Temple) & Richard Greenstein (Temple) here),] she observed that many statutory provisions have a characteristic structure: rules subject to exceptions. A typical rule says that WHEN certain conditions are satisfied, THEN certain consequences follow, UNLESS one of several exceptions applies. Exceptions have exceptions of their own: interest payments are deductible, unless they are personal, unless they are mortgage payments.

Lawsky’s great insight about law and logic is that this characteristic structure of nested exceptions is most naturally modeled using a branch of formal logic called “default logic.” 

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Crime And The EITC

Brigham Brau (North Carolina), Jeffrey L. Hoopes (North Carolina; Google Scholar), Junyoung Jeong (North Carolina; Google Scholar) & Mark H. Lang (North Carolina; Google Scholar), Crime and the EITC:

We examine the effects of an annual government social safety net payment on crime by leveraging geographic and intertemporal variation in the magnitude and timing of earned income tax credit (EITC) payments, combined with crime micro-data. We find that drug-related crimes increase somewhat whereas burglary and robbery decrease substantially within three weeks following peak EITC payments. Non-economic crimes, such as arson and sexual offenses, remain unchanged. Leveraging additional temporal variation in EITC disbursements induced by the PATH Act in 2017 confirms our findings. ...

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Truth, Justice, And Taxation: Towards An Ethical Framework For Tax Practitioners

Joshua Cutler (Boise State; Google Scholar), Truth, Justice, and Taxation: Towards an Ethical Framework for Tax Practitioners:

Uniquely, tax practitioners have dual ethical duties, both to the taxpayer-client and to the tax system. They protect the integrity of our voluntary tax system by ensuring that clients comply with the law, but they must also help clients minimize their legal tax liability. When tax law is ambiguous, as it often is, practitioners must decide how far they may go to interpret it in the client's favor. The professional responsibility standards provide little practical help in navigating this ethical dilemma. Instead, penalty provisions in the Internal Revenue Code set the parameters for taking uncertain positions, but these rules lack principles to guide their implementation and do not address other ethical dilemmas. This article seeks to fill this void and articulate for the first time an ethical framework for tax practitioners. 

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AI And Tools For Expanding Access To Justice

Quinten Steenhuis (Suffolk; Google Scholar), AI and Tools for Expanding Access to Justice, in The Cambridge Handbook of AI in Civil Dispute Resolution (Cambridge University Press 2025):

Access to justice is a fundamental right, yet for millions of people around the world resolution of legal problems via both formal and informal means isn't available, affordable, accessible, or understandable. The high cost of legal help, now between $200 and $400/hour across the United States, and the limited number of attorneys providing free legal aid, is just one of these barriers. This chapter explores how artificial intelligence (AI) is making a practical difference in the problems of everyday people by automating legal processes and making legal systems more affordable and accessible. This chapter discusses generative AI, traditional expert systems, and computational approaches each as tools that can help legal aid and private lawyers, and as tools that can help unrepresented people.

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Weisbach: An APA For Tax

David A. Weisbach (Chicago; Google Scholar), An APA For Tax: 

Recent Supreme Court cases threaten to upend the administrative law applicable to the tax system. Loper Bright eliminates Chevron deference. Ohio v. EPA heightens the scrutiny given to regulatory preambles. And Corner Post effectively eliminates the statute of limitations for challenging the validity regulations. A number of lower court decisions move in the same direction, aggressively using administrative law to invalidate guidance. Combined, these decisions threaten to make issuing guidance much more difficult and to slow the guidance process.

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Where Is The Wall Of Separation Between Direct And Indirect Taxes?

Donald Drakeman (Notre Dame), Where is the Wall of Separation Between Direct and Indirect Taxes?:

Rob Natelson’s essay, “The Constitutional Line on Direct Taxes,” concludes that the Supreme Court’s decisions involving direct and indirect taxes have been “conflicting, uncertain—and wrong.” Those decisions may have been conflicting and uncertain, but whether they are wrong is a more complicated question.

He urges us to do a deep dive into “eighteenth-century tax vocabulary and … contemporaneous tax laws” to identify a clear and consistent understanding of these terms. Joel Alicea and I did just that a few years ago [The Limits of New Originalism, 15 U. Pa. J. Const. L. 1161 (2013)], and we focused on the carriage tax upheld in the landmark 1796 Hylton case. This was the Court’s first exercise of judicial review, and it is well worth reading, not least because we discovered that “the case was trumped up, the facts were bogus, the procedure was defective, and the Court lacked a quorum.”

