Raskolnikov Presents A New View Of Formal Equality Today At Columbia

Alex Raskolnikov (Columbia) presents A New View of Formal Equality at Columbia today as part of its Faculty Workshop Series: 

When it comes to equality under the law, the contemporary focus is decidedly on substance rather than form. This is especially so when economic inequality is concerned. Formal equality of law—understood as the absence of formal legal distinctions based on the material resources of individuals—has few defenders. At least since Rawls, formal equality has been viewed as a cause of material inequality, a foundation of laissez-faire capitalism, a fig leaf of sorts designed to give a veneer of justice to the unjust exploitation of the weak in a market economy. Whatever equality under the law means in contemporary view, formal equality is not it.

This Essay argues that the contemporary view is mistaken. Legal reforms consistent with formal equality of law may, indeed, lead to more inequality, but they may also lead to less. In fact, a commitment to formally equal law offers a counterweight to the key neoliberal maxim that regulation of a market economy should aim only at maximizing economic efficiency.

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Gómez Presents Taxation’s Limits Today At Boston College

Luís C. Calderón Gómez (Cardozo; Google Scholar) presents Taxation’s Limits, 119 Nw. U. L. Rev. __ (2024), at Boston College today as part of its Tax Policy Collaborative hosted by Diane Ring:

Countless pages have been devoted to the question of why should everyone pay tax, yet its obverse has gone largely unnoticed: why should some people and organizations not pay tax? Our tax system exempts from ordinary income taxation a wide and diverse array of people and organizations engaged in significant economic activity—from parents providing childcare services for their family, to consular activities and charities operating animal shelters—seemingly without a convincing explanation. Perhaps as a result of the dizzying diversity of activities that have been exempted from tax, scholars and policymakers have eluded comprehensively or coherently justifying our exemption regimes.

This Article develops a novel normative theory that rationalizes and justifies our current tax exemption regime. Rather than conceiving exemptions as subsidies or individual deviations from a normative base explainable by ordinary politics, the Article argues that exemptions are best understood as mapping the “limits” of tax. These limits are neither arbitrary nor merely a collection of individual subsidies to favored activities; rather, they are best seen as being reflective of deeper collective socio-political judgments about the scope of the State and the public sphere.

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Next Week’s Tax Workshops

Monday, September 16: Luís C. Calderón Gómez (Cardozo; Google Scholar) will present Taxation’s Limits, 119 Nw. U. L. Rev. __ (2024), as part of the Boston College Tax Policy Collaborative. If you would like to attend, please contact Diane Ring. 

Tuesday, September 17: Alex Raskolnikov (Columbia) will present A New View of Formal Equality as part of the Columbia Faculty Workshop Series. 

Friday, September 20: Ron Harris (Tel Aviv; Google Scholar) will present a chapter from Empire Ltd.: Law and the Rise of Multinational Companies in the First Era of Globalization (1844-1914) as part of the Oxford-Virginia Legal Dialogs. If you would like to attend, please register here. 

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Derenoncourt Presents Wealth Of Two Nations: The US Racial Wealth Gap, 1860-2020 Today At NYU

Ellora Derenoncourt (Princeton; Google Scholar) presents Wealth of Two Nations: The US Racial Wealth Gap, 1860-2020 (online appendix) (with Chi Hyun Kim (University of Bonn), Moritz Kuhn (University of Mannheim; Google Scholar) & Moritz Schularick (Kiel Institute, Sciences Po Paris; Google Scholar)) at NYU today as part of its Tax Policy and Public Finance Colloquium hosted by Daniel Shaviro:

The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this article, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the past 150 years, with convergence stalling after 1950. 

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Next Week’s Tax Workshop

Tuesday, September 10: Ellora Derenoncourt (Princeton; Google Scholar) will present Wealth of Two Nations: The US Racial Wealth Gap, 1860-2020 (online appendix) (with Chi Hyun Kim (University of Bonn), Moritz Kuhn (University of Mannheim; Google Scholar) & Moritz Schularick (Kiel Institute, Sciences Po Paris; Google Scholar)) as part of the NYU Tax Policy and Public Finance Colloquium. If you would like to attend, please contact Daniel Shaviro. 

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Satterthwaite Presents Taxing Nannies Today At Florida

Emily Satterthwaite (Georgetown; Google Scholar) presents Taxing Nannies (with Ariel Jurow Kleiman (USC; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar)) (reviewed by Michelle Layser (San Diego; Google Scholar) here and by Susan Morse (Texas; Google Scholar) here) at Florida today as part of its Tax Colloquium hosted by Yariv Brauner:

Nannies in the U.S. work long hours for low wages and risk retaliation if they complain. Informal, or “off the books,” work exacerbates their precarity, keeping it 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 inform 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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Bank Presents The Golden Age Of Tax Dodging: Celebrities, Hollywood, And The Publicity Effect Today At Temple

Steven A. Bank (UCLA) presents The Golden Age of Tax Dodging: Celebrities, Hollywood, and the Publicity Effect at Temple today as part of its Faculty Colloquium Series:

In the 1950s, as one columnist recently pointed out, “the wealthiest people in the U.S. were not corporate executives or baseball players. . . . Rather, they were entertainers.” At a time when Roger Blough, the head of U.S. Steel, was making approximately $300,000, Frank Sinatra made nearly $4 million. Celebrities were income, rather than asset, rich, though, making them vulnerable to the sky-high marginal tax rates of the time, which exceeded 90 percent. Since they were already surrounded by teams of financial and tax advisors, it should not be surprising that when it came to tax dodging during this period, entertainers were on the cutting edge. Indeed, it is not a stretch to say that members of the entertainment industry either developed or were early adopters of many of the most common tax minimization techniques of the 20th century. Perhaps more significantly, celebrities helped to drive the demand for them by publicizing and normalizing them through the force of their celebrity status. 

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Maynard Presents Penalizing Precarity Today At UC-San Francisco

Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) presents Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)), at UC-San Francisco today as part of its Tax Speaker Series hosted by Heather Field:

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.

