Paul L. Caron

Friday, October 23, 2020

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Holderness's Insidious Regulatory Taxes

This week, Tracey Roberts (Cumberland) reviews a recently posted work by Hayes Holderness (Richmond), Insidious Regulatory Taxes.

Roberts (2020)In Insidious Regulatory Taxes, Hayes Holderness takes issue with state legislatures’ use of taxes to regulate individual behavior. He clarifies that regulatory taxes are “insidious” when a state legislature chooses to use a tax in order to avoid the level of state and federal constitutional scrutiny imposed on direct regulation. Federal and state courts have generally deferred to legislatures on tax matters because the U.S. Constitution and state constitutions grant legislature the “power of the purse.” Judicial attempts to curtail this power may be viewed as a violation of the separation of powers doctrine. Holderness argues that while judicial deference may be appropriate when the legislators’ goals are to raise revenue, that deference is not justified when legislators are acting with a regulatory purpose and when their goal in using a tax is to skirt the level of scrutiny applied to direct regulation.


Continue reading

October 23, 2020 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

The Dynamics Of Taxation: Essays in Honour of Judith Freedman

The Dynamics of Taxation: Essays in Honour of Judith Freedman (Oct. 15, 2020):

The Dynamics of Taxation 2This book brings together a landmark collection of essays on tax law and policy to celebrate the legacy of Professor Judith Freedman. It focuses on the four areas of taxation scholarship to which she made her most notable contributions: taxation of SMEs and individuals, tax avoidance, tax administration, and taxpayers' rights and procedures.

Professor Freedman has been a major driving force behind the development of tax law and policy scholarship, not only in the UK, but worldwide. The strength and diversity of the contributors to this book highlight the breadth of Professor Freedman's impact within tax scholarship. The list encompasses some of the most renowned taxation experts worldwide; they include lawyers, economists, academics and practitioners, from Britain, Canada, Portugal, Australia, Germany, Italy, Malta, Ireland, and Ukraine.

Continue reading

October 23, 2020 in Book Club, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Oren-Kolbinger: The Error Cost Of Marriage

Orli Oren-Kolbinger (Villanova), The Error Cost of Marriage:

Since its inception in 1918, the joint filing election has been one of the U.S. tax system’s most controversial concepts. This tax election allows married taxpayers to file a joint tax return or file two separate returns. Some err, either because they do not know they have a choice or simply because they choose unwisely and elect the less beneficial filing status.

The writers of the Code acknowledged taxpayers may need to correct a filing status error. Married taxpayers filing separately can retroactively amend their filing status for a previous year to joint filing under certain circumstances at no cost. Surprisingly, joint filers do not enjoy this opportunity to amend prior returns to filing separately in any circumstance. Scholars have extensively argued for and against treating married taxpayers as a single economic unit rather than on an individual basis. But they have yet to notice this asymmetric amendment rule. This Article is the first to examine the overlooked problem of the asymmetric treatment of married taxpayers who wish to amend their initial filing status election.

Continue reading

October 23, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, October 22, 2020

Daly & Mason: The Apple State Aid Case

Stephen Daly (King's College London) & Ruth Mason (Virginia), State Aid: The General Court Decision in Apple, 168 Tax Notes Fed. 1791 (2020):

Tax Notes FederalIn this article, the authors analyze the Apple state aid case, concentrating on its implications for state aid analysis and use of the arm’s-length standard, and they consider the drawbacks of using state aid to prevent corporate tax abuse as well as the broader implications of the case.

Continue reading

October 22, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

What’s Wrong With A Wealth Tax

Allison Schrager & Beth Akers (Manhattan Institute), What’s Wrong with a Wealth Tax:

In the coming months, Americans can expect calls to tax the wealth of the richest citizens. There are four oft-cited justifications for such a measure: inequality is rising, and there is a need to restore fairness; more revenue is necessary to bring exploding deficits under control, and taxing the wealthy is the least harmful way to do so; extreme wealth disparities harm economic growth; and the rich use their wealth to rig the political system, so democracy requires leveling the playing field.

Continue reading

October 22, 2020 in Tax, Tax Scholarship, Think Tank Reports | Permalink | Comments (1)

28,000 Charities Had Their Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Democratic Lawmakers Say

Forbes, 28,000 Charities Had Tax-Exempt Status Revoked After Trump Administration ‘Error,’ Lawmakers Say:

More than 30,000 nonprofit organizations in the U.S. have had their tax-exempt status automatically revoked by the Internal Revenue Service since May, Democratic lawmakers wrote in a letter to Treasury Secretary Steven Mnuchin, after an “apparent error” by the IRS may have erroneously revoked thousands of organizations’ tax-exempt status. ...

Continue reading

October 22, 2020 in Tax, Tax News | Permalink | Comments (1)

Guide To Election Year Activities Of § 501(c)(3) Organizations

PLI (2018)Continuing a TaxProf Blog tradition, Steven H. Sholk (Gibbons, Newark, NJ) has made available to readers the annual update of his wonderful 568-page Guide to Election Year Activities of Section 501(c)(3) Organizations (PLI 2020).

October 22, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, October 21, 2020

Dean Presents A Constitutional Moment In Cross-Border Taxation Virtually Today At Oregon

Steven Dean (NYU) presents A Constitutional Moment in Cross-Border Taxation virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

6a00d8341c4eab53ef0263e95a0f83200b-250wiThe Classification and Assignment Constitution has shaped cross-border policymaking for a century. Two global crises in quick succession have created both an opportunity and an urgent need to remake that material constitution, altering its substantive rules by transforming the processes that shape them. In tax, just as in trade and investment law, critics find “not a borderless market without states but a doubled world kept safe from mass demands for social justice and redistributive equality by the guardians of the economic constitution.” In order to rewrite the protective algorithm at the core of the Classification and Assignment Constitution to provide all states—and developing states in particular—with access to the revenues they desperately need, a more inclusive cast of constitutional actors must be empowered.

