Paul L. Caron
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Friday, June 21, 2024

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews An Originalist Analysis Of Wealth Taxes Under The Constitution By Schizer & Calabresi

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews David M. Schizer (Columbia) & Steven G. Calabresi (Northwestern), Wealth Taxes Under the Constitution: An Originalist Analysis, 28 Fla. Tax Rev. ___ (2024).

Eyal-Cohen

This Article delivers a timely and persuasive originalist examination of the federal wealth tax’s constitutionality, particularly relevant given the recent national and international initiatives to implement such taxes. Schizer and Calabresi lay out a detailed historical and legal examination and offer valuable insights into the Framers’ intent and the practical challenges of the legal concept of apportionment. They begin with the axiom that wealth taxes are “direct taxes” requiring apportionment among the states. This apportionment necessitates that each state’s contribution to the tax must be proportionate to its population, a requirement leading to significant practical challenges and undesirable consequences: states with a smaller share of national wealth would need to impose higher tax rates to meet their apportioned contribution. 

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June 21, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, June 14, 2024

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Reis's The Gift Tax Treatment Of Loan Guarantees

This week, David Elkins (Netanya, Google Scholar) reviews Eric Reis (North Texas), Guaranteed Wealth? A New Way of Thinking About the Gift Tax Treatment of Loan Guarantees, 27 Fla. Tax Rev. _ (2024):

Elkins (2018)

In this week’s feature article, Professor Eric Reis examines the gift tax consequences of gratuitous loan guarantees. A prototypical example is one in which a parent provides a guarantee for a loan to a child, where the child does not have enough assets or income to qualify for a loan on her own. As the author describes it, wealth is effectively transferred from the parent to the child because the child will benefit from the upside (if the asset appreciates more than the interest on the loan, the child will pocket the difference) but will have little to no exposure to the downside (if the asset depreciates in value, the parent will likely cover the difference). The author goes on to describe a number of similar structures involving children who are shareholders in corporations or beneficiaries of trusts and a parental guarantee of loans to the corporation or the trust.

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June 14, 2024 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, June 7, 2024

Weekly SSRN Tax Article Review And Roundup: Speck Reviews The TCJA: Sweeping Changes And An Uncertain Legacy By Gale, Hoopes & Pomerleau

This week, Sloan Speck (Colorado; Google Scholar) reviews William G. Gale (Brookings Institution; Google Scholar), Jeffrey L. Hoopes (North Carolina; Google Scholar) & Kyle Pomerleau (American Enterprise Institute), Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017, 39 J. Econ. Persp. __ (2024).

Sloan-speck

Soon after the President signed the Tax Cuts and Jobs Act in December 2017, the political push began to extend the law’s various time-limited individual and business tax provisions. This push for permanence promises to become more pressing as the 2024 election cycle unfolds—including partisan preparations to deploy the budget reconciliation process under potential majority control of both houses of Congress. The stakes are high: up to $4.6 trillion in foregone revenue, according to estimates by the Congressional Budget Office, as well as the shape and trajectory of the federal income tax system for years to come. A full understanding of these stakes requires context about the TCJA’s past, present, and possible futures. 

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June 7, 2024 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Weekly Legal Education Roundup

Friday, May 31, 2024

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Competing Narratives On OIRA Review Of Tax Regulations By Hickman & Dooling

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Kristin E. Hickman (Minnesota; Google Scholar) & Bridget C.E. Dooling (Ohio State; Google Scholar), Competing Narratives in OIRA Review of Tax Regulations, 19 J.L. Econ. & Pol’y __ (2024):

Blaine saito

In 2023, the Biden Administration issued a Memorandum of Agreement (MOA) that exempted all tax regulations from OIRA review. Many, including readers of this blog, hailed this undoing. But in Competing Narratives on OIRA Review of Tax Regulations, Kristine E. Hickman and Bridget C.E. Dooling show that what is at play are two competing narratives. One sees OIRA review as salutary and creating greater transparency, accountability, and rigorous analysis. The other views it as meddlesome to tax regulations. They show that the second narrative stems from some key misconceptions about OIRA review of tax regulations.

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May 31, 2024 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 24, 2024

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Cowing's Equity And Ownership In Affordable Housing

This week, Michelle Layser (San Diego; Google Scholar) reviews Adam Cowing (UC-Irvine), Equity and Ownership in Affordable Housing, 2024 U. Ill. L. Rev. 399.

Michelle-layser

In the U.S., homeownership is often essential for wealth building. For middle-income households, “home equity is the largest single financial asset,” and it accounts for 50-70% of net wealth. In 2022, the wealth gap between homeowners and renters reached a historic high, as the median wealth of homeowners rose to $85,000 and the median wealth of renters remained stable at $950. Tax-based homeownership subsidies are common (the mortgage interest deduction is one, and the exclusion of imputed rent is another), but none aim to make home ownership attainable for low-income families. Instead, tax subsidies like the Low-Income Housing Tax (LIHTC) credit (and proposed renters’ tax credits) have focused on providing affordable rental housing. Nevertheless, a new article by Professor Adam Cowing argues that the LIHTC has untapped potential to transform low-income tenants into homeowners.

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May 24, 2024 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 17, 2024

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews The Missing “T” in ESG By Chaim & Parchomovsky

This week, Tracey M. Roberts (Cumberland; Google Scholar) reviews a new work by Danielle A. Chaim (Bar-Ilan; Google Scholar) and Gideon Parchomovsky (Penn; Google Scholar), The Missing “T” in ESG, 77 Vanderbilt L. Rev. 789 (2024).

Roberts (2020)

In The Missing T in ESG, Danielle Chaim and Gideon Parchomovsky take a magnifying glass to ESG investing and the large asset management firms that have been promoting it in recent years. Environmental Social and Governance or “ESG” standards describe a broad array of criteria. Environmental factors examine environmental impacts (such as waste management and greenhouse gas production). Social factors focus on human rights violations and violations of labor laws (such as human trafficking and child labor in the supply chains), among other things. Governance factors consider longer-term value, positive and negative spillover effects, and whether a corporation has implemented structures and personnel with diverse perspectives to avoid the kinds of group-think that led to the mortgage crisis and Great Recession. Ultimately, ESG ratings allow investors, with an aversion to longer-term risks and with preferences beyond short term profit, to pick and choose where they invest their money.