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Next Week’s Tax Workshops

Tuesday, September 3: Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) will present Penalizing Precarity, 123 Mich. L. Rev. ___ (2024) (with Clinton Wallace (South Carolina; Google Scholar)) as part of the UC-San Francisco Tax Speaker Series. If you would like to attend, please contact [email protected]. 

Friday, September 6: Emily Satterthwaite (Georgetown; Google Scholar) will present Taxing Nannies (with Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Shayak Sarkar (UC-Davis; Google Scholar)) (reviewed by Michelle Layser (San Diego; Google Scholar) here) as part of the Florida Tax Colloquium. If you would like to attend, please contact Yariv Brauner. 

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Kim Presents Algorithmic Tax Ownership At Vanderbilt

Young Ran (Christine) Kim (Cardozo; Google Scholar) presented Algorithmic Tax Ownership (with Dmitry Erokhin (International Institute for Applied Systems Analysis; Google Scholar)) at Vanderbilt yesterday as part of its Law School Faculty Workshop Series:

Ownership for tax purposes is distinct from ownership under property or contract law, as it looks beyond mere form to the economic substance of the transaction to identify who must bear the tax burdens and reap the tax benefits. Tax ownership is essential in determining the tax consequences of complex transactions, yet it is notoriously convoluted. Neither Congress nor the IRS has provided taxpayers with a clear formula for identifying tax ownership. Rather, courts have been left to develop their own methods, resulting in a complex “patchwork of rules that appear to lack a unifying principle (or set of principles).” An example is the twenty-six factors in Frank Lyon Co. v. United States.

This paper offers clearer guidance on the relevant importance of factors in tax ownership analysis using machine learning.

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Alfani Presents Economic Inequality in Preindustrial Times Today At The Oxford-Virginia Legal Dialogs

Guido Alfani (Bocconi University; Google Scholar) presents Economic Inequality in Preindustrial Times: Europe and Beyond, 59 J. Econ. Lit. 3 (2021), today as part of the Oxford-Virginia Legal Dialogs hosted by Tsilly Dagan and Ruth Mason: 

Recent literature has reconstructed estimates of wealth and income inequality for a range of preindustrial, mostly European, societies covering medieval and early modern times, occasionally reaching back to antiquity and even prehistory. These estimates have radically improved our knowledge of distributive dynamics in the past. It now seems clear that in the period circa 1300–1800, inequality of both income and wealth grew almost monotonically almost everywhere in Europe, with the exception of the century-long phase of inequality decline triggered by the Black Death of 1347–52. Regarding the causes of inequality growth, recent literature ruled out economic growth as the main one. Other possible factors include population growth (also as mediated by inheritance systems) and especially regressive fiscal institutions (also as connected to the unequal distribution of political power). The recently proposed theoretical framework of the inequality possibility frontier (IPF) lends a better understanding of the implications of the reconstructed trends. This article concludes by showing how connecting preindustrial trends to modern ones changes our perception of long-term inequality altogether.

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9th Annual Texas Tax Faculty Workshop

SMU hosted the 9th Annual Texas Tax Faculty Workshop on Monday:

Christopher Hanna (SMU), Taxing Carried Interest: A Reappraisal (with David Elkins (Netanya; Google Scholar)
Commenter: Susan Morse (Texas; Google Scholar)

Gary Lucas (Texas A&M; Google Scholar), Shaping Preferences with Pigouvian Taxes
Commenter: Johnny Buckles (Houston; Google Scholar)

Orly Mazur (SMU; Google Scholar), Beyond ChatGPT: Responsible AI and Government Innovation, 92 Tenn. L. Rev. __ (2025) (with Adam Thimmesch (Nebraska; Google Scholar))
Commenter: William Byrnes (Texas A&M; Google Scholar) 

Susan Morse (Texas; Google Scholar), The Truth About Safe Harbors, 92 Tenn. L. Rev. __ (2025)
Commenter: Dennis Drapkin (SMU)

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Next Week’s Tax Workshop

Friday, May 24: Guido Alfani (Bocconi University; Google Scholar) will present Economic Inequality in Preindustrial Times: Europe and Beyond, 59 J. Econ. Lit. 3 (2021), as part of the Oxford-Virginia Legal Dialogs. If you would like to attend, please RSVP. 

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Hayashi & Deeks: Tax Sanctions And The Russia-Ukraine Conflict

Andrew T. Hayashi (Virginia; Google Scholar) & Ashley Deeks (Virginia; Google Scholar), Tax Sanctions and the Russia-Ukraine Conflict, 48 N.C. J. Int'l L. 433 (2023):

The Russian invasion of Ukraine in 2022 provoked the imposition of economic sanctions that are unprecedented in their swiftness, severity, and novelty. In this essay, we evaluate the possible role of tax law as another sanctions tool for addressing the Russia-Ukraine conflict and discuss a recent legislative proposal to impose tax sanctions.

Conclusion
When we wrote about the need for tax sanctions in January 2022, our primary concern was the need to find alternative points of leverage over foreign targets that would broaden the reach of U.S. sanctions and reduce the pressure being exerted through traditional financial sanctions, which risked divestment from the U.S. financial system and currency over the long term. More generally, we saw the possibility of making more favorable tradeoffs between foreign policy goals and domestic concerns through tax sanctions and through sanctions rules that allowed for finer calibration. 

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Smith Presents Taxing Business Owner-Managers Today At Oxford

Kate Smith (London School of Economics and Political Science; Google Scholar) presents It’s All About the Base: Taxing Business Owner-Managers (with Helen Miller (Institute for Fiscal Studies)) at Oxford today as part of its Centre for Business Taxation Seminar:

Business owner-managers form an important part of the workforce in many countries, including the US and UK. We develop an empirical dynamic model to study the taxation of this group, who commonly benefit from preferential tax rates aimed at boosting entrepreneurship and investment. We study all UK owner-managed businesses, explicitly accounting for heterogeneity in their activities and traits, and allow for a wide range of responses to tax, including avoidance margins. We model a rich set of policy instruments, including tax rates, bases and loans, accounting for how their interaction affects inter- and intra-temporal incentives. Increasing capital gains tax (CGT) rates on business owners raises revenue in a progressive manner and leads to a small drop in aggregate owner-managed business investment. There are large declines in investment for some high income incorporated businesses, because higher rates increase the cost of capital associated with new equity investments. 

