Paul L. Caron
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Monday, November 25, 2019

Lesson From The Tax Court: The Scope And Standard Of Review In CDP Cases

Tax Court (2017)Many Tax Court cases teach lessons about Collection Due Process (CDP).  The case of Norman Hinerfeld v. Commissioner, T.C. Memo. 2019-47 (May 2, 2019) (Judge Halpern), teaches a nice lesson about how the Tax Court reviews IRS CDP decisions.  It illustrates the difference between the concepts of “scope” of review and “standard” of review.  And it introduces readers to the wacky world of tax administrative law which, must to the consternation of those academics who like their law neat and tidy, is anything but neat and tidy.  More below the fold.

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November 25, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, November 24, 2019

NY Times: Raise Billions From Billionaires? Tax Experts Say It’s Not That Simple

New York Times, Raise Billions From Billionaires? Tax Experts Say It’s Not That Simple:

One of the signature initiatives of Elizabeth Warren’s presidential campaign is a wealth tax that, she says, would pay for many of the programs she proposes, like government-paid health care and free college tuition. Bernie Sanders, one of her opponents in the Democratic race, has proposed his own version of a wealth tax that would collect, according to estimates, about $4 trillion over a 10-year period, or $500 billion more than Senator Warren’s plan.

But here’s the big question: Would the proposals, elegant in theory, work in practice?

Lawyers and advisers to the wealthy say there is no way the wealth taxes would collect anything close to the estimates, and they cite ample evidence of taxes that are reduced or eliminated through extensive and sometimes aggressive strategies. ...

Gabriel Zucman, an economics professor at the University of California, Berkeley, who was one of the lead advisers on the Warren and Sanders wealth tax proposals, begs to differ. He said in an interview that he had solutions for many of the concerns and criticisms of the plans, including how to value private companies and illiquid assets. ...

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November 24, 2019 in Tax, Tax News | Permalink | Comments (2)

The Top Five New Tax Papers

There is a quite 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) [308 Downloads]  The Arm's Length Standard Is Not the Problem, by Lorraine Eden (Texas A&M)
  2. [289 Downloads]  Boiling Starbucks’ Roasting Down to the Essence of its Residual, by William Byrnes (Texas A&M)
  3. [210 Downloads]  Implications for Apple in the Lower Court Rulings in Starbucks and Fiat, by Ruth Mason (Virginia)
  4. [180 Downloads]  2018 Developments in Connecticut Estate and Probate Law, by Jeffrey Cooper (Quinnipiac) & John Ivimey (Reid and Riege, Hartford)
  5. [180 Downloads]  An Empirical Study of Statutory Interpretation in Tax Law, by Jonathan Choi (NYU)

November 24, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 23, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, November 22, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Morse's GILTI: The Co-Operative Potential Of A Unilateral Minimum Tax

This week, Ariel Jurow Kleiman (San Diego) reviews a new work by Susan Morse (Texas), GILTI: The Co-operative Potential of a Unilateral Minimum Tax, 2019 Brit. Tax Rev. 512.

StevensonCooperative is not a term often applied to the Tax Cuts and Jobs Act (TCJA).  And yet, as Susan Morse explains in her recent article on “global intangible low-taxed income” (GILTI), the Act does have some cooperative potential.  This potential arises from the new immediate tax on GILTI income—a subset of foreign income—earned by U.S.-parented multi-national corporations (MNCs).  The presence of a mandatory tax removes incentives for countries to race to the bottom with ever-lowering tax rates, to the extent that they do so to attract U.S. MNCs.  Moreover, by providing a foreign tax credit for 80% of foreign taxes paid, the law gives the “right of first refusal” to foreign jurisdictions.  In a sense, the GILTI regime carves out a protected space for foreign countries to tax U.S.-parented MNCs, effectively creating a global tax floor of 13.125% (increasing to 16.4% in 2025).

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November 22, 2019 in Ariel Stevenson, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

NTA 112th Annual Conference On Taxation

National Tax Association (2016)Highlights of today's National Tax Association 112th Annual Conference on Taxation in Tampa (full program here):

Keynote: The Triumph of Injustice: Lessons for Distributional Tax Analysis
Emmanuel Saez (UC-Berkeley)

Plenary in Honor of Louis Kaplow (Harvard), 2019 Holland Award Recipient
Chair: Alvin Warren (Harvard)

  • Alan Auerbach (UC-Berkeley)
  • James Hines (Michigan)
  • Stefanie Stantcheva (Harvard)
  • David Weisbach (Chicago)

Empirical Studies of Wealth Taxes
Chair: Emmanuel Saez (UC-Berkeley)

Alternatives to Wealth Taxation

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November 22, 2019 in Conferences, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Burke Presents The Factitious Allure Of Passthrough Parity At Northwestern

Karen C. Burke (Florida) presented The Factitious Allure of Passthrough Parity at Northwestern on Wednesday as part of its Advanced Topics in Taxation Colloquium Series hosted by Herbert Beller, David Cameron, Charlotte Crane, Sarah Lawsky, Ajay Mehrotra, Philip Postlewaite, and Jeffrey Sheffield:

Burke (2019)In 2017, Congress enacted § 199A, purportedly to maintain tax parity for corporate and noncorporate businesses. Despite concerns about mass conversions to the corporate form, upon closer examination § 199A appears largely to preserve the passthrough advantage, while raising issues concerning the relative tax efficiency of different passthrough types. Other factors, such as the use of partnerships to achieve an asset basis step-up with a single-level tax on sale of a business, are also likely to influence the choice of entity. Moreover, the 2017 Act encourages both corporate and noncorporate owner-managers to mischaracterize labor income as business income, thereby minimizing total income and employment tax exposure.

