28th Annual Critical Tax Conference At Wisconsin

Wisconsin hosts the 28th Annual Critical Tax Conference today and tomorrow (program): 

Friday 

9:00 AM: Welcome 

• Dan Tokaji (Dean, Wisconsin) 

9:10 - 10:15 AM: Panel 1

• Emily Cauble (Wisconsin; Google Scholar) (moderator) 
• Ariel Jurow Kleiman (USC; Google Scholar), Shayak Sarkar (UC-Davis; Google Scholar) & Emily Satterthwaite (Georgetown; Google Scholar), Taxing Domestic Employers
• Lauren Shores Pelikan (Missouri-Columbia), Toddlers, Investors and Tax Policy
  • Discussant: Gaga Gondwe (Wisconsin; Google Scholar) (discussant) 
• Kerry Ryan (St. Louis), Mothers in Jails: A Taxing Issue
  • Discussant: Diane Klein Kemker (Southern) (discussant) 

10:30 - 12:00 PM: Panel 2

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Oei Presents Global Tax Decluttering Today At Missouri

Shu-Yi Oei (Duke; Google Scholar) presents Global Tax Decluttering, 77 U.C. L.J. __ (2025) (with Diane Ring (Boston College; Google Scholar)) at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

Major global players—most prominently the OECD and European Union—have recently begun advocating that countries “declutter” their tax systems to tidy up, repeal, or eliminate pre-existing domestic anti-abuse tax rules. The reasoning is that these country-level rules are now duplicative or burdensome in light of a new global tax agreement spearheaded by the OECD and G20 and multilaterally agreed upon in 2021 by over 140 countries. Yet, this new multilateral regime is still in the process of being rolled out and is entirely untested.

In this article, we examine this recently emergent “tax decluttering movement” and present an analytical framework for understanding it. We show how the recent push for tax decluttering belies a convergence of interests among several powerful actors (international organizations, certain countries and regional blocs, and businesses interests).

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Clarke Presents Apportioned Direct Taxes Today At Columbia

Conor Clarke (Washington University; Google Scholar) presents Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

The Constitution requires that Congress apportion any “direct” tax among the states by population. This once-dormant provision is now the most important constitutional limitation on Congress’s taxing power. Last year, in Moore v. United States, the Supreme Court seriously considered, for the first time in decades, whether to invalidate an Act of Congress as an unapportioned direct tax. While the law survived, Moore signals a new era in which scholars and policymakers must again take apportionment seriously. Yet the apportionment requirement remains poorly understood.

This Article provides a new account of apportionment by examining how Congress and Treasury actually designed and implemented apportioned direct taxes. 

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Next Week’s Tax Workshops

Monday, April 21: Conor Clarke (Washington University; Google Scholar) will present Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Wednesday, April 23: Shu-Yi Oei (Duke; Google Scholar) will present Global Tax Decluttering, 77 U.C. L.J. __ (2025) (with Diane Ring (Boston College; Google Scholar)) as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

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Clarke Presents Apportioned Direct Taxes Today At Missouri

Conor Clarke (Washington University; Google Scholar) presents Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

The Constitution requires that Congress apportion any “direct” tax among the states by population. This once-dormant provision is now the most important constitutional limitation on Congress’s taxing power. Last year, in Moore v. United States, the Supreme Court seriously considered, for the first time in decades, whether to invalidate an Act of Congress as an unapportioned direct tax. While the law survived, Moore signals a new era in which scholars and policymakers must again take apportionment seriously. Yet the apportionment requirement remains poorly understood.

This Article provides a new account of apportionment by examining how Congress and Treasury actually designed and implemented apportioned direct taxes. 

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Winchester Presents A Tax Policing Paradox Today At Columbia

Richard Winchester (Brooklyn) presents A Tax Policing Paradox at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

If the government audits more taxpayers, that generally leads to higher levels of taxpayer compliance. However, this does not always happen. If the government audits taxpayers and fails to detect a specific form of tax evasion, taxpayer compliance will fall in two respects. The audited taxpayers will continue to engage in the practice that went unnoticed. In addition, as word spreads that the risk of detection or penalty is low, other taxpayers will start to engage in the same form of tax evasion.

There is one specific form of tax evasion that is unlikely to receive the scrutiny it deserves even as the Internal Revenue Service gears up to spend a huge injection of money to police taxpayers more frequently. It is often called the S corporation employment tax dodge and it works like this. If a closely held S corporation has an owner who also works for the firm, that individual can access the company’s earnings in two ways: as compensation for their work or as a distribution of profits. The main difference is that distributions are not subject to employment tax, while compensation is. So, the low-tax option is for the employee-owner to work for free and to cause the firm to pay them a distribution that is nothing more than disguised compensation.

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Good Governance Is Taxing: The Implications Of Tax Policy For Separation Of Powers And The Major Questions Doctrine

Samantha Strimling (J.D. 2024, Harvard), Note, Good Governance Is Taxing: The Implications of Tax Policy for Separation of Powers and the Major Questions Doctrine, 61 Harv. J. on Legis. 421 (2024): 

Among the significant developments of the Roberts Court so far has been the announcement of the major questions doctrine, which conditions “major” agency action on a clear statement from Congress. Much of the commentary on the doctrine has framed it as a tool for reprimanding perceived agency overreach. This Note challenges that framing by focusing on tax policy, an area of governance in which several broad assertions of agency power have not been challenged by courts on separation of powers grounds. This Note argues that this phenomenon is due to Congress’s own engagement in the realm of tax policy. First, Congress takes note of agency action and acts correctively where it disagrees. 

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Next Week’s Tax Workshops

Monday, April 14: Richard Winchester (Brooklyn) will present A Tax Policing Paradox as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love.

Wednesday, April 16: Conor Clarke (Washington University; Google Scholar) will present Apportioned Direct Taxes (with Ari Glogower (Northwestern; Google Scholar)) as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

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Viswanathan Presents Damage Award Taxation And Distributive Justice Today At Duke

Manoj Viswanathan (UC Law-SF; Google Scholar) presents Damage Award Taxation And Distributive Justice, 109 Cornell L. Rev. __ (2025), at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

Damage awards are often intended to make plaintiffs whole, yet their tax treatment often undermines this goal. Plaintiffs frequently face unfavorable tax consequences that reduce the net value of their awards, leaving them worse off relative to the position they would have occupied absent the defendant’s wrongful conduct. Despite their significant impact, the tax costs of damage awards remain an overlooked issue in both legal scholarship and judicial decision-making. 

This Article makes several contributions to the discourse on damage award taxation. First, it develops a novel taxonomy of unfavorable tax consequences, systematically categorizing the ways in which tax liabilities can undermine “make whole” remedies. While prior scholarship has primarily focused on the effects of progressive taxation in employment discrimination claims, this Article demonstrates that unfavorable tax consequences affect a much broader range of legal claims.