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27th Annual Critical Tax Conference At Florida

Florida hosts the 27th Annual Critical Tax Conference today and tomorrow. If you would like to attend via Zoom, contact David Hasen. 

Friday 

9:00 AM: Welcome 

9:10 AM: First Morning Session 

• Ted Afield (Georgia State), A Catholic Social Teaching Approach to Tax Administration and Enforcement 
• Emily Cauble (Wisconsin; Google Scholar), The Impact of Informal Tax Guidance

10:25 AM: Second Morning Session  

• Rebecca Morrow (Wake Forest; Google Scholar), The Income Tax As a Market Correction 
• Daniel Schaffa (Richmond; Google Scholar), The Regressivity of Complexity 

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Next Week’s Tax Workshop

Monday, May 13: Kate Smith (London School of Economics and Political Science; Institute for Fiscal Studies; Google Scholar) will present It’s All About the Base: Taxing Business Owner-Managers (with Helen Miller (Institute for Fiscal Studies)) as part of the Oxford Centre for Business Taxation Seminar. If you would like to attend, please RSVP here. 

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Columbia Tax Workshop (Day 2)

Today's Columbia Tax Workshop is being held at its Manhattanville Campus: 

Katarzyna Bilicka (Utah State; Google Scholar), The Role of Intellectual Property in Tax Planning (with Paul Organ (U.S. Treasury Department; Google Scholar) & İrem Güçeri (Oxford; Google Scholar)) 
Discussant: Michael Love (Columbia)

Multinational enterprises (MNEs) that invest in research and development (R&D) and innovation find it easier to shift profits between their subsidiaries located in jurisdictions with different tax rates. While MNEs invest in R&D and develop intellectual property (IP) across multiple jurisdictions, they can also strategically move profits arising from that IP from high- to low-tax jurisdictions to reduce their overall tax bill. In this paper, we analyze and quantify the importance of two different strategies that MNEs use to move their IP to low-tax jurisdictions: selling a patent developed in a high-tax jurisdiction to a low-tax jurisdiction directly, or signing a cost-sharing arrangement (CSA) between those two jurisdictions to cover the costs of developing further IP. Combining administrative data on CSAs, patent applications and transactions, and US tax returns, we provide novel stylized facts on the use of both those strategies by MNEs. We then show that CSAs increase jurisdiction-level patenting activity, royalty payments, profits, and profitability, especially the CSAs signed with low-tax jurisdictions. At the MNE level, a new CSA significantly increases firm sales, profitability, and R&D investment, without affecting the MNE’s effective tax rates. Private firms are the only ones that experience the significant MNE-level effects on sales, profitability, and intangible assets after they sign their first CSA.

Ari Glogower (Northwestern; Google Scholar), Closing the Life Insurance Tax Loophole (with Andrew Granato (J.D.-Ph.D. Candidate, Yale))
Discussant: John Vella (Oxford) 

Permanent life insurance contracts enjoy an unparalleled combination of tax benefits. In a permanent or “cash value” contract, a portion of the premium paid is allocated to an internal savings account or “cash value reserve,” which over time reduces the amount of insured risk in the contract. The cash value reserve enables the policyholder’s beneficiary to ultimately receive a guaranteed “death benefit” that includes the policyholder’s accumulated savings upon the death of the insured person, resulting in an arrangement that resembles an investment account, rather than financial protection in the event of an untimely death.

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Columbia Tax Workshop (Day 1)

Today's Columbia Tax Workshop is being held at its Manhattanville Campus: 

Kimberly Clausing (UCLA; Google Scholar), Capital Taxation and Market Power
Discussant: Wojciech Kopczuk (Columbia; Google Scholar)

In recent decades, market power has increased substantially, according to multiple measures that describe industry concentration, mark-ups, and business profitability. While market power can generate benefits, it also raises vexing policy concerns, including the potential for adverse effects on labor markets, income inequality, and the dynamism of market competition. The concept of market power also has implications for how we conceptualize capital income, making it important to distinguish between normal and above-normal returns to capital. The tax system taxes both types of returns to capital, but often imperfectly and incompletely. Full consideration of the relationship between market power and capital income suggests important implications for optimal capital taxation design, including the role of entity taxation, the use of graduated business tax rates, and international tax reform.

Conor Clarke (Washington University; Google Scholar) & Wojciech Kopczuk (Columbia; Google Scholar), Income Inequality and the Corporate Sector
Discussant: Yair Listokin (Yale; Google Scholar)

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Pepperdine Tax Policy Workshop Series (Spring 2024)

Thanks to Deanna Newton, the faculty who came to Malibu, and our students who made the Spring 2024 Pepperdine Tax Policy Workshop Series such a rousing success:

• January 22: Jason Oh (UCLA), How Does The Corporate Tax Distort Choice Of Corporate Governance? 
• February 5: Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar), Taxing Nannies (with Shayak Sarkar (UC-Davis; Google Scholar) & Emily A. Satterthwaite (Georgetown; Google Scholar))
• February 19: Young Ran (Christine) Kim (Cardozo; Google Scholar), Taxing the Metaverse, 112 Geo. L.J. ___ (2024)
• March 11: Jordan Barry (USC; Google Scholar), Tax and the Boundaries of the Firm (with Victor Fleischer (UC-Irvine; Google Scholar)
• March 25: Goldburn Maynard, Jr. (Indiana-Kelley; Google Scholar), Penalizing Precarity, 123 Mich. L. Rev. __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)) 
• April 8: Shayak Sarkar (UC-Davis; Google Scholar), Internal Revenue's External Borders, 112 Calif. L. Rev __ (2024)
• April 22: Michael Graetz (Columbia), The Power to Destroy: How the Antitax Movement Hijacked America (Princeton University Press 2024) 

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Advani Presents How Responsive Are Top Earners To Tax Rates? Today At Oxford

Arun Advani (Warwick; Google Scholar) presents Top Flight: How Responsive Are Top Earners to Tax Rates? (with Cesar Poux (London School of Economics) & Andy Summers (London School of Economics)) at Oxford today as part of its Oxford Centre for Business Taxation Seminars:

Using administrative data on the universe of UK taxpayers, we leverage major top tax rate reforms in the UK and France to evaluate how much top earners respond to tax increases by migrating. We document four main facts. First, looking across foreigners we find a migration semi-elasticity with respect to the net-of-average-tax rate of -0.2, somewhat lower than has been found for specific groups studied previously. Second, migration responses are driven by those with the highest predicted baseline emigration probability, highlighting the importance of accounting for heterogeneity. Third, there is little migration response from natives. Finally, we estimate the long term impact of tax changes on the stock of migrants among UK top earners taking a structural approach, and find that even our modest migration elasticity implies substantial stock changes in the long run.