November 22, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (2)

Thursday, November 21, 2019

De La Feria Presents Tax Fraud And Selective Law Enforcement At Toronto

Rita De La Feria (University of Leeds School of Law) presented Tax Fraud and Selective Law Enforcement at Toronto yesterday as part of its James Hausman Tax Law and Policy Workshop Series:

De-la-FeriaThis article presents a new conceptual framework for research into tax fraud. Informed by research approaches from across tax law, public economics, criminology, criminal justice, and regulatory theory, its proposed analytical framework assesses the effectiveness, and the legitimacy, of current approaches to combating tax fraud. The last decade has witnessed significant intensification of antitax fraud policy within Europe, with an upsurge in both legislative and administrative measures that purportedly target tax fraud. Using VAT as a case study, it is argued that these measures display a fundamental misunderstanding of the phenomenon of tax fraud, and in particular of the various costs it carries, by concentrating upon combating the revenue costs of fraud, rather than the fraud itself. Whilst measures deployed to combat revenue costs, and those deployed to combat the tax fraud, will often coincide, this will not always be the case. In those cases where they do not coincide prevalence is consistently given to enforcement measures addressing revenue costs, rather than combatting the fraud itself, even where the effect is to aggravate other costs of tax fraud, such as distortions to competition, or tax inequity, or to create an incentive to future non-compliance.

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November 21, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

NTA 112th Annual Conference On Taxation

National Tax Association (2016)Highlights of the opening day of the National Tax Association 112th Annual Conference on Taxation in Tampa (full program here):

Keynote: Tax Follies and Wisdom through the Ages
Joel Slemrod (Michigan)

Plenary: Capital and Wealth Taxation

  • Jason Furman (Harvard)
  • Beth Kaufman (Caplin & Drysdale)
  • Henrik J. Kleven (Princeton)
  • Wojciech Kopczuk (Columbia)

Law and Economics
Chair: Andrea Lopez-Luzuriaga (George Washington)

New Principles for Optimal Taxation
Chair: Theodore Seto (Loyola-L.A.)

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November 21, 2019 in Conferences, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Why Do People Tolerate Income Inequality?

Lucia Macchia (City, University of London), Anke C. Plagnol (City, University of London) & Nattavudh Powdthavee (Warwick Business School), Why Do People Tolerate Income Inequality?:

Harvard Business Review LogoAcross societies, the richest 1% now hold a larger percentage of national income than ever before. What’s puzzling is that the latest research on attitudes toward inequality suggests that citizens in more unequal countries are less concerned about income inequality than those in more egalitarian countries. If income inequality is overwhelmingly bad for most people in a society, why do they – especially those who live in the most unequal of places – still put up with it?

According to the latest work by Harvard sociologist Jonathan J. B. Mijs, this income inequality puzzle can be explained in part by evidence showing that people’s belief in meritocracy (i.e., that income differences stem from differences in effort, not in luck) often goes hand in hand with the level of income inequality in a society. It seems that people in the most unequal societies, irrespective of whether they are from the working class, the lower middle class, or the upper middle class, are more likely to believe that the rich are rich because they worked hard for their income, while the poor are poor because of a lack of trying.

Our latest research, however, offers an additional explanation for the income inequality puzzle. We find that people put up with high levels of inequality for two reasons:

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November 21, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (5)

Thomas: The Modern Case For Withholding

Kathleen DeLaney Thomas (North Carolina), The Modern Case for Withholding, 53 UC Davis L. Rev. 81 (2019):

Who is responsible for paying taxes to the government? Currently, the answer depends on one’s employment status. Employees enjoy the luxury of not having to think about tax remittance during the year because their employers withhold taxes from their paychecks. Non-employees, on the other hand, face a much more onerous system. They must keep track of and budget for taxes during the year, make quarterly remittances to the IRS, and may face penalties for failing to do so. Although this regime has been in place for many decades, there are several reasons why reform may be in order.

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November 21, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Wednesday, November 20, 2019

Phillips & Nelson Present Macroeconomic Effects Of Reducing OASI Benefits Today At Penn

Kerk Phillips (CBO) & Jaeger Nelson (CBO) present Macroeconomic Effects of Reducing OASI Benefits: A Comparison of Seven Overlapping-Generations Models at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

CBOIn this paper we evaluate the effects of a reduction in Social Security’s Old-Age and Survivors Insurance (OASI) benefits using seven different quantitative general equilibrium overlapping-generations (OLG) models. We compare the effects of an anticipated one-third reduction in OASI benefits beginning in 2031 on an economy that maintains currently scheduled benefits. We find many of the models generate qualitatively similar results concerning budgetary and macroeconomic aggregates; however, the magnitude of the effects varies owing to the models’ structure and calibration strategies.

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November 20, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Kim Presents The Digital Services Tax: A Cross-Border Variation Of The Consumption Tax Debate? At Vienna

Young Ran (Christine) Kim (Utah) presented The Digital Services Tax: A Crossborder Variation of Consumption Tax Debate at the University of Vienna yesterday as part of its Faculty Workshop Series hosted by Sabine Kirchmayr-Schliesselberger (University of Vienna) and Neil Buchanan (Florida):

KimAs highly digitalized business models, such as Google, Amazon, and Facebook, have been mainstreamed in the economy, the traditional profit allocation and nexus rules of taxation are further strained. Traditionally, profit is allocated to market countries when the business has physical presence there. However, highly digitalized business models can generate profits in market countries without physical presence. Thus, market countries, especially the EU, have started imposing a digital services tax (“DST”) on the gross revenue generated in jurisdictions with highly digital business models, which has ignited heated debate across the globe.

DST is criticized as “ring-fencing,” or segregating, certain digital business models, because it arguably imposes a disguised corporate income tax on the profits of only certain digital firms, which discriminates against American tech giants. However, while DST is politically driven, the criticism is largely based on practical concerns and focused on the imminent impact, such as who is the winner and loser in the short term, rather than considering DST theoretically. More importantly, there is little discussion of the consumption tax aspect of the DST. DST is a turnover tax, which is a subcategory of consumption tax levied on the gross revenue of a firm. However, strangely, there is little discussion of the theoretical value of DST as a consumption tax.