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May 17, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 10, 2024

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Raskolnikov's Law For The Rich

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a recent paper by Alex Raskolnikov (Columbia), Law for the Rich, 109 Minn. L. Rev. __ (2024).

Kim (2023)

With respect to the heated debate on introducing higher, more effective taxes on the rich, like a wealth tax, Alex Raskolnikov (Columbia) asks a provocative question in his recent essay, Law for the Rich, 109 Minn. L. Rev. (forthcoming 2024)—why not  propose legal reforms to expand the scope beyond tax law and introduce a separate general (non-tax) law for the rich, encompassing property law, contract law, corporate law, antitrust law, IP law, labor law, and so on (collectively, the Law for the Rich (LFR))?

Raskolnikov explains that although there is no such LFR, it is possible to envisage a practicable one and implement it. For example, in property law, "time limits can be shortened or lengthened if the negatively affected party happens to be the rich."

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May 10, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 3, 2024

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Efficiency vs. Welfare In Benefit-Cost Analysis — The Case Of Government Funding By Liscow & Sunstein

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Zachary D. Liscow (Yale; Google Scholar) & Cass R. Sunstein (Harvard; Google Scholar), Efficiency vs. Welfare in Benefit-Cost Analysis: The Case of Government Funding, 15 J. Benefit-Cost Analysis ___ (2024).

Eyal-Cohen

Benefit-Cost Analysis (“BCA”) is a methodical approach to assessing the economic advantages and disadvantages of different options that fulfill transactions, activities, or functional needs for businesses or individuals. Whether we are aware of it or not, we widely employ this method in everyday life as a tool for making decisions when assessing the viability of a project and comparing its strengths and weaknesses. Whether it is investing in higher education, buying a new appliance, or implementing a new business strategy, BCA enables us to evaluate the financial and practical consequences of our choices and efficiently optimize the allocation of our resources.

This Article critically examines the use of BCA in government funding decisions, particularly focusing on how its application has evolved to incorporate concerns for social welfare and equity.

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May 3, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 26, 2024

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews The Policy And Politics Of Alternative Minimum Taxes By Gamage & Glogower

This week, David Elkins (Netanya, Google Scholar) reviews David Gamage (Missouri-Columbia; Google Scholar) & Ari Glogower (Northwestern; Google Scholar), The Policy and Politics of Alternative Minimum Taxes, 78 Nat’l Tax J. _ (2024).

Elkins (2018)

The first Alternative Minimum Tax (AMT) was enacted in 1978 following reports that wealthy taxpayers were able to avoid paying any income tax by exploiting numerous preferences available to them. Whatever the policy justifications for each particular preference, there was a widespread sentiment that wealthy taxpayers should nevertheless pay some income tax. Congress therefore provided that the minimum tax that one must pay is a certain percentage of one’s “alternative minimum taxable income,” which is equal to what one’s taxable income would have been were it not for a number of specified tax preferences. Such AMTs, in which Congress restricts with one hand the use of preferences that it grants with the other, are frequently met with derision among tax scholars. If the preferences are appropriate, in the sense that society is better off (by whatever measure one chooses to determine societal well-being) with them than without them, then there is nothing wrong with taxpayers actually benefiting from such preferences. 

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April 26, 2024 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, April 19, 2024

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Elkins's Rules, Standards, And The Value Of Certainty In Tax Law

This week, Sloan Speck (Colorado; Google Scholar) reviews David Elkins (Netanya; Google Scholar), Rules, Standards, and the Value of Certainty in Tax Law.

Sloan-speck

In Rules, Standards, and the Value of Certainty in Tax Law, David Elkins brings a fresh and engaging perspective to well-traveled debates about the choice between rules and standards in taxation. Elkins juxtaposes the doctrinal significance of standard-based antiabuse doctrines in U.S. tax law with the IRS’s relatively low audit rates for self-reported tax returns. This wedge, Elkins argues, has a lottery-like effect. The “inherent indeterminacy” of standard-based antiabuse doctrines allows taxpayers to “safely ignore them when taking positions” (18). If those positions are questioned by the IRS, the after-the-fact assertion of antiabuse doctrines effectively applies an alternative body of law to the unlucky (or unfortunate) taxpayers selected for audit, which presents moral, equity, and efficiency concerns. As a result, Elkins concludes that, “in general, standards have no role to play in the tax system, even simply as a complement to a rules-based structure” (id.). Elkins’s thesis challenges a long arc in tax law and scholarship that sees a meaningful—and perhaps essential—role for antiabuse doctrines in tax law.

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April 19, 2024 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, April 12, 2024

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Kern’s Progressive Taxation For The World

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Adam Kern (NYU), Progressive Taxation for the World, 74 Tax L. Rev. __ (2024): 

Blaine saito

A growing set of voices in tax scholarship are seeking to reemphasize notions of justice. But one of the areas where many of these discussions have traditionally faltered is in the area of international taxation. Many commentators argue that justice really can only happen within a given state and society, not across the world. In his piece, Progressive Taxation for the World, Adam Kern seeks to rebut these ideas, showing that when countries act in the international tax arena to grab more taxing rights for themselves, the justice claims of the poorest countries are actually heightened. He also urges for notions of international taxation where needs of people are given a greater place than economic contributions of a given jurisdiction. The piece forces us to grapple with why we continue then to ignore such claims in our thinking and policymaking.

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April 12, 2024 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 5, 2024

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Tahk's The Tax Separation Of Powers

This week, Michelle Layser (San Diego; Google Scholar) reviews Susannah Camic Tahk (Wisconsin), The Tax Separation of Powers.

Michelle-layser

The economic development tax incentives that I study rarely appear in Tax Court cases. Instead, they tend to be the subject of legislative activity. Congress amends laws like the low-income housing tax credit and new markets tax credit to adjust program size, extend deadlines, and tweak eligibility requirements. Legislators debate whether incentives like opportunity zones are helpful social and economic policy tools or wasteful giveaways. Every so often, a case will reference an economic development incentive, but it’s unusual. I had no idea that this was part of a larger trend. In a new article, Professor Susannah Camic Tahk argues that the Code sections the Tax Court reviews (the “judicial Code”) and those that receive attention from Congress (the “legislative Code”) have so little overlap that they constitute a substantive divide in the separation of powers. 