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Next Week’s Tax Workshop

Monday, April 29: Arun Advani (Warwick; Google Scholar) will present Top Flight: How Responsive Are Top Earners to Tax Rates? (with Cesar Poux (LSE) & Andy Summers (LSE)) as part of the Oxford Centre for Business Taxation Seminars. If you would like to attend, please RSVP here. 

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Sarin Presents Broken Budgeting Today At Georgetown

Natasha Sarin (Yale; Google Scholar) presents Broken Budgeting (with Safia Sayed (J.D. 2025, Yale)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli: 

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. Presently, scorekeepers register these types of interventions as costs to the fisc rather than profitable investments, and that hinders their adoption. This is not the fault of scorekeepers, who have limited scope to act outside their mandate. But it is a critique of that mandate, which creates a process that is far from neutral: instead, one that skews policy outcomes against progressive reforms that invest in future generations and in redressing inequality.

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Graetz Presents The Power to Destroy: How The Antitax Movement Hijacked America Today At Pepperdine

Michael J. Graetz (Columbia), presents The Power to Destroy: How the Antitax Movement Hijacked America (Princeton University Press 2024) (reviewed by Martin Sullivan here) at Pepperdine today as part of the Tax Policy Workshop Series hosted by Deanna Newton:

The postwar United States enjoyed large, widely distributed economic rewards—and most Americans accepted that taxes were a reasonable price to pay for living in a society of shared prosperity. Then in 1978 California enacted Proposition 13, a property tax cap that Ronald Reagan hailed as a “second American Revolution,” setting off an antitax, antigovernment wave that has transformed American politics and economic policy. In The Power to Destroy, Michael Graetz tells the story of the antitax movement and how it holds America hostage—undermining the nation’s ability to meet basic needs and fix critical problems.

In 1819, Chief Justice John Marshall declared that the power to tax entails “the power to destroy.” But The Power to Destroy argues that tax opponents now wield this destructive power. Attacking the IRS, protecting tax loopholes, and pushing tax cuts from Reagan to Donald Trump, the antitax movement is threatening the nation’s social safety net, increasing inequality, ballooning the national debt, and sapping America’s financial strength. The book chronicles how the movement originated as a fringe enterprise promoted by zealous outsiders using false economic claims and thinly veiled racist rhetoric, and how—abetted by conservative media and Grover Norquist’s “taxpayer protection pledge”—it evolved into a mainstream political force.

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Raskolnikov Presents Equality Plus Equity: Law And Redistribution In A Capitalist Democracy Today At Cornell

Alex Raskolnikov (Columbia) presents Equality Plus Equity: Law and Redistribution in a Capitalist Democracy at Cornell today as part of its Faculty Workshop Series:

If the law of capitalism is rigged in favor of the wealthy, why is the rigging so shoddy? If majority rule offers an easy path to soaking the rich, why are the rich still not soaked? Clearly, there are real constraints on the distributional effects of legal rules in modern Western societies. These constraints are binding, long-standing, and consequential—but what are they, exactly, and why do they exist?

This paper offers an answer. Formal equality—same rules for the rich and the poor, the strong and the weak—is essential to a modern capitalist democracy. Political theories ranging from libertarianism to liberalism and Marxism all hold this view. A widely shared commitment to the rule of law reflects it as well. Even theories that reject formal equality reveal its strong influence. But the commitment to formal equality cannot be absolute. A legal system that fully reflects formal equality would allow deprivation. Not only is deprivation inequitable, it undermines, even destroys, the fundamental values underlying every political theory just mentioned. 

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Next Week’s Tax Workshops

Monday, April 22: Michael J. Graetz (Columbia) will present The Power to Destroy: How The Antitax Movement Hijacked America (Princeton University Press 2024) (reviewed by Martin A. Sullivan here) as part of the Pepperdine Tax Policy Workshop Series. If you would like to attend, please contact Deanna Newton. 

Tuesday, April 23: Natasha Sarin (Yale; Google Scholar) will present Broken Budgeting (with Safia Sayed (J.D. 2025, Yale)) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli. 

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Maynard Presents Penalizing Precarity Today At Georgetown

Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) presents Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)), at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli: 

Retirement policy in America is oriented around 401(k) accounts and other employer-sponsored savings plans, which will receive a whopping $1.5 trillion in tax subsidies over the next decade. This Article uncovers a harmful flaw in a common feature of these plans. The problem arises from a gap in the rules governing withdrawals made prior to reaching retirement age. Employees are generally required to seek approval from their plan administrator to receive a “hardship distribution,” which they are granted if they face an “immediate and heavy financial need,” like eviction or an unexpected medical expense. But even with this approval, these distributions are frequently subject to an “early withdrawal penalty,” a separate regime that is not coordinated with the hardship distribution rules.

This Article shows that the gap between the two sets of rules is little known to workers, employers and even policymakers. We document instances of taxpayers surviving financial calamity thanks to a hardship distribution only to learn that they now face a tax penalty—resulting in another cash crunch. 