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November 20, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Today Is Tampon Tax Day At Two Dozen Law Schools

Law.com, Tampon Tax Sparks Law Student Protests:

Tax FreeLaw students across the country are taking on the so-called tampon tax on Nov. 20.

Aspiring attorneys from two dozen law schools in states that tax menstrual products plan to purchase those items and send in tax refund claims to their respective state taxation agencies as both a form of protest and a bid to raise awareness about what they view as the unfairness of such taxes.

Wednesday’s coordinated efforts are spearheaded by the Tax Free. Period project, a collaboration between the nonprofit advocacy group Period Equity and menstrual products maker Lola. Fordham University School of Law’s Legislative and Policy Advocacy Clinic took the lead in organizing law student participation in the action, which also includes writing to state lawmakers and state departments of revenue about the unconstitutional nature of tampon taxes.

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November 20, 2019 in Legal Ed News, Legal Education, Tax | Permalink | Comments (9)

Tax Progressivity And Top Incomes: Evidence From Tax Reforms

Enrico Rubolino (University of Essex) & Daniel Waldenstrom (Paris School of Economics), Tax Progressivity and Top Incomes: Evidence from Tax Reforms:

We study the link between tax progressivity and top income shares. Using variation from large-scale Western tax reforms in the 1980s and 1990s and synthetic control method esti- mation, our results suggest that reductions in tax progressivity had large and lasting positive impacts on top income shares. The effects are largest within the top percentile while being almost zero in the lower half of the top decile, and they seem mainly related to cuts in top marginal tax rates. The results are robust to different model specifications, placebo tests in time and space and controlling for other simultaneous institutional reforms. Searching for mechanisms, we observe that the share of capital income of total income in the top income percentile increased after the reforms, which indicates that tax avoidance behavior related to the management of capital incomes could lie behind some of the observed effects.

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November 20, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Harvard Law Prof Who Was Ousted From Deanship For Representing Harvey Weinstein Failed To File Tax Returns For Nearly A Decade

Following up on my previous posts:

Sullivan v. Commissioner, T.C. Memo. 2019-153 (Nov. 19, 2019):

Petitioner is a clinical professor of law at Harvard Law School and the faculty director of the Harvard Trial Advocacy Workshop and the Harvard Criminal Justice Institute. He did not file a Federal income tax return for 2012 or 2013; IRS records indicate that he likewise failed to file returns for 2005-2011. ...

[P]etitioner’s aggregate outstanding liability for 2012 and 2013 was $1,231,775. The bulk of this assessed liability, for 2013, appears to be attributable to petitioner’s sale during 2013, for $1,865,000, of his former residence at the Newton address.

Petitioner timely filed Form 12153, Request for a Collection Due Process or Equivalent Hearing, listing his address as the Winthrop House address. He checked the box captioned “I cannot pay balance.” Referring to the 2013 liability in particular he stated: “I did not (nor have I ever made) enough money to justify a $1.2M tax.”

On July 3, 2017, the IRS sent petitioner a letter, addressed to his Winthrop House address, acknowledging receipt of his hearing request. The letter advised him that, to be eligible for a collection alternative, he would need to file Federal income tax returns for 2012-2015 and supply a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. He did not respond to this letter and did not supply any of the requested documents. ...

Finding no abuse of discretion in any respect, we will grant summary judgment for respondent and sustain the proposed collection action.

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November 20, 2019 in Legal Ed News, Legal Education, New Cases, Tax | Permalink | Comments (5)

Tax Court Chief Judge Maurice Foley Delivers Fogel Lecture Today At Temple

Fogel Lecture

Maurice Foley, Chief Judge of the U.S. Tax Court, delivers the Fall 2019 Frank & Rose Fogel Lecture at Temple today at Noon EST (livestream here).

November 20, 2019 in Tax, Tax News | Permalink | Comments (0)

Crawford: SSRN And The (Arbitrary) Determination Of 'Scholarly' Merit

Bridget J. Crawford (Pace), SSRN and the (Arbitrary) Determination of 'Scholarly' Merit, 22 Green Bag 2d 201 (2019):

SSRN Logo (2018)This article, published in the Green Bag, investigates and critiques SSRN’s (lack of clear) criteria for classification of material as a “scholarly paper” or “other paper.” In the former category appear to be “scholarly research papers,” bibliographies, briefs filed before some courts, some (but not all) teaching materials, and some (but not all) articles published in the Green Bag, for example. In the latter category are data tables, summary book reviews, opinion pieces, advocacy and satirical papers. “Other papers” are internet-searchable but are not displayed on the author’s SSRN page. Downloads of “other papers” are not included for purposes of SSRN’s various rankings.

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November 20, 2019 in Legal Ed Rankings, Legal Ed Scholarship, Legal Education, Scholarship, Tax, Tax Rankings, Tax Scholarship | Permalink | Comments (1)

Tuesday, November 19, 2019

Bankman Presents Mr. Smith Gets An Education: Why It Is So Hard To Get Easy Tax Filing Today At NYU

Joseph Bankman (Stanford) presents Mr. Smith Gets an Education: Why it is so Hard to get Easy Tax Filing at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

I Bankman (2016)magine that one day, you get a note in the mail from Visa saying that starting next month, Visa will no longer be sending itemized bills (or indeed, any bills at all) to its cardholders. Instead, it will be the responsibility of every Visa cardholder to keep a record of all purchases, and refunds charged or credited to their account during the month, along with late payments and late fees, interest accruing on unpaid balances, and then tote it all up at the end of the month to figure out how much they owe Visa. If cardholders inadvertently omit some charges and pay Visa too little, you’re informed, Visa will assess interest and penalties on the underpayment.

Why on earth would Visa do such a thing?, you wonder. After all, Visa already has all that information in its computers, which can automatically calculate from that information the net amount you owe. Why should individual cardholders duplicate that effort, at considerable annoyance and expense to themselves, and with the dead certainty of errors?