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April 5, 2024 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 29, 2024

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews 2025 Climate Policy Reform Options

This week, Tracey M. Roberts (Cumberland; Google Scholar) reviews a new work by John E. Bistline (Stanford; Google Scholar), Kimberly A. Clausing (UCLA; Google Scholar), Neil Mehrotra (Google Scholar), James H. Stock (Harvard; Google Scholar), and Catherine Wolfram (MIT; Google Scholar), Climate Policy Reform Options in 2025.

Roberts (2020)

This week, a cohort of scholars has examined an array of possibilities for bringing the United States into alignment with its promises under the Paris Agreement. The Paris Agreement is the legally binding 2015 international climate change treaty adopted in Paris France by 196 nations at the UN Climate Change Conference. In that agreement, the United States pledged to reduce greenhouse gas emissions to 50% below our 2005 emissions. Because of the thirty-plus-year plus delay in actually taking action after signing the 1992 United Nations Framework Convention on Climate Change, we are not going to meet those goals.

However, Bistline, Clausing, et al. have good news. We can come close, and we can meet that goal by 2035. They use the Electric Power Research Institute’s U.S. Regional Economy Greenhouse Gas and Energy (US-REGEN) model to project emissions reductions, budgetary impacts, and effects on household energy and fuel expenditures.

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March 29, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup | Permalink

Friday, March 22, 2024

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Infrastructure Costs By Brooks & Liscow

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Leah Brooks (George Washington, Google Scholar) and Zachary Liscow (Yale, Google Scholar)'s recent paper, Infrastructure Costs, 15 Am. Econ. J. Applied 1 (2023).

Kim (2023)

You may have wondered how your tax dollars are put to work while driving on the highway. Government spending on highways is a visible example of infrastructure costs, yet there has been little study on its cost trajectory over time. Leah Brooks (George Washington, Google Scholar) and Zachary Liscow (Yale, Google Scholar)'s recent paper, Infrastructure Costs, 15 Am. Econ. J. Applied 1 (2023), analyzes the historical trajectory of infrastructure costs by looking at the Interstate Highway System and shows that spending per mile (in real terms) increased more than threefold from the 1960s to the 1980s.

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March 22, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, March 15, 2024

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Brauner's Taxing People, Not Residents

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Yariv Brauner (Florida, Google Scholar), Taxing People, Not Residents:

Eyal-Cohen

The COVID-19 pandemic has really shaken things up in the workplace, causing us to take a closer look at how we handle taxation based on where people live. I discovered that job mobility, both domestic and international, has similar tax ramifications after my family relocated to Atlanta, GA, and I still commute to Tuscaloosa, AL, to teach at the University of Alabama. I also learned that it is not uncommon to hear about people like me who have moved without changing jobs. Indeed, the location of an employee in a state may result in the taxable presence (and taxation) of the employer in that state pursuant to its business tax laws, thus requiring complex reporting adjustments. Nevertheless, such developments in individuals’ mobility at the international level, as this Article demonstrates, may put increased pressure on international tax policy stances as well as the legitimacy of their residence taxations.

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March 15, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 8, 2024

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Fleischer's A New Look At Old Money

This week, David Elkins (Netanya, Google Scholar) reviews Miranda Perry Fleischer (San Diego; Google Scholar), A New Look at Old Money, 98 S. Cal. L. Rev. _ (2024).

Elkins (2018)Perhaps no tax generates as much visceral reaction as does the estate tax. To its proponents it promotes equality of opportunity, offsets to some extent the income tax advantages enjoyed by capital, and impedes dynastic wealth and power. To its detractors, who castigate it as the “death case,” it reeks of double taxation, discourages entrepreneurship and frugality, infringes on the rights of individuals to dispose of their property as they wish, is easily avoided by those who are its primary targets, and generates significant administrative and avoidance costs. 

In this week’s feature article, Prof. Miranda Perry Fleischer argues that in the field of tax policy in general, and estate taxation in particular, people often hold what appear to be inconsistent positions simultaneously. For example, around three-fifths of Americans believe that parents should be able to pass along whatever they wish to their children, even if that creates unequal opportunities at the societal level, while around two-thirds of Americans believe that the distribution of wealth is unfair and that it is unfair that children from wealthy families have access to better amenities such as schools.

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March 8, 2024 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, February 23, 2024

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Dagan’s Tax and Globalization: Toward a New Social Contract

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Tsilly Dagan (Oxford; Google Scholar), Tax and Globalization: Toward a New Social Contract

Blaine saito

Political theory has often struggled in trying to determine what justice requires across the borders of nation-states. In her piece Tax and Globalization: Toward a New Social Contract, Tsilly Dagan addresses these thorny issues in the context of taxation. In doing so, she shows that one of the great difficulties that tax, and indeed all areas of law, face under globalization, is to ensure that people’s liberties to leave political communities are balanced carefully with the needs of justice for those who are not so mobile. In doing so, she provides a framework for us to think about what justice and social contract theories demand in a globalized world.

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February 23, 2024 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 16, 2024

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Taxing Nannies By Kleiman, Sarkar & Satterthwaite

This week, Michelle Layser (San Diego; Google Scholar) reviews Ariel Jurow Kleiman (Loyola), Shayak Sarkar (UC Davis) & Emily Satterthwaite (Georgetown), Taxing Nannies

Michelle-layser

Nannies play an important role in the childcare system, helping many moderate-to-high income women pursue careers in fields like business, medicine, law, and politics. Research on the tax behavior of parent-hirers of nannies has raised significant concerns about noncompliance, and it would be easy to conclude that most nannies (and the parents they work for) prefer to keep their payments “under the table.” A new study by Professors Ariel Jurow Kleiman, Shayak Sarkar, and Emily Satterthwaite suggests that the tax reporting preferences of nannies and their employers are considerably more nuanced. While many nannies do prefer to receive pay under the table, others prefer formal employee status. The authors argue that understanding these preferences—and the reasons behind them—is key to crafting effective and equitable nanny tax reforms.

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February 16, 2024 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 9, 2024

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews New Articles On Moore v. United States By Avi-Yonah & Clarke

This week, Tracey M. Roberts (Cumberland; Google Scholar) reviews new works by Conor Clarke (Washington University; Google Scholar), Moore: The Overlooked Excise Power, 181 Tax Notes Fed. 1759 (Dec. 4, 2023) and Reuven Avi-Yonah (Michigan; Google Scholar), Effects from Moore: Does the Corporate Tax Require Realization, 182 Tax Notes Fed. 661 (Jan. 22, 2024).