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The New Potential Regulatory Death Of Aggressive Captive Insurance

Beckett Cantley (Northeastern) & Geoffrey Dietrich (Cantley Dietrich), The New Potential Regulatory Death of Aggressive Captive Insurance, 75 S. C. L. Rev. 343 (2023): 

The aggressive micro-captive insurance company industry is at severe risk of decimation. The Internal Revenue Service (IRS) initially issued Notice 2016-66 to designate certain micro-captives as transactions of interest, which allowed the IRS to garner information about a micro-captive to measure if it is an abusive tax shelter. However, Notice 2016-66 was overly broad in scope, forcing participants of non-abusive micro-captives to waste time and money on sending information to the IRS that the IRS never deserved to obtain. Therefore, certain taxpayers brought challenges to Notice 2016-66, and it was overturned in CIC Services, LLC v. Internal Revenue Service following a U.S. Supreme Court opinion allowing the challenge to proceed. In the end, the death knell for the Notice was the IRS’s failure to properly follow the Administrative Procedure Act (APA) when issuing the Notice, as well as the arbitrary and capricious manner in which the Notice was issued.

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Peer Review In Advanced Legal Writing Course

Patricia Montana (St. John's), Peer Review in Advanced Legal Writing Course, 68 St. Louis U. L.J. 1 (2023):

This Article adds to the conversation about peer review, discussing specifically the numerous benefits peer review brings to an advanced legal writing course. The Article illustrates how to effectively integrate peer review into an advanced legal writing course. Peer reviews can support student learning and improve students’ legal analysis and writing, among other things. Thus, the Article encourages law professors to experiment with peer review exercises and incorporate them into their advanced legal writing courses.

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A Theory Of The REIT

Jason S. Oh (UCLA) & Andrew Verstein (UCLA; Google Scholar), A Theory of the REIT, 133 Yale L.J. 669 (2024):

Real Estate Investment Trusts (REITs) are companies that raise money from the public to invest in real estate. Despite REITs being a vast and growing part of the economy, legal scholars have paid them almost no attention. Accordingly, no one has noticed that REITs possess several unique and puzzling legal characteristics. REITs are the only American business form that are forbidden from reinvesting their profits. They are also uniquely immune to hostile takeovers. Since reinvestment and takeovers are thought to be good for investors (at least on average), REIT law would seem to be an obstacle to REIT growth. Yet, REITs have grown feverishly for decades.

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Addressing Structural Impediments To Advocacy By Nonprofit Organizations On Behalf Of The Unenfranchised

Kirsten Widner (Tennessee; Google Scholar) & Heather M. Kolinsky (Florida; Google Scholar), Building Resilience by Removing Barriers: Addressing Structural Impediments to Advocacy by Nonprofit Organizations on Behalf of the Unenfranchised, 92 U. Cin. L. Rev. 786 (2024):

Charitable contributions, particularly from private foundations, are an essential source of support for many nonprofit charitable organizations. However, the ability to accept these contributions comes with significant restrictions on lobbying and advocacy. Using vulnerability theory and an original survey of nonprofit advocacy organizations, we show that current restrictions on 501(c)(3) organizations disproportionally limit advocacy on behalf of the most politically disadvantaged groups—those without the right to vote. This, in turn, reinforces existing inequalities in whose voices are heard and whose interests are considered by policymakers. 

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Effective Law Professor Feedback For Today's Students

Randall Ryder (Minnesota), "With Great Power Comes Great Responsibility": Improving Your Feedback and Hallmarks of Effective Feedback, 68 St. Louis U. L.J. 537 (2024):

Effective feedback can change a law student’s trajectory in law school and beyond. The feedback-centric nature of experiential learning courses allows law students to both develop their skills and personal lawyering style. However, many experiential instructors are from a different generation, with different expectations and communication styles than today’s law students. 

This article highlights hallmarks of effective feedback for the modern law school classroom.  As the field of law continues to evolve, law schools will need to as well. This article discusses four key hallmarks: (1) provide feedback in multiple formats, (2) help each student develop their personal style, (3) explain the why, and (4) highlight both the “good” and areas of opportunity. 

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Brunson: Religious Tax Protest Before And After RFRA

Sam Brunson (Loyola-Chicago; Google Scholar), Leave Your Conscience at the Court: Religious Tax Protest Before and After RFRA, Canopy Forum on the Interactions of Law & Religion:

In the 1970s and 1980s, a number of Americans objected, on religious grounds, to paying income taxes on the grounds that certain government spending violated their religious beliefs. These religious tax protestors largely came from two traditions: Catholics, who opposed government spending on abortion and Quakers, whose Peace Testimony prohibited them from paying taxes that funded war.

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Questioning The Inevitability Of The NextGen Bar Exam

Nachman N. Gutowski (UNLV; Google Scholar), Ashley London (Duquesne; Google Scholar), Steven Foster (Oklahoma City) & Taylor Israel (Thomas Jefferson), Questioning the Inevitability of the NextGen Bar Examination: 

The National Conference of Bar Examiners (NCBE) is actively promoting the NextGen Bar Exam (NextGen) as an inevitable and necessary replacement for the current Uniform Bar Examination (UBE). This new exam has been advertised as a modern solution to legal licensure, with the NCBE publicizing commitments from a growing list of jurisdictions as what can only be described as an inference of evidence to its inevitable nationwide adoption. However, a closer examination reveals a more complex and nuanced picture, raising questions about the true inevitability of NextGen and highlighting the significant remaining hurdles. The article delves into these complexities, challenging the narrative of widespread acceptance and emphasizing the need for a more thoughtful and inclusive approach. 