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Sarin Presents Broken Budgeting Today At UC Law-SF

Natasha Sarin (Yale; Google Scholar) presents Broken Budgeting (with Safia Sayed (J.D. 2025, Yale)) at UC Law-SF today as part of its Tax Policy Colloquium hosted by Manoj Viswanathan:

As peacetime deficits rose over the course of the last half century, policymakers searched for tools to assess how close—or far off new budget, tax, and spending proposals would bring them to fiscal sustainability. This search led to the birth of modern scorekeeping, a complex and highly technical exercise undertaken by neutral government analysts known as scorekeepers. Because its origins are tied to rising deficits, scorekeepers are governed by rules that focus their attention on myopic cost/benefit analysis, rather than long-term policy evaluation. Over the years, many have criticized the process and questioned the accuracy of scores in particular arenas.

This Article offers a more provocative and fulsome take. While ostensibly neutral, the primacy of scorekeeping and scorekeepers has created impediments to legislating a progressive vision of government. Progressive policymaking has at its core government interventions that give society the ability to reap benefits down the line—like investments in children, or in combatting climate change—benefits that accrue in the long-term and are difficult to quantify.

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Kern Presents The Hole In The Global Minimum Tax Today At Missouri

Adam Kern (San Diego; Google Scholar) presents The Hole in the Global Minimum Tax at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

This Article shows that the global minimum tax might make tax competition more intense. While the global minimum tax restricts competition for profit, it amplifies competition for investment. This Article provides the first analysis of that trade-off, suggesting surprising reforms to the global minimum tax and illuminating broader issues in tax policy and legal theory.

Conclusion
The global minimum tax is an ambitious effort to regulate international tax competition. Most tax scholars acknowledge that its carve-out for routine profit limits what it can achieve. Yet they remain optimistic: They believe that the global minimum tax will meaningfully restrict profit-shifting while leaving competition for investment, at worst, unaffected. On this view, even an imperfect reform represents progress.

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Suarez Presents Discussion On The GAAR Today At Toronto

Steve Suarez (Borden Ladner Gervais LLP) presents a Submission to Deputy Prime Minister Chrystia Freeland Regarding Post-Budget Comments on the General Anti-Avoidance Rule (GAAR) at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

The Canadian Chamber of Commerce is pleased to share post-budget comments on the general anti-avoidance rule (GAAR). Written by Steve Suarez, co-chair of the Canadian Chamber’s Economics and Taxation Committee and a partner in the Toronto office of Borden Ladner Gervais LLP, our submission:

• Proposes steps to achieve the GAAR that Parliament wants, which would produce “’reasonably predictable result[s]’ so that taxpayers can comply with the rule, and the administration and the courts can easily apply it”.
• Highlights the practical reality that virtually any commercial transaction done in something other than the least tax-efficient manner possible will come within the definition of GAAR, which contravenes Parliament’s original intention.
• Discusses suggestions for better targeting GAAR on those cases of abusive tax avoidance which GAAR is meant to address while minimizing the potential for administrative over-reach, reducing the number of GAAR disputes before the courts, and minimizing the cost and complexity of resolving those that remain.

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Stuntz Presents Using A Gravity Model To Predict Cross-Border Tax Avoidance Today At Georgetown

Lori Stuntz (IRS) presents Using a Gravity Model to Predict Cross-Border Tax Avoidance (with Michael Udell (IRS, RAAS)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

International trade economists use gravity models to explain cross-border flows of goods and services across features of the two countries that either encourage (mass, or size) or discourage (distance) these flows. We repurpose this concept to measure the attractiveness for cross-border tax avoidance.

Our approach recasts the gravity model mass concept as a composite measure that includes the withholding tax rate (WHT) on payments between countries, ownership requirements associated with each WHT, and capital gains taxes imposed by the destination country. The distance term becomes measures of tax administration transparency across the border (with less transparency increasing the attractiveness for crossborder tax avoidance) and an index that measures regulator quality in each country. Unlike the classical gravity equation, which is measured as the attraction across two masses, this repurposed gravity equation for tax avoidance is not limited to an attraction across a single border. Instead, we develop a framework to measure the attraction across multiple borders as a sequence. An important feature of our model is that the order of the countries in a sequence matters.

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Moon Presents Manufacturing Investment And Employee Earnings Today At Columbia

Terry S. Moon (University of British Columbia; Google Scholar) presents Manufacturing Investment and Employee Earnings: Evidence from Accelerated Depreciation (with Yige Duan (Shanghai Jiao Tong University; Google Scholar)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

This paper assesses the effects of a tax policy designed to induce manufacturing investment on employee earnings. Following the accelerated depreciation policy in Canada, which lowers the costs of acquiring machinery or equipment, treated firms increase manufacturing investment and employment. However, earnings of incumbent workers at treated firms decrease on average, primarily driven by displaced or low fixed effects workers. Furthermore, both the skill ratio and skill premium increase within firm, providing evidence of skill-biased technological change. Our findings suggest that a tax policy promoting manufacturing investment may contribute to increases in wage inequality both within firm and across firms.

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Next Week’s Tax Workshops

Monday, April 7: Terry S. Moon (British Columbia; Google Scholar) will present Manufacturing Investment and Employee Earnings: Evidence from Accelerated Depreciation (with Yige Duan (Shanghai Jiao Tong; Google Scholar) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Tuesday, April 8: Lori Stuntz (IRS) will present Using a Gravity Model to Predict Cross-Border Tax Avoidance (with Michael Udell (IRS)) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle and Day Manoli. 

Wednesday, April 9: Natasha Sarin (Yale; Google Scholar) will present as part of the UC Law San Francisco Tax Policy Colloquium. If you would like to attend, please contact Manoj Viswanathan. 

Wednesday, April 9: Adam Kern (San Diego; Google Scholar) will present The Hole in the Global Minimum Tax as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Wednesday, April 9: Steve Suarez (Borden Ladner Gervais, Toronto) will present as part of the Toronto James Hausman Tax Law and Policy Workshop Series. If you would like to attend, please contact Ben Alarie. 

Thursday, April 10: Manoj Viswanathan (UC Law-SF; Google Scholar) will present Damage Award Taxation And Distributive Justice, 109 Cornell L. Rev. __ (2025), as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

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Nadler Presents The Case For Taxing Inbound Portfolio Investment Today At Boston College

Hillel Nadler (Wayne State; Google Scholar) presents The Case for Taxing Inbound Portfolio Investment at Boston College today as part of its Tax Policy Collaborative hosted by James Repetti and Diane Ring:

The tax rules governing investment in the United States offer very favorable tax treatment to foreign investors: the typical foreign investor pays no U.S. tax on passive investment in the United States. These tax rules have been shaped by the assumption that the United States needs to attract scarce financial capital to fill the gap between domestic saving and investment. But that assumption is wrong; global financial capital is not scarce. Over the past three decades, regressive economic policies abroad have suppressed consumption and led to an overabundance of foreign saving. What is more, instead of financing productive investment, the flow of that saving to the United States has financed unproductive consumption, leading to a widening trade deficit and helping fuel financial instability. 