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November 19, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Li Presents Arbitration Of International Tax Disputes At Boston College

Jinyan Li (Osgoode Hall) presented Arbitration of International Tax Disputes: A Rich Countries’ Game Ill-fit for Belt & Road Countries (with Nathan Jin Bao (Gowling WLG, Toronto), Sean Shanghua Hu & Wayne Wei Hu)) at Boston College yesterday  as part of its Tax Policy Workshop Series hosted by Shu-Yi Oei, Jim Repetti, and Diane Ring:

Jinyan-LI_NEWSROOMTax arbitration is considered by many to be an effective way of resolving tax disputes under tax treaties by pressuring the competent authorities to reach an agreement in a timely manner. Since its first adoption in the 1989 Germany-United States Tax Treaty, arbitration has been included in over 200 bilateral tax treaties, Article 25 of the OECD Model and United Nations Model (Alternative B) and Part VI of the Multilateral Instrument (MLI). Developing countries have generally resisted using arbitration out of sovereignty and other concerns. In this paper, the authors argue that arbitration, especially the “last best offer” or “baseball” style arbitration is a game for the rich countries. Drawing on existing literature and preliminary empirical research on tax disputes between Belt and Road Countries (about 130 countries participating in the China-led Belt and Road Initiative, purportedly representing over one half of the world population and 1/3 of global GDP), the authors explain that baseball arbitration is ill-fit for these countries for several reasons.

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November 19, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Sarin & Summers: Shrinking the Tax Gap — Approaches And Revenue Potential

Natasha Sarin (Penn) & Lawrence H. Summers (Harvard), Shrinking the Tax Gap: Approaches and Revenue Potential:

Between 2020 and 2029, the IRS will fail to collect nearly $7.5 trillion of taxes it is due. It is not possible to calculate with precision how much of this “tax gap” could be collected. This paper offers a naïve approach. The analysis suggests that with feasible changes in policy, the IRS could aspire to shrink the tax gap by around 15 percent in the next decade—generating over $1 trillion in additional revenue by performing more audits (especially of high-income earners), increasing information reporting requirements, and investing in information technology. These investments will increase efficiency and are likely to be very progressive.

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November 19, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Tax Justice Is Gender Justice: Advancing Gender And Racial Equity By Harnessing The Power Of The U.S. Tax Code

The Atlantic, Tax the Patriarchy:

The Rube Goldberg mess of the United States tax code picks winners and losers as it raises trillions of dollars for the federal government. It advantages unearned income over earned income. It advantages big, mortgaged homes over little, rented apartments. It advantages the richest of the rich over the merely rich. And, in many cases, it advantages men over women.

That last claim is the contention of three new reports produced by the National Women’s Law Center and several other research and advocacy groups. They analyze the tax code through the lens of gender and conclude that many provisions reflect, amplify, and entrench long-standing disparities between men and women.

But it need not be so. The tax code has profound power to close the gender wage-and-wealth gap, as well as to support equality in the workplace and help families thrive at home. As the country debates taxing billionaires out of existence, it might consider taxing the patriarchy out of existence, too.

National Women's Law Center, Tax Justice Is Gender Justice: Advancing Gender and Racial Equity by
Harnessing the Power of the U.S. Tax Code:

The tax code sets the rules that shape our economy, reflecting and perpetuating notions of who and what our society values. It’s an opportunity to fight inequality. But today’s tax code contains outdated and often biased assumptions about family structures, marriage, participation in the paid workforce, and more that work together to perpetuate structural barriers against women, families with low incomes, and people of color. The tax code can be a barrier for realizing gender justice – but it can also be a tool. It’s time we take advantage.

NWL Three

Ariel Jurow Kleiman (San Diego), Amy Matsui (National Women’s Law Center) & Estelle Mitchell (National Women’s Law Center), The Faulty Foundations of the Tax Code: Gender and Racial Bias in Our Tax Law:

This report ... examines the outdated assumptions and gender and racial biases embedded in the U.S. tax code. It highlights tax code provisions that reflect and exacerbate gender disparities, with particular attention to those that disadvantage women with low incomes, women of color, members of the LGBTQ community, people with disabilities, and immigrants.

  • Examined policies include the joint filing of spousal income, treatment of informal caregiving, incentives for business formation and wealth accumulation, and IRS enforcement patterns. 
  • Although perhaps facially neutral, many of these policies likely provide disproportionate benefit to men, may heighten pressure for women to leave the formal labor market, and reflect biased assumptions about gender, race, and family structure. 
  • This report offers recommendations for better data and analysis so that policymakers, advocates, and the public can fully understand the impact of the current tax code and proposed tax policies.

Katy Milani (Roosevelt Institute), Melissa Boteach (National Women’s Law Center), Steph Sterling, (Roosevelt Institute) & Sarah Hassmer (National Women’s Law Center), Reckoning With the Hidden Rules of Gender in the Tax Code: How Low Taxes on Corporations and the Wealthy Impact Women’s Economic Opportunity and Security:

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November 19, 2019 in Tax, Tax Scholarship, Think Tank Reports | Permalink | Comments (3)

Alice Abreu Named Inaugural Director Of Temple Center For Tax Law And Public Policy

Temple

The tax faculty at Temple University Beasley School of Law is delighted to announce the launch of Temple’s Center for Tax Law and Public Policy, with Professor Alice Abreu as the inaugural director. Temple’s Tax Center not only serves as a hub for the many tax-related activities at Temple, it affirms Temple’s commitment to leadership in tax education and scholarship.