While the NCBE touts early commitments to the NextGen Bar Exam, these commitments represent only a fraction of the total jurisdictions and even less of the examinees nationally. Many jurisdictions, particularly those with the largest numbers of bar exam takers, have yet to commit to adopting the new exam.

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The Top Five New Tax Papers

There is quite bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #4 and #5.

1. [1,465 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [444 Downloads]  Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, by William Gale (Brookings Institution; Google Scholar), Jeffrey Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
3. [305 Downloads]  Wealth Taxes Under the Constitution: An Originalist Analysis, by David Schizer (Columbia) & Steven Calabresi (Northwestern) (reviewed by Mirit Eyal-Cohen (Alabama; Google Scholar) here)
4. [211 Downloads]  Shaping Preferences With Pigouvian Taxes, by Gary Lucas, Jr. (Texas A&M; Google Scholar)
5. [158 Downloads]  Nondelegation, Original Meaning, and Early Federal Taxation: A Dialogue With My Critics, by Nicholas Parrillo (Yale)

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Oei's Disentangling Power And Preferences In Tax Treaties Between Developing And OECD Countries

This week, David Elkins (Netanya, Google Scholar) reviews a new work by Shu-Yi Oei (Duke; Google Scholar), Disentangling Power and Preferences in Tax Treaties between Developing and OECD Countries Using Multilevel Modeling.

One of the linchpins of the international tax regime is the network of over 3,000 bilateral tax treaties. Of those, as noted by Prof. Oei, about 40% are between developed and developing countries. The primary goals of tax treaties are to prevent double taxation and to divide up taxing rights between the taxpayer’s country of residence (the home country) and the country from which the income is derived (the source country). However, it is often not necessary to conclude a tax treaty to prevent the taxation of the same income by more than one country. Foreign tax credits and territorial taxation are unilateral means by which counties can and do prevent double taxation. Moreover, these unilateral measures tend to give precedence to source countries. The question that has been raised in the literature is why developing countries, which to a great extent rely upon source taxation, would enter into treaties, the effect of which is to limit their ability to tax income deriving from their own territory.

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Exploring (In)Equity In The Internal Revenue Code: Discussions Of Race In The Tax Classroom

Kimberly S. Krieg (San Diego; Google Scholar), Amanda Marino (San Diego State; Google Scholar) & Landi Morris (Northern Arizona; Google Scholar), Exploring (In)Equity in the Internal Revenue Code: Discussions of Race in the Tax Classroom:

In this learning strategy (LS) we provide materials on how to discuss race as a source of inequity in the Internal Revenue Code (IRC). We provide online discussion questions, practice problems, classroom talking points, and guidance for student presentations to illustrate inequities between Black and white taxpayers. The assignments can be delivered in entirety or piecemeal. Our material is inspired by Dr. Dorothy Brown's The Whiteness of Wealth: How the Tax System Impoverishes Black Americans-And How We Can Fix It, which identifies how the IRC contributes to the racial wealth gap. This LS supplements an individual taxation course with real-world application of the IRC. 

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Using Technology To Promote Well-Being And Foster Professional Identity Formation In The 1L Classroom

Kendall Kerew (Georgia State; Google Scholar), Using Technology to Promote Well-Being and Foster Professional Identity Formation in the 1L Classroom, 20 U. St. Thomas L.J. ___ (2024): 

Critical components of professional identity are associated with self-determination theory.  While all three of the basic psychological needs contribute to well-being, autonomy is considered the most important.  Moreover, when student autonomy is supported, “by giving them (1) as much choice as possible, (2) a meaningful rationale to explain decisions, and (3) a sense that authorities are aware of and care about their point of view,” it leads to “(1) higher self-determined career motivation; (2) higher well-being; and (3) higher academic performance.”  

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Taxation, Citizenship And Democracy In The 21st Century

Yvette Lind (BI Norwegian Business School; Google Scholar) & Reuven S. Avi-Yonah (Michigan; Google Scholar), Taxation, Citizenship and Democracy in the 21st Century (Edward Elgar Publishing 2024): 

Proposing innovative ideas on the links between taxation, citizenship and democracy, this multidisciplinary book contributes to ongoing research and scholarship by emphasizing the importance of taxation to the functioning of modern democracy.

This book provides methodological and theoretical research tools from various disciplines such as law, economics and sociology. It considers, among other research questions, the disciplinary boundaries surrounding taxation, citizenship and democracy; the taxation of migrants in an era of globalization; and the role of procedural safeguards in legitimizing the use of automated risk management systems. Featuring contemporary case studies from the perspectives of taxpayers, legislators and tax administrations, it presents new perspectives on capital migration, social security and noncitizen farmworkers, as well as cooperative compliance policies in Nordic countries.