Over the last decade, during what the ongoing pandemic has revealed to be merely the eye of a fiscal storm, persistent inequality and austerity attracted an unprecedented level of attention to the way states collect revenues to meet their growing needs. A window of time that might have witnessed a restructuring of global tax policy instead culminated in an internecine struggle over how—and whether—the profits of digital giants such as Amazon and Google fit within its rigid numerus clausus algorithm. The arrival of COVID has only exacerbated those unresolved tensions.

Continue reading

October 21, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Yin: Repairing The Tax Privacy Rules

George K. Yin (Virginia), Repairing the Tax Privacy Rules:

This brief essay, adapted from remarks delivered to the Tax Policy and Simplification Committee of the ABA Tax Section on October 2, 2020, describes needed changes in three tax privacy areas: access and disclosure of presidential tax information, civil enforcement of congressional subpoenas, and confidentiality protections for tax return information obtained by subpoena.

Continue reading

October 21, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

ABA Tax Section Hosts Free Webinar Today On The Tax System and Social Policy

The ABA Tax Section hosts a free webinar today on The Tax System and Social Policy at 1:00 ET:

ABA TaxThe tax system has been used with increasing frequency as a social policy tool to administer social programs. From the Earned Income Tax Credit to the recent Economic Impact Payments, the IRS has been asked to do more with an ever decreasing budget. While the tax system may be an attractive vehicle to administer certain payments or benefits, it can also pose challenges. Panelists will examine the history of the tax code as a way to administer social programs. Panelists will then evaluate certain programs and discuss some advantages and disadvantages of administering these programs through the tax code. In particular, panelists will discuss the recent Economic Impact Payments and some of the challenges with administering these payments successfully. Lastly, panelists will propose some changes and alternatives to the way programs are administered to better serve the communities that are most in need of these benefits.


Continue reading

October 21, 2020 in ABA Tax Section, Conferences, Tax, Tax Conferences, Tax News | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN Logo (2018)SSRN has updated its monthly ranking of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through October 1, 2020) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

    All-Time   Recent
1 Reuven Avi-Yonah (Michigan)  193,644 Reuven Avi-Yonah (Michigan) 7,672
2 Dan Shaviro (NYU) 121,471 D. Dharmapala (Chicago) 4,492
3 Lily Batchelder (NYU) 118,169 Lily Batchelder (NYU) 4,194
4 David Gamage (Indiana-Bloom.) 117,337 Ruth Mason (Virginia) 4,050
5 Daniel Hemel (Chicago) 117,219 David Kamin (NYU) 3,780
6 Darien Shanske (UC-Davis) 110,644 Daniel Hemel (Chicago) 3,475
7 David Kamin (NYU) 106,364 Bridget Crawford (Pace) 3,252
8 Cliff Fleming (BYU)    105,240 Diane Ring (Boston College) 3,139
9 Manoj Viswanathan (Hastings) 102,274 Shu-Yi Oei (Boston College)  3,046
10 Rebecca Kysar (Fordham) 101,172 Hugh Ault (Boston College) 2,782
11 Ari Glogower (Ohio State) 100,006 Richard Ainsworth (BU) 2,420
12 Michael Simkovic (USC) 44,741 Dan Shaviro (NYU) 2,246
13 D. Dharmapala (Chicago) 42,038 David Gamage (Indiana-Bloom.) 2,207
14 Paul Caron (Pepperdine) 37,416 Margaret Ryznar (Indiana-Indy)    2,152
15 Louis Kaplow (Harvard) 33,734 Brad Borden (Brooklyn) 1,846
16 Richard Ainsworth (BU) 30,711 Darien Shanske (UC-Davis)  1,840
17 Ed Kleinbard (USC) 27,177 Robert Sitkoff (Harvard) 1,833
18 Vic Fleischer (UC-Irvine) 26,388 Louis Kaplow (Harvard) 1,553
19 Jim Hines (Michigan) 25,307 Paul Caron (Pepperdine)   1,480
20 Brad Borden (Brooklyn) 25,161 Cliff Fleming (BYU) 1,404
21 Bridget Crawford (Pace) 24,987 Ari Glogower (Ohio State) 1,359
22 Robert Sitkoff (Harvard) 24,876 Manoj Viswanathan (Hastings) 1,341
23 Ted Seto (Loyola-L.A.) 24,569 Katie Pratt (Loyola-L.A.) 1,310
24 Gladriel Shobe (BYU) 24,217 Michael Simkovic (USC) 1,264
25 Katie Pratt (Loyola-L.A.) 23,838 Yariv Brauner (Florida) 1,197

Continue reading

October 21, 2020 in Scholarship, Tax, Tax Prof Rankings, Tax Scholarship | Permalink | Comments (0)

Mark Zuckerberg Has Spent Over $10 Million To Overhaul California's Proposition 13 Tax Law

Vox, Mark Zuckerberg Is Spending Millions Like Never Before to Overhaul a Landmark Law:

[Mark] Zuckerberg has chosen to embark on a decidedly dicey political crusade: an attempt to touch the so-called third rail of California politics — the state’s 40-year-old landmark tax law — in the most expensive electoral play of the billionaire’s career.

Zuckerberg has been waging a costly and risky political battle for more than a year against California’s Proposition 13, the law that critics say has hamstrung the state’s economy by capping its property taxes, and thus underfunding two priorities of Zuckerberg and his wife, Priscilla Chan: schools and housing. While other tech leaders have conspicuously avoided weighing in until the very last minute, if at all, Zuckerberg stuck his neck out early and has now spent almost $11 million — including $4.5 million more just this month — on the cause, raising the stakes for Election Day.