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Galle Presents How To Tax The Rich: Options For 2025 And Beyond Today At Toronto

Brian Galle (Georgetown; Google Scholar) presents Paper with Link at School today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

How should we pay for the future? This monograph describes and compares major proposals to reform federal individual income and transfer (that is, estate and gift) taxes. The Biden administration and senior Senate Democrats have outlined plans for a “minimum income tax” on multi-millionaires in which very wealthy households (generally those worth over $100 million) would be taxed on the value of appreciated but unsold property. The administration’s proposal was dubbed the Billionaire Minimum Income Tax, or BMIT. Yet some other Senators, and advocates outside government, have pointed to possible constitutional limits on that proposal, as well as offering critiques of its economic and political merits.

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Harpaz Presents Artificial Intelligence And Taxpayer Entity Today At Duke

Assaf Harpaz (Georgia; Google Scholar) presents Artificial Intelligence and Taxpayer Entity at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak: 

Artificial intelligence (AI) is changing the world and presents numerous challenges to legal and regulatory frameworks. The evolving, complex yet still ambiguous concept demands rethinking longstanding doctrines at risk of obsoleteness. These tensions are highlighted in federal income taxation, which generally compartmentalizes taxpayers into individuals and business entities. Technological developments such as generative AI upend these conceptions given their capacity to create value and operate autonomously, interacting with the economy in ways that combine human and non-human attributes.

Under current U.S. law, even the most advanced AI models are not directly subject to the income tax regime, as they are neither individuals nor separate business entities. AI is poised to dramatically reshape the tax base by altering both the sources of income (from humans to robots) and the type of income (from labor to capital) that is subject to tax.

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Kleiman & Sarkar Present Taxing Nannies Today At Missouri

Ariel Jurow Kleiman (USC; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar) present Taxing Nannies, 110 Iowa L. Rev. 111 (2024) (with Emily A. Satterthwaite (Georgetown; Google Scholar)) (reviewed by Michelle Layser (San Diego; Google Scholar) here and Susan Morse (Texas; Google Scholar) here), at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

Nannies in the United States often work long hours for low wages and fear retaliation if they complain. This precarity is exacerbated by nannies working informally, or “off the books,” keeping their work secret from state and federal tax agencies, as well as employment and labor agencies. Yet we have little understanding of how nannies navigate the tax reporting that renders them formal or informal.

This Article investigates nannies’ preferences for or against formal employment and tax reporting, the reasons behind such preferences, and how such preferences correspond to nannies’ relationships with their employers and legal institutions more broadly. The Article employs a multi-method research approach that includes an original and innovative survey of nannies and an analysis of nannies’ tax-related posts on the online forum Reddit. To supplement this research, the Article also discusses interviews with fifteen subject matter experts regarding industry norms, common challenges nannies face, and policy reforms.

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Perry Presents Black Power Scorecard Today At Georgetown

Andre M. Perry (Brookings Institution) presents Black Power Scorecard: Measuring the Racial Gap and What We Can Do to Close It (Metropolitan Books 2025) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

Historically, Black Americans’ quest for power has been understood as an attempt to gain equal protections under the law. But power in America requires more than basic democratic freedoms. It is inextricably linked with economic influence and ownership―of one’s self, home, business, and creations.

Andre M. Perry draws on extensive research and analysis to quantify how much power Black Americans actually have. Ranging from property, business, and wealth to education, health, and social mobility, Black Power Scorecard moves across the country, evaluating people’s ability to set the rules of the game and calculating how that translates into the ultimate means of power―life itself, and the longevity of Black communities. Along the way, Perry identifies woefully overlooked areas of investment that could close the racial gap and benefit everyone.

An expansive take on power supported by documentation and data, Black Power Scorecard is a fresh contribution to the country’s reckoning with structural inequality, one that offers a new approach to redressing it.

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Metcalfe Presents A Welfare Analysis Of Policies Impacting Climate Change Today At Columbia

Robert Metcalfe (Columbia; Google Scholar) presents A Welfare Analysis of Policies Impacting Climate Change (with Robert W. Hahn (Oxford; Google Scholar), Nathaniel Hendren (MIT; Google Scholar) & Ben Sprung-Keyser (Penn; Google Scholar)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love: 

What are the most effective ways to address climate change? This paper extends and applies the marginal value of public funds (MVPF) framework to help answer this question. We examine 96 US climate-related policy changes studied over the past 25 years. These policies span subsidies (wind, residential solar, electric and hybrid vehicles, vehicle retirement, appliance rebates, weatherization), nudges (marketing, energy conservation), and revenue raisers (fuel taxes, cap and trade). For each policy, we draw upon quasi-experimental or experimental evaluations of its causal effects and translate those estimates into an MVPF. We apply a consistent translation of these behavioral responses into measures of their associated externalities and valuations of those externalities. We also provide a new method for incorporating learning-by-doing spillovers. The analysis yields three main results: First, subsidies for investments that directly displace the dirty production of electricity, such as production tax credits for wind power and subsidies for residential solar panels, have higher MVPFs (generally exceeding 2) than all other subsidies in our sample (with MVPFs generally around 1). 

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Sarkar Presents Taxing Surveillance Of Citizenship Today At San Diego

Shayak Sarkar (UC-Davis; Google Scholar) presents Taxing Surveillance of Citizenship at San Diego today as part of its Tax Law Speaker Series hosted by Michelle Layser:

This Article examines how migrants are recognized in law, and to what end. Legal recognition of migrants—through noncitizens’ Individual Taxpayer Identification Numbers, for example—does not provide them with legal status as conventionally understood, much less citizenship. Yet rather than “living in the shadows,” migrants use ITINs to facilitate tax compliance and visibility. Such use elides the costs of extreme privacy in our data age but may attract the extreme surveillance surrounding noncitizens across legal statuses. Presidential pressure on the IRS to disclose taxpayer information to the Department of Homeland Security vindicates surveillance fears. This pressure asserts an unprecedented place for the IRS in federal immigration enforcement, despite the failed protests of the agency’s now-demoted chief counsel.

The membranes between beneficial and punitive systems are thin, but that need not render them fragile. For decades, even in periods of aggressive immigration enforcement, the IRS and its lawyers guarded the information of all filers, regardless of immigration status. Immigration authorities (and Congressional proposals for comprehensive reform) also viewed tax compliance as a favorable factor for status adjustments. Status might come to those who filed.