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The Open Casebook Revolution

Samuel Beswick (British Columbia; Google Scholar) & Maddison Zapach (British Columbia), The Open Casebook Revolution, 3 Sup. Ct. L. Rev. __ (2024): 

The open-access casebook revolution is gaining momentum. Open casebooks are compiled and edited teaching materials, typically hosted as webpages and available as downloadable, searchable, printable, mark-up-able documents. In the United States, dozens of open casebooks can be found on platforms such as eLangdell, H2O Open Casebook, Open Textbook Library and SSRN. Outside of the United States, however, open casebooks for law school courses remain underutilized. This paper provides insights on the power and limits of open casebooks from the perspectives of a teacher and a student. It draws on our experience creating an open casebook for a Canadian law school torts course. It addresses some practicalities of designing and creating an open casebook and the benefits and challenges of doing so.

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The Myths And Truths Of Extraterritorial Taxation

Laura Snyder (President, Stop Extraterritorial American Taxation (SEAT); Board of Directors, Association of Americans Resident Overseas (AARO)), The Myths and Truths of Extraterritorial Taxation, 32 Cornell J. L. & Pub. Pol'y 185 (2022):

The 1924 U.S. Supreme Court decision Cook v. Tait is considered to underpin the U.S. extraterritorial tax system. It is cited with statements such as “it is settled law” that the U.S. Constitution permits the federal government to tax the worldwide income of nonresident U.S. citizens. But in the century since Cook was decided, both U.S. citizenship and the U.S. tax system have developed and expanded, as have our understandings of equal protection and human rights.

As compared to 1924, today many more overseas Americans are subjected to a nationality-based extraterritorial system that severely penalizes activities required to sustain modern life. The activities include owning a home, holding a bank account, investing and planning for retirement, operating a business, holding certain jobs, and pursuing community service opportunities. Neither U.S. residents (regardless of nationality) nor non-U.S. nationals residing overseas are subjected to such a penalizing system.

While Cook may hold that the federal government has the power to tax overseas Americans based upon their worldwide income, it is a myth that Cook allows the government to tax overseas Americans under any conditions, without any regard for the effects the policies have and in manners that violate their Constitutional and human rights.

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Billionaire Superstar: Public Image And Demand For Taxation

Ricardo Perez-Truglia (UCLA; Google Scholar) & Jeffrey Yusof (Zurich; Google Scholar), Billionaire Superstar: Public Image and Demand for Taxation: 

In the United States, there are 741 billionaires with a combined net worth of $5.2 trillion. These billionaires live highly public lives, with some achieving superstar status. Despite growing inequality, billionaires face effective tax rates lower than the average American. Is this due to a lack of public support for taxation? Is it due to misperceptions about billionaires’ lives and careers? To address these questions, we conducted a survey experiment with a sample of 9,013 Americans. We designed multiple treatments based on research on preferences for redistribution and arguments made by academics, journalists, and the general public to increase taxes on the ultra-wealthy. 

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Trauma-Informed Pedagogy In Law School

Angela P. Harris (UC-Davis) & Monika B. Kashyap (Seattle), From Trauma to Transformation: Trauma-Informed Pedagogy in Law School, 27 U. Pa. J.L. & Soc. Change 1 (2023): 

In this essay, we seek to expand the meaning of “trauma” by aligning trauma-informed pedagogy with principles of disability justice and progressive critiques of legal education. We argue first that the existence of trauma is not a sign of individual brokenness or deficiency, but rather should be taken as a warning about broken or deficient social institutions or practices. This approach to trauma recognizes the potential of those who experience trauma—whose bodies and minds bear the marks of both subordination and resilience—to contribute to institutional and structural transformation. We use as an example the trauma too often experienced in law school by students and faculty with stigmatized identities. 

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Rosenzweig Reviews Kysar's The Global Tax Deal And The New International Economic Governance

Adam Rosenzweig (Washington University), Is There Finally a New World (Economic) Order? (JOTWELL) (reviewing Rebecca M. Kysar (Fordham; Google Scholar), The Global Tax Deal and the New International Economic Governance, 77 Tax L. Rev. __ (2024)): 

In 1944 forty-four nations signed an agreement in Bretton Woods, New Hampshire, which laid the foundation for what would become the modern international economic system. The so-called Bretton Woods system was built on the commitments to free and open trade, stable monetary exchange markets, and investments in global public goods. One of the motivating factors underlying the Bretton Woods agreement was to prevent the kind of trade protectionism, isolationism, and hyperinflation that had been seen as some of the geopolitical factors ultimately leading to World War II. While the Bretton Woods agreement itself only lasted until 1971, the commitment to liberalized trade, liquid currency markets, and investments in global public goods continued and came to be known collectively as the “Washington Consensus.”

