Paul L. Caron

Wednesday, July 28, 2021

The Effect Of Taxes On Where Superstars Work

David R. Agrawal (Kentucky) & Kenneth Tester (Kentucky), The Effect of Taxes on Where Superstars Work:

Prior studies show that taxes matter for the residential locations of high-income earners. But, states raise a significant share of income taxes from nonresidents, especially superstars. Using superstar athletes and variation in state tax rates, we provide causal evidence on the effect of the net-of-participation tax rate on the location of labor supply. 

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July 28, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Calculating Conservation Easement Settlement Initiative Benefits

Beckett Cantley (Northeastern) & Geoffrey Dietrich (Cantley Dietrich, Las Vegas), Calculating Conservation Easement Settlement Initiative Benefits, 168 Tax Notes Fed. 2015 (Sept. 14, 2020):

Tax Notes Federal (2020)Following its recent success against syndicated conservation easements (“SCEs”), the IRS announced a Settlement Initiative (“SI”) on June 25, 2020 to “bring finality” to taxpayers battling the IRS on SCE issues. The IRS has been suspicious of conservation easements since 2016, when it first designated SCE transactions as “listed transactions.” In 2019, the IRS announced a “significant increase in enforcement actions” related to SCE transactions as SCEs made the IRS’ “Dirty Dozen” list of tax scams. This increase in enforcement actions has primarily resulted in IRS victories in the Tax Court. Thus, the IRS announced the SI to leverage its favorable outcomes against the taxpayers. Some critics are skeptical of the SI, claiming that the IRS has only been winning SCE cases on technical grounds and that the IRS does not hold as strong of a position as it claims on the true issues surrounding SCEs.7 Accordingly, many suggest that few taxpayers will take part in the SI. However, the IRS urges taxpayers to take a “hard, realistic look at their cases” with independent counsel.

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July 28, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Panels Today At SEALS

Tax panels today at the 2021 SEALS Annual Conference on Amelia Island, Florida (program):

SEALs Logo (2013)New Scholars Workshop: Corporate Law, Financial Markets, and Taxation I
This workshop gives New Scholars the opportunity to present a work-in-progress in a welcoming and supportive environment and to receive feedback on their presentation from more senior scholars in their fields. New Scholars are also assigned a mentor. The program is open to junior faculty at member schools. New Scholars are nominated to participate in the New Scholars Workshop by the deans of their respective law schools.

  • Mark Drumbl (Washington & Lee) (moderator)
  • Nicole Iannarone (Drexel), Faux Transparency
    Mentor: Constance Wagner (St. Louis)
  • Carla Reyes (SMU), Limited Liability DAOs for Regular People
    Mentor: James Gibson (Richmond)

Call for Papers Luncheon
This luncheon is being held to honor the winners of SEALS' annual Call for Papers competition. Admission ticket required.

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July 28, 2021 in Conferences, Legal Ed Conferences, Legal Education, Tax, Tax Conferences, Tax Scholarship | Permalink

Leff: Marijuana Taxation—Theory And Practice

Benjamin M. Leff (American; Google Scholar), Marijuana Taxation: Theory and Practice, 101 B.U. L. Rev. 999 (2021):

Marijuana legalization creates a host of complex legal problems, not the least of which is how to best tax the emerging legal market. This Essay attempts to bridge the gap between tax theory and marijuana policy to make some modest claims. First, it roots the discussion of state-level marijuana taxation in the theoretical distinction between ordinary revenue-raising taxes and so-called “Pigouvian” or regulatory taxes. It makes the somewhat controversial claim that the best taxing strategy for states is to attempt to capture as much of the marijuana legalization premium as possible without driving consumers into the illegal market, and that other Pigouvian policy concerns are likely to be less important. Second, it roots the discussion of federal-level taxes in the many factors that will change if federal prohibition ends, again recognizing the importance of possible additional legalization surplus if marijuana is legalized at the federal level.

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July 28, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Trailblazers: Tax Careers On Capitol Hill

U.S. Tax Court's Diversity & Inclusion Series, Tax Careers on Capitol Hill:

Please join the United States Tax Court for the next in its series of monthly programs celebrating diversity and inclusion in tax law. Moderated by Judge Cary Douglas Pugh, July’s webinar [today at 7:00 PM ET] looks at tax careers on Capitol Hill [registration]

SmithTiffany P. Smith is Chief Tax Counsel for Senator Ron Wyden’s staff of the United States Senate Committee on Finance. She has handled tax issues relating to international and corporate tax, tax exempt organizations and estate and gift taxes. Ms. Smith has also worked on small business/pass-throughs and individual issues, including the alternative minimum tax, and education tax incentives. Prior to working with the Senate Finance Committee, Ms. Smith worked with the Office of Chief Counsel for the Internal Revenue Service. Ms. Smith was also an Assistant Chief Counsel for the City of Chicago’s Office of Chief Counsel. She handled local tax issues in the Regulatory and Aviation Litigation Division. Ms. Smith received her undergraduate and law degrees from the University of Illinois in Champaign-Urbana, and her LL.M in Taxation from Georgetown University.

