TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, January 18, 2019

Tax Policy In The Trump Administration

Friday, January 11, 2019

Tax Policy In The Trump Administration

Friday, January 4, 2019

Tax Policy In The Trump Administration

Friday, December 14, 2018

Tax Policy In The Trump Administration

Friday, December 7, 2018

Tax Policy In The Trump Administration

Friday, November 30, 2018

Tax Policy In The Trump Administration

Friday, November 23, 2018

Tax Policy In The Trump Administration

Friday, November 16, 2018

Tax Policy In The Trump Administration

Friday, November 9, 2018

Tax Policy In The Trump Administration

Friday, November 2, 2018

Tax Policy In The Trump Administration

Friday, October 26, 2018

Tax Policy In The Trump Administration

Friday, October 19, 2018

Tax Policy In The Trump Administration

Friday, October 12, 2018

Tax Policy In The Trump Administration

Friday, October 5, 2018

Tax Policy In The Trump Administration

Friday, September 28, 2018

Tax Policy In The Trump Administration

Friday, September 21, 2018

Tax Policy In The Trump Administration

Friday, September 14, 2018

Tax Policy In The Trump Administration

Friday, September 7, 2018

Tax Policy In The Trump Administration

Friday, August 31, 2018

Tax Policy In The Trump Administration

Friday, August 24, 2018

Tax Policy In The Trump Administration

Friday, August 17, 2018

Tax Policy in the Trump Administration

Friday, August 10, 2018

Tax Policy In The Trump Administration

Friday, August 3, 2018

Tax Policy In The Trump Administration

Wednesday, August 1, 2018

Trump Administration's Trial Balloon On Indexing Capital Gains Is Widely Panned

Following up on my previous posts:

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August 1, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

Friday, July 27, 2018

Tax Policy In The Trump Administration

Friday, July 20, 2018

Tax Policy In The Trump Administration

Friday, July 13, 2018

Tax Policy In The Trump Administration

Friday, July 6, 2018

Tax Policy In The Trump Administration

Friday, June 29, 2018

Tax Policy In The Trump Administration

Friday, June 22, 2018

Tax Policy In The Trump Administration

Friday, June 15, 2018

Tax Policy In The Trump Administration

Friday, June 8, 2018

Tax Policy In The Trump Administration

Friday, June 1, 2018

Tax Policy In The Trump Administration

Friday, May 25, 2018

Tax Policy In The Trump Administration

Hemel: Two Cheers For IRS Guidance On The New State & Local Tax Cap

Following up on yesterday's post, IRS Warns Taxpayers That Regs Will Prevent States From Circumventing $10k S&L Tax Cap With 'Charitable' Contributions:  Daniel Hemel (Chicago), Two Cheers for IRS Guidance on the New SALT Cap:

Yesterday’s notice by the Treasury Department and the IRS that they plan to propose regulations related to the state and local tax (SALT) and charitable contribution deductions has generated lots of news coverage. ...

Let’s start with what the notice did say. First, it revealed — and this is new news — that Treasury and the IRS “intend to propose regulations addressing the federal income tax treatment of certain payments made by taxpayers for which taxpayers receive a credit against their state and local taxes.” That’s apparently a reference to laws already enacted in New JerseyNew York, and Oregon that allow taxpayers to claim a state tax credit for charitable contributions to certain state-affiliated funds, as well as several similar proposals pending in other state legislatures. Interestingly, Treasury and the IRS signaled no intention to issue regulations addressing New York’s new “Employer Compensation Expense Program,” which allows employees to claim a state tax credit if their employer opts into a new payroll tax regime. Even those who are skeptical of the charitable credit arrangement acknowledge that the payroll tax shift “almost certainly” will pass muster under federal tax law, and nothing in yesterday’s notice suggests otherwise.

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May 25, 2018 in IRS News, Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Friday, May 18, 2018

Tax Policy In The Trump Administration

Thursday, May 17, 2018

Top GOP Donors Close Wallets Over Tax Law

CNN, Top GOP Donors Close Wallets Over Tax Law:

As national Republicans scramble their resources for a high-stakes midterm election year, some of the party's biggest and most reliable donors have quietly withheld their support for Senate and House Republican groups out of frustration with the new tax law, CNN has learned.