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Harpaz Presents Artificial Intelligence And Taxpayer Entity At Case Western

Assaf Harpaz (Georgia; Google Scholar) presented Artificial Intelligence and Taxpayer Entity at Case Western yesterday as part of its Journal of Law, Technology & the Internet (JOLTI) Symposium (agenda):

Artificial intelligence (AI) is changing the world and presents numerous challenges to legal and regulatory frameworks. The evolving, complex yet still ambiguous concept demands rethinking longstanding doctrines at risk of obsoleteness. These tensions are highlighted in federal income taxation, which generally compartmentalizes taxpayers into individuals and business entities. Technological developments such as generative AI upend these conceptions given their capacity to create value and operate autonomously, interacting with the economy in ways that combine human and non-human attributes.

Under current U.S. law, even the most advanced AI models are not directly subject to the income tax regime, as they are neither individuals nor separate business entities. AI is poised to dramatically reshape the tax base by altering both the sources of income (from humans to robots) and the type of income (from labor to capital) that is subject to tax.

Continue reading

Next Week’s Tax Workshops

Monday, March 31: Robert Metcalfe (Columbia; Google Scholar) will present A Welfare Analysis of Policies Impacting Climate Change (with Robert W. Hahn (Oxford; Google Scholar), Nathaniel Hendren (MIT; Google Scholar) & Ben Sprung-Keyser (Penn; Google Scholar))  as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Monday, March 31: Shayak Sarkar (UC-Davis; Google Scholar) will present Taxing Surveillance of Citizenship as part of the San Diego Tax Law Speaker Series. If you would like to attend, please contact Michelle Layser. 

Tuesday, April 1: Andre M. Perry (Brookings Institution) will present Black Power Scorecard: Measuring the Racial Gap and What We Can Do to Close It (Metropolitan Books 2025) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle or Day Manoli. 

Wednesday, April 2: Ariel Jurow Kleiman (USC; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar) will present Taxing Nannies, 110 Iowa L. Rev. 111 (2024) (with Emily A. Satterthwaite (Georgetown; Google Scholar)), as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

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Shay Presents Does The UTPR Violate OECD Model Capital Ownership Non-discrimination? Today At Toronto

Stephen Shay (Boston College; Google Scholar) presents The UTPR and Double Tax Treaties: Does the UTPR Violate OECD Model Capital Ownership Non-discrimination? at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

This paper considers whether a tax imposed under the Inclusive Framework’s Pillar 2 undertaxed profits rule (UTPR) on a constituent entity (CE) of a multinational group within the scope of Pillar 2 would be inconsistent with the capital ownership paragraph of the OECD Model Convention nondiscrimination article. The better answer is that the UTPR would not violate capital ownership non-discrimination

Conclusion
Pillar 2 does not sit comfortably alongside bilateral tax treaties. There is interpretative room to apply them in harmony with each other and that yields the better result from a legal and policy perspective. The better answer is that the UTPR does not discriminate in a manner that is within the intended scope of OECD Article 24(5).

Pillar 2 is an imperfect yet successful example of modern global coordination among a broad group of countries. It is innovative and advances the overall welfare of developed and developing countries, though the former are no doubt favored. 

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Holtzblatt Presents New Performance Metrics For A New IRS Today At Georgetown

Janet Holtzblatt (Tax Policy Center) presents Measuring Success: New Performance Metrics for a New Internal Revenue Service at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

The Inflation Reduction Act (IRA) of 2022 enacted an $80 billion 10-year investment in the Internal Revenue Service on top of the agency’s regular annual appropriations. Although Congress cut the IRA funding by over 25 percent the following year, the agency has maintained its commitment to the transformative IRS Inflation Reduction Act Strategic Operating Plan to bring the agency into the 21st century. That plan includes detailed objectives and a summary of what success would look like for each new initiative. But it does not provide specific metrics for evaluating the agency’s performance in achieving many of those goals.

Well-defined performance metrics will provide insight into the overall return on the now nearly $60 billion investment, inform the IRS’s choices between various programs, and identify ways to improve a program’s effectiveness.

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Gómez Presents Coin Taxes Today At Columbia

Luís Carlos Calderón Gómez (Cardozo; Google Scholar) presents Coin Taxes, 16 U.C. Irvine L. Rev. __ (2025) (with Mitchell Kane (NYU; Google Scholar)), at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

New kinds of private money are thriving, with increasing circulation, growing acceptance, and rapid technological innovation. But this new suffers from an old problem: bank runs. Bank runs can destabilize even well-regulated and healthy banks, and their contagion can catalyze and amplify a system-wide financial crisis. Since the 1930s, policymakers have sought to protect our financial system from bank runs through public deposit insurance and other emergency response mechanisms. Those historically effective policy tools, however, are critically unavailable or ineffective in the context of these new types of money. As a result, these new types of money remain critically vulnerable to bank runs, and the potential for financial contagion from their failure poses catastrophic risks to society.

In light of traditional legal tools’ inadequacy, the Article proposes an unconventional solution to the financial contagion risks these new kinds of money impose on society writ-large: taxation.

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Next Week’s Tax Workshops

Monday, March 24: Luís Carlos Calderón Gómez (Cardozo; Google Scholar) will present Coin Taxes, 16 U.C. Irvine L. Rev. __ (2025) (with Mitchell Kane (NYU; Google Scholar)), as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Tuesday, March 25: Janet Holtzblatt (Tax Policy Center) will present Measuring Success: New Performance Metrics for a New Internal Revenue Service as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle and Day Manoli. 

Thursday, March 27: Stephen Shay (Boston College; Google Scholar) will present The UTPR and Double Tax Treaties: Does the UTPR Violate OECD Model Capital Ownership Non-discrimination? as part of the Toronto James Hausman Tax Law and Policy Workshop Series. If you would like to attend, please contact Ben Alarie. 

Friday, March 28: Assaf Harpaz (Georgia; Google Scholar) will present Artificial Intelligence and Taxpayer Entity as part of the Case Western Journal of Law, Technology & the Internet (JOLTI) Symposium. If you would like to attend, please register here. 

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Tax Workshops: Zhang At Missouri, Thomas At Duke, Evans At Toronto

Alex Zhang (Emory; Google Scholar) presents The Other Taxation at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

Native Americans pay taxes. The territories do not. Both live with the legacy of American imperialism. Both seek the elusive fiscal self-governance and autonomy promised by Congress. The Supreme Court—through preemption, the plenary-power doctrine, and tax interpretive principles—has hollowed out the Native tax base, forcing tribes to compete fiercely with Congress, states, and localities for revenue. By contrast, territorial residents pay no federal or state taxes by edicts of Congress and geography. This Article argues that the conceptual underpinnings of the divergent tax treatment of tribes and territories are unsound. Under a more robust vision of fiscal autonomy, judicial limits on Native tax sovereignty are misguided. The territories’ wide latitude in designing revenue streams merits heightened scrutiny. While imperfect, a uniform, nonrefundable federal income-tax credit for tribal and territorial taxes paid is a promising path forward. This Article thus provides the first systematic study of subfederal taxation beyond states and localities—the “other” American taxation often overlooked in scholarship.