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July 28, 2021 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Tuesday, July 27, 2021

2022 Vault Law Firm Tax Rankings:  Skadden Is #1 For 12th Year In A Row

VaultVault has released its annual ranking of the Top 100 Law Firms, based on prestige as voted on by associates (methodology here). The Top Tax Practices are:



Home City

% Vote



New York



Davis Polk

New York



Kirkland & Ellis





New York



Baker McKenzie





New York



McDermott, Will & Emery




Latham & Watkins

Los Angeles



Cleary Gottlieb

New York



Weil Gotshal

New York



Sullivan & Cromwell

New York



Caplin & Drysdale




Simpson Thacher

New York



Morgan Lewis




Paul Weiss

New York



Mayer Brown




Miller & Chevalier




Debevoise & Plimpton

New York



Eversheds Sutherland




Ropes & Gray



For the twelfth year in a row, Skadden is #1. The city rankings are:

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July 27, 2021 in Law Firm Tax Rankings, Tax | Permalink

Brown: How Race Plays Into Tax Policing

The Atlantic:  The IRS Is Targeting the Poorest Americans, by Dorothy Brown (Emory):

AtlanticSenate Republicans recently killed a proposed increase in funding for the IRS that would have helped pay for the Biden administration’s infrastructure bill. The beneficiaries of that omission will be wealthy taxpayers, who regularly manage to stay just beyond the law’s reach with their tax-avoidance strategies. This is all too familiar. As my research shows, rich white Americans tend to get tax rules designed for their benefit. Quashing the funding that could have helped the IRS more aggressively pursue elite tax fraud is yet another example.

Without increased funding, the IRS will continue targeting low-income taxpayers for audits, particularly those claiming the earned-income tax credit.

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July 27, 2021 in Tax, Tax News | Permalink

Blank: United States National Report On Mandatory Disclosure Rules

Joshua D. Blank (UC-Irvine; Google Scholar), United States National Report on Mandatory Disclosure Rules:

This National Report was prepared for a conference titled Mandatory Disclosure Rules, hosted by the Institute for Austrian and International Tax Law at the Vienna University of Economics and Business in July 2021. This National Report addresses the mandatory disclosure rules that apply to “reportable transactions” under United States tax law. In responding to the conference questionnaire, this National Report describes the tax enforcement strengths and weaknesses of the mandatory disclosure rules that apply to reportable transactions in the US. It provides an overview of the types of transactions that taxpayers and advisors are required to disclose to the IRS, the persons that are required to disclose, and the process for disclosure.

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July 27, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Elkins: A Scalar Conception Of Tax Residence For Individuals

David Elkins (Netanya), A Scalar Conception of Tax Residence for Individuals:

Residence is one of the fundamental concepts in international taxation. As a rule, residents are taxed on their worldwide income while nonresidents are taxed only on their domestic-source income. The criteria for residence vary from country to country. Some countries look to physical presence. Other rely upon more obtuse concepts such as domicile, permanent home, ordinary residence, habitual abode, connections, or ties. Many countries use a variety of tests. Tax treaties typically employ a series of tie-breaking provisions to determine residency when each of the two signatories views an individual as a resident in accordance with its own domestic rules.

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July 27, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Monday, July 26, 2021

Cui: What Does China Want From International Tax Reform?

Wei Cui (British Columbia; Google Scholar), What Does China Want From International Tax Reform?, 103 Tax Notes Int'l 141 (July 12, 2021):

Tax Notes Int'lThe G-7 countries’ June 5 accord to implement a global minimum corporate tax rate promises to set off frenzied negotiations among nations regarding coordinated international tax reform. Finance ministers from the G-20 countries met in Venice on July 9-10, after this magazine went to press. Whether members of the G-7 club can persuade the larger group to endorse their minimum tax proposal will determine what mandate the OECD receives to continue the (re-)negotiations under pillars 1 and 2 of its program of work to develop a consensus solution. How will China respond to the G-7 proposal at the G-20 meeting? That question is especially intriguing, given the growing political antagonisms between China and some G-7 countries.

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July 26, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Magical Thinking and Trusts

Bridget J. Crawford (Pace; Google Scholar), Magical Thinking and Trusts, 50 Seton Hall L. Rev. 289 (2019) (reviewed by Hayes Holderness (Richmond) here): 

At a time of monumental economic inequality in the United States, wealthy individuals and their tax-motivated behavior have come under significant scrutiny from all corners. In 2019, the Supreme Court issued its first major ruling in over sixty years on the state income taxation of trusts. In North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, the Court declined to close what some critics consider to be a major loophole that benefits the trusts that wealthy individuals create for family members. This Article makes two principal claims — one interpretative and the other normative. The Article explains why the Court’s decision in Kaestner Trust is correct as a matter of law. Just as trusts themselves are a type of magical thinking — legal fictions made real by law — so, too, is the hope that the judicial branch can play an active role in limiting the use of trusts by the wealthy. Because judges cannot disregard centuries of trust jurisprudence, critics of family trusts have directed their attention mostly to the tax law. This Article suggests that reformation of the substantive law of trusts might help achieve reform, as well.

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July 26, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Lesson From The Tax Court: No Deduction For Under-The-Table Cash Payments

Camp (2017)When my son took an informal job as a “ranch hand” this past May, he was delighted to receive unrecorded cash payments.  He thinks it means he does not have to report them as income.  He will discover differently next filing season when we prepare his taxes.  But he is not alone in thinking that unrecorded cash payments are like eating someone else's dessert: the calories don't count.

The attractive obscurity of unrecorded and unreported payments for workers, however, presents a problem for those who employ them.  Employers would like to deduct those labor costs under §162.   In Engen Robert Nurumbi v. Commissioner, T.C. Memo. 2021-79 (June 30, 2021) (Judge Pugh), we learn that the Tax Court will not even use the Cohan rule to rescue a taxpayer who seeks to deduct unrecorded cash payments made to workers.  Mr. Nurumbi’s unrecorded cash payments to his workers may have helped them hide their income, but it also bit him on the butt when he tried to deduct the payments.  As part of this short and blunt lesson, I address the question of whether the Cohan rule might actually be mandatory.  Details below the fold. 