In recent years, however, cracks have begun to emerge in the Washington Consensus under the stress of the Financial Crisis, the COVID pandemic, and increased protectionism and trade wars. At the same time, the Organization for Economic Cooperation and Development (OECD) began the single most significant overhaul of the global tax regime since its inception through its Base Erosion and Profit Shifting (BEPS) project. Over one hundred and forty countries eventually reached near universal agreement on fifteen separate Action Items fundamentally overhauling the international tax regime. This success stands in stark contrast to the otherwise perceived crumbling of the Washington Consensus. Was this merely another notable example of tax exceptionalism? Or could the success of BEPS serve as a model for revitalizing the Washington Consensus?

Professor Rebecca M. Kysar intervenes in this debate in her new article, The Global Tax Deal and the New International Economic Governance. The underlying premise of the article provides that the success of the BEPS negotiations proves the demise of the Washington Consensus, not its survival. ...

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Measuring Tax Literacy In A Politically Charged Climate

Michael Conklin (Texas A&M; Google Scholar) & John Weatherford (Western Carolina), Measuring Tax Literacy in a Politically Charged Climate, 102 Tex. L. Rev. Online 1 (2021):

This Article reports the findings of a survey measuring tax literacy on politically charged issues, such as how much high-income earners and large corporations pay in taxes. The results illuminate numerous aspects of tax literacy, including differences based on gender, socioeconomic status, and political affiliation. This study also uncovers novel internal inconsistencies between policy preferences and stated beliefs about taxation. This finding highlights the effects of deceptive media coverage and deceptive political rhetoric. Other topics discussed include the importance of tax literacy to a democracy, the ability of tax education to improve tax literacy, and the association between tax literacy and tax compliance.

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The Constitutional Line On Direct Taxes

Rob Natelson (Montana; Google Scholar), The Constitutional Line on Direct Taxes:

The idea of a federal wealth tax recently has become a popular cause among “progressives.” The question arises, however, of whether such a tax would be constitutional.

In theory, a federal wealth tax could pass constitutional muster. But unless it qualified under the Constitution as an “indirect tax” rather than as a “direct” one, its projected revenue would have to be allocated (“apportioned”) among the states according to their respective populations. The apportionment rule likely would render such a levy impractical.

Many wealth tax advocates contend, therefore, that wealth taxes qualify as “indirect.” But this contention seems plausible only because most Supreme Court pronouncements on direct and indirect taxes have been conflicting, uncertain—and wrong.

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Hemel: Flips And Splits In Administrative Law

Daniel J. Hemel (NYU; Google Scholar), Flips and Splits in Administrative Law: 

In Loper Bright Enterprises v. Raimondo, the Supreme Court discarded the four-decade-old Chevron deference regime and circumscribed the authority of federal agencies to choose among multiple interpretations of ambiguous statutes. In justifying its ruling, the Loper Bright majority argued that Chevron deference had generated unnecessary regulatory uncertainty by allowing agencies to switch from one interpretation of an ambiguous statute to another. Against that backdrop, Loper Bright marks a move toward temporal uniformity in federal law: once the courts recognize a certain reading of a statute as “best,” that reading will reign under Loper Bright unless and until Congress repeals or amends the relevant provision.

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Moore v. The United States: Will The Supreme Court Join The Whack-A-Tax Shelter Game?

Eugene Steuerle (Tax Policy Center; Google Scholar), Moore v. The United States: Will The Supreme Court Join The Whack-A-Tax Shelter Game?:

In  Moore v. the United States, the Supreme Court dodged the issue of whether the Constitution allows for the taxation of unrealized income, concluding that the “disagreement over realization” was among “potential issues for another day.” However, Justices Amy Coney Barrett and Samuel Alito, in a concurring opinion, and Justices Clarence Thomas and Neil Gorsuch, in the dissent, declared that realization was a Constitutional requirement.

This is not a minor issue. As my colleague Steven Rosenthal explains, their declarations open the Court to new challenges to the taxation of unrealized income. If the Court determines that “realization” is a Constitutional requirement, the decision would, at worst, threaten to gut the taxation of capital income. At best, it would require the Court to join Congress and the US Treasury Department in the endless game of whack-a-mole on tax shelters. ...

Will this whack-a-tax-shelter game be improved if the Supreme Court steps in as umpire?