Temple Tax Faculty

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November 19, 2019 in Legal Ed News, Legal Education, Tax, Tax News | Permalink | Comments (0)

Monday, November 18, 2019

Rubolino Presents Can Local Governments Implement A Progressive Income Tax? Today At UC-Berkeley

Enrico Rubolino (University of Essex) presents Can Local Governments Implement a Progressive Income Tax? at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar Series:

EnricoThis paper studies the effects of local income taxation on taxable income and within-country migration, using data from tax returns and all transfers of fiscal residence since the early 2000s in Italy. Over this period of tax decentralization, regions and municipalities have been granted greater power to set different tax rates across income brackets. Municipalities switching from a flat to a progressive income tax schedule experience a drop in their tax base, mostly due to a reduction in the income share held by the top percentile. This effect translates into a net-of-local tax taxable income (population stock) elasticity of 0.83 (0.74). Moving the fiscal residence from high- to low-tax places is the main driver of this response: a 1 percent increase in the net-of-tax differential within a province-pair raises outmigration by 1.6 percent. Despite the threat of repelling wealthy residents, these estimates imply that the benefit of additional revenues from adopting a progressive income tax significantly exceeds the cost of foregone income tax revenue due to tax-induced mobility.

November 18, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (1)

NY Times: How FedEx Cut Its Tax Bill To $0

New York Times, How FedEx Cut Its Tax Bill to $0:

FedEx LogoIn the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration’s tax cut — for which the company had lobbied hard.

The public face of its lobbying effort, which included a tax proposal of its own, was FedEx’s founder and chief executive, Frederick Smith, who repeatedly took to the airwaves to champion the power of tax cuts. “If you make the United States a better place to invest, there is no question in my mind that we would see a renaissance of capital investment,” he said on an August 2017 radio show hosted by Larry Kudlow, who is now chairman of the National Economic Council.

Four months later, President Trump signed into law the $1.5 trillion tax cut that became his signature legislative achievement. FedEx reaped big savings, bringing its effective tax rate from 34 percent in fiscal year 2017 to less than zero in fiscal year 2018, meaning that, overall, the government technically owed it money. But it did not increase investment in new equipment and other assets in the fiscal year that followed, as Mr. Smith said businesses like his would.

Nearly two years after the tax law passed, the windfall to corporations like FedEx is becoming clear. A New York Times analysis of data compiled by Capital IQ shows no statistically meaningful relationship between the size of the tax cut that companies and industries received and the investments they made. If anything, the companies that received the biggest tax cuts increased their capital investment by less, on average, than companies that got smaller cuts.

NYT

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November 18, 2019 in Tax, Tax News | Permalink | Comments (3)

Lesson From The Tax Court: Whistleblowers Don't Get To Work The Case

Tax Court (2017)You can't bring a Qui Tam action against a tax cheat.  You can blow the whistle, but it's not the same.

Qui Tam actions are lawsuits brought by private parties on behalf of the federal government against those who have defrauded the government.  Congress has long allowed such actions.  The current rules are found in 31 U.S.C. §3730.  That statute permits private parties to enforce the provisions of the immediately preceding statute, 31 U.S.C. §3729, known as the False Claims Act.

The False Claims Act, however, explicitly excludes actions against tax cheats from its scope.  See §3729(d).  That means private parties cannot bring Qui Tam actions to enforce the tax laws.  Instead, to help the IRS enforce the tax laws, Congress has created a whistleblower program, codified in §7623.  It permits individuals who report wrong-doing to the IRS to “receive as an award at least 15 percent but not more than 30 percent of the proceeds collected...”  In FY18, the Whistleblower Office's Report To Congress said that the program resulted in collection of over $1.44 billion, at a cost (of awards) of $312 million (about a 21% award rate). 

The recent case of Vincent J. Aprunzzese v. Commissioner, T.C. Memo. 2019-141 (Oct. 21, 2019)(Judge Vasquez) teaches the difference between a Qui Tam action and whistleblowing.  There, the whistleblower argued that he was due a larger award because the IRS could have collected much more based on the information he gave.  The Tax Court rejected the argument.  The case also shows why allowing Qui Tam actions for tax would not be a good idea: you don’t want private parties working the audits.  Details below the fold.

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November 18, 2019 in Bryan Camp, New Cases, Scholarship, Tax, Tax Practice And Procedure, Tax Scholarship | Permalink | Comments (1)

WSJ: Elizabeth Warren’s Plan Would Bring Tax Rates Over 150% For Some

Wall Street Journal, Elizabeth Warren’s Tax Plan Would Bring Rates Over 100% for Some:

WSJPresidential hopeful proposes wealth tax and levy on unrealized gains, a combination that could alter investing.

Democratic presidential candidate Elizabeth Warren has unveiled sweeping tax proposals that would push federal tax rates on some billionaires and multimillionaires above 100%.

That prospect raises questions for taxpayers and the broader economy that experts are starting to ponder: Under which circumstances would taxpayers have to pay those rates? How might that change their behavior? And would investment and economic growth suffer?

Potential tax rates over 100% could result from the combination of tax increases the Massachusetts senator proposes for the very top tier of investors. She wants to return the top income-tax rate to 39.6% from 37%, impose a new 14.8% tax for Social Security, add an annual tax of up to 6% on accumulated wealth and require rich investors to pay capital-gains taxes at the same rates as other income even if they don’t sell their assets.

Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.

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November 18, 2019 in Tax, Tax News | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, November 17, 2019

NY Times: Warren Wealth Tax Would Slow Economic Growth By 13% According To Penn Wharton Budget Model

New York Times, Warren Wealth Tax Could Slow Economy, Early Analysis Finds:

Penn Wharton Budget ModelSenator Elizabeth Warren’s proposed wealth tax would slow the United States economy, reducing growth by nearly 0.2 percentage points a year over the course of a decade, an outside analysis of the plan estimates.

The preliminary projection from the Penn Wharton Budget Model, which was unveiled on Thursday in Philadelphia, is the first attempt by an independent budget group to forecast the economic effects of the tax that has become a centerpiece of Ms. Warren’s campaign for the Democratic presidential nomination.

The assessment found that if the tax raised as much new federal revenue as Ms. Warren intends, and if the proceeds went toward reducing the federal debt, annual economic growth would slow from an average of 1.5 percent to an average of just over 1.3 percent over a decade.