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July 26, 2021 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, July 25, 2021

The Top Five New Tax Papers

There is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and new papers debuting on the list at #3, #4, and #5:

  1. SSRN Logo (2018)[404 Downloads]  Discerning Commercial and Economic Reality: Applying the GAAR to Frucor, by Craig Elliffe (University of Auckland; Google Scholar)
  2. [398 Downloads]  Can Blockchain Revolutionize Tax Administration?, by Orly Mazur (SMU; Google Scholar) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  3. [292 Downloads]  The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule, by Zachary Liscow (Yale; Google Scholar) & Edward Fox (Michigan; Google Scholar)
  4. [277 Downloads]  Taxing the Top 100: U.S. Estimates of Winners and Losers From Pillar One Amount A, by Lorraine Eden (Texas A&M; Google Scholar)
  5. [244 Downloads]  The History of International Tax Law, by Marilyne Sadowsky (University Paris 1, Sorbonne Law School)

July 25, 2021 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, July 24, 2021

This Week's Ten Most Popular TaxProf Blog Posts

Christians & Lederman: How To Read A Tax Statute

This video provides helpful guidelines for reading a tax statute, focusing on the U.S. Internal Revenue Code. This video isn't about canons of interpretation, it's about how to read the statute itself well, with examples. Check out our 6 simple rules!

Note that this video does not focus on other sources of tax law and guidance, such as regulations and case law. Also, like everything from Break Into Tax, it does not provide legal or tax advice.

Break Into Tax thanks Josh Blank and Bill Popkin for comments on a draft of this video and thanks Connor Hasegawa (McGill Law '23) for editing assistance.

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July 24, 2021 in Legal Education, Tax | Permalink

Friday, July 23, 2021

The Charitable Tax Deduction And Civic Engagement

Andrew T. Hayashi (Virginia; Google Scholar) & Justin Hopkins (Virginia; Google Scholar), The Charitable Tax Deduction and Civic Engagement:

In an era characterized by inequalities of income and influence, political polarization, and the segregation of social spaces, the income tax deduction for charitable contributions would appear to abet some of our worst social ills because it allows wealthy individuals to steer public funds to their preferred charities. But we argue that now is the time to expand and refocus—not abolish—the tax subsidy for charitable giving.

Previous assessments of the charitable deduction have focused on how it helps charities but ignored an essential benefit of giving: its effect on the donor. We show that the charitable deduction increases volunteerism along with financial giving, and we report new evidence that volunteerism is associated with broader civic and political engagement, including engagement with people of different cultures, races, and ethnicities.

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July 23, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Tax Policy In The Biden Administration

Martinez Reviews Infanti's Our Selfish Tax Laws

Leo P. Martinez (UC-Hastings), Book Review, 47 Hastings Const. L.Q. 467 (2020) (reviewing Anthony C. Infanti (Pittsburgh; Google Scholar), Our Selfish Tax Laws: Toward Tax Reform That Mirrors Our Better Selves (MIT Press 2018)) (reviewed by Bridget J. Crawford (Pace; Google Scholar) & Ashley Unangst (J.D. 2020, Pace), A Picture of Society with Critical Tax Theory As Its Interpreter, 41 J. Am. Tax'n Ass'n 128 (2019); and Clint Wallace (South Carolina), Tax Policy and Our Democracy, 118 Mich. L. Rev. 1233 (2020)):

Our Selfish Tax LawProfessor Infanti does everyone a service by using comparative law principles to inform the tax policy debate. The lack of discipline overlap—tax law and constitutional law come easily to mind—only worsens the scarcity of scholarship that examines the Code in nuanced and constructive ways.

In his book, Tony Infanti uses comparative law principles to show how effective it can be to look at tax law in a different light Professor Infanti has chosen two separate areas as his vehicles for comparative illustration and examination of the selfishness of tax law: (1) U.S. housing policy and (2) the concept of the tax unit. With this part of the book, he delves into each area and points out how they fail to serve those who are already underserved. These areas are worthy of his insights because both are fundamental to the way the tax system affects taxpayers.

My friend Professor Emerita Margaret Montoya, has observed “budgets are moral documents; budgets, including tax expenditures, expose and reveal our lawmakers’ values and commitments.” While she is undoubtedly correct and unquestionably eloquent in her observation, Professor Infanti’s book reveals that she was too narrow in her formulation. The Code exposes not only lawmakers’ values and commitments but our own. As Professor Infanti would agree, we can do better.

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July 23, 2021 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink

Kissing The Security Blanket Goodbye: How The SECURE Act Will Affect IRA Beneficiaries’ Long-Term Financial Security

Cassidy J. Seamon (J.D. 2021, Boston College), Note, Kissing the Security Blanket Goodbye: How the Secure Act Will Affect IRA Beneficiaries' Long-Term Financial Security, 62 B.C. L. Rev. 357 (2021):

BC Law ReviewThe Setting Every Community Up for Retirement Enhancement Act (the SECURE Act) offers many forms of new support for retirement savings to help more Americans better prepare for their retirement. It also includes a provision that eliminates the stretch payout option for the beneficiaries of inherited individual retirement arrangements (IRAs). Prior to the SECURE Act, beneficiaries of inherited IRAs were able to capitalize on the tax-deferred savings vehicles for the remainder of their lifetimes. After the SECURE Act, the period of taxdeferred investment for beneficiaries was limited to ten years. In eliminating the stretch payout option, Congress opted for a relatively small amount of short-term revenue rather than the long-term financial security of both the IRA owner and the beneficiaries of the IRA based upon closing a perceived loophole.