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Piketty, Saez & Zucman Find Error In Auten & Splinter In Measuring Income Inequality In The United States

Thomas Piketty (Paris School of Economics), Emmanuel Saez (UC-Berkeley; Google Scholar) & Gabriel Zucman (Paris School of Economics & UC-Berkeley; Google Scholar), Income Inequality in the United States: A Comment:

Auten and Splinter [Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends, 132 J. Pol. Econ. 2179 (2024)] provide estimates of income inequality in the United States, starting with income observed in tax returns and making adjustments to account for untaxed income. We uncover an error in the allocation of untaxed income. The growing amount of partnership income exempt from taxation (due to increasingly generous fiscal depreciation rules) is allocated by Auten and Splinter (2023) not to owners of partnerships but to owners of sole proprietorships, who are much less rich. This creates a bias in the level and rise of the top 1% income share. We trace the remaining difference with the top 1% income share of Piketty, Saez and Zucman (2018) to assumptions made by Auten and Splinter (2024) about the distribution of untaxed business income, untaxed capital income, and non-cash notional income. After clarifying these assumptions and confronting them with existing evidence, the Auten and Splinter (2024) estimates become similar in level and trend to those of Piketty, Saez and Zucman (2018).

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Lesson From The Tax Court: The Shrinking §469 Exception For Active Participation

Section 469 generally denies taxpayers the ability to use net losses from passive activities to offset income from active activities.  Renting real property is a passive activity.  But there are some exceptions when it comes to renting real estate.  Two are relevant for today’s lesson.  First, taxpayers who are real estate professionals can deduct such losses.  Second, individual taxpayers who actively participate in a rental activity can use up to $25k of net losses to offset other income ... if they are not too rich!

Today we learn how difficult it can be for taxpayers employed in a full-time job to claim they are a real estate professional.  We also learn how second exception is shrinking.  In Timothy L. Foradis and Jessica L. Moore v. Commissioner, T.C. Summ. Op. 2024-13 (July 11, 2024) (Judge Leyden), the married taxpayers attempted to deduct some $22k in net rental losses on their 2020 return.  But they were too rich!  That exception closes when taxpayers have AGI of over $150,000.  This couple had total wage income of just over $161k.  So they were forced to try and sell Mr. Foradis as a real estate professional.  It did not go well.

Details below the fold.

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The Top Five New Tax Papers

There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a paper returning to the list at #5.

1. [1,461 Downloads]  Of Losing Citizenship, Tropes, and Missed Opportunity, by Laura Snyder (Association of Americans Resident Overseas)
2. [675 Downloads]  FATCA is Not the Answer, by Karen Alpert (FixTheTaxTreaty.org), John Richardson (TaxResidentAbroad.com) & Laura Snyder (Association of Americans Resident Overseas)
3. [664 Downloads]  Does the Federal Budget Trump Constitutional Rights?, by Laura Snyder (Association of Americans Resident Overseas)
4. [430 Downloads]  Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, by William Gale (Brookings Institution; Google Scholar), Jeffrey Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
5. [294 Downloads]  Wealth Taxes Under the Constitution: An Originalist Analysis, David Schizer (Columbia) & Steven Calabresi (Northwestern) (reviewed by Mirit Eyal-Cohen (Alabama; Google Scholar) here)

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Chaim's The Common Ownership Tax Strategy

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Danielle A. Chaim (Bar-Ilan; Google Scholar), The Common Ownership Tax Strategy, 101 Wash. U. L. Rev. 501 (2023).

Over the last decade-and-a-half, economists and corporate law scholars have unpacked the consequences of index-based mutual funds’ burgeoning ownership of equity in public companies. In The Common Ownership Tax Strategy, Danielle Chaim synthesizes and extends this literature as it applies to taxation. Chaim argues that mutual funds’ substantial stakes in broad swaths of companies—“diversified-yet-concentrated” ownership—facilitate a tax avoidance strategy that Chaim terms “corporate flooding.” Essentially, firms can simultaneously increase their overall tax avoidance, overwhelming the IRS’s enforcement capacities and driving down the odds that the IRS will detect abusive practices by any one firm. This rising tide of tax avoidance raises all mutual funds’ boats, and the costs are distributional: fund managers and their moderate- to upper-income clientele benefit.

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Appleby: Formulary Apportionment — A New Framework For Personal Income Taxation

Andrew D. Appleby (Stetson; Google Scholar), Formulary Apportionment: A New Framework for Personal Income Taxation, 52 Pepp. L. Rev. __ (2025):

The prevalence of post-pandemic remote working arrangements and increased interstate migration have upended existing personal income taxation regimes.  For decades, the current paradigm proved to be an imperfect but workable means to determine which state has the prevailing claim to impose tax on a particular item of income.  The individual’s state of residence has a residual claim to all the individual’s worldwide income, but defers to the state in which the income is derived if such a state is determinable.  To that end, the state of residence typically provides a credit for income taxes paid on a source basis to other states.  Fundamentally, source trumps residence in the context of personal income taxation.      