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November 17, 2019 in Tax, Tax Scholarship, Think Tank Reports | 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. The #1 paper is #81 among 14,713 tax papers in all-time downloads:

  1. SSRN Logo (2018)[2,405 Downloads]  Taxing the Rich: Issues and Options, by Lily Batchelder (NYU) & David Kamin (NYU)
  2. [289 Downloads]  The Arm's Length Standard Is Not the Problem, by Lorraine Eden (Texas A&M)
  3. [281 Downloads]  Boiling Starbucks’ Roasting Down to the Essence of its Residual, by William Byrnes (Texas A&M)
  4. [207 Downloads]  Implications for Apple in the Lower Court Rulings in Starbucks and Fiat, by Ruth Mason (Virginia)
  5. [175 Downloads]  2018 Developments in Connecticut Estate and Probate Law, by Jeffrey Cooper (Quinnipiac) & John Ivimey (Reid and Riege, Hartford)

November 17, 2019 in Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink | Comments (0)

Saturday, November 16, 2019

This Week's Ten Most Popular TaxProf Blog Posts

NY Times: Warren's Tax Plan Would Dramatically Cut Billionaires' Wealth Over Time

New York Times, Warren Would Take Billionaires Down a Few Billion Pegs:

“Yes, billionaires will have to pay a little more,” Senator Elizabeth Warren said of the revised tax package she introduced recently, “six cents on each dollar.”

This modest-sounding proposal, though, would have a far-reaching impact on the wealthiest Americans when combined with her other tax plans — shrinking colossal fortunes over time and making it much more difficult to hand down multibillion-dollar legacies.

The tax bite for any individual would not equal the $100 billion that Bill Gates jokingly cited, but over time it would still sting, according to estimates by two economists who advised Ms. Warren. If her wealth tax had been in effect since 1982, for example, Mr. Gates, who had made his first billion dollars by 1987, would have had $13.9 billion in 2018 instead of $97 billion. Jeff Bezos, the world’s richest person, would have had $48.8 billion last year instead of $160 billion. ...

NYT 1

As for the 400 people who made it to Forbes magazine’s list of the country’s wealthiest people, each would have an average worth of $3.1 billion, down from the current $7.2 billion.

NYT 2

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November 16, 2019 in Tax, Tax News | Permalink | Comments (1)

Friday, November 15, 2019

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Chason's A Tax On The Clones: The Strange Case Of Bitcoin Cash

This week, Mirit Eyal-Cohen (Alabama) reviews Eric D. Chason (William & Mary),  A Tax on the Clones: The Strange Case of Bitcoin Cash, 39 Va. Tax Rev. __ (2019).  

Mirit-Cohen (2018)This Article is right down my ally dealing with taxation and innovation. In recent years, Cryptocurrency generally, and Bitcoin specifically, have risen steeply in their market value breaking record percentage increase. Notwithstanding its speculative hype, blockchain technology through community-wide protocols has been a state-of-the-art development that had been spurring change in the fields of economics, technology, and the law. The rise in digital assets has created tax issues involving the definition of blockchain. Is it property or currency? In a series of publications including Rev. Rul. 2019-24, the IRS determined these digital assets are considered property. This Article presents the difficulty of applying such tax treatment encroach upon its administrability and making digital assets’ use impractical when looking at every transaction as subject to gain and loss recognition. It does so by focusing on implications of Cryptocurrency derivatives, also known as Bitcoin forks or Bitcoin Cash.

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November 15, 2019 in Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

New York Times, Trump Asks Supreme Court to Bar Release of His Tax Returns:

President Trump asked the Supreme Court on Thursday to bar his accounting firm from turning over eight years of his tax returns to Manhattan prosecutors.

The case, the first concerning Mr. Trump’s personal conduct and business dealings to reach the court, could yield a major ruling on the scope of presidential immunity from criminal investigations. ...

In their petition urging the Supreme Court to hear their appeal, Mr. Trump’s lawyers argued that he was immune from all criminal proceedings and investigations so long as he remained in office. But even if some federal investigations may be proper, the petition said, the Supreme Court should rule that state and local prosecutors may not seek information about a sitting president’s conduct. ...

Mr. Trump’s lawyers noted that the Supreme Court heard cases concerning claims of immunity from Presidents Richard M. Nixon and Bill Clinton. ... In the two earlier cases, United States v. Nixon in 1974 and Clinton v. Jones in 1997, both presidents suffered unanimous losses.

Last week, a unanimous three-judge panel of a federal appeals court in Manhattan ruled against Mr. Trump. The court, in a focused ruling, said state prosecutors may require third parties to turn over a sitting president’s financial records for use in a grand jury investigation.

Mr. Trump has fought vigorously to shield his financial records, and prosecutors in Manhattan have agreed not to seek the tax returns until the case is resolved by the Supreme Court. ...

On Thursday, Mr. Trump’s lawyers wrote that the proper way to address any misconduct by a sitting president is through impeachment proceedings. “Allowing a single prosecutor to investigate a sitting president through the issuance of criminal process no less invades Congress’s impeachment authority than the filing of a criminal charge,” they wrote.

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November 15, 2019 in Tax, Tax News | Permalink | Comments (0)

Flanagan: Reframing Taxigration

Jacqueline Lainez Flanagan (University of the District of Columbia), Reframing Taxigration:

Tax compliance by undocumented immigrant workers could and should be the architectural centerpiece of immigration reform. Analyzing this premise using broad economic frameworks and examining corresponding mechanisms in U.S. tax and immigration systems, this article seeks to reframe “taxigration” to signify tax filing as a threshold condition to legalization.

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November 15, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

Billionaires Are Bad For Democracy

New York Times op-ed:  Are Billionaires Bad for Democracy?, by Michael Tomasky:

I’m not expert enough to judge the wisdom of Senator Warren’s proposed wealth tax. ... So this column is not a brief for Ms. Warren’s wealth tax or for her candidacy — I don’t have a preferred candidate. Instead, I want to make a simple plea to the country’s billionaires: Multibillion-dollar fortunes are often called excessive and decadent. But here’s something they’re rarely called but ought to be: anti-democratic. These fortunes will destroy our democracy. ...