Roberts (2020)

A tax case on an obscure provision in the Tax Cuts and Jobs Act has captured the attention not only of tax specialists, but the broader public. Rightly so. If decided in favor of the Moores, it could be the most consequential decision since Citizens United v. Federal Election Commission, which held that the freedom of speech clause of the First Amendment prohibits the government from restricting corporate expenditures for political campaigns. In Moore v. United States, the Moores take issue with the Mandatory Repatriation Tax (or “MRT”) set forth in I.R.C. section 965. The MRT is a one-time tax levied on the undistributed earnings and profits of specified foreign corporations dating from 1986, when Congress enacted provisions that shielded those earnings from taxation. Following Congress’s repeal of those provisions and the addition of the MRT under the Tax Cuts and Jobs Act, the MRT would tax that income, at a lower rate, to the shareholders whose holdings exceed a 10 percent threshold. 

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February 9, 2024 in Scholarship, Tax, Tax Daily, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 2, 2024

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Delmotte's Predistribution Against Rent-Seeking — The Benefit Principle’s Alternative To Redistributive Taxation

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Charles Delmotte (Michigan State, Google Scholar), Predistribution Against Rent-Seeking: The Benefit Principle’s Alternative to Redistributive Taxation, 39 Soc. Phil. & Pol’y 1 (2023).

Kim (2023)

Taxation has several goals. The most obvious goal is to raise revenue for necessary government functions. A more controversial goal of taxation is a redistributive function to reduce the unequal distribution of income and wealth. Different theories of distributive justice endorse or oppose the legitimacy and/or effectiveness of the redistributive goal of taxation. In his recent article, Predistribution Against Rent-Seeking: The Benefit Principle’s Alternative to Redistributive Taxation, 39 Soc. Phil. & Pol’y 1 (2023), Charles Delmotte (Michigan State, Google Scholar) questions the redistributive goal of taxation and offers an alternative approach based on the benefit principle. The benefit principle means that “specific rules and institutions are acceptable to the extent that they create benefits for all individuals in society, or at least don’t make anyone worse off.” 

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February 2, 2024 in Christine Kim, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 26, 2024

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Hemel's Phaseouts

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Daniel J. Hemel (NYU; Google Scholar), Phaseouts, 74 Tax L. Rev. __ (2024) (reviewed by Sloan Speck (Colorado; Google Scholar) here)

Eyal-CohenPhaseouts are federal tax benefits that decrease with income. They are used for health insurance, higher education, and retirement savings tax breaks. As income rises, tax breaks such as the child tax credit, earned income tax credit, deduction for traditional individual retirement plan contributions, and student loan interest deduction decrease. Individuals earning less than a certain income threshold receive the full benefit, while those earning more than that threshold are ineligible for benefits. Taxpayers with incomes in the range may claim partial benefits that decrease with income. Other federal income tax benefits, such as medical expenses and personal casualty loss deductions, have implicit phaseouts (though they appear as income-based "floors").

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January 26, 2024 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 19, 2024

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Eyal-Cohen's Tax Incentives For Investment Crowdfunding

This week, David Elkins (Netanya; Google Scholar) reviews Mirit Eyal-Cohen (Alabama; Google Scholar), Tax Incentives for Investment Crowdfunding: A Comparative Analysis, 23 Colo. Tech. L. J. __ (2024).

Elkins (2018)

Crowdfunding is a widely used method for individuals to raise funds, whether it be for a charitable purpose, a business, or a specific event. As online crowdfunding campaigns have become more common, questions arise regarding the role that tax law has to play in that phenomenon. For example, when the underlying motivation is primarily donative, questions arise as to whether the transfer is income to the recipient or provides a charitable deduction to the donor.

In this week’s feature article, Prof. Eyal-Cohen examines investment crowdfunding, which involves companies offering common stock, convertible debt, tokens, coins, or other assets to the general public using the internet. The questions that she raises are descriptive (how traditional rules of tax law are to be applied to this relatively new phenomenon), normative (whether Congress should encourage investment crowdfunding by means of tax incentives), and administrative (how to clarify the tax consequences for the participant in various crowdfunding initiatives).

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January 19, 2024 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 12, 2024

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Circular Partnerships By Sanchirico & Shuldiner

This week, Sloan Speck (Colorado; Google Scholar) reviews Chris William Sanchirico (Penn; Google Scholar) & Reed Shuldiner (Penn), Circular Partnerships.

Sloan-speck

The current crisis in partnership tax enforcement is simultaneously well-established and difficult to define. Notwithstanding new tools (such as the centralized partnership audit regime), new funding (principally from the Inflation Reduction Act), and new initiatives (to audit certain very large partnerships using—as is au courant—artificial intelligence), the precise problems with tax partnerships, as deployed by sophisticated taxpayers and their advisors, remain relatively inchoate. In Circular Partnerships, Chris William Sanchirico and Reed Shuldiner deconstruct the emergent political and scholarly narrative surrounding tiered partnership structures with hook interests that may recursively cycle income earned by a parent partnership back through a subsidiary, possibly without end. Sanchirico and Shuldiner conclude that the problem of “trapped income” in partnership cycles, while difficult to untangle, almost certainly is overstated in current debates. Furthermore, Sanchirico and Shuldiner identify compliance issues inherent in circular partnerships, as well as opportunities for reform to more effectively target income that passes through partnership cycles.

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January 12, 2024 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, December 22, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Hayashi's The Federal Architecture Of Income Inequality

This week, Tracey M. Roberts (Cumberland; Google Scholar) reviews a new work by Professor Andrew T. Hayashi (Virginia; Google Scholar), The Federal Architecture of Income Inequality.

Roberts (2020)

In The Federal Architecture of Income Inequality, Andrew Hayashi draws into question the national narrative on income inequality and the bias towards national solutions. Existing literature concludes that redistribution should be performed at the national level rather than by local governments. Undergirding this conclusion is the premise that national income inequality is the most important feature of our economic and political landscape. Hayashi shows that while some policies may reduce national income inequality and local income inequality simultaneously, that does not always occur. To illustrate his point, he examines the economic effects of several tax policy changes and proposals on both relative income inequality (using the Theil Index) and absolute income inequality (using the standard deviation of income) at the national and county level based on data from the Statistcs of Income Division of the Internal Revenue Service.