Zuckerberg is backing what is called the “split roll” reform measure through his and his wife’s philanthropy, the Chan Zuckerberg Initiative. For the past year, he has been a key player behind the scenes and the only major Silicon Valley leader who has publicly endorsed it. And because he has been so alone in this effort, the vote on Prop 13 reform in some ways serves as a test of his and his ambitious philanthropy’s political muscle. ...

[W]hat Zuckerberg is attacking isn’t just a California tax law. It’s the nucleus of the modern, national anti-tax movement.

Continue reading

October 21, 2020 in Tax, Tax News | Permalink | Comments (4)

Saez & Zucman: Trends In US Income And Wealth Inequality

Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley), Trends in US Income and Wealth Inequality: Revising After the Revisionists:

Recent studies argue that US inequality has increased less than previously thought, in particular due to a more modest rise of wealth and capital income at the top (Smith et al., 2019; Smith, Zidar and Zwick, 2020; Auten and Splinter, 2019). We examine the claims made in these papers point by point, separating genuine improvements from arguments that do not appear to us well grounded empirically or conceptually. Taking stock of this body of work, and factoring in other improvements, we provide a comprehensive update of our estimates of US income and wealth inequality. Although some of the points raised by the revisionists are valuable, the core quantitative findings of this literature do not appear to be supported by the data. The low capital share of private business income estimated in Smith et al. (2019) is not consistent with the large capital stock of these businesses. In Smith, Zidar and Zwick (2020), the interest rate assigned to the wealthy is higher than in the datasets where both income and wealth can be observed, leading to downward biased top wealth shares; capitalizing equities using almost only dividends dramatically underestimates the wealth of billionaires relative to the Forbes 400. In Auten and Splinter (2019), business profits earned by the top 1% but not taxable (due in particular to generous depreciation rules) are classified as tax evasion; tax evasion is then allocated to the bottom 99% based on an erroneous reading of random audit data.

Continue reading

October 21, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Tuesday, October 20, 2020

Layser Presents How Place-Based Tax Incentives Can Reduce Economic Inequality Virtually Today At NYU

Michelle Layser (Illinois) presents How Place-Based Tax Incentives Can Reduce Economic Inequality, 74 Tax L. Rev. ___ (2020), virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Michelle-LayserPlace-based tax incentives are frequently used by governments to encourage investment in low-income areas. But no standard exists to describe the ideal place-based tax incentive, making evaluation of these programs nearly impossible. This Article provides the necessary baseline by explaining when, where, and how to design place-based tax incentives that can benefit low-income communities by reducing geographic inequality. Using Geospatial Information System (GIS) mapping methods, this Article demonstrates how lawmakers can use public data to map spatial disadvantage. It then draws on tax theory to show how to design place-based tax incentives to reduce geographic inequality in targeted areas. The result is not a one-size-fits-all prescription, but a place-specific approach that can help place-based tax incentives become an effective vehicle for reducing underlying, geographic causes of neighborhood disadvantage.

Continue reading

October 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Thomas Presents Taxing Nudges Virtually Today At UC-Hastings

Kathleen Delaney Thomas (UNC) presents Taxing Nudges 106 Va. L. Rev. ___ (2020), virtually at UC-Hastings today as part of its Tax Speakers Series hosted by Heather Field and Manoj Viswanathan:

Thomas-Kathleen-VERTICAL-844A8567-e1569848371875Governments are increasingly turning to behavioral economics to inform policy design in areas like health care, the environment, and financial decision-making. Research shows that small behavioral interventions, referred to as “nudges,” often produce significant responses at a low cost. The theory behind nudges is that, rather than mandating certain behaviors or providing costly economic subsidies, modest initiatives may “nudge” individuals to choose desirable outcomes by appealing to their behavioral preferences. For example, automatically enrolling workers into savings plans as a default rather than requiring them to actively sign up has dramatically increased enrollment in such plans. Similarly, allowing individuals to earn “wellness points” from attendance at a gym, redeemable at various retail establishments, may improve exercise habits.

Continue reading

October 20, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Meet The Excel Warriors Saving The World From Spreadsheet Disaster

Wired, Meet the Excel Warriors Saving the World From Spreadsheet Disaster:

ExcelDavid Lyford-Smith is an expert at solving spreadsheet mysteries. Once, in a previous job, he was sent a payroll form to look over for a new starter. It had the number 40,335 in a random box, and payroll wasn’t clear why it was there. “So they assumed it was a joining bonus for the employee and drew up a draft pay slip with a £40,335 bonus,” he says. But, when it comes to spreadsheets, assumptions can be costly.

Lyford-Smith isn’t just a spreadsheet enthusiast. He’s the technical manager for the Institute of Chartered Accountants in England and Wales (ICAEW), running its Excel community group — and as such has always been suspicious of numbers in that range. “That’s how Excel stores dates, as serial numbers,” he says. He was right: that wasn’t a generous signing bonus, but the new hire’s starting date.

Lyford-Smith is part of a community of accountants, auditors and Excel power users who have joined forces in a quiet battle against illogical formulas, copy-and-paste errors, and structural chaos that cause data carnage.

Last week, the government stumbled into its own spreadsheet nightmare when it admitted contact-tracing efforts were stymied by a simple data processing mistake. They’re not the first to fall victim to the curse of Excel – and they won’t be the last either. ...

Research suggests more than 90 per cent of spreadsheets have errors, and half of spreadsheet models used in large businesses have “material defects”. Given some 750 million people use Excel globally, there are plenty of errors needing attention. One prominent researcher calls spreadsheets the dark matter of corporate IT. And that’s why people like Lyford-Smith have become defenders of the spreadsheet, mitigating the risks by fixing everyone else’s mistakes. ...