[A]ny democracy needs a robust and thriving middle class, and we have spent the last 30 or so years transferring trillions of dollars from the middle class to the people at the very top. Just one set of numbers, from the University of California, Berkeley economist Gabriel Zucman: The 400 richest Americans — the top .00025 percent of the population — now own more of the country’s riches than the 150 million adults in the bottom 60 percent of wealth distribution. The 400’s share has tripled since the 1980s.

This is carnage, plain and simple. No democratic society can let that keep happening and expect to stay a democracy. It will produce a middle and working classes with no sense of security, and when people have no sense that the system is providing them with basic security, they’ll make some odd and desperate choices. ...

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November 15, 2019 in Tax, Tax News | Permalink | Comments (8)

Call For Papers: Indiana Symposium On Social Equality in the Sharing Economy

Call for Participation: 2020 Social Equality in the Sharing Economy Symposium:

Indiana (2017)The “sharing economy,” also known as the “gig” or “on-demand” economy, is transforming the way people work, eat, commute, and travel by seamlessly connecting suppliers and consumers via app-based technology platforms.  It provides flexible income earning opportunities for one side and convenience and low prices for the other. However, it also creates a dizzying array of policy problems for communities of all sizes—from tax evasion and pollution to price discrimination, worker precarity, and violent protests.  The Indiana Journal of Law and Social Equality (IJLSE), in collaboration with Indiana University’s Kelley School of Business and the Ostrom Workshop, is hosting a symposium on February 13th and 14th at the Maurer School of Law in Bloomington, Indiana to offer and debate solutions to these complex and fast-moving set of challenges.

Designed to stimulate interdisciplinary research and collaboration, as well as to amplify existing research, the Social Equality in the “Sharing Economy?” Symposium will consist of a series of keynotes, panel discussions, and paper presentations from a range of voices.

We invite original paper submissions from all relevant disciplines for the Symposium.

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November 15, 2019 in Conferences, Legal Education, Tax, Tax Scholarship | Permalink | Comments (0)

Thursday, November 14, 2019

Blank Presents Progressive Tax Procedure Today At San Diego

Joshua Blank (UC-Irvine) presents Progressive Tax Procedure (with Ari Glogower (Ohio State)) today at San Diego as part of its Tax Law Speaker Series:

6a00d8341c4eab53ef0240a4467a28200c-300wiDiscussions of progressive taxation in the United States—and of whether the rich pay enough in taxes—generally focus on the structure of the substantive tax law, such as the marginal rates, income brackets, deductions, and credits under the federal income tax. Despite recent reports of tax avoidance and noncompliance by high-income taxpayers, these discussions have not focused on the structure of the tax procedure rules, which govern the Internal Revenue Service’s administrative responsibilities and taxpayers’ compliance obligations.

This Article presents the case for a new system of “progressive tax procedure.” Currently, tax procedure rules—such as tax penalties and the statute of limitations—typically apply in a uniform manner to all taxpayers, irrespective of their income. Under progressive tax procedure, in contrast, these rules would vary depending on the taxpayer’s income. For example, a high-income taxpayer would face higher tax penalty rates or longer periods where the IRS could assess tax deficiencies.

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November 14, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

McCoskey & Narotzki: Education Has Been 'Dumbed-Down' in Tax Reform

Melanie McCoskey (Akron) & Doron Narotzki (Akron), Education Has Been 'Dumbed-Down' in Tax Reform, 22 Fla. Tax Rev. ___ (2019):

Florida Tax Review (2019)With promises of “Make America Great Again” and tax reform for “middle-class” Americans, the current federal government administration has implied that the average American would become more prosperous under this tax system. It is no surprise that most middle-class Americans view a college education as a requirement for achieving a better life. However, under the TCJA, education has not fared well, and in reality, students from many low- and moderate-income families will face reduced scholarships from elite schools, thereby reducing diversity on these campuses. Other proposed changes to education in the original tax bill, which were later removed, are also addressed as they may hint to which direction this may go and face legislative changes in the future.

November 14, 2019 in Legal Ed News, Legal Education, Scholarship, Tax, Tax Scholarship | Permalink | Comments (1)

Morse: GILTI — The Cooperative Potential Of A Unilateral Minimum Tax

Susan C. Morse (Texas), GILTI: The Co-operative Potential of a Unilateral Minimum Tax, 2019 Brit. Tax Rev. 512:

Prior to the Tax Cuts and Jobs Act of 2017 (TCJA), the US allowed US parented multinationals to delay indefinitely their payment of US corporate income tax on non-US income earned by non-US corporate subsidiaries (CFCs). The TCJA revoked this permission through the enactment of a unilateral, current minimum tax on the “global intangible low-taxed income” (GILTI) of CFCs. The post-TCJA US international tax law generally imposes current US tax on CFC income subject to reductions for foreign income taxes paid or accrued. This US regime supports the continued existence of a corporate income tax and presents an opportunity to co-ordinate the details of corporate income tax systems globally. Similarity among systems, for instance with respect to rate, timing and base, would further strengthen the corporate income tax and perhaps support innovations such as formulary apportionment.

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November 14, 2019 in Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

RenTech’s Billion-Dollar Tax Cloud Darkens After IRS Ruling

Following up on my previous post, $6.8 Billion Hedge Fund Tax Dispute Moves to IRS Appeals Office:  Bloomberg, RenTech’s Billion-Dollar Tax Cloud Darkens After IRS Ruling:

RenaissanceA little-noticed decision by the Internal Revenue Service’s appeals unit may spell trouble for legendary investor Jim Simons, who’s embroiled in a multibillion-dollar tax dispute with the agency.

Reviewing the audit of an investment manager in Connecticut, the IRS Office of Appeals rejected a tax-avoidance maneuver involving so-called basket options. That’s the type of transaction at the heart of a separate, larger case involving Simons’s Renaissance Technologies hedge fund. The decision, made public in a court filing in May, could offer a preview of the tax agency’s reasoning in the Renaissance case.