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July 23, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Thursday, July 22, 2021

English Presents International Effective Minimum Taxation – OECD/G20 Pillar Two (“GloBE”) Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

Joachim English (Universität Münster) will present International Effective Minimum Taxation – OECD/G20 Pillar Two (“GloBE”) virtually today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

Joachim-englishThe G20/OECD Inclusive Framework is currently deliberating an effective international minimum tax as Pillar Two of its work on the tax challenges arising from digitalization. Political agreement on the so-called Global Anti-Base Erosion Proposal (GloBE) is sought for summer 2021 and prospects currently look good, in particular due to its full endorsement by the Biden administration. This paper outlines the developments leading up to the October 2020 Blueprint on GloBE and provides an assessment of its policy rationale and of certain objections raised in public hearings and in literature. 

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July 22, 2021 in Scholarship, Tax, Tax Workshops | Permalink

Proposition 13, Revisited

Evelyn Danforth (J.D. 2020, Stanford), Note, Proposition 13, Revisited, 73 Stan. L. Rev. 551 (2021):

In 1978, Californians overwhelmingly voted to add a suite of antitax measures to their state constitution. These provisions, together known as Proposition 13, ushered in a new era for the state—one that continues to define the contours of both public finance and private property ownership nearly a half century later.

On the heels of California’s first major political fight over Proposition 13 in decades, this Note seeks to reignite debate in the legal academy over the law’s wisdom as a matter of policy and its compatibility with the federal scheme in which it operates. To do so, this Note makes two distinctive contributions. 

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July 22, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Chicago-Kent Seeks To Hire A Tax Prof

Hiring Announcement: Chicago-Kent College of Law:

Chicago-KentChicago-Kent College of Law expects to hire one or more faculty to join our vibrant and nationally recognized intellectual community.  We have hiring needs in a variety of areas, including but not limited to:

  • First-Year Subjects, particularly Civil Procedure, Criminal Law, Property, and Torts;
  • Upper-Level Subjects, particularly Race and the Law, Commercial Law, Corporate Law, International Law, and Tax Law.

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July 22, 2021 in Legal Education, Tax, Tax Prof Jobs | Permalink

Jay: Down the Rabbit Hole With the IRS’ Challenge To Perpetual Conservation Easements

Jessica Jay (Vermont), Down the Rabbit Hole With the IRS’ Challenge to Perpetual Conservation Easements, Part One (51 Envtl. L. Rep. 10136 (2021)) and Part Two (51 Envtl. L. Rep. 10239 (2021)):

When the Internal Revenue Service began disallowing gifts of perpetual conservation easements for claimed failures of perpetuity requirements, it tumbled land trusts, landowners, and the U.S. Tax Court down the rabbit hole to a baffling land below. The Service’s drop into matters beyond valuation and into elements intended and necessary for easement durability and flexibility has caused a confusing array of Tax Court decisions.

Part One of this two-part Article examines how the Service lures the land conservation community and the Tax Court into Wonderland distortions, and the precarious tower of cards upon which its legal theories rest.

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July 22, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Wednesday, July 21, 2021

Buchanan Reviews Brooks' A Hitchhiker’s Guide To Comparative Tax Scholarship

Neil H. Buchanan (Florida; Google Scholar), Comparative (Tax) Scholarship Is For Everyone, and Everyone Can Make It Better (JOTWELL) (reviewing Kim Brooks (Dalhousie; Google Scholar), A Hitchhiker’s Guide to Comparative Tax Scholarship, 24 Fla. Tax Rev. 1 (2020):

JOTWELL Tax (2021)Justice Louis Brandeis famously described U.S. states as “laboratories” in which citizens can authorize their sub-national governments to “try novel social and economic experiments.” His logic surely also applies to nations as well, with countries around the world offering a wealth of real-world experiments from which we can all draw valuable insights.

Kim Brooks knows quite a lot about comparative legal scholarship (tax studies in particular), but she understands that most people have only passing familiarity with that vast body of literature. She also understands that most every scholarly enterprise could profit from a comparative perspective but that most scholars do not have the time or inclination to become full-on comparativists. What to do?

Brooks’s answer is to offer what she cheekily refers to as a hitchhiker’s guide, by which she means a practical immersion into just enough of the concepts of comparative scholarship to allow relative novices (like most of us) to enhance our analyses by looking beyond our own countries. She demonstrates, in short, that it is not necessary to become a Comparative Legal Scholar to engage usefully in comparative scholarship, and she shows how to do so carefully and with sufficient sophistication for any particular project. ...

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July 21, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Regulation and Tax in Space

Galya Savir, Regulation and Tax in Space (Wolters Kluwer 2021):

SpaceRegulation and Tax in Space, authored by a tax attorney with first-hand knowledge of the aerospace issues involved, is the first book to delve deep into the yet-to-be-resolved practicalities of taxation of resources mined in space. By international consensus, space is considered as a commons for all humanity. Now, however, as space activities and technologies are chiefly focused on commercial interests in extraterrestrial mineral resources, the mechanisms for allocating space mining resources must be sketched out to balance the efficient use of resources with a fair and stable tax system.

What’s in this book
Arguing that the space mining industry should be regulated in a way that will ensure an attractive investment climate for space entrepreneurs and the existence of a stable fiscal regime that will finance the costs of conservation and utilization of space resources, the author advocates for an international royalty system to help achieve industry goals, such as efficiency, administrative convenience, and sustainability. The book explores the following aspects of the topic:

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July 21, 2021 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink

Ryznar: A Tax Credit For Wills

Margaret Ryznar (Indiana-Indianapolis), A Tax Credit for Wills, 172 Tax Notes Fed. 211 (July 12, 2021):

Tax Notes Federal (2020)In this article, Ryznar suggests using tax law to encourage people to execute wills, arguing that the coronavirus pandemic revealed the importance of estate planning.

