Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Taxing Luxury Emissions By Wallace & Welton

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by Clinton G. Wallace (South Carolina; Google Scholar) and Shelley Welton (Penn), Taxing Luxury Emissions, 106 Cornell L. Rev. __ (2023).

One of the greatest challenges to global coordinated action on climate change is climate justice. The vast majority who will suffer the most from climate change have contributed very little to the aggregate stock of carbon emissions during their lifetimes and enjoy few of the legacy benefits that industrialization has yielded over the past 100 years. Most of the discussions about matching responsibility for climate change to its benefits have approached the issue at a nation-state level. Underdeveloped countries, including most of the Global South, argue that the countries who developed using financially cheap, if globally harmful, fossil fuels should be subject to regulation or taxation, since they caused the bulk of the problem. They also argue that, until they reach the basic standard of living enjoyed throughout Europe and the United States, they should be exempt from such taxation or regulations. 

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Alarie's The Rise Of The Robotic Tax Analyst

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Benjamin Alarie (Toronto; Google Scholar; CEO, Blue J Legal), The Rise of the Robotic Tax Analyst, 178 Tax Notes Fed. 57 (Jan. 2, 2023).

ChatGPT, an artificial intelligence chatbot, is generating buzz in legal academia and practice. On November 30, 2022, OpenAI made ChatGPT available for public use through an open beta. In less than one week, the system was deployed by more than 1 million registered users. Driving this extremely rapid adoption were claims — and plenty of evidence — of impressive algorithmic feats performed by ChatGPT. The capabilities of this technology reportedly include achieving passing scores on practice bar and medical board examinations. Unsurprisingly, many law schools are discussing how to cope with students' using this technology to potentially cheat in their writing and exams. On the other hand, TaxBuzz said something the tax community would be glad to hear:ChatGPT's tax advice was wrong 100% of the time.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews The Interconnections Between Corruption And Tax Crimes By Ring & Grasso

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Diane Ring (Boston College; Google Scholar) & Costantino Grasso (Manchester Metropolitan; Google Scholar), Beyond Bribery: Exploring the Intimate Interconnections Between Corruption and Tax Crimes, 85 L. & Contemp. Probs. 1 (2022).

Complex economic crimes have emerged as a major menace to the international society in recent years. Yet, few studies have investigated the connections between tax fraud and corruption. While “corruption” has been referenced within the tax abuse context, analysis has been mostly focused on “bribery,” i.e. paying a government official to avoid taxes. There remains a wide gap between the two ends of such spectrum, in which tax avoidance and evasion play a significant role. Various forms of corruption such as “nepotism, asynchronous exchanges, and unreciprocated but corrupt granting of favors” are not included in international terminology as of yet. The legal literature generally rejects a corruption theory beyond bribery. Legal experts appear to oppose a more comprehensive definition of corruption for several reasons including, but not limited to, lack of supported evidence, difficulties to uncover, prove, and publicize tax corruption, and infractions of the “Principle of legality.”

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Do Corporate Taxes Impede Mergers?

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Erin Henry (Arkansas; Google Scholar), Jennifer Luchs-Nuñez (Colorado State; Google Scholar) & Steven Utke (Connecticut; Google Scholar), Do Corporate Taxes Impede Merger and Acquisition Activity? Evidence from Private Corporations (Feb. 9, 2023)

The intuition that business income taxes affect the rate and volume of merger and acquisition activity has a certain theoretical—and anecdotal—appeal. The empirical challenges to validating this intuition are, however, legion. M&A implicates myriad tax benefits and detriments, firms’ abilities to monetize these tax benefits varies, and study design and data collection present significant hurdles. In a recent paper, Erin Henry, Jennifer Luchs-Nuñez, and Steven Utke employ an innovative natural experiment and proprietary IRS data to address taxes’ role in M&A involving closely held corporations. The authors show that entity-level tax cuts operate principally at the intensive margin, leading buyers to pay moderately lower prices for targets and their assets. Consistent with other research, the authors find little aggregate effect at the extensive margin—on the overall number of acquisitions.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Morse's Tax Without Law: Cui's Administrative Foundations Of The Chinese Fiscal State

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by Susan Morse (Texas; Google Scholar), Tax Without Law: Book Review of Wei Cui, The Administrative Foundations of the Chinese Fiscal State, 26 Fla. Tax Rev. __ (2023).