The Renaissance dispute is one of the largest ever handled by the IRS, potentially involving about $6.8 billion in back taxes, according to an estimate by U.S. Senate investigators.

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November 14, 2019 in Tax, Tax News | Permalink | Comments (0)

Wednesday, November 13, 2019

Robinson Presents Negotiated Tax Havens Today At Penn

Leslie Robinson (Dartmouth) presents Negotiated Tax Havens (with Kevin Markle (Iowa)) at Pennsylvania today as part of its Tax Law and Policy Workshop Series hosted by Michael Knoll, Chris Sanchirico, and Reed Shuldiner:

Robinson (2019)The intersection of state aid and international tax has acquired a high profile in Europe. In response, disclosure policies are being proposed. With no empirical evidence, these policies are predicated on rhetoric that pervasive practices by host country governments unfairly benefit foreign-owned companies. Using several novel data sources on tax relief granted in the EU, we find that both domestic- and foreign-owned companies benefit from tax concessions. Our evidence that tax avoidance is a joint production function of business and government suggests that any jurisdiction can operate as a tax haven for a company willing to negotiate. ...

Conclusion.  Overall, our results suggest that state aid offers tax benefits to both foreignowned and domestic-owned companies. Aid that is pre-approved appears more likely to benefit domestic-owned companies, perhaps because helping domesticowned companies is more likely to meet a broader EU objective than aiding foreign-owned companies. The recent trend towards enhanced disclosure of tax rulings as well as disclosure of aid granted at the level of the beneficiary are, in our view, necessary steps toward appropriate enforcement of state aid rules in the EU. However, because state aid does appear to benefit domestic-owned companies, the automatic exchange of tax rulings should cover all rulings, not just those issued to foreign-owned companies.

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November 13, 2019 in Colloquia, Scholarship, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)

Winchester: A Tax Theory Of The Firm

Richard Winchester (Thomas Jefferson), A Tax Theory of the Firm, 88 U. Cin. L. Rev. 1 (2019):

The U.S. has always had two distinctly different methods for taxing business profits. The method that applies in any given case has always depended on the tax classification assigned to the firm. However, there has never been a satisfactory way to determine a firm’s tax classification because the rules for doing so were never grounded in a theory of the firm that had any relevance for tax purposes.

This article offers a tax theory of the firm that can serve as an organizing principle for classifying firms and taxing their profits.

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November 13, 2019 in Scholarship, Tax | Permalink | Comments (0)

ABA And UNLV Host Webinar Today On Economic, Gender And Racial Inequality In State & Local Tax Systems

The ABA and UNLV Law School host a webinar today (12:30 pm PST) on Economic, Gender and Racial Inequality in State and Local Tax Systems:

  • UNLV ABABridget Crawford (Pace)
  • Lisa Christensen Gee (Institute on Taxation & Economic Policy)
  • Francine Lipman (UNLV) (moderator)
  • Kirk Stark (UCLA)

Over the past four decades, wealth has increasingly concentrated among the highest-income households. These households are disproportionately White and male. In 2018, three White men held aggregate wealth greater than the aggregate wealth of one-half of Americans. The median White household has 41 times more wealth than the median Black household and 22 times more wealth than the median Latinx household. On average women earn less than men in all industries. The largest pay gaps are in management, in which men earned $88,000 on average in 2016, compared to $55,000 for women. At the intersection of race and gender the gaps are even more shocking. Women of color are disproportionately poor suffering poverty rates of 21.4% Black women, 18.7% Latinas, and 22.8% Native American women, as compared to 7% for White men The United States exhibits wider disparities of wealth than any other major developed nation.

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November 13, 2019 in Conferences, Scholarship, Tax, Tax Scholarship | Permalink | Comments (0)

The Happy, Healthy Capitalists Of Switzerland

New York Times op-ed:  The Happy, Healthy Capitalists of Switzerland, by Ruchir Sharma (Chief Global Strategist, Morgan Stanley):

FlagLike many progressive intellectuals, Bernie Sanders traces his vision of economic paradise not to socialist dictatorships like Venezuela but to their distant cousins in Scandinavia, which are just as wealthy and democratic as the United States but have more equitable distributions of wealth, as well as affordable health care and free college for all.

There is, however, a country far richer and just as fair as any in the Scandinavian trio of Sweden, Denmark and Norway. But no one talks about it.

This $700 billion European economy is among the world’s 20 largest, significantly bigger than any in Scandinavia. It delivers welfare benefits as comprehensive as Scandinavia’s but with lighter taxes, smaller government, and a more open and stable economy. Steady growth recently made it the second richest nation in the world, after Luxembourg, with an average income of $84,000, or $20,000 more than the Scandinavian average. Money is not the final measure of success, but surveys also rank this nation as one of the world’s 10 happiest.

This less socialist but more successful utopia is Switzerland.

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November 13, 2019 in Tax, Tax News | Permalink | Comments (5)

Tuesday, November 12, 2019

LaPlante Presents The Effect Of Intellectual Property Boxes On Innovation And Effective Tax Rates Today At NYU

Stacie LaPlante (Wisconsin), The Effect of Intellectual Property Boxes on Innovative Activity & Effective Tax Rates (with Tobias Bornemann (Vienna University of Economics and Business) & Benjamin Osswald (Wisconsin)) at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

LaplanteWe investigate whether and to what extent the adoption of an intellectual property box increases innovative activity and the extent to which different types of firms benefit financially. We examine the adoption of the intellectual property box in Belgium because it allows us to cleanly identify the impact on innovative activity and effective tax rates. Our results indicate an overall increase in innovative activity as proxied by patent applications, grants, and highly-skilled employment, at the expense of patent quality. We also provide evidence that firms with patents on average enjoy 7.2% to 7.9% lower effective tax rates, with the greatest financial benefits accruing to multinational firms compared to domestic firms

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November 12, 2019 in Colloquia, Tax, Tax Scholarship, Tax Workshops | Permalink | Comments (0)