When the pandemic eases, many resulting issues will need to be addressed. One of these is preparation for the next pandemic, which should include encouraging people to create an estate plan.

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July 21, 2021 in Scholarship, Tax, Tax Analysts, Tax Scholarship | Permalink

Will Foster Named Arkansas Bar Foundation Professor Of Law

Will Foster has been named Arkansas Bar Foundation Professor of Law at the University of Arkansas School of Law:

Foster (2021)School of Law faculty members are selected as the Arkansas Bar Foundation Professor of Law based on outstanding teaching and excellence in scholarship in Arkansas law. During their one-year appointments, they are expected to contribute to the legal profession in Arkansas by building strong relationships between the faculty and state's bench and bar. The professorship was created through a gift from the Arkansas Bar Foundation.

"I am deeply grateful for the support of the Arkansas Bar Foundation for both our students and the work of the faculty," Will Foster said. "It's always a treat to work with the outstanding and generous lawyers of the Arkansas bar, and I'm honored to serve in this role again."

Will Foster's teaching and research focus primarily on business law, tax and transactional matters. His current courses include Business Organizations, Mergers and Acquisitions, Corporate Counsel Colloquium, Tax Policy, and Federal Income Taxation of Business Entities. Prior to joining the U of A, Will Foster was an associate professor at Washburn University School of Law and an attorney at Friday, Eldredge & Clark LLP in Fayetteville.

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July 21, 2021 in Legal Ed News, Legal Education, Tax, Tax News | Permalink

Good Riddance, TurboTax. Americans Need A Real ‘Free File’ Program.

New York Times:  Good Riddance, TurboTax. Americans Need a Real ‘Free File’ Program., by Binyamin Appelbaum:

TurboTax 3Intuit, the tax preparation giant, performed a public service last week by announcing its exit from a federal program that let some Americans use a free version of its TurboTax software.

With this move, the company is making clear what has always been true. Intuit and the rest of the tax prep industry want Americans to pay to file their taxes.

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July 21, 2021 in Tax, Tax News | Permalink

Tuesday, July 20, 2021

Infanti & Crawford: A Taxing Feminism

Anthony C. Infanti (Pittsburgh; Google Scholar) & Bridget J. Crawford (Pace; Google Scholar), A Taxing Feminism, in The Oxford Handbook of Feminism and Law in the United States (Deborah L. Brake (Pittsburgh), Martha Chamallas (Ohio State) & Verna Williams (Dean, Cincinnati) eds. 2021):

Feminist perspectives are not new to tax law. The first academic piece bringing a feminist perspective to bear on tax law dates to the early 1970s, when Grace Blumberg published Sexism in the Code: A Comparative Study of Income Taxation of Working Wives and Mothers. Contemporaneously, none other than Ruth Bader Ginsburg (along with her tax lawyer husband Marty Ginsburg) brought a feminist perspective to bear on tax law when she argued Moritz v. Commissioner before the Tenth Circuit Court of Appeals, as depicted in the movie On the Basis of Sex. Since then, numerous other contributions have been made to the tax literature identifying ways in which a feminist perspective might influence tax reform debates.

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July 20, 2021 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink

Cantley: Constitutional Issues In The Trump Tax Return Cases

Beckett Cantley (Northeastern), Trumped: Constitutional Issues in the Trump Tax Return Cases:

Since the beginning of his candidacy, there have been demands for President Donald J. Trump’s tax returns. Since his election, there have been non-stop court battles over his refusal to release personal financial information. Several House Committees have sought President Trump’s personal information on multiple different grounds, each claiming a valid legislative purpose for needing the information. President Trump argues the subpoenas do not serve a valid legislative purpose and that the House Committees are seeking this information to release to the public. The various sides have been locked in legal battles for years, with no end in sight.

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July 20, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

The Parallel Head Taxes Of Margaret Thatcher And Barack Obama: Economics As Morality And Its Populist Rejection

Joshua Cutler (Boise State; Google Scholar), The Parallel Head Taxes of Margaret Thatcher and Barack Obama: Economics As Morality and Its Populist Rejection, 29 S. Cal. Interdisc. L.J. 251 (2020):

The legacies of Margaret Thatcher and Barack Obama are alike intertwined with failed per capita taxes: Thatcher’s infamous local government poll tax and the individual mandate tax at the heart of Obama’s signature health care reform. Examining these two taxes together reveals that—despite the pronounced differences between the two political leaders—both taxes were conceived, enacted, met with virulent popular opposition, and ultimately repealed under remarkably parallel processes. Both taxes arose out of essentially the same economic idea, and in fact, this animating idea originated from the same small network of think-tank economists in both cases. Crucially, economic theory served as both the technical basis and the moral justification for the taxes. The Thatcher poll tax was morally justified as necessary to increase local government “accountability,” defined economically such that an accountable government is one where all citizens equally bear the full marginal cost of local government spending increases. Likewise, the moral basis of the individual mandate tax was “responsibility,” defined in economic terms such that a responsible person is one who bears the marginal cost imposed on society by their decision not to purchase health insurance.