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December 22, 2023 in Scholarship, Tax, Tax Daily, Tracey Roberts, Weekly SSRN Roundup | Permalink

Friday, December 8, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Bearer-Friend’s Paying For Reparations

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Jeremy Bearer-Friend (George Washington; Google Scholar), Paying for Reparations: How to Capitalize a Multi-Trillion Reparations Fund, 67 How. L.J. __ (2024).

Blaine saitoEven well-meaning liberals who support the idea in concept find reparations for slavery a difficult issue because question where we would get the money. The costs of paying the descendants of those enslaved, even on a conservative estimate, stems in the trillions of dollars. In his piece, Paying for Reparations, Jeremy Bearer-Friend proposes a novel solution; we can pay for it through a proportionate equity share of large businesses in the U.S. The piece builds on his prior work on in-kind taxation. The article produces a thoughtful outline toward quickly capitalizing a trillion-dollar reparation fund.

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December 8, 2023 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, December 1, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Cui’s The Mirage Of Mobile Capital

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Wei Cui (British Columbia; Google Scholar), The Mirage of Mobile Capital (May 7, 2023).

Kim (2023)

Over two years have passed since more than 140 countries signed the OECD's global tax deal, consisting of two Pillars, in October 2021. Pillar One is focused on expanding source country taxing rights on the income of large multinational enterprises (MNEs). It targets digital companies such as Facebook or Google that can extract profits from a source jurisdiction without a physical presence. The implementation of Pillar One remains uncertain. Nonetheless, the global minimum tax in Pillar Two is expected to be implemented globally soon. A popular narrative about Pillar Two endorsed by many scholars, including myself here, is as follows: Pillar Two and its global minimum tax embrace the ideal of corporate tax harmonization to combat the tax competition that has dominated international taxation since the advent of globalization in the 1980s. 

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December 1, 2023 in Christine Kim, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, November 24, 2023

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Hanna's Moore, The 16th Amendment, And The TCJA’s Deemed Repatriation Provision

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Christopher Hanna (SMU), Moore, the Sixteenth Amendment, and the Underpinnings of the Deemed Repatriation Provision, 76 S.M.U. L. Rev. F. 156 (2023).

Eyal-CohenOn June 26, 2023, the Supreme Court in Moore v. United States granted the taxpayer’s petition to hear a rare case involving the constitutionality of section 965 deemed repatriation, a provision that was added by the 2017 Tax Cuts and Jobs Act (“TCJA”). The question at subject is whether the Sixteenth Amendment authorizes Congress to tax unrealized sums under the deemed repatriation clause without apportionment among the states. Under section 965, a U.S. shareholder who owns 10% or more of a deferred foreign income corporation must include its pro rata share of the foreign corporation’s accumulated post-1986 deferred foreign income in its gross income (Subpart F income). The U.S. shareholder’s pro rata share of the foreign corporation’s cash position determines whether that amount is taxed at 8%, 15.5%, or both. 

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November 24, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, November 10, 2023

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews The 16th Amendment And Congress’s Income Tax Power By Brooks & Gamage

This week, David Elkins (Netanya; Google Scholar) reviews John R. Brooks (Fordham; Google Scholar) & David Gamage (Indiana-Maurer; Google Scholar), “From Whatever Source Derived”: The Sixteenth Amendment and Congress’s Income Tax Power (2023). 

Elkins (2018)

On June 26, 2023, the Supreme Court granted certiorari in Moore v. United States. With the exception of National Federation of Independent Business v. Sebelius (2012) (which upheld the Affordable Care Act and in the which the question of whether it was indeed a tax case was the key to the decision), it would be difficult to cite a tax case in the last century that can compete with the potential impact of Moore. Petitioners argue that Congress does not have the constitutional authority to tax unrealized gain. A broadly worded decision accepting that argument could invalidate large portions of the Internal Revenue Code, in addition to stymying efforts to impose a wealth tax or a tax on unrealized appreciation.

The familiar story is that the Constitution distinguishes between direct taxes and indirect taxes (although as Profs. Brooks and Gamage point out, the Constitution does not use the term “indirect tax,” instead referring to taxes that are not direct as “duties, imposts, and excises”).

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November 10, 2023 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, November 3, 2023

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Avi-Yonah's DSTs, Pillar One, And The Multilateral Tax Project

This week, Sloan Speck (Colorado; Google Scholar) reviews new works by Reuven Avi-Yonah (Michigan; Google Scholar) & Eran Lempert (Erdinast, Ben Nathan & Toledano, Israel), The Historical Origins and Current Prospects of the Multilateral Tax Convention, 15 World Tax J. 379 (2023).. 

Sloan-speck

Half of the BEPS 2.0 project stands on the precipice. As Reuven Avi-Yonah argues in a forthcoming article in Tax Notes, the multilateral convention to implement Pillar One is likely to fail. The United States must ratify the convention for it to take effect, and this outcome seems remote, given the United States’ historical behavior and current politics. Moreover, Canada threatens to end the OECD moratorium on digital services taxes (DSTs) in January 2024, and the United States may retaliate. The problem, however, isn’t clearly about DSTs, or trade wars, or Pillar One’s redistributive aims. Instead, as Avi-Yonah and Eran Lempert elaborate in a longer article in the World Tax Journal, the multilateral vehicle itself hinders the adoption of Pillar One.

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November 3, 2023 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, October 27, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews The 16th Amendment And Congress’s Income Tax Power By Brooks & Gamage

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by John R. Brooks (Fordham; Google Scholar) & David Gamage (Indiana-Maurer; Google Scholar), “From Whatever Source Derived”: The Sixteenth Amendment and Congress’s Income Tax Power:

Blaine saitoLike many of our readers, I am following the Supreme Court case of Moore v. United States. In their piece “From Whatever Source Derived”: The Sixteenth Amendment and Congress’s Income Tax Power, John R. Brooks and David Gamage makes a series of compelling arguments. First, the piece shows that the original understanding of the Sixteenth Amendment allowed for an income tax that included potential taxes on unrealized gains. They unearth new evidence in support of this view. Second, the piece argues that in light of Eisner v. Macomber, the Sixteenth Amendment has three potential views on “taxes on income”: “(1) the realization-based conception, (2) the presumptive-measurement conception, and (3) the economic-gains conception.” They show that under almost any conception, except for the economic-gains conception, a wealth tax could arise. Instead, the main result of the realization-based conception that the Moore petitioners advocate is to introduce chaos.