In this week’s feature article, Susan Morse reviews a new book by Wei Cui (British Columbia), The Administrative Foundations of the Chinese Fiscal State (Oxford University Press 2022). While it might be a bit unusual to review a review, I think that Professor Cui’s important book and Professor Morse’s insightful comments make it a worthwhile endeavor.

Professor Cui describes the Chinese fiscal system as divorced from the rule of law. No legal norms guide the tax administration, audits are practically nonexistent, and there is no meaningful judicial review. At the heart of the system are hundreds of thousands of revenue managers, each responsible for perhaps 1,000 taxpayers. One of their functions is to serve as a “nagging adult presence,” to make sure that taxpayers register and file on time. 

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Admin Law And The Crisis Of Tax Administration By Galle & Shay

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Brian Galle (Georgetown; Google Scholar) & Stephen Shay (Boston College; Google Scholar), Admin Law and the Crisis of Tax Administration, 101  N.C. L. Rev. __ (2023).

One of the major issues in taxation is the application of administrative law principles, derived from the Administrative Procedure Act (APA) and the case law interpreting it. Scholars like Professor Kristin Hickman have persuasively shown that tax is not exceptional, and the federal courts, starting with Mayo Foundation for Medical Education & Research v. United States, have followed. This author too has fallen closer to the line of applying these administrative law doctrines to the IRS and Treasury’s administrative actions. But in their article, Admin Law and the Crisis of Tax Administration, Professors Brian Galle and Stephen Shay force us to grapple with some of the effects of this revolution. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Household Asymmetric Risk Of Foreclosure From Tax Assessment Limit

This week, Michelle Layser (San Diego) reviews Sebastien Bradley (Drexel; Google Scholar), Da Huang (Utah; Google Scholar), Nathan Seegert (Utah; Google Scholar), Household Asymmetric Risk of Foreclosure From Tax Assessment Limit (Jan. 21, 2023).

During the pandemic, U.S. housing prices soared. In many cities, rising home prices can trigger higher assessed values for property taxation. But in California and 16 other states with assessment limits, laws limit how much appreciation cities can take into account for property tax purposes. That is good news for homeowners here in San Diego, where housing prices in March 2022 were up a whopping 29.9% from the previous year. Since California law caps the annual increase in assessed value at 2%, homeowners were protected from property tax spikes during that period.

Then came the fall. From April to September, prices in San Diego fell 5.2%, and they have continued to drop. 

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Trade, Leakage, And The Design Of A Carbon Tax By Weisbach et al.

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by David A. Weisbach (Chicago; Google Scholar), Samuel S. Kortum (Yale; Google Scholar), Yujia Yao (IMF) and Michael Wang (Northwestern), Trade, Leakage, and the Design of a Carbon Tax (Jan. 20, 2023):

Communities throughout the world are facing extreme weather events, including heat waves, droughts, wildfires, severe storms events, tornados, hurricanes/ tropical cyclones, storm surges and floods. Important and unique ecosystems are suffering irreparable harm, including polar and high mountain areas, tropical systems, and coral reefs. The risks of large-scale climate shifts, such as deglaciation, ice sheet loss, rapid sea-level rise, ocean acidification, and changes in thermohaline circulation system are rising. We are currently witnessing secondary effects of these processes including biodiversity loss, fishery collapse, deforestation, conflicts over natural resources, global migration, and threats to economic, social and political stability. All countries have a stake in these outcomes. Ideally, all countries would coordinate their efforts to address climate change.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Solving The Valuation Challenge: The ULTRA Method For Taxing Extreme Wealth By Galle, Gamage & Shanske

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Brian D. Galle (Georgetown; Google Scholar), David Gamage (Indiana Maurer; Google Scholar), & Darien Shanske (UC Davis; Google Scholar), Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. __ (2023).

It is well known that our income tax system is based on a realization approach which avoids valuation problems but enables the rich to pay little in taxes. Brian Galle (Georgetown), David Gamage (Indiana), and Darien Shanske (UC Davis) address this inequality brilliantly in their article Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. __ (forthcoming 2023). To solve the valuation problem, they propose that governments take payments from the rich by receiving notional equity interests, called "ULTRAs." ULTRA stands for unliquidated tax reserve accounts and is similar to a government claim on a portion of the stock of a business. 

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews The Long Tax Reach Of Stanley Surrey By Avi-Yonah & Fishbien

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Reuven S. Avi-Yonah (Michigan, Google Scholar) & Nir Fishbien (Caplin & Drysdale, New York), What Would Surrey Say? The Long Reach of Stanley S. Surrey (2023).