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May 17, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

GOP Tax Cut Not Why Economy Is Booming: Economists Are Rolling Their Eyes At Candidates’ Claims

Politico, GOP Tax Cut Not Why Economy Is Booming: Economists Are Rolling Their Eyes at Candidates’ Claims:

Republicans facing a tough midterm election season are pointing to the strong economy as proof their new tax law is working its magic.

But as campaign ads tout swelling payrolls and lawmakers spotlight companies handing out employee bonuses, there’s little evidence the tax cuts are already having an impact across the economy, which was already humming even before the law was enacted.

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May 17, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Monday, May 14, 2018

Is Trump’s Tax Incoherence Just A Way To Hurt Amazon?

Amazon logoNew York Times op-ed:  Is Trump’s Tax Incoherence Just a Way to Hurt Amazon?, by Veronique de Rugy (Mercatus Center, George Mason University):

For months, the Trump administration has rightfully been trying to thwart attempts by some European governments to impose a new corporate “digital tax” on American high-tech giants. This campaign to block internet-inspired extraterritorial taxation — taxation of income earned outside of a jurisdiction — is strongly supported by the American business community. But the White House, in an odd twist that turns its European Union digital tax arguments upside down, just argued before the Supreme Court that the same kind of extraterritorial taxation is acceptable when carried out by American states on retail sales on the internet.

Does the left hand of the Trump administration know what the right hand is doing on internet-related tax policy? Are American corporate leaders who have ignored the issue of internet sales taxes about to suffer a key setback in relation to the European Union tax grab? And does sound tax policy go out the window if the president seems to think Amazon is in the cross hairs?

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May 14, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

NY Times: Federal Tax Cuts Leave States In A Bind

New York Times, Federal Tax Cuts Leave States in a Bind:

The federal tax overhaul cut taxes for millions of American families and businesses. But the law also had an unintended effect: raising the state-tax bite in nearly every state that has an income tax.

Now, governors and state legislators are contending with how to adjust their own tax codes to shield their residents from paying more or, in some cases, whether to apply any of the unexpected revenue windfall to other priorities instead.

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May 14, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

Friday, May 11, 2018

Tax Policy In The Trump Administration

Sunday, May 6, 2018

Resistance To The New GOP Tax Law In California, New York, And Illinois

Friday, May 4, 2018

Tax Policy In The Trump Administration

Field: Tax Implications Of The Dynamex Worker Classification Ruling

Following up on Paul Caron's previous post: California Supreme Court Deals Major Blow to Gig Economy Business Model, Treats Workers as Employees Rather than Independent Contractors: Heather Field (UC-Hastings) at Surly Subgroup: Tax Implications of the Recent Dynamex Worker Classification Ruling 

Greetings from San Francisco, the epicenter of the gig economy, where workers-rights advocates are celebrating Monday’s California Supreme Court decision in the Dynamex case. The ruling, which cites an article by my colleague Veena Dubal, is expected to make it harder for businesses in California to classify gig economy workers (and others) as independent contractors rather than employees. As a result, these workers are more likely to be protected by rules about minimum wage, overtime, rest breaks, and other working conditions, although there are open questions about exactly how these rules will apply to gig workers.

But what is good for workers for employment/labor law purposes may not be so good for workers for federal income tax purposes. As readers of this blog know, independent contractors can generally deduct their business expenses above-the-line and may be able to take the new Section 199A deduction equal to up to 20% of qualified business income (significantly reducing the effective tax rate). Employees, on the other hand, can do neither. Thus, the employment/labor law win for workers in the Dynamex case may come with some unexpected and unwanted tax losses for these same workers. This is especially true for workers with non-trivial amounts of unreimbursed business expenses (although the amount of a worker’s unreimbursed expenses may decline if the worker is classified as an employee because California Labor Code 2802 generally requires employers to reimburse significant business expenses of employees).