Kathleen DeLaney Thomas (North Carolina; Google Scholar) presents Tax and the Myth of the Family Farm, 110 Iowa L. Rev. ___ (2024), at Duke tomorrow as part of its Tax Policy Seminar hosted by Larry Zelenak:

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Tax Workshops: Strain At Georgetown, Kysar At San Diego

Michael Strain (American Enterprise Institute) presents Protectionism is Failing and Wrongheaded: An Evaluation of the Post-2017 Shift Toward Trade Wars and Industrial Policy at Georgetown as part of the Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli. 

The Trump–Pence and Biden–Harris administrations enthusiastically embraced protectionism. Each administration explicitly argued for a break from the bipartisan consensus of recent decades that has been generally supportive of free trade and of allowing markets to shape US industrial and employment composition. But the protectionism of the Trump and Biden administrations has not succeeded and likely will not succeed at meeting its goals: they have caused manufacturing employment to decline, not to increase; they have not reduced the overall trade deficit; they have not led to a substantial decoupling of the US and Chinese economies. More fundamentally, the goals that have not been met are wrongheaded: policymakers should not pay inordinate attention to manufacturing employment, and the trade deficit is a poor guide to economic policy. Finally, these wrongheaded goals often rest on fundamental economic misperceptions: free trade is not a policy to create jobs; it is a policy to increase productivity, wages, and consumption. The balance of the evidence suggests that free trade, including trade with China, has not reduced employment. Of course, trade has been disruptive. But populist policies adopted in response will hurt workers, not help them.

Rebecca Kysar (Fordham; Google Scholar) delivers the annual Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego today on The Stakes of the Global Tax Deal For International Economic Governance, 77 Tax L. Rev. ___ (2024) (reviewed by Adam Rosenzweig (Washington University) here):

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Next Week’s Tax Workshops

Tuesday, March 18: Michael Strain (American Enterprise Institute) will present Protectionism is Failing and Wrongheaded: An Evaluation of the Post-2017 Shift toward Trade Wars and Industrial Policy as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle or Day Manoli. 

Tuesday, March 18: Rebecca Kysar (Fordham; Google Scholar) will deliver the Richard Crawford Pugh Lecture on Tax Law & Policy at San Diego on The Stakes of the Global Tax Deal For International Economic Governance. If you would like to attend, please register here. 

Wednesday, March 19: Alex Zhang (Emory; Google Scholar) will present The Other Taxation as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Wednesday, March 19: Heather Evans (Canadian Tax Foundation), Tim Fitzsimmons (Fasken, Martineau, DuMoulin) & Josh Jones (Blakes, Cassels & Graydon) will present a new paper as part of the Toronto James Hausman Tax Law and Policy Workshop Series. If you would like to attend, please contact Ben Alarie. 

Thursday, March 20: Kathleen DeLaney Thomas (North Carolina; Google Scholar) will present Tax and the Myth of the Family Farm, 110 Iowa L. Rev. ___ (2024), as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

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Tax Workshops: Roh At Georgetown, Maynard At Missouri, And Holderness At UC-San Francisco

Sean Roh (IRS) presents Staying on the Wagon: Estimating Indirect Deterrence Effects from Filing and Payment Compliance Programs at Georgetown as part of its Georgetown Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) presents Penalizing Precarity, 123 Mich. L. Rev ___ (2024) (with Clinton Wallace (South Carolina; Google Scholar) (reviewed by Emily Satterthwaite (Georgetown; Google Scholar) here), at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

Retirement policy in America is oriented around 401(k) plans and other employer-sponsored savings plans, which together will receive a whopping $1.5 trillion in tax subsidies over the next decade. This Article uncovers a harmful flaw in the policy governing withdrawals made prior to reaching retirement age: an unnoticed gap between the rules governing plan distributions and the rules imposing penalties on employees in certain situations. Employees are generally required to seek approval from their plan administrator to receive a “hardship distribution.” These requests are granted for employees who face an “immediate and heavy financial need,” such as eviction or an unexpected medical expense. However, even with this approval, these distributions are frequently subject to an “early withdrawal penalty,” under a separate regime that is not coordinated with the hardship distribution rules.

We document instances of employees who were able to survive financial calamity because of a hardship distribution only to learn that they now face a tax penalty—resulting in another cash crunch. Retirement plans disburse over $16 billion in hardship withdrawals each year, and the funds go to the most financially precarious households—ones that have fewer assets, lower incomes, and are more likely to be Black or Hispanic. Recognizing the existence of this gap also exposes a fundamental flaw in retirement savings policy: under the existing rules, some workers are made worse off by trying to make use of 401(k) plans. This Article introduces several reforms to protect against penalizing financial precarity by integrating hardship distributions with the early withdrawal penalty regime. We also explore broader reforms to effectively reduce financial precarity among lower-income and lower-asset households.

Hayes R. Holderness (Richmond) presents Multistate Tax Customs at UC-San Francisco today as part of its Tax Policy Colloquium hosted by Manoj Viswanathan:

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Tax Workshops: Daly At Oxford, Zhang At Columbia

Stephen Daly (King's College London; Google Scholar) presents The Rule of Law in Comparative Tax Administration at the Oxford University Centre for Business Taxation:

That the Rule of Law is an “essentially contested concept,” like Democracy, Human Rights and Legitimacy, prompts scholarly inquiry. Many scholars discuss the Rule of Law at a level of abstraction, sometimes entirely divorced from any particular field of law. Whilst there is value in such analyses, so too is there a place for sector specific studies of how the Rule of Law manifests itself. For this purpose, the rules governing tax administration in Germany, the UK and the US, specifically with regards those tax authorities’ management powers and collection powers, are chosen to articulate several arguments about the Rule of Law. First that Rule of Law compliance should be judged against the system as a whole as opposed to discrete aspects of a given system. Secondly, that Germany and the UK do exhibit fidelity to different accounts of the Rule of Law. Thirdly, nevertheless, that administrative tax systems can be differently constituted does not mean that they subscribe to different accounts of the Rule of Law.

Alex Zhang (Emory; Google Scholar) presents The Other Taxation at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

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Next Week’s Tax Workshops

Monday, March 10: Stephen Daly (King's College London; Google Scholar) will present The Rule of Law in Comparative Tax Administration at the Oxford University Centre for Business Taxation. If you would like to attend, please register. 