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October 27, 2023 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, October 20, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Elkins' Gregory v. Helvering — A Red Herring That Shaped Tax Jurisprudence

This week, Michelle Layser (San Diego; Google Scholar) reviews David Elkins (Netanya College School of Law), Gregory v. Helvering: A Red Herring that Shaped Tax Jurisprudence, 31 Berkeley Business L. J. ___ (2024)

Michelle-layser

Gregory v. Helvering (1935) is a classic tax abuse case that features a taxpayer who followed the letter, but not the spirit, of the law. The traditional reading of Gregory goes like this: Mrs. Gregory structured a transaction to formally comply with corporate reorganization rules, but not for business reasons. She did it exclusively for tax avoidance purposes. The Court was unimpressed by her motives and rejected her attempt at tax planning, and Gregory became the leading case in the field of anti-avoidance jurisprudence. As Professor David Elkin puts it, Gregory is the “intellectual godfather of all of the doctrines that seek to restrict tax-planning opportunities: business purpose, step transaction, substance over form, sham transaction, and economic substance.”

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October 20, 2023 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, October 13, 2023

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Reexamining Triangular B Reorganizations By Narotzki & Shanan

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Doron Narotzki (Akron; Google Scholar) & Tamir Shanan (College of Management; Google Scholar), Reexamining Triangular B Reorganization: Requirements and Potential Tax Traps or a Time to Revisit Its Favorable Application, 24 U.C. Davis Bus. L.J. __ (2024).

Mirit-eyal-cohen

This week, when it was my turn to review new SSRN scholarship, I never expected to do so with such a broken heart. How can one function after witnessing videos taken of infants, children, and women being murdered, incinerated alive, kidnapped, and mutilated? Sadly, while we cannot do much from a distance to mitigate such abhorrent cruelty, I am confident that the Authors  of the aforementioned article (and others with families in Israel) will appreciate the TaxProf Blog community's prayers and words of consolation during these trying times. Thank you in advance for your support. And now, sigh, back to this week’s SSRN Roundup.    

One of the most frequently used schemes for tax-free reorganizations, which the vast majority of scholars and tax practitioners intuitively believe to be justified, is the Triangular B Reorganization. 

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October 13, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, October 6, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Hemel's The Low And High Stakes Of Moore

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Daniel Hemel (NYU; Google Scholar), The Low and High Stakes of Moore, 180 Tax Notes Fed. 563 (July 24, 2023).  

Kim (2023)

Everybody in the tax community talks about, or at least pays attention to, Moore—the mandatory repatriation tax (MRT) case that the Supreme Court will hear in coming months. I think there is at least one tax event a week on Moore these days. Among the overflowing write-ups, I chose Daniel Hemel (NYU; Google Scholar)'s recent article, The Low and High Stakes of Moore, 180 Tax Notes Fed. 563 (July 24, 2023), for this week's review. It is a concise yet remarkably insightful article that contains everything you need to think about Moore

The tax challenged is the MRT introduced by the Tax Cuts and Jobs Act (TCJA). The MRT requires the U.S. shareholders who own at least 10% of a Controlled Foreign Corporation (CFC) to pay a one-time tax on the undistributed earnings and profits of the CFC dating back to the end of 1986. 

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October 6, 2023 in Christine Kim, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, September 29, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Tax And The Boundaries Of The Firm By Barry & Fleischer

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by Jordan M. Barry (USC; Google Scholar) and Victor Fleischer (UC-Irvine; Google Scholar), Tax and the Boundaries of the Firm (2023).

Roberts (2020)While a significant tax scholarship examines the way that tax may distort firm capitalization, financing firm operations through debt, equity, or retained earnings, Jordan Barry and Vic Fleischer explore how the U.S. corporate income tax distorts non-financial decisions in Tax and the Boundaries of the Firm. They reflect on the way the corporate tax influences firm decisions about the location of assets and production within a firm, the existence and location of corporate subsidiaries, and the reinvestment of profits, by applying Ronald Coase’s transaction cost analysis from his seminal work, The Nature of the Firm. Coase explained that a decision by a firm about whether it should produce a good internally (“make”) or acquire those goods from other firms (“buy”) depends on the relative benefits, costs, and risks of the two choices.

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September 29, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, September 22, 2023

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Morgan's Measuring Wealth Under A Wealth Tax

This week, David Elkins (Netanya; Google Scholar) reviews Robin Morgan (S.J.D. 2022, Harvard), Valuation: Measuring Wealth Under a Wealth Tax (2023).

Elkins (2018)

Valuation is the Achilles heel of any tax system that relies upon…well, valuation. Income tax does its level best to avoid valuation, often simply by adopting a head-in-the-sand attitude and ignoring anything that is difficult to value. Unrealized appreciation is perhaps the notable example but others abound: disputed income, doubtful debt provisions, and certain types of fringe benefits to name a few. On other occasions, ignorance-is-bliss is not a sustainable policy and there is no option other than to attempt the frustrating task of valuation. The theory of practice of transfer pricing is a testimony to the suspicion that the attempt is more often than not an exercise in futility. Property taxes and estate taxes are similarly plagued with problems of valuation. Consider, for instance, the dispute surrounding Michael Jackson’s estate, which the executors valued at about $7 million and the IRS valued at $1.125 billion.

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September 22, 2023 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, September 15, 2023

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Hemel's Phaseouts

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Daniel J. Hemel (NYU; Google Scholar), Phaseouts, 74 Tax L. Rev. __ (2024):

Sloan-speck

Since the transition from class tax to mass tax in the Second World War, the U.S. income tax system has applied income-based limitations to tax expenditures. In Phaseouts, Daniel Hemel explores why rational policymakers might prefer these benefits-specific limitations (which can be drafted as phaseouts or phase-ins, or as ceilings or floors) to “the more straightforward alternative” of an unrestricted benefit coupled with revenue-neutral rate adjustments across income levels (2). Phaseouts, of course, are legion in today’s Internal Revenue Code, and Hemel does his usual brilliant work in elucidating the contours and stakes of these pervasive provisions, even when deployed by a Congress less disinterested—and perhaps less rational—than one might prefer.

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September 15, 2023 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, September 8, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Sarkar’s Internal Revenue’s External Borders

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Shayak Sarkar (UC-Davis; Google Scholar), Internal Revenue's External Borders, 112 Calif. L. Rev __ (2024).