So, taking tax into account, is independent contractor status or employee status better for workers? This question involves complicated employment/labor law and tax law tradeoffs. For example, despite the tax disadvantages of employee classification mentioned above, employee status can benefit workers for employment tax and tax compliance purposes. Others (including Shuyi Oei here, Shuyi Oei and Diane Ring here, here and here, and Kathleen DeLaney Thomas here) have written extensively on worker classification/taxation topics, and at least some of them have additional articles forthcoming on these topics. I will defer to them for more details as I am not an expert (at least right now) on worker classification or its tax implications. But even I know that, when analyzing the implications of the Dynamex case, it will be important for commentators to consider the tax, not just employment/labor, consequences.

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May 4, 2018 in New Cases, Shuyi Oei, Tax, Tax Policy in the Trump Administration, Tax Profs | Permalink | Comments (0)

Tuesday, May 1, 2018

NY Times: Investment Boom From Trump’s Tax Cut Has Yet to Appear

New York Times, Investment Boom From Trump’s Tax Cut Has Yet to Appear:

Republicans sold the 2017 tax law as “rocket fuel” for American investment and growth, saying that corporations — flush with cash from lower tax rates — would channel money back into the economy by building factories and offices and investing in equipment, which would help companies grow and provide winnings for workers.

Economists say that may happen as companies readjust their spending plans over the coming months to take advantage of the new law, and they note that it is too early to tell how much the tax law will spread into the broader economy.

But, so far, hard evidence of such an acceleration has yet to appear in economic data, which show more of a steady investment roll than a rapid escalation. And while there are pockets of the economy where investment is picking up — among large tech companies and in shale oil business, for example — corporate spending on buying back stock is increasing at a far faster clip, prompting a debate about whether the law is returning money to the overall economy or just rewarding a small segment of investors.

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May 1, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Friday, April 27, 2018

Tax Policy In The Trump Administration

Did Paul Ryan Fire The House Chaplain For Tax Cut Blasphemy?

House ChaplainNew York Magazine, Paul Ryan Allegedly Ousted House Chaplain for Disrespecting His Tax Cuts:

Under the Trump administration, we’ve learned that Paul Ryan is willing to shrug off racist remarks from the president, and has no problem enabling attacks on the rule of law. But one thing that will not be tolerated in Ryan’s House is a man of God suggesting that tax cuts should be fair to all Americans.

When Ryan announced earlier this month that House Chaplain Patrick Conroy would soon step down, he gave no explanation for his exit, and many assumed he was leaving voluntarily. But anger erupted on the Hill in recent days when the Jesuit priest told lawmakers that Ryan was pushing him out, and he didn’t know exactly why. ...

On Thursday Democratic sources pointed to a potential explanation: a prayer Conroy offered on November 6, 2017, when the House was on the verge of passing the GOP tax bill.

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April 27, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Thursday, April 26, 2018

GOP Tax Reform Law Continues To Sink In Polls

Real Clear Politics Poll Average, Trump, Republicans' Tax Reform Law:

RCP

April 26, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (1)

Friday, April 20, 2018

Tax Policy In The Trump Administration

Desai: Tax Reform, Round One

Mihir A. Desai (Harvard), Tax Reform, Round One:

The Trump Administration's successful efforts at tax legislation stand out as the primary achievement of its first year. But the hurried, largely furtive drafting, and rush to passage at the end of 2017, have helped obscure the new tax regime’s real impact. Much of the reporting and debate has focused on the politicking that went into passing the bill, and the purported effect on the federal budget deficit. That has diverted attention from the true significance of the Tax Cuts and Jobs Act (TCJA). Instead of simply changing rates and addressing loopholes, the TCJA represents a structural change to the income tax and, consequently, will lead to major changes in behavior. Teasing out those details reveals that the new law is likely to generate different incentives for economic growth than commonly claimed, unwanted complexities that invite still further gaming of the tax code (which the reforms themselves were intended to minimize), and larger deficits than forecast. If the past is a guide, and we can hope it is, the TCJA will be a precursor to further reforms that correct these shortcomings and address important distributional and fiscal concerns.

In the context of other legislation during the past 40 years, the magnitude of this tax reform is unremarkable when framed relative to gross domestic product. Indeed, the 1981 tax bill reduced federal revenue by an amount equaling more than twice the share of the estimated reduction in the Trump edition. But no reform during the last four decades approximates the scope and depth of the TCJA’s changes to the overall structure of the tax system.

Harvard 1

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April 20, 2018 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)