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Inaugural Issue: The Journal Of Law Teaching And Learning

The Journal of Law Teaching and Learning has published its inaugural issue, Vol. 1, No. 1 (2024):

• Debra Moss Vollweiler (Nova), The Year of Magical Teaching: Lessons Learned from One Class in Three Modalities, 1 J. Law Teaching & Learning 1 (2024)
• Hillary A. Wandler (Montana; Google Scholar), Pacing Beside the Pool: Coaching Champion Writers to a Strong Finish in Clinic (Without Jumping in and Finishing for Them), 1 J. Law Teaching & Learning 56 (2024).
• Jennifer A. Gundlach (Hofstra) & Jessica R. Santangelo (Hofstra; Google Scholar), An Empirical Study of the Relationship Between Metacognitive Skills, Performance in a Bar Prep Course and Bar Passage, 1 J. Law Teaching & Learning 100 (2024)
• Jane Mitchell (BYU), Legal Education and the Threat Response, 1 J. Law Teaching & Learning 155 (2024)

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Clausing: The Green Transformation And Tax Policy Criteria

Kimberly A. Clausing (UCLA; Google Scholar), The Green Transformation and Tax Policy Criteria: 

The principles of sound tax policy are highly relevant to climate policy evaluation; climate policy design features will have large consequences for fiscal balances, distributional goals, administrative complexity, and efficiency. Domestic climate policy adoption would ideally serve dual goals, both meeting domestic policy criteria and responding to the broader challenge of incentivizing global emissions reductions. The biggest hurdle in global emissions reduction is improving the incentives for ambitious climate policy adoption. In this regard, the move toward carbon pricing accompanied by carbon border adjustments can be a helpful step forward. Toward that end, countries should pursue greater policy alignment, including addressing the measurement and administrative challenges that carbon border adjustments entail. 

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Onwuachi-Willig: Roberts's Revisions: A Narratological Reading Of The Affirmative Action Cases

Angela Onwuachi-Willig (Dean, Boston University; Google Scholar), Roberts's Revisions: A Narratological Reading of the Affirmative Action Cases, 137 Harv. L. Rev. 192 (2023):

In law, one of the stories told by some scholars is that legal opinions are not stories. The story goes: legal opinions are mere recitations of facts and legal principles applied to those facts; they are the end result of a contest between opposing sides that have brought the parties to an objective truth through a lawsuit. In these scholars’ eyes, legal opinions are objective, neutral, disinterested, and free from the emotion of narratives. Yet, as feminist legal scholars, Critical Race scholars, and law-and-humanities scholars have long asserted, legal opinions themselves can also be read as narratives, narratives constructed in a way to offer one version of the facts and the legal principles applied to them as the objective truth.

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Is It Time For Federal Regulation Of The Tax Preparer Industry? New Insights From Legal And Empirical Developments

Jessica A. Magaldi (Pace; Google Scholar), Matthew Reidenbach (James Madison; Google Scholar), Jonathan S. Sales (Bentley) & John S. Treu (West Virginia; Google Scholar), Is It Time for Federal Regulation of the Tax Preparer Industry? New Insights from Legal and Empirical Developments, 106 Marq. L. Rev. 543 (2023):

The tax preparer industry is unusual in that it involves the interpretation of an intricate and complicated tax code, but imposes no minimum requirements of competency because the industry is largely unregulated. A study by the Government Accountability Office (GAO) indicated that unregulated tax preparers commit significantly higher error rates and, based in part on that study’s findings, the Internal Revenue Service (IRS) attempted to regulate the tax preparer industry nationwide under the Registered Tax Return Preparer (RTRP) regime. This RTRP program was invalidated in Loving v. IRS, however, leaving the industry largely unregulated, except in the small minority of states that have enacted tax preparer regulations.

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Borden: Tax-Law Analysis

Bradley T. Borden (Brooklyn; Google Scholar), Tax-Law Analysis:

Tax law has a unique analytical framework, which the nature of tax law requires. In areas of uncertainty, advisors and taxpayers are unable to predict the outcome of some reporting positions with perfect certainty. If a taxpayer takes a reporting position that results in the taxpayer paying less tax at the time a tax return is filed, the taxpayer runs the risk of being required to pay tax later upon an IRS audit. Congress recognizes that there are areas of uncertainty in tax law and only imposes penalties if the authority supporting a reporting position is weak. To determine the strength of a reporting position, a tax advisor must be able to identify and analyze legal authority that relates to the reporting position and determine whether the authority supports the desired reporting position or is contrary to it. 

Bradley T. Borden (Brooklyn; Google Scholar), Tax-Law Analysis Applied to Section 1031 Exchanges & Proximate Business Transactions:

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Law Review And Finding A Place In The Academy

Jenny E. Carroll (Texas A&M; Google Scholar), Law Review and Finding a Place in the Academy, 100 Tex. L. Rev. Online 60 (2021):

Membership on the Texas Law Review created opportunities for me, taught me a lot about editorial processes, and served as a reminder that I was a law outsider. The last of these is the focus for this essay, not because it is the most important or because it stands alone (it doesn’t), but because I believe there are other rooms in which to reminisce fondly about law review. 