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Newton Presents Inclusive Prosperity Today At San Diego

Deanna S. Newton (Pepperdine) presents Inclusive Prosperity at San Diego today as part of its Tax Law Speaker Series hosted by Michelle Layser:

Gentrification affects almost every American city to varying degrees, involving different parties with different interests. While positive changes are associated with gentrification, low-income individuals are often displaced from their communities due to increased rent costs and property values. Throughout our nation’s history, the federal government has offered tax incentives to those who invest in low-income areas that have historically suffered disinvestment. These tax incentives encourage investment by providing tax benefits and minimal investment constraints. However, because investors are not required to tailor their investments to meet the needs of communities, the unintended consequence of these programs is that residents do not typically benefit and are instead displaced from their communities. There is little in the current literature that proposes how economic development tax incentives should be practically designed to ensure community members are not displaced.

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Next Week’s Tax Workshops

Tuesday, April 16: Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) will present Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli. 

Friday, April 19: Alex Raskolnikov (Columbia) will present Equality Plus Equity: Law and Redistribution in a Capitalist Democracy as part of the Cornell Faculty Workshop.

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Cauble Presents Informal Tax Guidance’s Impact Today At Indiana

Emily Cauble (Wisconsin; Google Scholar) presents Informal Tax Guidance’s Impact at Indiana-Maurer today as part of its Tax Policy Colloquium hosted by Leandra Lederman:

This Article presents the results of a new survey of 2191 U.S. adults designed to gain insight into the impact that statements in informal IRS guidance have on non-expert taxpayers. The results of the survey demonstrate that such statements (taken from actual guidance) are susceptible to interpretations that are inconsistent with actual tax law.

These results underscore the need for reforms that would mitigate the harms that follow when users interpret guidance inconsistently with tax law. In addition, while some of the participants’ misconceptions were predictable, others differed from what legal experts might anticipate. This finding suggests a potential role for studying how non-experts actually interpret guidance – to supplement analysis of technical measures of its readability and reliance on expert review.

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Mehrotra Presents The Rise And Fall Of The 1970s National VAT Today At Duke

Ajay K. Mehrotra (Northwestern; Google Scholar) presents Nixon’s VAT: Lawyers, Economists, and the Rise and Fall of the 1970s National Value-Added Tax to Fund Education at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

Nearly all developed countries and many in the developing world have some type of a broad-based, national consumption tax, frequently in the form of a value-added tax (VAT). These levies generate tremendous revenues that often underwrite expansive social-welfare spending, such as national healthcare, free education, and ample retirement savings – spending that mainly addresses economic inequality by promoting redistribution.

The United States is a glaring exception. While there are numerous U.S. subnational consumption taxes, in the form of state and local sales taxes, the federal government has consistently rejected broad-based national consumption taxes. Likewise, the United States has comparative low levels of direct social-welfare spending. This paper – which is part of a larger project exploring the question “why no VAT in the U.S.?” – examines the rise and fall of the 1970s national VAT aimed at funding education.

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Hickman Presents OIRA Review Of Treasury Regulations Today At UC-Irvine

Kristin Hickman (Minnesota; Google Scholar) presents OIRA Review Of Treasury Regulations Project at UC-Irvine today as part of its Tax Policy Colloquium hosted by Natascha Fastabend:

In a major retreat for presidential administration and a reassertion of tax exceptionalism, the Biden Administration pulled the plug—at least for now—on Office of Information and Regulatory Affairs (OIRA) review of tax regulations. The interagency memorandum of agreement (the 2023 MOA) ended the OIRA-facilitated interagency review process and compliance with Executive Order (EO) 12,866 for tax regulatory actions. Contrary to some assertions, the 2023 MOA goes further than any of its predecessor agreements by exempting not merely some or most but rather all tax regulatory actions from OIRA review. The move also ended a short-lived effort, memorialized in a 2018 memorandum (the 2018 MOA), that required OIRA review more often in the tax context than had been the case in the past.

Several justifications have been offered in support of the 2023 MOA and the retreat from OIRA review and EO 12,866 in the tax context. These justifications inhabit two dimensions

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Organ Presents The Role Of Intellectual Property In Tax Planning Today At Georgetown

Paul Organ (U.S. Treasury Department; Google Scholar) presents The Role of Intellectual Property in Tax Planning (with Katarzyna Bilicka (Utah State; Google Scholar) & İrem Güçeri (Oxford; Google Scholar)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli: 

Multinational enterprises (MNEs) that invest in research and development (R&D) and innovation find it easier to shift profits between their subsidiaries located in jurisdictions with different tax rates. While MNEs invest in R&D and develop intellectual property (IP) across multiple jurisdictions, they can also strategically move profits arising from that IP from high- to low-tax jurisdictions to reduce their overall tax bill. In this paper, we analyze and quantify the importance of two different strategies that MNEs use to move their IP to low-tax jurisdictions: selling a patent developed in a high-tax jurisdiction to a low-tax jurisdiction directly, or signing a cost-sharing arrangement (CSA) between those two jurisdictions to cover the costs of developing further IP. Combining administrative data on CSAs, patent applications and transactions, and US tax returns, we provide novel stylized facts on the use of both those strategies by MNEs. We then show that CSAs increase jurisdiction-level patenting activity, royalty payments, profits, and profitability, especially the CSAs signed with low-tax jurisdictions. 

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Sarkar Presents Internal Revenue's External Borders Today At Pepperdine

Shayak Sarkar (UC-Davis; Google Scholar) presents Internal Revenue's External Borders, 112 Calif. L. Rev __ (2024), at Pepperdine today as part of its Tax Policy Workshop Series hosted by Deanna Newton:

The mandate of tax agencies seems clear: to secure revenue for the government and ensure taxpayer compliance. Yet for decades, the Internal Revenue Service (IRS) has regularly facilitated violent immigration enforcement. Scholars and the public have paid significant attention to the state and local policing of immigration law. But the role of tax bureaucrats as generals—no mere foot soldiers—has largely been overlooked.

This Article corrects that oversight. Building on emerging critiques of the tax system, I first describe tax-agency leadership in immigration raids, holding the dry mechanics of agency procedures against stark examples of IRS complicity in civil rights violations. I then raise several concerns about tax-agency involvement in immigration enforcement. After describing the tax-law origins of immigration raids’ constitutional exceptionalism, I assess residual constraints on tax-agency involvement: taxpayer privacy, regulatory suppression, and civil rights liability.