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July 20, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Former Dean And Tax Prof Martin Dickinson: 48 Years Of Dedicated Service To Kansas Law School

Stephen W. Mazza (Dean, Kansas), Martin Dickinson: 48 Years of Dedicated Service to KU Law, 69 U. Kan. L. Rev. 1 (2020):

DickinsonThe University of Kansas School of Law has a 142-year history.1 During that time, several KU Law faculty have devoted forty-plus years of service to the institution and its students. But only one holds the record for the longest period of service: former dean and Robert Schroeder Distinguished Professor of Law, Martin B. Dickinson (1938–2020). From the time he was hired in 1967 to his retirement from the Law School in 2015, an estimated four thousand KU Law students witnessed his skills as a classroom instructor and they, along with thousands more, benefitted from his leadership of and dedication to KU Law. This brief Article includes facts known to many. It also includes anecdotes and occurrences less well-known, particularly to those who met Martin later in his career and after he stepped down as dean. It is a tribute to an individual who spent his professional life in service to his students and colleagues. ...

At this retirement party, Martin’s former students, his friends, and his admirers generously donated to a fund in his honor. After chatting with him about how the Law School might use that funding, we eventually settled on a teaching award for faculty. Martin made it clear that the students should be given the honor of selecting the award recipient. He carefully crafted the criteria and insisted on procedures that would encourage students to participate in the selection process. At the same time, he wanted to reward those faculty who challenged students to think critically, who set clear learning outcomes, and who were available to students outside of class.

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July 20, 2021 in Legal Ed News, Legal Education, Obituaries, Tax, Tax News | Permalink

Economic Opportunity & Resilience: Opportunity Zones & Equity

Daniel Figueroa (Massachusetts), Economic Opportunity & Resilience: Opportunity Zones & Equity:

The Tax Cuts and Jobs Act provided the most comprehensive update to the tax code in two decades. Born of it was the federal opportunity zone legislation that facilitates economic development in historically distressed areas by offering tax incentives. But does this “catalyst of economic growth” provide the needed relief and opportunity to the communities which it’s aimed to serve? This piece is an analysis of opportunity zones—the good, the bad, and the yet to be defined and their effect on actually curbing (or accelerating) gentrification. By considering the TCJA in general, this work evaluates stipulations regarding “Opportunity Zones,” and the concept of geographically-targeted tax policy. First, an analogization of supply-side tax policy and place-based incentivization programs; following the analysis of supply-side economics and its influence on a rising inequality; and a two-fold assessment of the factors most germane to this analysis: a historical overview of the ideological, legislative, and social factors most pivotal to the passage of TCJA, reforms are shown to have culminated not only in sky-high levels of wealth and income inequality in the U.S., but also an increasing distance and isolation between the wealthy ‘investor class’ targeted by ‘Opportunity Zone’ legislation, and the economically-distressed communities which such tax-based legislative incentives were designed to bring relief.

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July 20, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Monday, July 19, 2021

As IRS Audits Waned, Big Businesses Racked Up Unapproved Tax Breaks

Washington Post, As IRS Audits Waned, Big Businesses Racked Up Unapproved Tax Breaks:

Federal audits of corporate tax returns have plunged in recent years, letting big companies claim elaborate tax breaks with less government scrutiny, according to a Washington Post analysis of company filings.

Accounting rules permit businesses to claim tax breaks even if they are likely to be overturned by tax authorities, legal experts said. In the past, the Internal Revenue Service audited virtually every tax return filed by large corporations and rejected tax breaks it deemed inappropriate, data show.

But during the Obama administration, congressional Republicans moved to slash the IRS budget, shrinking the agency’s staff and straining its ability to conduct audits. As a result, the federal government now examines just half of all large company tax returns, despite businesses claiming increasing tax benefits over this period that they say could be overturned by authorities, according to regulatory filings, interviews with tax policy experts and data from the IRS and financial researcher Calcbench.

Companies currently in the S&P 500 index had $235 billion in tax breaks awaiting audit at the end of last year, up 43 percent from a decade earlier, data show. These tax breaks, defined by companies as “unrecognized” or “uncertain” tax benefits, include deductions that companies see as unlikely to be approved by authorities because they rely on disputable interpretations of the tax code, experts said.


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July 19, 2021 in Tax, Tax News | Permalink

Explosive Interview Directly Implicates Trump In Tax Scheme

Following up on my previous posts (links below):  Daily Beast, Explosive Interview Directly Implicates Trump in Tax Scheme:

A witness in the New York investigation against the Trump Organization has told prosecutors that Donald Trump personally guaranteed he would cover school costs for the family members of two employees in lieu of a raise—directly implicating the former president in an ongoing criminal tax fraud case.

The explosive claims come from Jennifer Weisselberg, the ex-wife of a longtime company employee, during a teleconference call with investigators on Friday, June 25, according to two sources who agreed to speak on the condition of anonymity.

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July 19, 2021 in Tax, Tax News | Permalink

Lesson From The Tax Court: For Whom The Bankruptcy Tolls

Camp (2017)Most tax practitioners are vaguely aware of bankruptcy law.  Today we learn something more.

Bankruptcy can have significant benefits for taxpayers.  First, it can stop IRS collection action.  Second, it can shake off a tax liability sooner than the 10 year time period Congress gives the IRS to collect.  Third, it can be a pre-payment forum, an alternative to the Tax Court, where the taxpayer can contest an unassessed liability.

Along with benefits, however, come costs.  The biggest cost is tolling.  Bankruptcy tolls various time periods for the IRS to assess or collect.  Two recent cases teach us just how costly bankruptcy tolling bad can be for taxpayers.  Dave Andrew Lufkin Sr., v. Commissioner, T.C. Memo. 2021-71 (June 8, 2021) (Judge Greaves), teaches how bankruptcy tolls tax collectionMarc. S. Barnes and Anne M. Barnes v. Commissioner, T.C. Memo. 2021-49 (May 4, 2021) (Judge Lauber), teaches how bankruptcy can also toll assessment:  it illustrates the confusing exception to discharge for tax debts that are unassessed but assessable as of the petition date.   Details below the fold.