Throughout his career, which veered between academia and government service, Stanley S. Surrey never wavered in his dedication to advancing policy. In 1950, he spent three years at the University of California, Berkeley School of Law, before making the transfer to Harvard Law School, where he stayed for more than three decades. During his time in office, he served two significant terms in the Department of the Treasury: first, as a temporary adviser and tax legislative counsel from 1937 to 1947, and then as the head of the executive branch’s tax policy division as the first Assistant Secretary of the Treasury for Tax Policy from 1961 to 1969. While working at the Treasury, Surrey was a major player in shaping federal tax policy. There has never been an assistant secretary for tax policy with as much of a public and legislative profile as Surrey; his “Selected Speeches and Testimony” during his tenure in office fill more than 700 pages (and that’s just the ones he decided to include in this annotated collection).

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Wardell-Burrus's State Strategic Responses To The GloBE Rules

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by Heydon Wardell-Burrus (Oxford), State Strategic Responses to the GloBE Rules (2022).

The ability of multinational enterprises (MNEs) to reduce their tax liability by exploiting fissures in the international tax regime prompted the OCED to launch its BEPS (Base Erosion and Profit Shifting) initiative. The most recent iteration of that initiative, known as BEPS 2.0, rests upon two pillars. Pillar 1 is designed to allocate taxing rights to countries in which the consumers of digital services are located. Pillar 2 (also referred by the rather inelegant acronym GloBE, for Global Anti-Base Erosion) is intended to guarantee that MNEs are subject to a global minimum tax rate of at least 15%. As Wardell-Burrus points out, one of the novelties of Pillar 2 is that that it treats states as strategic actors, competing with each other to attract investment. Accordingly, many of the rules are designed to limit the capacity of states to engage in certain types of tax competition.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Yin’s Textualism, Tax Legislative History, And Stanley Surrey

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by George K. Yin (Virginia), Textualism, the Role and Authoritativeness of Tax Legislative History, and Stanley Surrey, 86 Law & Contemp. Probs. __ (2023).

In Textualism, the Role and Authoritativeness of Tax Legislative History, and Stanley Surrey, George Yin uses Stanley Surrey’s writings to reflect on the edicts of new textualism as applied to tax statutes. Surrey, of course, is a foundational figure in postwar tax policy, and his lateral and longitudinal engagement, inside and outside of government, sheds light on virtually every iteration of tax legislation from the late 1930s through the early 1980s—just shy of the judiciary’s textualist turn, as led by Antonin Scalia. Although Yin’s speculations are emphatically counterfactual, his project ably bridges two eras in legal history, shedding light on what changed—and perhaps what was lost—as the last vestiges of the New Deal order yielded to the rise of modern conservatism.

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Mann's Targeting Plastic Pollution With Taxes

This week, Tracey Roberts (Cumberland; Google Scholar) reviews Roberta Mann (Oregon), Targeting Plastic Pollution with Taxes, 37 J. Land Use & Envtl. L. __ (2022).

In the 1967 film, The Graduate, Benjamin Braddock has just finished college and, having returned to his parents' Pasadena home, he is trying to avoid the one question everyone keeps asking: "What are you going to do with your life?" One of his father’s business partners, Mr. McGuire, pulls Ben aside to make a recommendation: "I just want to say one word to you. Just one word. ... Are you listening?... Plastics.... There's a great future in plastics. Think about it. Will you think about it?... Enough said. That's a deal."

It’s a deal Americans took and ran with. Since the 1970s, plastics have come to define our way of life. Plastic seemed to be the ideal substance; it is strong, light-weight, durable, and cheap. Now, decades later, we realize that durability has a cost that belies the adjective “cheap.”

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews The (Uncertain) Future Of Corporate Tax Shelters By Blank & Glogower

This week, Michelle Layser (San Diego) reviews Joshua D. Blank (UC Irvine) & Ari Glogower (Northwestern), The (Uncertain) Future of Corporate Tax Shelters, in Corporate Tax Research Handbook (Reuven Avi-Yonah, ed., Edward Elgar Publishing, forthcoming, 2023).