Saito-blaine-800x800-1

When asked does the IRS aid Immigration and Customs Enforcement (ICE) and other authorities that seek to remove undocumented immigrants, my reflexive response is no. After all, that undermines many of the goals of the tax system from revenue collection to the provision of social welfare programs. But in his piece, Internal Revenue’s External Borders, 112 Calif. L. Rev. ___ (2024). Shayak Sakar shows how the IRS does collaborate in violent immigration raids. It cautions that coordination between the IRS and other agencies is not an unalloyed good. And sometimes our instincts and sense of the protections that the tax system provides can be wrong on the ground.

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September 8, 2023 in Blaine Saito, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, September 1, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Zhang’s Eisner v. Macomber And The Future Of The Realization Requirement

This week, Michelle Layser (San Diego; Google Scholar) reviews Alex Zhang (Emory), Rethinking Eisner v. Macomber, and the Future of Structural Tax Reform, 92 Geo. Wash. L. Rev __ (2024).

Michelle-layser

Eisner v. Macomber is a staple of introductory tax law courses. Like many professors, I assign Macomber to illustrate the realization requirement, while downplaying its constitutional significance. For those who need a refresher, the taxpayer in Macomber was a shareholder of Standard Oil. The company distributed a pro rata common-on-common stock dividend that increased the taxpayer’s number of shares but did not change her proportionate interest in the company. The government attempted to tax the stock dividend as income under the Revenue Act of 1916, but the taxpayer challenged the law under the Sixteenth Amendment. The Court sided with the taxpayer, essentially holding that it is unconstitutional to tax accumulated profits until they have been “severed from the capital” through a realization event.

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September 1, 2023 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Saturday, August 19, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Parsons' Taxing Taxonomies

This week, Tracey Roberts (Cumberland; Google Scholar) reviews Amanda Parsons (Colorado; Google Scholar), Taxing Taxonomies.

Roberts (2020)In  Taxing Taxonomies, Amanda Parsons introduces the concept of “legibility” into the analysis of tax rules. Joining H.L.A. Hart, Roscoe Pound, Roberto Unger, Ronald Dworkin, Duncan Kennedy, Louis Kaplow, and more recently, Lee Anne Fennell, Susie Morse, Dov Fox, and Jacob Goldin, she enters the metanalysis debate around rules versus standards, formalism versus realism, efficiency versus equity, moral versus analogic reasoning, and decisionmaker discretion versus taxpayer opportunism. Drawing from Seeing Like a State, by James Scott, she explains that “legibility” is the process by which a state sorts activities into categories to make complex systems governable. For those steeped in tax policy, the concept appears to be synonymous with “simplicity.” Ideally tax systems are meant to be “simple,” as well as efficient and equitable, since simplicity supports administrability for those who govern (and collect taxes), and promotes transparency and predictability for those who must comply. 

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August 19, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, August 11, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Yin’s The Supreme Court’s Misinterpretation Of The FBAR Statute

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews George K. Yin (Virginia), Of Blind Men, Elephants, and the Supreme Court's Misinterpretation of the FBAR Statute:

Kim (2023)

The United States Supreme Court recently addressed whether a non‑willful penalty under FBAR accrues on a per‑report or per‑account basis in the case of Bittner v. United States. Bittner was a dual citizen unaware of his responsibility to file a report called a Report of Foreign Bank and Financial Accounts (FBAR) under the Bank Secrecy Act from 2007 through 2011. Bittner failed to report 272 accounts in those five years—61 accounts in 2007, 51 in 2008, 53 in 2009 and 2010, and 54 in 2011. The government interpreted the language of the non‑willful penalty as per account and imposed a fine of $2.72 million. 

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August 11, 2023 in Christine Kim, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, August 4, 2023

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Nissim's Normal Tax Rate

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Doron Nissim (Columbia; Google Scholar), Normal Tax Rate:

Mirit-eyal-cohen

Can we predict a company’s effective tax rates? Estimating corporation tax rates is required for forecasting income taxes on operational profit, computing the aftertax cost of capital, estimating the income tax consequences of nonoperating and transitory items, and assessing anomalous income tax expenses in financial statement analysis and valuation. Forecasting, valuation, and earnings quality analysis, among other things, necessitate firm-specific “normal tax rate” estimates. These estimates can be calculated using the reported effective tax rate, the statutory tax rate, or other disclosures such as components of income tax expenses, taxes actually paid, domestic versus foreign earnings and effective tax rates, deferred tax assets and liabilities, and non-GAAP measures and reconciliation.

But what is the typical tax rate for a foreign multinational corporation with subsidiaries all over the world? From a U.S. tax law point of view, corporations are subject to both a normal tax and a surtax calculated on the corporation’s taxable income for the taxable year. 

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August 4, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, July 28, 2023

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews The Use And Abuse Of Location-Specific Rent By Kane & Kern

This week, David Elkins (Netanya; Google Scholar) reviews Mitchell Kane (NYU) & Adam Kern (NYU), The Use and Abuse of Location-Specific Rent, 76 Tax L. Rev. __ (2023).

Elkins (2018)

The authors of this week’s feature article begin with the premise that an ideal formula for allocating taxing rights among countries would be one that enables them to raise substantial amounts of revenue, allows them to do so efficiently, and assigns rights fairly. The conceptual basis for such an allocation would constitute the holy grail of international taxation. The current system, which relies upon the concepts of residence and source, fail on all three counts. Both residence and source are easily manipulable, distort locational decisions, and are flawed proxies for countries’ contributions to business profits. The proposed alternative of some sort of formulary apportionment has significant drawbacks. If apportionment factors (e.g., employees, assets, and research) are elastic, they would distort locational decisions. Apportioning by sales can be avoided by selling to an unrelated intermediary located in a low-tax jurisdiction. 

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July 28, 2023 in David Elkins, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, July 21, 2023

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Claussen's Tax Intelligence

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Kathleen Claussen (Georgetown; Google Scholar), Tax Intelligence, 72 Duke L.J. Online 155 (2023).

Sloan-speck

The U.S. income tax system collects, alongside revenue, a vast trove of information about taxpayers’ assets, activities, and relationships. Kathleen Claussen, in a provocative essay, proposes that the federal government mobilize this wealth of tax information affirmatively to achieve foreign policy aims. Claussen differentiates her proposal from constructions of “tax policy as foreign policy,” such as those expertly explored by Ashley Deeks and Andrew Hayashi, by emphasizing “tax law for foreign policy” (165), in which tax reporting serves as intelligence gathering, and perhaps even explicitly as surveillance. Claussen situates her proposal within broader trends in foreign policy towards a “geoeconomics toolkit” of “unilateral economic tools” that align private actors with state-centric goals, and Claussen posits that tax may, in fact, help “normalize [this] otherwise exceptional toolkit” (160).