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Mirkay Presents Formulating Tax Policy Through The Lens Of Economic Dignity At Indiana

Nicholas Mirkay (Hawaii; Google Scholar) presented Formulating Tax Policy Through the Lens of Economic Dignity at Indiana-Maurer yesterday as part of its Tax Policy Colloquium hosted by Leandra Lederman:

We must examine our federal and state tax systems, which play a central role in overall fiscal policy, through the lens of economic dignity with an eye on the effect of these policies at the human or individual level. To harness the power of economic dignity, instructs Gene Sperling, policy determinations must begin with “the end goals of lifting human well-being.” Economic growth, an often pronounced as an end by policy makers, is not an end goal in and of itself because growth does not ensure it will lift all people from various socioeconomic, racial, and ethnic backgrounds. It does not automatically take into account differences in wealth accumulation or even the types of wealth held. A focus on growth alone likewise does ensure fairness and equal treatment. The end goal of human well-being must supersede ideology and not allow policy makers to get mired in the weeds of programmatic details. Such details may be necessary, but they are not the end goal.

In order to “go out of the comfort zone of [economic] numbers,” Sperling recommends this beginning with this question: “What would a person on his or her death bed say mattered most in his or her economic life?” What is the destination – the ultimate goal to which we aspire?

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Next Week’s Tax Workshops

Monday, April 8: Shayak Sarkar (UC-Davis; Google Scholar) will present Internal Revenue’s External Borders, 112 Calif. L. Rev __ (2024) as part of the Pepperdine Tax Policy Workshop Series. If you would like to attend, please contact Deanna Newton. 

Tuesday, April 9: Paul Organ (U.S. Treasury; Google Scholar) will present The Role of Intellectual Property in Tax Planning (with Katarzyna Bilicka (Utah State; Google Scholar) & İrem Güçeri (Oxford; Google Scholar)) as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli. 

Wednesday, April 10: Kristin Hickman (Minnesota; Google Scholar) will present OIRA Review Of Treasury Regulations Project as part of the UC-Irvine Tax Policy Colloquium. If you would like to attend, please contact Natascha Fastabend. 

Thursday, April 11: Ajay K. Mehrotra (Northwestern; Google Scholar) will present Nixon’s VAT: Lawyers, Economists, and the Rise and Fall of the Education Value-Added Tax as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

Friday, April 12: Emily Cauble (Wisconsin; Google Scholar) will present Informal Tax Guidance’s Impact as part of the Indiana Tax Policy Colloquium. If you would like to attend, please RSVP here. 

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Satterthwaite Presents Taxing Nannies Today At Duke

Emily Satterthwaite (Georgetown; Google Scholar) presents Taxing Nannies (with Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar)) at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:

Nannies in the U.S. work long hours for low wages and risk retaliation if they complain. Informal, or “off the books,” work exacerbates their precarity, keeping it 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 inform 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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Zwick Presents Tax Policy And Investment In A Global Economy Today At Northwestern

Eric Zwick (Chicago; Google Scholar) presents Tax Policy And Investment In A Global Economy (with Gabriel Chodorow-Reich (Harvard; Google Scholar), Matthew Smith (U.S. Treasury Department) & Owen Zidar (Princeton; Google Scholar) at Northwestern today as part of its Advanced Topics in Taxation Colloquium hosted by Ari Glogower:

This paper combines administrative tax data and a model of global investment behavior to evaluate the investment and firm valuation effects of the Tax Cuts and Jobs Act (TCJA) of 2017, the largest corporate tax reduction in the history of the United States. We extend the canonical model of Hall and Jorgenson (1967) to a multinational setting in which a firm produces in domestic and international locations. We use the model to characterize and measure four determinants of domestic investment: domestic and foreign marginal tax rates and cost-of-capital subsidies. We estimate elasticities of domestic investment with respect to each and use them to identify the structural parameters of our model, to quantify which parts of the reform mattered most to investment, and to conduct policy counterfactuals.

We have five main findings. First, the TCJA caused domestic investment of firms with the mean tax change to increase by roughly 20% relative to firms experiencing no tax change. Second, the TCJA created large incentives for some U.S. multinationals to increase foreign capital, which rose substantially following the law change. 

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Herzfeld Presents What’s An Income Tax? Today At Toronto

Mindy Herzfeld (Florida) presents What’s an Income Tax? at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series hosted by Ben Alarie:

Developments in international taxation – including the substitution of accounting standards for tax laws -- and tensions in the interaction between tax and trade and investment agreements and trends, mandate a renewed attempt to better define and provide a principled meaning to the term income tax, to distinguish income from other types of taxes, and to make sense of the use of other terminology – such as the distinctions drawn between direct and indirect taxes. Meanwhile, the U.S. Congress has mandated that the Treasury allow taxpayers a credit for foreign inome taxes paid, but has provided no guidance as to what an income tax means for this purpose, leaving the government struggling to apply decades old law to new types of foreign taxes. The exercise of trying to distinguish between taxes imposed on income and other types of taxes is inherently interdisciplinary, yet law, economics and accounting all come to the table with different principled approaches and objectives. 

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Brooks Presents The Original Meaning Of The Sixteenth Amendment Today At UC-Irvine

John Brooks (Fordham; Google Scholar) presents The Original Meaning Of The Sixteenth Amendment, 102 Wash. U. L. Rev. ___ (2024) (with David Gamage (Missouri-Columbia; Google Scholar)), at UC-Irvine today as part of its Tax Policy Colloquium hosted by Natascha Fastabend:

The Sixteenth Amendment to the United States Constitution enshrines Congress’s “power to lay and collect taxes on incomes, from whatever source derived.” Challenges to the exercise of that power have typically turned on whether the thing being taxed is “income” or not. In the most recent example, the 2023 Supreme Court case of Moore v. United States, taxpayers have argued that the Sixteenth Amendment only authorizes taxation of realized income—this is, that gain from appreciated property can only be taxed as “income” when there has been a sale or conversion of that property.