Monday, March 10: Alex Zhang (Emory; Google Scholar) will present The Other Taxation as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love.

Tuesday, March 11: Sean Roh (IRS) will present Staying on the Wagon: Estimating Indirect Deterrence Effects from Filing and Payment Compliance Programs as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle or Day Manoli. 

Wednesday, March 12: Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) will present Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar) (reviewed by Emily Satterthwaite (Georgetown; Google Scholar) here), as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Wednesday, March 12: Hayes R. Holderness (Richmond) will present Multistate Tax Customs as part of the UC-San Francisco Tax Policy Colloquium. If you would like to attend, please contact Manoj Viswanathan. 

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Tax Workshops: McCormack At Missouri, Bank At Duke

Shannon W. McCormack (University of Washington) presents America's Failure to Rescue Parents: A Narrative of Inequitable Tax "Reform", 76 U.C. L.J. ___ (2025), at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

Other developed nations provide a slew of direct benefits to parents, such as paid parental leave and affordable childcare. America instead takes a circuitous route, heavily relying on the Internal Revenue Code (the “Code”) to provide tax breaks to certain parents. In addition to being indirect and comparatively stingy, these “parental tax benefits” are not awarded equitably. Instead, they favor non poor one breadwinner families, ignore the plight of non poor working parents incurring substantial childcare and other work-related costs, exhibit an outright hostility towards poor parents and raise a host of other distributional concerns. This preferentialism is sticky––when Congress alters parental tax benefits, it rarely deviates from these patterns.

That is, until the COVID pandemic. Signed into law on March 11, 2021, the American Rescue Plan Act (the ARPA) provided much needed relief to parents attempting to maintain jobs and care for children during this global health crisis. As is America’s tendency, the ARPA leaned extensively on the Code to do so. But it abandoned its consistent preferentialism for non poor one breadwinner parents, expanding the various tax benefits available to non poor working parents and poor parents in historically significant ways.

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Tax Workshops: Fleischer At Columbia, Leenders At Oxford

Miranda Perry Fleischer (San Diego; Google Scholar) presents The Case for a Universal Child Allowance at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

“Helping families” is a hot topic, with policymakers ranging from J.D. Vance and Marco Rubio on the right to Cory Booker and Elizabeth Warren on the left unveiling proposals that would benefit families with children. And later this year, Congress will almost certainly revisit family-friendly tax benefits such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), discussing expansions and reforms. Yet once again, the same, seemingly intractable debate will likely ensue. Should aid be limited to children whose parents work, or should we help all low-income children? Should strings be placed on how parents spend aid, or should we trust parents to decide what is best for their child? A key contributor to this quagmire is that policymakers often conflate distinct goals—helping working families, alleviating poverty generally, or reducing the tax burden on low-income workers—when discussing these programs. What emerges is a mishmash of programs that, in trying to fulfill multiple goals at once, fail to achieve any single one particularly well. This lack of focus is especially troublesome when talk turns to reform. Policymakers compare apples to oranges, muddying discussions of program design.

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Next Week’s Tax Workshops

Monday, March 3: Miranda Fleischer (San Diego; Google Scholar) will present The Case for a Universal Child Allowance as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love.  

Tuesday, March 4: Wouter Leenders (Ph.D. Candidate, UC-Berkeley; Google Scholar) will present Taxing High Wages: Evidence from the Netherlands at the Oxford University Centre for Business Taxation. If you would like to attend, please register. 

Wednesday, March 5: Shannon W. McCormack (University of Washington) will present America's Failure to Rescue Parents: A Narrative of Inequitable Tax "Reform", 76 U.C. L.J. ___ (2025), as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Thursday, March 6: Steven A. Bank (UCLA) will present Tax Dodging and Its Evolution as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak.

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Today's Tax Presentations: Rubin At Duke, Repetti At IFA

Richard Rubin (WSJ) presents Tax Legislation in 2025: Where We Are and Where We Are Headed at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak.

James Repetti (Boston College; Google Scholar) presents International Tax Policy’s Harm to Manufacturing and National Interests, 2023 Wisc. L. Rev. 1309 (reviewed by David Elkins (Netanya) here), as part of the International Tax Reform panel at today's IFA USA New England Region Annual Conference: 

Two tax regulations that permit U.S. multinational enterprises (MNEs) to use foreign contract manufacturers and to disregard their wholly owned foreign subsidiaries have created significant tax incentives for MNEs to move manufacturing outside the U.S. These tax incentives have contributed to the loss of 5 million manufacturing jobs and the closure of more than 91,000 plants since 1997.

The job losses increased racial and economic inequality and stressed our political system. But the losses arising from offshore manufacturing also extend to other areas. Offshore manufacturing increases U.S. exposure to supply chain disruptions, threatens U.S. national security, and decreases research and development efforts to improve production techniques. Also, as automated manufacturing increases, the use of offshore manufacturing hinders the ability of the U.S. to compete in that sector.

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Today's Tax Workshops: Galle At Missouri, Morgan At Toronto

Brian Galle (Georgetown; Google Scholar) presents How to Tax the Rich: Options for 2025 and Beyond at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

How should we pay for the future? This monograph describes and compares major proposals to reform federal individual income and transfer (that is, estate and gift) taxes. The Biden administration and senior Senate Democrats have outlined plans for a “minimum income tax” on multi-millionaires in which very wealthy households (generally those worth over $100 million) would be taxed on the value of appreciated but unsold property. The administration’s proposal was dubbed the Billionaire Minimum Income Tax, or BMIT. Yet some other Senators, and advocates outside government, have pointed to possible constitutional limits on that proposal, as well as offering critiques of its economic and political merits. ...

To briefly preview my findings, my central argument is that instead of any of these options, policy makers in search of revenue should adjust the capital gains tax so that its rate increases the longer the taxpayer holds an asset, which I call the fair share tax (FAST). For reasons I describe more below, the FAST in fact can be designed so that it is exactly economically equivalent to the other options, such as a BMIT, eliminating basis step-up at death, or deemed sales triggered by borrowing. But the FAST is much easier to implement, because it doesn’t suffer from the traditional challenges tax systems have struggled with when attempting to impose tax at times other than at sale. And there is little doubt that the FAST, which is just a choice of the tax rate, would be constitutional. 

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Today's Tax Workshops: Marian At San Diego, Bearer-Friend At Columbia

Omri Marian (UC-Irvine; Google Scholar) presents Income Taxation and the Regulation of Supreme Court Justices' Conduct, 110 Cornell L. Rev. __ (2025), at San Diego today as part of its Tax Law Speaker Series hosted by Michelle Layser:  

Last year, investigative journalists reported multiple instances where billionaires showered Supreme Court Justices with lavish gifts. Previously undisclosed luxury fishing trips, private jet travels, and yacht cruises ignited popular and scholarly debates about Congress’s role in regulating Justices’ conduct. This article explains how income taxation can, and should, be used to regulate judicial misconduct where rules of judicial conduct fail.