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July 19, 2021 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, July 18, 2021

The IRS Reads The Bible And Reveals Its Bias: A Bureaucrat Examined Our Religion And Declared It Republican

Following up on my previous posts (links below):  Wall Street Journal Letter to the Editor:  Bunni Pounds (President, Christians Engaged), The IRS Reads the Bible and Reveals Its Bias: A Bureaucrat Examined Our Religion and Declared it Republican:

Christians EngagedWilliam McGurn (“Defund Joe Biden’s IRS,” Main Street, July 6) and Holman W. Jenkins, Jr. (“The IRS is ProPublica’s Accessory,” Business World, July 7) articulate theoretical dangers from the IRS that my organization experienced in reality.

Christians Engaged was founded to help civically minded Christians think through their responsibility in voting. All the pieces were in place—staff, a board, resources—but we had to apply for recognition by the IRS as a 501(c)(3). It took more than 18 months to get a response. When the IRS’s response letter came in May, it seemed to examine in great detail the faith that informs the organization. It felt strange to have a bureaucrat examine our religion, belief in the Bible and how we believe our faith impacts the world.

Then came this sentence: “The bible teachings are typically affiliated with the [Republican] party and candidates. This disqualifies you from exemption under the IRC Section 501(c)(3).”

Because we believed in and taught the Bible, the IRS disqualified us from charitable recognition. The IRS determined that biblical values and Republican politics were so intertwined as to make us partisan.

Thankfully, we appealed and this month secured a quick reversal of the IRS decision. Still, the danger remains as long as the IRS views religious institutions with such political cynicism.

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July 18, 2021 in IRS News, Tax, Tax News | Permalink

The Top Five New Tax Papers

There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new #1 paper and a new paper debuting on the list at #5:

  1. SSRN Logo (2018)[390 Downloads]  Can Blockchain Revolutionize Tax Administration?, by Orly Mazur (SMU; Google Scholar) (reviewed by Sloan Speck (Colorado; Google Scholar) here)
  2. [374 Downloads]  International Tax Law and its Influence on National Tax Systems, by Craig Elliffe (University of Auckland; Google Scholar)
  3. [373 Downloads]  The Allocation of Taxing Rights under Pillar One of the OECD Proposal, by Aitor Navarro (Universidad Carlos III de Madrid; Google Scholar)
  4. [340 Downloads]  Discerning Commercial and Economic Reality: Applying the GAAR to Frucor, by Craig Elliffe (University of Auckland; Google Scholar)
  5. [311 Downloads]  Justifying Source Taxation in the Digital Age, by Craig Elliffe (University of Auckland; Google Scholar)

July 18, 2021 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink

Saturday, July 17, 2021

This Week's Ten Most Popular TaxProf Blog Posts

A Majority Of Donor-Advised Funds Send Little/No Money To Charity Every Year

Following up on my previous posts (links below):  Chronicle of Philanthropy, New Study Shows That Majority of Donor-Advised Funds Are Sending Little or No Money to Charity Every Year:

InitiativeOne of the first studies ever to look at donor-advised funds on a micro level has found that every year, 37 percent on average don’t distribute any money and over half give less than 5 percent of their assets. The findings are fueling demands for passage of a Senate bill that would spur donors to do more to channel their money out of the funds faster.

The study of donor-advised funds at Michigan community foundations found that in 2020, 35 percent of those funds distributed no money, 22 percent distributed less than 5 percent of their assets, and 43 percent distributed more than 5 percent. Across the entire four-year period covered in the study — 2017 through 2020 — 86 percent of the advised-fund accounts gave money to working charities.

The findings come amid a growing debate over legislation proposed by Sen. Angus King, a Maine independent, and Sen. Charles Grassley, Republican of Iowa, that would add new incentives to encourage donors to give fast. For instance, donors would get an immediate tax break if they distributed their funds within 15 years, while delaying tax benefits for funds distributed beyond that span and requiring all funds to be spent within 50 years.

Proponents of the legislation have seized on the results as evidence that the measure is needed. At issue is the lack of a requirement for donor-advised funds to give money to charities similar to laws requiring private foundations to distribute at least 5 percent of their assets to charity every year.

“If society is going to subsidize through the tax code the creation of donor-advised funds and private foundations, then there is a responsibility that those vehicles transmit resources into the community in a timely manner,” John Arnold, a prominent philanthropist pushing for Congress to change regulations for donor-advised funds, told the Chronicle. Arnold is a founder of the Initiative to Accelerate Charitable Giving, a group of donors, scholars, and foundation leaders who drafted many of the ideas included in the King-Grassley measure.

“Opponents have said the bill is a solution in search of a problem, and this report explicitly describes the problem,” said Arnold. “There are too many DAF accounts that have received a tax benefit and are not distributing resources into the community.”

Not everybody agrees with that analysis.

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July 17, 2021 in Tax, Tax News | Permalink

Friday, July 16, 2021

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Monetary Finance By Galle And Listokin

This week, David Elkins (Netanya) reviews a new article by Brian Galle (Georgetown; Google Scholar) & Yair Listokin (Yale; Google Scholar), Monetary Finance (2021):

Elkins (2018)

Governments need (or want) to spend money. Perhaps the most obvious and time-honored means to finance that spending is via taxation. However, when the government concerned is a sovereign entity with the power to print currency, the question arises as to why it should resort to taxation at all. Why not simply print (or otherwise create ex nihilo) the money that it needs? The traditional response is that printing money leads to inflation, which is itself a form of taxation. It effectively redistributes from those who are least able to protect themselves from rising prices (e.g., retirees living on fixed income or employees without sufficient bargaining power to demand cost-of-living wage adjustments) to those who are able to protect themselves from rising prices and perhaps even to benefit from it. Furthermore, high inflation carries with it severe economic and political risks (Europe’s experience with hyper-inflation in the twentieth century is one reason why the mandate of the European Central Bank emphasizes price stability above all other goals).