Last August, Congress approved a plan to provide the IRS with $80 billion in funding over the next 10 years. Though the details about how the IRS will use the funding are still unfolding, many of us hope the IRS will use the extra money to clamp down on abusive tax planning activities by high-income and corporate taxpayers. In recent years, lack of resources has hindered the agency’s capacity to police taxpayer abuses, and increased funding was desperately needed. But money alone may not be enough for the IRS to effectively fight taxpayer abuses. In a new book chapter focused on corporate tax shelters, Professors Joshua Blank and Ari Glogower argue that the IRS will also need new tools to identify abusive activities.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Scharff And Shanske’s Local Income Taxes In The Era Of Increased Remote Work

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Erin Adele Scharff (Arizona State) & Darien Shanske (UC-Davis; Google Scholar), The Surprisingly Strong Case for Local Income Taxes in the Era of Increased Remote Work, 74 Hastings L.J. __ (2022).

Conventional wisdom and heuristics are often helpful, but when they are not reexamined every so often, they ossify and lead us astray. One of those adages is that U.S. local governments should never use income taxes and only rely on property taxes. But in their piece, The Surprisingly Strong Case or Local Income Taxes in the Era of Increased Remote Work, Erin Adele Scharff and Darien Shanske show that a relatively low and simple local income tax has great benefits to municipal governments.

As noted, numerous people have said that localities should not impose progressive income taxes.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Helman's Innovation Funding And The Valley Of Death

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Lital Helman (Ono Academic College) Innovation Funding and the Valley of Death, 76 SMU L. Rev. ___ (2023).

Economic theorists have long held that innovation is the key to economic development and many positive spillovers. Alas, as a public good with high risk, non-rivalry, non-exclusive characteristics, it may suffer underinvestment and underproduction in the free private market. Accordingly, almost every legal system in the world has long incorporated an array of innovation incentives that overcome this inherent market inefficiency. Some of those stimuli mechanisms include intellectual property rights (IP), cash transfers (mostly grants and prizes), and various tax incentives. In their recent article Innovation Policy Pluralism, Daniel Hemel & Lisa Quellette discuss ways to combine, complement, and alternate between such innovation policy mechanisms based on the overall government purpose (allocation or incentive) in each case.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Kamin's Ambition, Limits, And Politics Of The Global Minimum Tax

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews two new works by David Kamin (NYU), Why Book Minimum Taxes? Taking Politics Seriously, 177 Tax Notes Fed. 193 (Oct. 10, 2022), and The Ambition and Limits of the Global Minimum Tax, 177 Tax Notes Fed. 385 (Oct. 17, 2022).

The two articles I introduce today were written by David Kamin, who served as Deputy Assistant and Deputy Director of the National Economic Council under President Biden until May of 2022. Kamin’s articles focus on the corporate alternative minimum tax (AMT) and are his first publications since returning to academia. On a personal note, I was thrilled to discover that Kamin chose to write on a topic that is dear to me.

 

Kamin’s first article, Why Book Minimum Taxes? Taking Politics Seriously, presents a political argument for book minimum taxes. It explains how book minimum taxes address the challenge of coordinating political actors inside the United States and around the world. The recent enactment of a new corporate AMT in the United States has generated a mixed response. Some critics argue that Congress should fix the corporate income tax system directly by limiting subsidies, raising rates and not imposing another tax base as a backstop. 

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Dagan's Tax Justice In The Era Of Mobility And Fragmentation

This week, Tracey Roberts (Cumberland; Google Scholar) reviews Tsilly Dagan (Oxford; Google Scholar), Tax Justice in the Era of Mobility and Fragmentation, 4 Revue européenne du droit, Paris: Groupe d’études géopolitiques (Summer 2022).

At a recent Oxford University Philosophy, Law, and Politics Colloquium at All Souls College, Dr. Liam Murphy (NYU) presented his paper, “Why Tax Wealth?” to a large assembly of students and scholars hailing from countries all over the globe and bringing insights from an array of disciplinary fields. He acknowledged that taxing wealth may be an effective and efficient means to tax income from capital (which largely escapes taxation in the United States), but noted that his focus in this article was on the role wealth taxation plays in securing economic justice; he asked whether wealth, itself, contributes to welfare. As some of the colloquium participants noted, Murphy’s fellow political philosopher, Professor Martha Fineman (Emory), would argue that human beings experience an array of vulnerabilities in this material world, that we have differing levels of resilience, that wealth provides an important form of resilience, and that the state has an important role in ensuring our resilience. 

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Raskolnikov's Should Only The Richest Pay More?