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July 21, 2023 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, July 14, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Wallace’s A Democratic Perspective On Tax Law

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Clint Wallace (South Carolina; Google Scholar), A Democratic Perspective on Tax Law, 98 Wash. L. Rev. __ (2023).

Saito-blaine-800x800-1

Frequently, our tax discussion, and for that matter most of our legal-policy discourse, focuses on economics. In tax, we talk about efficiency often as the first among equals in triad of principles that also include equity, and administrability. Frequently too, our concepts of equity and administrability focus a lot on economics costs and benefits and distribution tables. But too often we do not talk about the concepts of democracy and how the tax system can foster or hamper it. In his article, A Democratic Perspective on Tax Law, Clint Wallace turns our attention on both the existing writings on democracy and tax and adds that for tax policy, there should be an analysis on the basis of democratic ideals that we use to judge these policies. Democracy should stand with efficiency, equity, and administrability as a separate criterion for analyzing the tax system.

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July 14, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, July 7, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Moore v. United States And The Original Meaning Of Income By Brooks & Gamage

This week, Michelle Layser (San Diego; Google Scholar) reviews John R. Brooks (Fordham; Google Scholar) and David Gamage (Indiana-Maurer; Google Scholar), Moore v. United States and the Original Meaning of Income

Michelle-layser

One of the most fundamental concepts taught to income tax students is the realization requirement. In short, income generally is not subject to taxation until it is realized through a conversion into cash or property. But is realization a constitutional requirement? The Supreme Court is expected to provide an answer to that question next year in Moore v. United States. In that case, the Court has been asked to decide whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states. The taxpayers in Moore are challenging a provision of the Tax Cuts and Jobs Act of 2017 known as the Mandatory Repatriation Tax. 

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July 7, 2023 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, June 30, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Gift Tax Consequences Of Luxury Hospitality By Crawford, Haneman & Blattmachr

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a work by Bridget J. Crawford (Pace; Google Scholar), Victoria J. Haneman (Creighton; Google Scholar) & Jonathan G. Blattmachr (Milbank LLP), Gift Tax Consequences of Luxury Hospitality: An Introduction, 115 Tax Notes Fed. 1157 (May 15, 2023).

Roberts (2020)

In Gift Tax Consequences of Luxury Hospitality: An Introduction, Bridget Crawford, Victoria Haneman, and Jonathan Blattmachr examine the possible gift tax consequences of luxury consumption transfers. They explore the scope and the purpose of the federal gift tax through variations on three different scenarios: (i) Mom rents a mansion for a month in an exclusive resort town for her family ($800,000 FMV),(ii) Dad lets son ride to his college reunion in Chicago via his private jet ($70,000 FMV), and (iii) Rich invites friends for an all-inclusive nine-day yacht cruise ($5 million FMV).

There are a few clear guidelines in applying the federal gift tax. Transfers of cash and property clearly fall within its ambit. For example, if Mom, Dad and Rich simply give the recipients cash to purchase the lodging, transportation, and travel experiences, the cash transfers are clearly subject to the gift tax. On the other hand, personal spending and acts of economic waste do not fall within its ambit.

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June 30, 2023 in Scholarship, Tax, Tax Analysts, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, June 23, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Crypto Losses By Nguyen & Maine

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Xuan-Thao Nguyen (Washington) and Jeffrey A. Maine (Maine), Crypto Losses 2024 U. Ill. L. Rev. __ .

Kim (2023)Recently the crypto industry has been hit hard by various market forces and scams, leaving investors with trillion-dollar losses. In January 2023, in response to confusion surrounding abandoned and worthless cryptocurrency, the IRS weighed in on the deductibility of crypto losses (see ILM 202302011). The Chief Counsel Advice Memorandum stated the obvious—that taxpayers cannot claim an abandonment loss without an affirmative act (like sale or exchange) and cannot take a worthless deduction for the temporary decline in value. Furthermore, even if the loss was realized, the loss deduction would be disallowed because section 67(g) suspends miscellaneous itemized deductions for taxable years 2018 through 2025.

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June 23, 2023 in Christine Kim, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, June 16, 2023

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Nadler's Taxing Zero

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Hillel Nadler (Wayne State), Taxing Zero, 26 Fla. Tax Rev. _ (2023):

Mirit-eyal-cohen

Companies in the technology industry that offer “free” goods and services frequently collect a large amount of user data. They use this information to show more relevant advertisements and then charge higher prices. Furthermore, user data can be packaged and sold to businesses, who can then use it to better understand customer behavior or determine the viability of a new product offering. In one case, a company provided a popular, free version of antivirus software that also collected and sold data on users’ internet browsing habits.

Zero-price transactions are common, but not unique to the digital economy. Aside from the latter, there are numerous multi-sided platforms, such as credit card companies and investment brokers, that charge high fees to their vendors in exchange for customer data on trading and purchasing habits. As the saying goes, “nothing in life is free,” so are “zero-price” products and services because consumers pay in-kind with their time, attention, or personal information.

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June 16, 2023 in Legal Education, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup | Permalink

Friday, June 2, 2023

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Shaviro's Income Versus Consumption Taxation In 'The Myth of Ownership'

This week, David Elkins (Netanya; Google Scholar) reviews a new paper by Daniel Shaviro (NYU, Google Scholar), Ancillary Benefits and Income Versus Consumption Taxation in Liam Murphy’s and Thomas Nagel’s 'The Myth of Ownership':

Elkins (2018)

The question of whether income or consumption is a more appropriate tax base has occupied a prominent place in the tax policy discourse since about the 1970s. Although deliberated in the literature for centuries — the names Hobbes, Smith, Mill, Fisher, and Kaldor come to mind — it appears to have been William Andrews’ 1974 Harvard Law Review article, A Consumption-Type or Cash Flow Personal Income Tax, that brought the issue to the attention of tax academics and policymakers. That article, which may also be credited with having introduced the Cary Brown theorem into the legal academic discourse, triggered debate concerning the proper tax base and analysis of the extent to which the current income tax actually does tax income. It may also have indirectly sparked the call in some political quarters to replace the income tax with a consumption tax.

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June 2, 2023 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup | Permalink