In this Article we argue—based on the original meaning of the Sixteenth Amendment—that this approach to constitutional tax questions is wrong. The focus of the Sixteenth Amendment and of the Congressional income tax power is not “income” per se, but rather “taxes on incomes, from whatever source derived.” Thus, the question should not be whether the thing being taxed satisfies some isolated definition of “income,” but rather whether that tax in question comports with the original meaning of “taxes on incomes.” 

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de la Feria Presents Designing a Progressive VAT Today At Georgetown

Rita de la Feria (Leeds; Google Scholar) presents Designing a Progressive VAT at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli:

This paper presents a novel approach to addressing VAT regressivity, by proposing the adoption of a progressive VAT: a single-rate, broad-base, VAT, whereby tax paid on consumption is re-paid to lower income households in real-time, at the moment of purchase. Such a system can effectively eliminate regressivity, while minimizing the political economy, cash-flow, and welfare stigma obstacles that are often associated with standard welfare transfers used in modern VAT systems. It would also have other significant advantages, particularly in terms of compliance incentives.

Perkins Presents The Exigent AI Mandate For All Law Faculty Today At Florida

Rachelle Holmes Perkins (George Mason; Google Scholar) presents The Exigent AI Mandate for All Law Faculty at Florida today as part of its Marshall M. Criser Distinguished Faculty Workshop: 

Legal scholars have made important explorations into the opportunities and challenges of generative artificial intelligence within legal education and the practice of law, as well as its broader impact on the legal profession. This Article adds to this literature by directly engaging with members of the legal academy. As a collective, law professors, who are responsible for cultivating the knowledge and skills of the next generation of lawyers, are seemingly adopting a laissez faire posture towards the advent of generative artificial intelligence. In stark contrast to law practitioners, law professors generally have displayed a lack of urgency in responding to the repercussions of this emerging technology.

This Article contends that all law professors have an inescapable duty to understand the capabilities and applications of generative artificial intelligence. This obligation stems from the pivotal role faculty play on three distinct but interconnected dimensions: pedagogy, scholarship, and governance. No law faculty are exempt from this mandate because all are entrusted with responsibilities that intersect with at least one, if not all three dimensions, whether they are teaching, research, clinical, or administrative faculty. 

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Next Week’s Tax Workshops

Monday, April 1: Rachelle Holmes Perkins (George Mason; Google Scholar) will present The Exigent AI Mandate for All Law Faculty as part of the Florida Marshall M. Criser Distinguished Faculty Workshop. If you would like to attend, please contact RSVP here.

Tuesday, April 2: Rita de la Feria (Leeds; Google Scholar) will present Designing a Progressive VAT as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli. 

Wednesday, April 3: John Brooks (Fordham; Google Scholar) with present The Original Meaning Of The Sixteenth Amendment, 102 Wash. U. L. Rev. ___ (2024) (with David Gamage (Missouri-Columbia; Google Scholar)) as part of the UC-Irvine Tax Policy Colloquium. If you would like to attend, please contact Natascha Fastabend. 

Wednesday, April 3: Eric Zwick (Chicago; Google Scholar) will present Tax Policy And Investment In A Global Economy (with Gabriel Chodorow-Reich (Harvard; Google Scholar), Matthew Smith (U.S. Treasury Department) & Owen Zidar (Princeton; Google Scholar)) as part of the Northwestern Advanced Topics in Taxation Colloquium. If you would like to attend, please contact Ari Glogower.

Wednesday, April 3: Mindy Herzfeld (Florida) will present What’s an Income Tax? 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 4: Emily Satterthwaite (Georgetown; Google Scholar) will present Taxing Nannies (with Ariel Jurow Kleiman (Loyola-L.A.; Google Scholar) & Shayak Sarkar (UC-Davis; Google Scholar)) as part of the Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak.

Friday, April 5: William G. Gale (Brookings Institution; Google Scholar), Jacob Goldin (Chicago; Google Scholar), Omri Marian (UC-Irvine; Google Scholar) & Nicol E. Turner-Lee (Brookings Institution) will present AI, Tax, and Society as the 2024 Ellen Bellet Gelberg Tax Policy Lecture. If you would like to attend, please RSVP here.

Friday, April 5: Nicholas Mirkay (Hawaii; Google Scholar) will present Formulating Tax Policy Through the Lens of Economic Dignity as part of the Indiana Tax Policy Colloquium. If you would like to attend, please contact Leandra Lederman. 

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Ring Presents The Conflictual Core Of Global Tax Cooperation Today At Duke

Diane M. Ring (Boston College; Google Scholar) presents The Conflictual Core of Global Tax Cooperation (with Shu-Yi Oei (Duke; Google Scholar)) at Duke today as part of its Duke Tax Policy Seminar hosted by Larry Zelenak:

Conventional wisdom suggests that the world is in a transformative era of global tax cooperation, as evidenced by the launch of a sweeping multilateral tax reform project to confront tax base erosion and profit shifting (“BEPS”) spearheaded by the OECD and G20. This Article argues that this dominant cooperation-centric account of OECD/G20-based global tax reform is overstated and masks fundamental conflicts in how developing and developed countries evaluate these reforms.

This Article illuminates and decodes the conflictual core imbedded in the OECD/G20 tax reform project by analyzing developing countries’ criticisms of the project and by identifying their unifying drivers. We argue that, fundamentally, developing countries are intensely concerned about the wide historical gulf in resources and power between developing and developed countries (particularly the United States and the European Union), and how the OECD/G20 global tax reform fails to address, and may even exacerbate, that gulf. Meanwhile, OECD and developed country defenses of the global tax reform have largely missed this fundamental crux of developing country criticisms—as evinced by their focus on the project’s incremental short-term benefits for inter-developing country tax competition.

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Brooks Presents The Original Meaning Of The Sixteenth Amendment Today At Washington University

John Brooks (Fordham; Google Scholar) presents The Original Meaning of the Sixteenth Amendment, 102 Wash. U. L. Rev. ___ (2024) (with David Gamage (Missouri-Columbia; Google Scholar)) at Washington University today as part of its Faculty Workshop Series: 

The Sixteenth Amendment to the United States Constitution enshrines Congress’s “power to lay and collect taxes on incomes, from whatever source derived.” Challenges to the exercise of that power have typically turned on whether the thing being taxed is “income” or not. In the most recent example, the 2023 Supreme Court case of Moore v. United States, taxpayers have argued that the Sixteenth Amendment only authorizes taxation of realized income—this is, that gain from appreciated property can only be taxed as “income” when there has been a sale or conversion of that property.