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by Alex Raskolnikov (Columbia), Should Only the Richest Pay More? (2022).

Reportedly, F. Scott Fitzgerald once remarked to Ernest Hemingway that “the rich are different from you and me,” to which the latter replied, “Yes, they have more money.”

Taxing the rich has a strong intuitive and political appeal. However, the call to do so means little unless we identify whom we mean by “the rich.” In 2011, the Occupy Wall Street movement demanded in the name of the “99%” that the “1%” pay more. Under this conception, a person who is wealthier than 98.99% of the population is a member of the downtrodden “99%,” and has a place in the front line of protesters calling for increased taxes on the rich. Since then, proposals to tax the rich have tended to raise the threshold even higher. The Biden administration’s proposal to include unrealized gain in the income tax base would have applied only to those with assets of over $1 billion or income of over $100 million per year for three consecutive years. 

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Weekly SSRN Tax Article Review And Roundup: Sarkar Reviews Gondwe's The Tax-Invisible Labor Problem: Care, Work, Kinship, And Income Security Programs

This week, Shayak Sarkar (UC-Davis; Google Scholar) reviews Nyamagaga Gondwe (Wisconsin; Google Scholar), The Tax-Invisible Labor Problem: Care, Work, Kinship, and Income Security Programs in the IRC, 102 B.U. L. Rev. ___ (2022)

We must all care for others. Yet for the millions of women who do the yeoman’s share of American care work, the ways they are compensated, if at all, raise questions for tax law and implications for us all.  It is to the phenomenon of nonmarket care work that Professor Nyamagaga Gondwe turns in her forthcoming Article, The Tax-Invisible Labor Program: Care, Work, Kinship, and Income Security Programs in the IRC. Gondwe advocates for greater recognition of nonmarket care work, in tax law and beyond.

The Article lies at the intersection of at least two literatures: on one hand, tax scholarship focused on the lives of those deemed poor and different (and often both) and on the other, scholarship on domestic workers that tries to understand how we value those who work intimately with humanity. Both literatures center household formation, household labor, gender, and race, all of which animate Gondwe’s Article.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews New Work On Form And Substance In Tax Cases By Gillis & Grewal

This week, Sloan Speck (Colorado; Google Scholar) reviews new work by Rory Gillis (Western; Google Scholar), The Limits of Legal Substance: Tax Avoidance and Equitable Remedies After Collins Family Trust, 66 Can. Bus. L.J. __ (2022), and Amandeep S. Grewal (Iowa; Google Scholar), When Is the Economic Substance Doctrine “Relevant” to a Transaction? (Aug. 17, 2022).

According to a well-traveled adage among tax experts, United States tax law looks to economic substance over legal form—except when it doesn’t. In new work, Rory Gillis and Andy Grewal explore the complex dynamics between form and substance in two very different contexts: a recent Supreme Court of Canada decision that denies equitable remedies to tax-motivated transactions gone wrong, and the statutory interpretation issues that may arise from the IRS’s recent relaxation of internal procedures with respect to audit-level application of the economic substance doctrine. Both Gillis and Grewal emphasize the fundamental challenges faced by courts in implementing appropriate understandings of form and substance in taxation.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Falcão's Carbon Tax Policy And The EU Green Deal

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a new work by Tatiana Falcão (international tax consultant), Updating Carbon Tax Policy Is Crucial to the EU Green Deal, 103 Tax Notes Int'l 485 (July 26, 2021).

The 2022 Congress of the International Fiscal Association (IFA) was held in Berlin, Germany, earlier this month after the two virtual Congresses in 2020 and 2021. In this long-awaited in-person event, the OECD's tax head Pascal Saint-Amans, who led the base erosion and profit shifting (BEPS) project and brokered the two-pillar global tax deal, announced his departure. Although the successful implementation of the global tax deal is still uncertain, it is hard to deny that Saint-Amans has been at the center of the efforts to update the international tax system. Personally, I appreciate his making the international tax a more exciting and dynamic subject, not only because he led the BEPS project and the global tax deal but also because he contributed to establishing the automatic exchange of tax information systems and building the inclusive framework on BEPS. It is indeed the end of a chapter in the international tax discourse.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Reimagining The Tax System Through The Work Of Dorothy Day By Crawford & Afield

This week, Michelle Layser (San Diego; Google Scholar) reviews Bridget J. Crawford (Pace; Google Scholar) & W. Edward Afield (Georgia State; Google Scholar), Yesterday’s Protestor May be Tomorrow’s Saint: Reimagining the Tax System Through the Work of Dorothy Day, 76 Tax L. Rev. __(2023).