Continue reading

October 20, 2020 in Legal Ed News, Legal Education, Tax, Tax News | Permalink | Comments (0)

Trump’s Taxes Were Not A Flaw In The System

Trump Tax Return (2020)

New York Times op-ed:  Trump’s Taxes Were Not a Flaw in the System, by Veronique de Rugy (George Mason):

When Americans recently learned how little President Trump has paid in taxes in the past 15 years and how he benefited from financial maneuvers, it reinforced the widespread belief that the rich don’t pay their fair share. Lost in the outrage is the fact that the tax provisions that allowed Mr. Trump to trim his tax bill were probably not illegal or the results of tax schemes concocted by anti-tax legislators.

Those provisions, and many others like them, delivered exactly what their drafters intended: They are engineered to benefit certain kinds of taxpayers — and most Americans are not among them. ...

[I]f your vision is for a more equitable system that can actually be enforced by the I.R.S., what we really need is a simpler and fairer tax code. Some of the current rules are good, but many are political giveaways to special interests. Telling those rules apart is actually harder than it seems, but there are some obvious places to start.

Continue reading

October 20, 2020 in Tax, Tax News | Permalink | Comments (1)

Monday, October 19, 2020

Wilking Presents Employees v. Independent Contractors: Evidence From U.S. Tax Returns Virtually At Michigan

Eleanor Wilking (Cornell) presented Independent Contractors in Law and in Fact: Evidence from U.S. Tax Returns virtually at Michigan yesterday as part of its Law and Economics Workshop Series hosted by J.J. Prescott & Veronica Santarosa:

WilkingFederal tax law divides workers into two categories depending on the degree of control exercised over them by the service purchaser (i.e. the firm): employees, who are subject to direct supervision; and independent contractors, who operate autonomously. Worker classification is consequential, determining how the income tax is administered and what it subsidizes, as well as which non-tax regulations pertain, such as workplace safety and anti-discrimination protections. The Internal Revenue Service and other federal agencies have codified common law agency doctrine into multi-factor balancing tests that are challenging to apply and costly to enforce. Yet almost nothing is known about how firms actually classify workers, and how such classification relates to the control they exercise. To bridge this gap between legal principles and legal practice, this Article introduces a novel empirical analysis using a comprehensive data source—all digitized U.S. income tax filings. This analysis establishes several new empirical facts.

Continue reading

October 19, 2020 in Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Dharmapala Presents Do Multinational Firms Use Tax Havens To The Detriment Of Other Countries? Virtually Today At Loyola-L.A.

Dhammika Dharmapala (Chicago) presents Do Multinational Firms Use Tax Havens to the Detriment of Other Countries? virtually today at Loyola-L.A. as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

Dharmapala_dhammika1The use of tax havens by multinational corporations (MNCs) has attracted increasing attention and scrutiny in recent years. This paper provides an exposition of the academic literature on this topic. It begins with an overview of the basic facts regarding MNCs’ use of havens, which are consistent with the location of holding companies, intellectual property, and financial activities in havens. However, there is also evidence of significant frictions that limit MNCs’ use of havens. These limits can be attributed to non-tax frictions (such as the legal and business environment in different jurisdictions), to tax law provisions limiting profit shifting, and to the costs of tax planning. There is evidence consistent with the relevance of each of these channels. The paper also argues that non-haven countries have available a range of powerful tax law instruments to neutralize the impact of MNCs’ use of havens. To the extent that it is not due to political dysfunction, their failure to deploy these instruments more extensively can be viewed as a deliberate policy choice, attributable either to collective action problems among non-havens or to the possibility that in certain circumstances MNCs’ use of havens increases the welfare of non-haven countries. In either case, MNCs’ use of havens is facilitated in crucial respects by the laws of non-haven countries.

Continue reading

October 19, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Lesson From The Tax Court: §6662 Penalties Treated As One For Supervisory Approval Requirement

Tax Court (2020)Last week, the Tax Court issued an important opinion on the §6751(b)(1) supervisory review requirements.  In Jesus R. Oropeza v. Commissioner, 155 T.C. No. 9 (Oct. 13, 2020) (Judge Lauber), held that the 20% penalty under §6662(b)(6) is the same as the 40% penalty under §6662(i) and therefore the failure to secure proper approval for assertion of the former in an RAR precludes assertion of the latter in a later NOD.  The latter subsection simply “enhances” the amount of §6662(b)(6) penalty and does not impose a separate penalty.

The path of the law is not linear. Doctrinal development sometimes involves two steps forward, one step backwards, and maybe even a step or two sideways.  In Oropeza the Tax Court took what some may view as a step sideways, and what the government will likely view as a step backwards.  The decision seems in tension with prior Tax Court opinions that treat §6662 as containing multiple penalties for supervisory approval purposes, including an opinion by the same judge about the same taxpayer!  The upshot of today’s opinion is that practitioners need to read NODs very carefully. Details below the fold.

Continue reading

October 19, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 18, 2020

The Intersection Of Race And Taxes

The Philadelphia Bar Association Tax Section hosted a webcast on Friday on The Intersection of Race and Taxes:

Philadelphia Bar AssociationAmid a renewed focus on racial justice in our society, this CLE program will address the scholarship and client-facing work on issues related to our tax system and its impact on racial inequality. The panelists share their insights and perspectives on how different aspects of international, federal, state and local tax structures effect racial inequities. Join your colleagues in the Tax Section for this fascinating examination of the intersection of racial diversity and federal, state and local tax policy.