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July 16, 2021 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Tax Policy In The Biden Administration

Next Week's Virtual Tax Workshop

Thursday, July 22: Joachim English (Universität Münster) will present International Effective Minimum Taxation – OECD/G20 Pillar Two (“GloBE”) virtually as part of the Indiana/Leeds Summer Zoom Tax Workshop Series. If you would like to attend, please contact Leandra Lederman or Leopoldo Parada.

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July 16, 2021 in Colloquia, Legal Education, Scholarship, Tax, Tax Workshops | Permalink

Báez Presents The UN Model Tax Convention On Automated Digital Services Today At The Indiana/Leeds Summer Zoom Tax Workshop Series

Andrés Báez (Universidad Carlos III de Madrid) presents Because Not Always B Comes After A: Critical Reflections on the new Article 12B of the UN Model Tax Convention on Automated Digital Services virtually today as part of the Indiana/Leeds Summer Zoom Tax Workshop Series hosted by Leandra Lederman (Indiana) and Leopoldo Parada (Leeds):

Baez-aProposals to try to meet the challenges of the digital economy through a more or less extensive system of withholding taxes at source are a not great novelty. However, in recent times, these proposals have gained new academic impetus in parallel with the work that, since 2013, and in line with the BEPS Plan, the Organisation for Economic Cooperation and Development (OECD) has been developing concerning taxation of the digitalized economy. 

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July 16, 2021 in Colloquia, Scholarship, Tax, Tax Workshops | Permalink

ABA Tax Section Women's Tax Forum Hosts Zoom Tea Today With Patricia Gimbel Lewis

The ABA Tax Section Women's Tax Forum is hosting a Zoom Tea today with Patricia Gimbel Lewis (Caplin & Drysdale) at 4:30 PM ET:

Aba-tax-section-women-in-tax-forumYou're invited to join the next Women in Tax Forum Zoom Tea! Take a 45-minute tea break with us as we chat on Zoom video with leading women tax lawyers from a variety of fields who share stories of success and struggle as we explore individual paths to professional and personal fulfillment.

We're honored to announce that Pat Lewis is joining us in July! With 50 years of experience as a tax attorney, Pat is a true pioneer for women in tax. Pat's practice at Caplin & Drysdale has long focused on transfer pricing issues, competent authority matters, and other aspects of international tax planning and controversy. She has been an advocate for transfer pricing "safe harbors" and other tax simplification approaches. 

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July 16, 2021 in ABA Tax Section, Legal Education, Tax | Permalink

Death Of Frank Doti (Chapman)

Remembering Fowler School of Law Prof. Frank Doti:

Doti 3The Chapman Family suffered a tremendous loss on July 14 when Fowler School of Law Professor Frank Doti was tragically killed in a car accident while travelling with his family. A member of the law school faculty since 1996, Doti founded both the Fowler School of Law’s Tax Law emphasis program and its Tax Law Clinic, and taught such courses as Contracts I and II, Federal Income Taxation, and Estate and Gift Tax Law.

“One cannot speak about the Fowler School of Law and its rich history without inevitably talking about Frank Doti,” said Fowler School of Law Dean Matt Parlow. “He was as well-known in the world of tax as he was well-loved by his students, and we will miss our beloved friend and colleague.”

Proving his popularity among students, Doti received the M. Katherine Baird Darmer Outstanding Professor of the Year Award in 2012, and one of his former students, Chapman University Trustee Zeinab Dabbah, M.D. (JD ’12), made a generous gift to name Kennedy Hall’s room 142 the Frank Doti Lecture Hall in his honor.

Doti 2

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July 16, 2021 in Legal Education, Obituaries, Tax | Permalink

Thursday, July 15, 2021

Soled: The Case For Deunification Of Gift And Estate Taxes

 Jay A. Soled (Rutgers; Google Scholar), Gift and Estate Taxes: The Case for Deunification, 57 Harv. J. on Legis. 439 (2020):

For the last half a century, the federal gift tax has been relegated virtually out of existence. There are many reasons that the gift tax has met this fate, including the current size of the lifetime tax exemption amount and the fact that noncompliance has gone largely unchecked. However, the real culprit in the subversion of the gift tax is the academic community: several decades ago, in the name of theoretical tidiness, it prodded Congress to amalgamate the estate and gift taxes into a unified whole. In retrospect, this exercise has proven to be a blunder that needs to be undone. This analysis posits how Congress can resurrect the federal gift tax and restore it to its former vibrancy.

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July 15, 2021 in Scholarship, Tax, Tax Scholarship | Permalink

Humans Vs. Robots: Rethinking Tax Policy For A More Sustainable Future

Kathryn Kisska-Schulze (Clemson; Google Scholar) & Karie Davis-Nozemack (Georgia Tech; Google Scholar), Humans vs. Robots: Rethinking Tax Policy for a More Sustainable Future, 79 Md. L. Rev. 1009 (2020):

Robotic and software innovation threatens to displace one third of the global workforce by 2030. Widespread worker displacement would decimate U.S. social safety net funding. To address these issues, Bill Gates and others have proposed a robot tax. A robot tax, while elegant on its face, masks the underlying tension between innovation and employment tax policies. Only by examining the foundational principles of these two policies is it evident that their dissonance can only be harmonized by requiring these policies to remain faithful to their original objectives.

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July 15, 2021 in Scholarship, Tax, Tax Scholarship | Permalink