The article shows that in some instances income tax already serves as a backstop to rules of judicial conduct. Under current law, some of the “gifts” reported in recent press stories are likely taxable income to the Justices. If so, the Justices should have reported these amounts on their income tax returns and paid income tax on them. If the Justices indeed do so, many of the concerns raised in public and scholarly discourse on Justices’ conduct are mitigated. If the Justices did not report and pay tax on certain gifts, they should be audited, and be subject to the same consequences as any other taxpayer who fails to properly report income and pay taxes.

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Next Week’s Tax Workshops

Monday, February 24: Jeremy Bearer-Friend (George Washington; Google Scholar) will present Sharing the Algorithm: The Tax Solution to Generative A.I. (with Sarah Polcz (UC-Davis; Google Scholar)) as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Monday, February 24: Omri Marian (UC-Irvine; Google Scholar) will present Income Taxation And The Regulation Of Supreme Court Justices' Conduct, 110 Cornell L. Rev. __ (2025), as part of the San Diego Tax Law Speaker Series. If you would like to attend, please contact Michelle Layser. 

Tuesday, February 25: Elira Kuka (George Washington; Google Scholar) will present Anomalous Unemployment Insurance During the Pandemic as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle or Day Manoli. 

Wednesday, February 26: Brian Galle (Georgetown; Google Scholar) will present How to Tax the Rich: Options for 2025 and Beyond as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Wednesday, February 26: Robin Morgan (Toronto) will present Retrospective Wealth Taxation with Dynamic Portfolio Adjustments as part of the Toronto James Hausman Tax Law and Policy Workshop Series. If you would like to attend, please contact Ben Alarie. 

Thursday, February 27: Richard Rubin (WSJ) will present Tax Legislation in 2025: Where We Are and Where We Are Headed as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

Thursday, February 27: James Repetti (Boston College; Google Scholar) will present International Tax Policy’s Harm to Manufacturing and National Interests, 2023 Wisc. L. Rev. 1309 as part of the IFA USA New England Region Annual Conference. If you would like to attend, please register here. 

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Tax Workshops: Zhang At Duke, Samms At Boston College

Alex Zhang (Emory; Google Scholar) will present The Other Taxation at Duke tomorrow as part of its Tax Policy Seminar hosted by Larry Zelenak:

Native Americans pay taxes. The territories do not. Both live with the legacy of American imperialism. Both seek the elusive fiscal self-governance and autonomy promised by Congress. The Supreme Court—through preemption, the plenary-power doctrine, and tax interpretive principles—has hollowed out the Native tax base, forcing tribes to compete fiercely with Congress, states, and localities for revenue. By contrast, territorial residents pay no federal or state taxes by edicts of Congress and geography. This Article argues that the conceptual underpinnings of the divergent tax treatment of tribes and territories are unsound. Under a more robust vision of fiscal autonomy, judicial limits on Native tax sovereignty are misguided. The territories’ wide latitude in designing revenue streams merits heightened scrutiny. While imperfect, a uniform, nonrefundable federal income-tax credit for tribal and territorial taxes paid is a promising path forward. This Article thus provides the first systematic study of subfederal taxation beyond states and localities—the “other” American taxation often overlooked in scholarship.

Brakeyshia Samms (Institute on Taxation and Economic Policy) presents Tax Policy to Reduce Racial Retirement Wealth Inequality (with Carl Davis (Institute on Taxation and Economic Policy)) in Reducing Retirement Inequality: Building Wealth and Old-Age Resilience (Olivia Mitchell (Penn Wharton) & Nikolai Roussanov (Penn Wharton) eds., Oxford University Press 2024) at Boston College tomorrow as part of its Tax Policy Workshop hosted by James Repetti and Diane Ring:

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Bearer-Friend & Polcz Present Sharing The Algorithm: The Tax Solution To Generative A.I. Today At Missouri

Jeremy Bearer-Friend (George Washington; Google Scholar) & Sarah Polcz (UC-Davis; Google Scholar) present Sharing the Algorithm: The Tax Solution to Generative A.I. at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

This article argues that tax policy offers a core tool for mitigating the sweeping public policy challenges of generative Artificial Intelligence (“AI”). Specifically, we propose a tax that would allow the public to own a share of AI itself, not just through future income tax liabilities or new excise taxes, but a proposed ownership structure that requires a one-time tax payment by AI operators in the form of equity.

Fractional public ownership of AI would directly address four of the key harms of AI that have been well-documented in a deep and still expanding literature. 

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Love Presents Who Benefits From Partnership Flexibility? Today At Georgetown

Michael Love (Columbia; Google Scholar) presents Who Benefits From Partnership Flexibility? at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle and Day Manoli:

Partnerships (including LLCs) account for more than one-third of US business profits. A key feature they offer owners and investors is unparalleled flexibility to divide up income and losses, but this creates opportunities to lower taxes—a well-recognized concern since the 1950s. Yet little is known about what happens in practice. Using anonymized tax records, I estimate over $300 billion of tax benefits associated with this flexibility between 2011-2020. But these benefits are narrowly concentrated in only 9% of firms, generally larger and more complex firms, while the vast majority of firms—especially smaller operating firms—do not utilize this flexibility at all.

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Today's Tax Workshops: Ring At San Diego, Harpaz At Columbia

Diane M. Ring (Boston College; Google Scholar) presents The Conflictual Core of Global Tax Cooperation (with Shu-Yi Oei (Duke; Google Scholar)) (reviewed by Blaine Saito (Ohio State; Google Scholar) here) at San Diego today as part of its Tax Law Speaker Series hosted by Michelle Layser:

It is widely argued that the world is in a new and distinctive era of global tax cooperation, as evidenced by the launch of a sweeping multilateral tax reform project spearheaded by the OECD and G20 to confront tax base erosion and profit shifting ("BEPS"). This Article argues, however, that this cooperation-centric account is overstated and masks fundamental conflicts between developing and developed countries' interests, conflicts that have recently culminated in a vote to shift the location of the reform work to the United Nations. This Article also argues that these conflicts constitute more than a random mélange of objections from losing parties in negotiations but instead reflect a coherent and unified set of developing country-centered concerns that extend far beyond tax policymaking.