  • Alice Abreu ( Temple)
  • Steven Dean (NYU)

Continue reading

October 18, 2020 in Conferences, Legal Ed Conferences, Legal Education, Tax | Permalink | Comments (0)

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 paper debuting on the list at #5:

  1. SSRN Logo (2018)[568 Downloads]  Ending Corporate Tax Avoidance and Tax Competition: A Plan to Collect the Tax Deficit of Multinationals, by Kimberly Clausing (UCLA), Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley)
  2. [270 Downloads]  Good Tax Governance: International Corporate Tax Planning and Corporate Social Responsibility – Does One Exclude the Other?, by Ave-Geidi Jallai (Tilburg)
  3. [251 Downloads]  The Rise of Cooperative Surplus Taxation, by Allison Christians (McGill) & Tarcisio Diniz Magalhaes (McGill)
  4. [244 Downloads]  Economic Reality in EU VAT, by Ad van Doesum (Maastricht) & Frank Nellen (Maastricht)
  5. [131 Downloads]  Why Is So Much Redistribution In-Kind and Not in Cash? Evidence from a Survey Experiment, by Zachary Liscow (Yale) & Abigail Pershing (J.D. 2020, Yale)

October 18, 2020 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, October 17, 2020

This Week's Ten Most Popular TaxProf Blog Posts

The Best Stimulus: 0% Income Tax

Wall Street Journal op-ed:  The Best Stimulus: 0% Income Tax, by Stephen Moore:

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Continue reading

October 17, 2020 in Tax, Tax News | Permalink | Comments (9)

Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability And Transparency In Form 990

Patrick R. Baker (Tennessee), Paula Hearn Moore (Tennessee) & Kaleb Paul Byars (J.D. 2021, Tennessee), Nonprofit College Crash: Enforcing Board Fiduciaries Through Increased Accountability and Transparency in the IRS Form 990 Procedure, 2019 BYU Educ. & L.J. 167:

Private colleges are closing at an increasing rate due to mismanagement by their boards of directors. Because of inadequate standing to sue nonprofits and courts not questioning board decisions due to the business judgement rule, management of nonprofits is minimal after mishaps occur. Prevention measures must be established to ensure these breaches are prevented on the front-end. One solution is to strengthen IRS Form 990 by enforcing faster and more in-depth disclosures. This solution will allow stakeholders of nonprofits, such as Burlington College and Sweet Briar, to complete their due diligence, make informed decisions faster and more efficiently, and increase the likelihood that such educational institutions will survive and thrive.

October 17, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Friday, October 16, 2020

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Strategic Nonconformity To The TCJA

This week, Ariel Jurow Kleiman (San Diego) reviews a two-part essay, Strategic Nonconformity to the TCJA, Part I: Personal Income Taxes, 97 Tax Notes State 17 (July 6, 2020), by Adam Thimmesch (Nebraska), Darien Shanske (Davis), and David Gamage (Indiana); and Strategic Nonconformity, State Corporate Income Taxes, And the TCJA: Part II, 97 Tax Notes State 123 (July 13, 2020), by Darien Shanske, Adam Thimmesch, and David Gamage.

StevensonNo one reading this review will be surprised to hear that states need cash. They need it to fund vital public services and to shore up coffers eviscerated by the economic fallout of the pandemic. While borrowing and federal support are both logical revenue sources, state borrowing limits prevent deficit spending and aid to state and local governments has been a major sticking point in federal stimulus talks. For the foreseeable future, states may be on their own.

Well, not entirely on their own. They do have some very able tax law scholars to help them navigate these rocky fiscal shoals. In this two-part essay, Adam Thimmesch, Darien Shanske, and David Gamage offer several ways that states can raise revenue during the current crisis. Part of a larger effort called Project SAFE (State Action in Fiscal Emergencies), this two-part installment considers how states’ tax laws should or should not conform with changes enacted in the Tax Cuts and Jobs Act (TCJA).

Continue reading

October 16, 2020 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Stark Presents South Dakota v. Wayfair: One Small Step for Man Virtually Today At Florida

Kirk Stark (UCLA) presents South Dakota v. Wayfair: One Small Step for Man virtually today at Florida as part of its Tax Colloquium Series:

StarkMy objective in this article is to situate the Wayfair decision within the broader historical and institutional context of U.S. fiscal federalism, with a particular emphasis on what Wayfair may portend for U.S. fiscal federalism and future of the retail sales tax. With apologies to Neil Armstrong, the Supreme Court’s repudiation of the Quill physical presence rule surely marks a “small step” in the development of state and local retail sales taxes. Tax policy analysts, myself included, have long bemoaned the adverse effects of the physical presence rule, so its demise is unquestionably welcome news. But does the Wayfair holding represent a “giant leap” toward a more coherent and rational system of taxing household consumption in the United States? 

Continue reading

October 16, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

15th Annual Junior Tax Scholars Workshop Continues Virtually Today At Utah

Utah Logo (2016)Andrew Appleby (Stetson), Subnational Digital Services Taxes
Commentators: Christine Kim (Utah), Shelly Layser (Illinois)

Ed Fox (Michigan, presenting) & Zach Liscow (Yale), When the Taxman Pays Taxpayers: Understanding the Psychology of Negative Tax Liability
Commentators: Jeremy Bearer-Friend (George Washington), Clint Wallace (South Carolina)

Jacob Goldin (Stanford, presenting) & Ariel Jurow Kleiman (San Diego), Whose Child Is This?
Commentators: Jeremy Bearer-Friend (George Washington), Daniel Schaffa (Richmond)

Christine Kim (Utah), Taxing Teleworks in the Wake of COVID-19
Commentators: Goldburn Maynard (Indiana Business School), Ariel Jurow Kleiman (San Diego)

Shelley Layser (Illinois), Magnet Zones
Commentators: Zach Liscow (Yale), Tracey Roberts (Cumberland)

Daniel Schaffa (Richmond), Payroll Subsidies as a Policy Tool
Commentators: Tracey Roberts (Cumberland), Eleanor Wilking (Cornell) 

Continue reading

October 16, 2020 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Dagan Presents Re-Imagining Tax Justice In A Globalized World Virtually Today At Boston College

Tsilly Dagan (Oxford) presents Re-Imagining Tax Justice in a Globalized World virtually at Boston College today as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Dagan (2020)In this paper I explain why designing a country’s tax policy with the elasticity of taxpayers’ choices of residency in mind, although a rational welfare-maximizing move by the state as a whole, and possibly even for its immobile as well as mobile constituents, is a policy that may not be justified under a liberal-egalitarian social contract.