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NYU And Georgetown: The Case For Meat Taxes

Dale Jamieson (NYU; Google Scholar), Emma Dietz (NYU) & Katrina M. Wyman (NYU), Designing a "Made in America" Meat Tax, 32  N.Y.U. Envtl. L.J. 157 (2024): 

Agriculture is the fourth largest source of greenhouse gas (GHG) emissions in the United States, and agriculture is the largest national source of methane emissions in particular. Yet regulators have paid far less attention to emissions from agriculture than from transportation and electricity, the top two sources of GHG emissions nationally. This Article seeks to put the idea of a meat tax on the agenda of scholars and climate policymakers as a tool for reducing GHG emissions from agriculture. 

Drawing on scholarship and policy proposals from other jurisdictions, where discussions of taxing meat are further advanced, this Article identifies key issues that would need to be addressed to design a meat tax that could be implemented in the United States. It also recommends an iterative modelling process to devise concrete proposals for an equitable meat tax that would reduce agricultural GHG emissions. A meat tax could be one tool in a basket of policy measures designed to reduce emissions from agriculture. In addition, reducing human consumption of meat would have the ancillary benefits of improving human health and animal welfare, as well as the environment.

Reuben Ilan Siegman (J.D. 2023, Georgetown), Note, Beefing up Our Tax Policy: Why Local Governments Should Tax Red and Processed Meat, 35 Geo. Env't L. Rev. 417 (2023)

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Choi & Jurow Kleiman: Subjective Costs Of Tax Compliance

Jonathan H. Choi (USC; Google Scholar) & Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Subjective Costs of Tax Compliance, 108 Minn. L. Rev. 1255 (2024):

This Article introduces and estimates the “subjective costs” of tax compliance, which are costs of tax compliance that people experience directly and individually. To measure these costs, we conducted a survey experiment assessing how much taxpayers would pay to reduce the unpleasantness associated with filing a tax return. The experiment revealed that taxpayers are more concerned about inadvertent mistakes in their tax filings than the time spent on compliance. Respondents also only ascribed meaningful value to eliminating all tax compliance work; they ascribed essentially no value to marginal time savings. Additionally, taxpayers were indifferent between simplification services offered by a private company versus the government.

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Townsend: Federal Tax Procedure 2024

Jack Townsend, formerly an adjunct tax professor at the University of Houston Law School, has posted to SSRN his annual editions of the Federal Tax Procedure Book:

• Student 2024 Edition (782 pages)
• Practitioner 2024 Edition (1,125 pages)

The text is the same in both editions; the Student Edition has no footnotes; the Practitioner Edition has footnotes (numbering 4,932) fleshing out the text with information beyond that needed for students.

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The Anti-Deference Fallacy

Darien Shanske (UC-Davis; Google Scholar) & Peter D. Enrich (Northeastern) et al., The Anti-Deference Fallacy: 

In 2019, Eversheds Sutherland (US) launched the Reform Administrative Deference (RAD) Coalition, and McDermott Will & Emery launched the Deference Coalition. As of 2024, only the latter appears to still be a going concern. These coalitions argue against deference to state tax administrative judgments. In this column, the authors critique this attack on deference and argue that it is an appropriate part of modern tax administration.

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Zywicki: How Law School Got Woke

National Review Special Section: Defending the Rule of Law (Sept. 2024):

Todd Zywicki (George Mason), How Law School Got Woke:

Students learn to seek outcomes, not justice.

Law schools are the training ground of the next generation of lawyers, judges, and public officials, and for many decades, beginning with the emergence of critical legal studies at Harvard in the 1980s, they have promoted ideas that are fundamentally hostile to the rule of law. For most of that time, this radical thinking remained on the periphery. In recent years, however, “woke law” has taken over the schools. The George Floyd murder and its aftermath, in particular, accelerated the trend. Understanding this anti-rule-of-law philosophy helps to explain the alarming intensification of lawfare tactics against Donald Trump and his supporters today.

The nostrums of woke law reject the rule of law precisely because it attempts to apply fair, neutral principles to everyone (even if it does so imperfectly in practice). The traditional focus on fair processes and procedures should now be subordinated, the thinking goes, to equity in results. Under this worldview, the gauge of an institution’s fairness or justice is not rigorous adherence to formal rules but certain outcomes, such as elimination of racial disparities. Equal formal treatment of all individuals through consistent application of principles of procedural justice violates the concept of equity. The ongoing attack on the criminal-justice system as “systemically racist” and illegitimate illustrates this mind-set. The system is no longer judged according to the traditional notion of a fair trial, which relies on unbiased jurors’ applying the law neutrally to the facts of the case. What matters instead is that the system deliver specific results thought to correct historical injustices. The ideal of impartiality is thus replaced with transparent activism. ...

What, if anything, can be done to reform law schools and pull them back from this abyss? Several practical steps might help rescue the rule of law.

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