This Article's highlights the conflictual elements inherent in the OECD/G20 BEPS project and presents an interpretative framework through which developing country-centered criticisms and their likely implications can be analyzed and understood. Fundamentally, these criticisms reflect concerns about the wide historical gulf in power and resources between developing and developed countries and how the BEPS reforms fail to address, and may even exacerbate, that gulf. Meanwhile, defenders of the BEPS reforms have largely missed this crux of the criticisms, focusing instead on the project's incremental short-term benefits for inter-developing country tax competition.

Our interpretation of these deep conflicts at the heart of contemporary global tax reform has important implications for accurately describing the state of asserted global tax cooperation and for appreciating both its promise and its risks.

Assaf Harpaz (Georgia; Google Scholar) presents Global Tax Wars in the Digital Era at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium hosted by Michael Love:

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Next Week’s Tax Workshops

Monday, February 17: Assaf Harpaz (Georgia; Google Scholar) will present Global Tax Wars in the Digital Era as part of the Columbia Davis Polk & Wardwell Tax Policy Colloquium. If you would like to attend, please contact Michael Love. 

Monday, February 17: Diane M. Ring (Boston College; Google Scholar) will present The Conflictual Core of Global Tax Cooperation (with Shu-Yi Oei (Duke; Google Scholar)) as part of the San Diego Tax Law Speaker Series. If you would like to attend, please contact Michelle Layser. 

Tuesday, February 18: Michael Love (Columbia; Google Scholar) will present Who Benefits From Partnership Flexibility? as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle or Day Manoli. 

Wednesday, February 19: Jeremy Bearer-Friend (George Washington; Google Scholar) & Sarah Polcz (UC-Davis; Google Scholar) will present Sharing the Algorithm: The Tax Solution to Generative A.I. as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Thursday, February 20: Alex Zhang (Emory; Google Scholar) will present The Other Taxation as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

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Today's Tax Workshops: Parsons At Duke, Graetz At UCLA, Glogower & Granato At Connecticut

Amanda Parsons (Colorado; Google Scholar) presents Tax Law for Informational Capitalism at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

Informational capitalism warrants a fundamental rethinking of tax law. This Article evaluates the tax policy implications of the emergence of social data (or data about people) as a new and essential factor of production within informational capitalism. It concludes that social data value creation necessitates elevating the role of wealth and capital income taxes to allow tax law to achieve its underlying policy goals in our modern economic environment.

The Article presents a thorough account of social data value creation, explaining how companies transform social data into money for themselves and wealth for their shareholders. It then exposes how the existing tax system, which is built upon outdated assumptions about how companies create value, is not effectively recognizing and capturing this new mode of value creation. It argues that greater taxation of wealth and capital income are critical components of the broader toolkit of reforms necessary to correct this failing and ensure that companies and their shareholders do not escape taxes on the economic gains they accrue from social data.

In an age of technological and economic upheaval and rising inequality, it is essential that we adapt tax law so that it can achieve its fundamental goals, including redistributing economic resources in our society. Otherwise, we will allow the continued concentration of economic and political power in the hands of companies that exploit novel and unfamiliar  forms of value creation and their owners. This Article illustrates why and how we must do so.

Michael Graetz (Columbia; Google Scholar) presents The Power to Destroy - How the Antitax Movement Hijacked America (Princeton University Press 2024) at UCLA today as part of its Business Law Breakfast:

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Today's Tax Workshops: Villero At Georgetown, Glogower & Granato At Missouri

Jesús Villero (Penn Wharton; Google Scholar) presents Tuition Effects of IDR Plans: Evidence from the Introduction of the PAYE Repayment Plan (with Junlei Chen (Penn Wharton) & Kent A. Smetters (Penn Wharton, NBER)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle:

We study the effects of an increase in the generosity of income-driven repayment (IDR) plans on net tuition (tuition less school-provided financial aid) using policy-induced variation from the introduction of the Pay As You Earn (PAYE) repayment plan in 2012. We estimate future wages, student loan borrowing, and the present value of loan repayment savings from opting into PAYE at the student level based on the student’s SAT score, college attended, field of study, gender, race, parental income, and other attributes. Using a triple difference framework, we find that elite colleges (all private non-profit universities and highly selective public universities) increase their annual net tuition by $3,324 to capture about $21 for every $100 in potential loan repayment savings; this effect is statistically insignificant and negligible for non-elite, non-selective colleges. Our estimates are robust to accounting for the potential endogeneity of applying for federal student aid post-PAYE, alternative definitions of elite and non-elite institutions, and variations in the nature of our treatment variable (discrete/continuous). As an application, we estimate that President Biden’s proposed SAVE plan would effectively transfer about $12 billion to selective colleges over the next 10-year budget window.

Ari Glogower (Northwestern; Google Scholar) & Andrew Granato (J.D.-Ph.D. Candidate, Yale; Google Scholar) present Reforming The Taxation Of Life Insurance, 44 Va. Tax Rev. __ (2025), at Missouri today as part of its Tax Policy Colloquium hosted by David Gamage:

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Next Week’s Tax Workshops

Tuesday, February 11: Jesús Villero (Penn Wharton; Google Scholar) will present Tuition Effects of IDR Plans: Evidence from the Introduction of the PAYE Repayment Plan as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Brian Galle. 

Wednesday, February 12: Ari Glogower (Northwestern; Google Scholar) & Andrew Granato (J.D.-Ph.D. Candidate, Yale; Google Scholar) will present Reforming The Taxation Of Life Insurance, 44 Va. Tax Rev. ___ (2025), as part of the Missouri Tax Policy Colloquium. If you would like to attend, please contact David Gamage. 

Thursday, February 13: Michael Graetz (Columbia; Google Scholar) will present The Power to Destroy - How the Antitax Movement Hijacked America (Feb. 13, 2024 Princeton University Press) as part of the UCLA Business Law Breakfast. If you would like to attend, please RSVP. 

Thursday, February 13: Amanda Parsons (Colorado; Google Scholar) will present Tax Law for Informational Capitalism as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

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Jurow Kleiman Presents Redistributive User Fees Today At Duke

Ariel Jurow Kleiman (USC; Google Scholar) presents Redistributive User Fees at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

While theory suggests that redistribution should occur entirely through progressive income taxes, political and legal limits at the state and local levels render this ideal redistribution impossible. Public finance models offer user fees as an alternative revenue source that has the added benefit of improving allocative efficiency. The problem with fee-financing is that too many people can’t afford to pay fees for necessary or enriching public services. The result is deprivation and exclusion from vital state and local public services.

This Article identifies a middle way overlooked by the tax policy and public finance literatures: redistributive user fees. More accurately, these are fee-financed public services for which vulnerable users, like those with low-incomes or a disability, are exempt from paying the fee. These non-paying users receive a free service while paying users, in theory, pay a higher fee to subsidize them. The fees can appease Americans’ disdain for redistributive taxes while also minimizing the deprivation and exclusion that fee-financing often entails. 

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