I discuss two polar views of the social contract: one endorsing the state with the coercive power to promote the joint interests of its constituents. The other views the coercive power of the state as a way to fulfill the collective will of its constituents as a society of equals in order to promote who they are as people.

Continue reading

October 16, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Thursday, October 15, 2020

Goldin & Michelmore: Who Benefits From The Child Tax Credit?

Jacob Goldin (Stanford) & Katherine Michelmore (Michigan), Who Benefits from the Child Tax Credit?:

The Child Tax Credit (CTC) provides a cash transfer of up to $2,000 per child under age 17 to millions of families in the United States. Using the Current Population Survey, we examine the aggregate effects and distributional implications of the rules governing children’s eligibility for the credit. While approximately 90% of all children qualify for at least a partial CTC, we document striking disparities in eligibility by income and race. The vast majority of children living in households in the bottom decile of the national AGI distribution are completely ineligible for the CTC and the majority of filers in the bottom thirty percent are eligible only for a partial credit. In contrast, virtually all children living in households in the top half of the income distribution qualify for the full credit amount. Approximately three-quarters of white and Asian children are eligible for the full CTC, compared to only about half of Black and Hispanic children. We use our results to estimate the distributional effects of a range of reforms to the CTC eligibility rules. Our results suggest that reforming the credit to include a larger share of children would more evenly distribute the credit’s benefits across children of different races and incomes.

Continue reading

October 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Cockfield: How To End The Conflict Over Taxing Global Digital Commerce

Arthur J. Cockfield (Queen's University), Tax Wars: How to End the Conflict over Taxing Global Digital Commerce, 17 Berkeley Bus. L.J. 353 (2020):

In the last two years, dozens of governments have proposed or implemented unilateral tax measures to tax foreign-based technology companies. The new tax innovations include special withholding taxes, diverted profit taxes, minimum taxes, and digital services taxes. The rise of these unilateral measures threatens an international tax “war” among governments that could stifle new business models or even the spread of the global digital economy. This Article reviews the failure of international reform efforts to constrain aggressive international tax planning within the digital economy, and how the global digital tax conflict masks a growing dissatisfaction with how to tax value associated with global transactions.

Continue reading

October 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Christians & Tazeem: Facebook’s Libra Is The Next Tax Challenge For The Digital Economy

Allison Christians (McGill) & Mahwish Tazeem (McGill), Facebook’s Libra: The Next Tax Challenge for the Digital Economy, 3 Stan. J. Blockchain Law & Pol'y 228 (2020):

LibraIn 2019 Facebook announced its plan to launch a cryptocurrency within the coming year, with the express goal of extending past its existing user base to those who lack access to traditional banking services. The prospect of Facebook enabling millions of global transactions outside of the (highly regulated) conventional banking system prompted scrutiny, most immediately in the area of financial services regulation. But it should also heighten the sense of urgency to reconstruct prevailing global tax rules to ensure that highly digitalized businesses pay an appropriate amount of taxes wherever they carry out business activities and create value. This paper lays out Facebook Libra’s original design concept, the problems it sought to solve, and the potential implications its successful launch would have on the redesign of the global tax system that is already in progress.

Continue reading

October 15, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, October 14, 2020

Kim Presents Blockchain Initiatives For Tax Administration Virtually Today At Oregon

Young Ran (Christine) Kim (Utah) presents Blockchain Initiatives for Tax Administration virtually at Oregon today as part of its Tax Policy Colloquium Series hosted by Roberta Mann:

ImageBlockchain has become an attractive topic not only among techies, but also entrepreneurs, policymakers, and even laymen. A thriving body of literature discusses various legal issues related to blockchain, but it often mixes the discussion of blockchain with Bitcoin and other cryptocurrencies. However, cryptocurrencies and blockchain are not synonymous. Blockchain is a decentralized, immutable, peer-to-leer ledger technology, whereas cryptocurrencies are built on a blockchain. In other words, blockchain is the original, underlying technology of cryptocurrencies. Recently, not only the private sector—e.g., financial services, smart contracts, medical records, property records, supply chain—but also the public sector—e.g., defense, budget allocation, government approval chain, voting—have gone beyond the cryptocurrencies and have begun to utilize blockchain technology itself as a newly emerged data management system, appreciating its resilient and immutable features. Considering that more data is processed remotely and thus digitally in post COVID-19 era, the data management system built upon blockchain will gain stronger momentum.

Continue reading

October 14, 2020 in Christine Kim, Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Kysar Presents Interpreting By The Rules Virtually Today At UC-Irvine

Rebecca Kysar (Fordham) presents Interpreting by the Rules, 99 Tex. L. Rev. ___ (2020), virtually at UC-Irvine today as part of its Tax Policy Colloquium Series hosted by Joshua Blank, Victor Fleischer, and Omri Marian:

RebeccaKysar_240x240A promising new school of statutory interpretation has emerged that tries to wed the work of Congress with that of the courts by tying interpretation to congressional process. The primary challenge to this process-based interpretive approach is the difficulty in reconstructing the legislative process. Scholars have proposed leveraging Congress’s procedural frameworks and rules as reliable heuristics to that end. This Article starts from that premise but will add wrinkles to it. The complications stem from the fact that each rule is adopted for distinct reasons and is applied differently across contexts. As investigation into these particularities proceeds, it becomes apparent that the complications are also rooted in something deeper—that Congress’s procedures are often hollow, even fraudulent. Congress, it turns out, breaks its own rules with impunity.