In this Article we argue—based on the original meaning of the Sixteenth Amendment—that this approach to constitutional tax questions is wrong. The focus of the Sixteenth Amendment and of the Congressional income tax power is not “income” per se, but rather “taxes on incomes, from whatever source derived.” Thus, the question should not be whether the thing being taxed satisfies some isolated definition of “income,” but rather whether that tax in question comports with the original meaning of “taxes on incomes.” 

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Jones Presents Charitalism And Federal Tax Exemption: A Case Study Using OpenAI And The PGA Tour Today At UC-Irvine

Darryll K. Jones (Florida A&M) presents Charitalism and Federal Tax Exemption: A Case Study Using OpenAI and The PGA Tour, 52 Cap. U. L. Rev. __ (2024), at UC-Irvine today as part of its Tax Policy Colloquium hosted by Natascha Fastabend: 

OpenAI and the Professional Golf Association Tour (PGAT) have entered separate partnerships with private investors who, in exchange for necessary capital, share in the organizations’ net assets. In effect, capitalists have been invited to share in profits generated by tax subsidized charities, that term expanded a bit to include the PGAT. The PGAT is a business league but subject to the same profit-prohibitions as charities. I argue that tax law’s resistance to explicit profit sharing is futile because the market is incessant and capitalists are indispensable to the charitable goal. My purpose is to discover and give meaning to “charitalism,” a portmanteau used to describe the co-dependent relationship between tax law’s prohibition against profit-taking, and capitalism’s unceasing quest for profit. The relationship is fraught, most of all, when charitalists form partnerships with capitalists. The private inurement doctrine prohibits unreasonable payments — amounts beyond fair market value — but only payments made in self-dealing transactions. It doesn’t demarcate the extent to which charitalists may facilitate profit taking on the open market — “outsider profit taking” — to acquire necessary inputs.

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Nam Presents Luck Egalitarian Redistribution: What Should We Do About Addiction? Today At Georgetown

Jeesoo Nam (USC; Google Scholar) presents Luck Egalitarian Redistribution: What Should We Do About Addiction? at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli: 

Suffering from substance use disorder is a material disadvantage. Drug addiction is the cause of many serious harms, often harms to the addicted person.

But when it comes to the issue of redistributing benefits and burdens in our society, many think that the disadvantage of being addicted requires no corrective redistribution because addicted people brought that disadvantage on themselves by choosing to use recreational drugs. Those who hold this view might prefer that redistributive welfare benefits that we ordinarily give to the less fortunate be withheld from drug users.

Is that view right?

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Maynard Presents Penalizing Precarity Today At Pepperdine

Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) presents Penalizing Precarity, 123 Mich. L. Rev __ (2024) (with Clinton Wallace (South Carolina; Google Scholar)) at Pepperdine today as part of its Tax Policy Workshop Series hosted by Deanna Newton:

Retirement policy in America is oriented around 401(k) accounts and other employer-sponsored savings plans, which will receive a whopping $1.5 trillion in tax subsidies over the next decade. This Article uncovers a harmful flaw in a common feature of these plans. The problem arises from a gap in the rules governing withdrawals made prior to reaching retirement age. Employees are generally required to seek approval from their plan administrator to receive a “hardship distribution,” which they are granted if they face an “immediate and heavy financial need,” like eviction or an unexpected medical expense. But even with this approval, these distributions are frequently subject to an “early withdrawal penalty,” a separate regime that is not coordinated with the hardship distribution rules.

This Article shows that the gap between the two sets of rules is little known to workers, employers and even policymakers. We document instances of taxpayers surviving financial calamity thanks to a hardship distribution only to learn that they now face a tax penalty—resulting in another cash crunch. 

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Gómez Presents Taxation's Limits At Indiana

Luís Calderón Gómez (Cardozo; Google Scholar) presented Taxation's Limits at Indiana-Maurer yesterday as part of its Indiana Tax Policy Colloquium hosted by Leandra Lederman:

Countless pages have been devoted to the question of why should everyone pay tax, yet its obverse has gone largely unnoticed: why should some people and organizations not pay tax? Our tax system exempts from ordinary income taxation a wide and diverse array of people and organizations engaged in significant economic activity—from parents providing childcare services for their family, to consular activities and charities operating animal shelters—seemingly without a convincing explanation. Perhaps as a result of the dizzying diversity of activities that have been exempted from tax, scholars and policymakers have eluded comprehensively or coherently justifying our exemption regimes.

This Article develops a novel normative theory that rationalizes and justifies our current tax exemption regime. Rather than conceiving exemptions as subsidies or individual deviations from a normative base explainable by ordinary politics, the Article argues that exemptions are best understood as mapping the “limits” of tax. 

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Next Week’s Tax Workshops

Monday, March 25: Goldburn P. Maynard, Jr. (Indiana-Kelley; Google Scholar) will present Penalizing Precarity (with Clinton Wallace (South Carolina; Google Scholar)) as part of the Pepperdine Tax Policy Workshop Series. If you would like to attend, please contact Deanna Newton.

Tuesday, March 26: Jeesoo Nam (USC; Google Scholar) will present Luck Egalitarian Redistribution: What Should We Do About Addiction? as part of the Georgetown Tax Law and Public Finance Workshop. If you would like to attend, please contact Emily Satterthwaite and Dayanand Manoli. 

Wednesday, March 27: Darryll K. Jones (Florida A&M) will present Charitalism and Federal Tax Exemption: A Case Study Using OpenAI and The PGA Tour, 52 Cap. U. L. Rev. __ (2024), as part of the UC-Irvine Tax Policy Colloquium. If you would like to attend, please contact Natascha Fastabend. 

Thursday, March 28: 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 Duke Tax Policy Seminar. If you would like to attend, please contact Larry Zelenak. 

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