Continue reading

October 14, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Saito Presents Tax Coordination Virtually Today At Northeastern

Blaine Saito (Northeastern) presents Tax Coordination virtually at Northeastern today as part of its Faculty Colloquia Series:

SaitoThe United States implements a great deal of its social policy through the income tax laws. The Code is rife with tax expenditures for education, housing, community economic development, retirement savings, and health care to name a few. Many tax scholars have questioned consistently the use of the Code to implement these policies, calling instead for the elimination of these tax expenditures. Furthermore, as an agency the IRS and Treasury lack the expertise to manage these social policy tax expenditures effectively. Yet, given American politics and the institutional structure of the federal government, that is unlikely to happen.

This piece suggests that agency coordination between the IRS and other federal agencies, called tax coordination, would improve administration, management, and potential outcomes of these social policy tax expenditures. Drawing on the well-established literature in administrative law and public administration regarding agency coordination, it shows the benefit of tax coordination. 

Continue reading

October 14, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

NY Times: Four Books That Explain The U.S. Tax System

New York Times, Four Books that Explain the U.S. Tax System:

David Foster Wallace, The Pale King (2012), reviewed by Darien Shanske (UC-Davis) and Larry Zelenak (Duke):

The Pale KIngIn this posthumous novel, set at an I.R.S. office in Illinois, the agency is a microcosm of human nature: “greed, politics, power, goodness, charity.

The agents at the IRS Regional Examination Center in Peoria, Illinois, appear ordinary enough to newly arrived trainee David Foster Wallace. But as he immerses himself in a routine so tedious and repetitive that new employees receive boredom-survival training, he learns of the extraordinary variety of personalities drawn to this strange calling. And he has arrived at a moment when forces within the IRS are plotting to eliminate even what little humanity and dignity the work still has.

The Pale King remained unfinished at the time of David Foster Wallace's death, but it is a deeply compelling and satisfying novel, hilarious and fearless and as original as anything Wallace ever undertook. It grapples directly with ultimate questions -- questions of life's meaning and of the value of work and society -- through characters imagined with the interior force and generosity that were Wallace's unique gifts. Along the way it suggests a new idea of heroism and commands infinite respect for one of the most daring writers of our time.

David Cay Johnston, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else (2003), reviewed by Joel Newman (Wake Forest):

Continue reading

October 14, 2020 in Book Club, Tax, Tax Scholarship | Permalink | Comments (0)

U.S. Still Balks At OECD Plan To Tax Tech Giants

OECDNew York Times, Global Talks on Taxing Tech Firms Will Slip Into 2021:

International negotiators said on Monday that they would not reach agreement this year on how and where to tax technology giants like Google and Facebook, as talks remain hindered by the pandemic and an ongoing dispute between the United States and other wealthy nations.

Wall Street Journal, U.S.-Europe Relations Tested as Talks on Taxing Multinationals Fall Short:

World governments have failed to agree to new rules on taxing the profits of multinational companies, a long-running point of tension between the U.S. and Europe over levies paid by the likes of Apple Inc. and Google and one that has raised the threat of trans-Atlantic tariffs. ... [T]he Organization for Economic Cooperation and Development, the forum for the talks, said on Monday that governments have failed so far to agree on new rules.

Financial Times, OECD Drafts Principles For $100bn Global Corporate Tax Revolution:

Continue reading

October 14, 2020 in Tax, Tax News | Permalink | Comments (0)

Tuesday, October 13, 2020

Zucman Presents The Rise Of Income And Wealth Inequality Of America Virtually Today At NYU

Gabriel Zucman (UC-Berkeley) presents The Rise of Income and Wealth Inequality of America: Evidence from Distributional Macroeconomic Accounts (with Emmanuel Saez (UC-Berkeley)) virtually at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

Zucman (2021)This paper studies inequality in America through the lens of distributional macroeconomic accounts—comprehensive distributions of the aggregate amount of income and wealth recorded in the official macroeconomic accounts of the United States. We use these distributional macroeconomic accounts to quantify the rise of income and wealth concentration since the late 1970s, the change in tax progressivity, and the direct redistributive effects of government intervention in the economy. Between 1978 and 2018, the share of pre-tax income earned by the top 1% rose from 10% to 19% and the share of wealth owned by the top 0.1% rose from 7% to 19%. In 2018, the tax system was regressive at the top-end; the top 400 wealthiest Americans paid a lower average tax rate than the macroeconomic tax rate of 28%. We confront our methods and findings with those of other studies, pinpoint the areas where additional data and more research is needed, and describe how additional data collection could improve inequality measurement.

Continue reading

October 13, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

Holderness: Tax Relief For Commuters After COVID-19

Hayes Holderness (Richmond), Changing Lanes: Tax Relief for Commuters:

Tax law reaches all parts of life, and societal views about life activities often affect how the law is applied. As those societal views change, then, application of the law should be expected to change in turn. This Essay highlights changing societal views about commuting, particularly as a result of the COVID-19 pandemic, to demonstrate how even long-standing positions under the tax law can be quickly uprooted.

Continue reading

October 13, 2020 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

15th Annual Junior Tax Scholars Workshop Kicked Off Oct. 2 Virtually At Utah

Utah Logo (2016)Zach Liscow (Yale, presenting) & Ed Fox (Michigan), The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule
Commentators: Jon Choi (Minnesota), Sloan Speck (Colorado)

Goldburn Maynard (Indiana Business School), Enjoying Luxury while Black
Commentators: Jacob Goldin (Stanford), Blain Seto (Norteastern)

Tracey Roberts (Cumberland), Regulatory Taxation (Revisited)
Commentators: Hayes Holderness (Richmond), Eleanor Wilking (Cornell)

Blaine Saito (Northeastern), Tax Coordination
Commentators: Jacob Goldin (Stanford), Clint Wallace (South Carolina)

Continue reading

October 13, 2020 in Scholarship, Tax, Tax Conferences, Tax Scholarship | Permalink | Comments (0)

Eleanor Wilking Joins Cornell Tax Faculty

WilkingEleanor Wilking (personal website)
Assistant Professor of Law
Eleanor Wilking studies the intersection of tax policy and employment law through the lens of law and economics. Her research interests include tax administration, particularly questions concerning individual income and consumption tax structuring, distribution, and compliance. Her current research focuses on tax compliance questions raised by the proliferation of digital platform firms and accompanying changes in self-employment earnings of independent contractors. She received her J.D. (2015) and Ph.D. in Economics (2018) from the University of Michigan.

Prior to joining the faculty as an Assistant Professor in 2020, Eleanor was an Acting Assistant Professor of Tax at NYU Law.

Her recent publications and papers include:

Continue reading

October 13, 2020 in Legal Ed News, Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Monday, October 12, 2020

Bearer-Friend Presents In-Kind Tax Paying: Lessons And Risks Virtually Today In California

Jeremy Bearer-Friend (George Washington) presents In-Kind Tax Paying: Lessons and Risks virtually today as part of the San Diego-Davis-Hastings Tax Law Speaker Series:

JeremyBearerFriend_0 (1)This Article documents and evaluates noncash remittance of tax obligations, referred to as “in-kind tax paying.” Such forms of tax paying include: paying a federal income tax bill by remitting a used, flatbed truck to the IRS; paying a property tax bill by working a few hours a month answering phones at city hall; and, conveying a proportion of all seashells farmed within a state to that state. These are not just hypotheticals, but forms of in-kind tax paying that occur in the United States throughout periods when many taxes are also paid in cash. Nevertheless, despite its long history and prevalence, in-kind tax paying has consistently been overlooked.

By providing a comprehensive account of in-kind tax paying within a cash economy, this Article makes three contributions. First, it improves our definition of tax paying by identifying the wide variety of in-kind remittances that already occur in our current tax system and offering a taxonomy for how to understand in-kind remittances within an economy that relies primarily on cash taxes. Second, it refutes the presumption that in-kind remittance of tax obligations is not viable, thus expanding the tax tools available to local, state, and federal governments and demonstrating how narrow presumptions about tax remittance have predetermined core tax policy choices.

Continue reading

October 12, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Shanske Presents States Should Issue Debt In Emergencies Virtually Today At Loyola-L.A.

Darien Shanske (UC-Davis) presents States Should Issue Debt in Emergencies virtually today at Loyola-L.A. as part of its Tax Policy Colloquium Series hosted by Katie Pratt and Ted Seto:

Shanske-darienWe are in the midst of overlapping national crises, which call for a national response. So far the national response has not been adequate. Facing revenue shortfalls and constrained by balanced budget rules, the states have started to cut services, a cruel response that will perpetuate the misery. It would be far better to raise taxes on those who can afford to pay as compared to making such cuts. But can states raise enough revenue fast enough? Likely not.

What if the Federal Reserve extended long-term loans to the states at the federal government’s cost of funds and only for revenue shortfalls caused by the pandemic/recession? I argue that the Fed could and should do so and that, if the Fed were to make the offer, then the states should take it and could take it under current state law (at least in some states). To be clear, borrowing from the Fed is far inferior to direct federal support, but, I argue, borrowing is far better than making cuts during a pandemic and recession.

Continue reading

October 12, 2020 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

More NY Times Coverage Of Trump's Taxes

Lesson From The Tax Court: The Slippery Slope Of Tax Court Review

Tax Court (2020)Today’s post is about how the Tax Court reviews decisions of the IRS Whistleblower Office (WBO).  If you want to report a tax cheat, you have a variety of choices, detailed in this IRS webpage.  Typically, you write a letter or submit a Form 3439-A.  But if you want to also claim an award for blowing the whistle, you must submit a Form 211 with the IRS Whistleblower Office (WBO).  That is because the WBO is the office in the IRS that decides whether the information you gave resulted in additional collections of tax.  If it did, you get a cut.  If you don’t like the amount of the award, you can ask the Tax Court to review the WBO’s decision on the amount.

When the WBO decides that you are entitled to no award, however, it could be for a variety of reasons, only some of which are reviewable by the Tax Court.  In John Worthington v. Commissioner, T.C. Memo 2020-141 (Oct. 8, 2020) Judge Gustafson teaches the difference between those decisions the Tax Court will review and those it will not; it turns on the difference between the words “rejection” and “denial.”  To me, this case represents a wobbly first step onto a slippery slope towards reviewing IRS audit decisions.  That is not what WBO review used to cover but times, they may be a-changing!  Details below the fold.

Continue reading

October 12, 2020 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, October 11, 2020

Tax Fact-Checking The Vice Presidential Debate

Marketplace, Fact-Checking Harris’ and Pence’s Claims About Taxes:

VP DebateAt the vice presidential debate on Wednesday, Sen. Kamala Harris and Vice President Mike Pence sparred over who the Trump administration’s tax reforms wound up benefiting: middle-class families or the rich.

Soon after he entered office, President Trump signed the Tax Cuts and Jobs Act into law, which lowered the corporate tax rate from 35% to 21% and changed the income level of individual tax brackets, dropping the highest tax bracket from 39.6% to 37%.

The winners of Trump’s tax law
Harris said that Donald Trump’s tax law benefited “the top 1% and the biggest corporations,” while Pence said that the average American family of four saved $2,000 in taxes because of the new law.

According to the White House’s Council of Economic Advisers, a typical family of four earning $73,000 received a $2,000 tax break in 2018.

According to Eleanor Wilking, an assistant law professor at Cornell University, because the tax law reduced personal income rates for every tax bracket except for the 10% bracket, it did not exclusively benefit those in the top 1%. She pointed out that it did disproportionately benefit high-income taxpayers

Continue reading

October 11, 2020 in Tax, Tax News | Permalink | Comments (1)