Political protests have become more frequent in recent years, but tax protests are nothing new. The Tax Revolt of the 1970s may be fresh in memory, but people have been protesting taxation since the earliest days of the Christian church. In fact, first century tax protests against the Roman Empire were so frequent that Jesus himself is said to have weighed in on the issue, telling the Pharisees they should “render unto Caesar what belongs to Caesar and to God what belongs to God.” A simplistic reading of this passage might suggest a Christian moral imperative to pay taxes. But as Professors Bridget Crawford and W. Edward Afield remind us, at least one prominent Catholic figure disagreed. Dorothy Day, the founder of the Catholic Worker movement, made conscientious tax protest a central part of her religious practice, setting her on a path toward sainthood.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Doran’s Executive Compensation And Corporate Governance

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Michael Doran (Virginia; Google Scholar), Executive Compensation and Corporate Governance (Aug. 25, 2022).

Some say that the definition of insanity is doing the same thing repeatedly and expecting different results. In Executive Compensation and Corporate Governance, Michael Doran illustrates Congress’s tendency to meet this definition, especially in policy areas that implicate big business. Doran starts from the observation that, while significant empirical uncertainty exists as to whether lavish executive compensation reveals a breakdown of corporate governance, Congress’s extensive deployments of tax policy to curtail executive pay generally have fared poorly. Indeed, Doran argues that these legislative efforts, which span four decades, may have harmed shareholders and workers—the precise constituencies that Congress intended to protect.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Holderness’s Individual Home-Work Assignments For State Taxes

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Hayes Holderness (Richmond), Individual Home-Work Assignments for State Taxes, 98 Wash. L. Rev. ___ (2023).

The COVID-19 pandemic pushed much of work online. But this move to greater remote work raises issues for state taxation of that labor income. In his piece Individual Home-Work Assignments for State Taxes, Hayes Holderness makes a convincing case that the dominant view that the employees’ residency jurisdiction should be the only one able to tax this labor income is misguided. The result is a thoughtful and forceful argument that the states where the employer is located should be allowed to tax remote work income.

Holderness first notes that the Constitution allows the employer’s state, the source state, to tax the income even in a remote work situation. He further argues that it is unlikely that the Supreme Court is going to reverse course and limit source states’ rights to tax this income.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Harpaz's International Tax Reform — Challenges To Multilateral Cooperation

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Assaf Harpaz (Drexel; Google Scholar), International Tax Reform: Challenges to Multilateral Cooperation, 44 U. Penn. J. Int’l L. __ (2022).

With the digitalization transformation of the economy where commerce has been occurring mainly online, and most functions become automated, concerns for cross-border taxation of multinational corporations became the focus of international tax discussions. The digital platform allows greater mobility of large multinational enterprises (MNEs) to shift profits more easily to low-tax jurisdictions or avoid paying tax altogether in market jurisdictions. It is estimated that corporate tax avoidance amounts to between $100 to $240 billion in annual costs, equal to 4% to 10% of global corporate income tax revenues. The OECD has had a central role in designing international tax norms. In mid-2021, while implementing the BEPS agreements, the OECD began working with an Inclusive Framework of over 140 countries that includes non-OECD members on a major reform to profit-shifting rules governing cross-border taxation of multinationals. Indeed, this reform marks a crucial juncture in international tax history and cross-border taxation.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Plekhanova's Taxes Through The Reciprocity Lens

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by Victoria Plekhanova (Massey), Taxes Through the Reciprocity Lens, 70 Can. Tax J. 303 (2022).

In this week’s feature article, Victoria Plekhanova formulates what she describes as a reciprocity-based framework for a systematic assessment of the normative merits and effectiveness of taxes. Painting with a broad brush, the author begins by describing Aristotelian concepts of justice, and in particular distributive justice (those who are equal are entitled to equal shares, and those who are unequal are entitled to unequal shares in proportion to their inequality) and commutative justice (a corrective remedy should rectify the injustice inflicted by one person on another). Each deals with a different moral problem. Distributive justice focuses on the sharing of burdens and benefits, while corrective justice links the wrongdoer and the sufferer of injustice in terms of their correlative positions prior to and after an interaction.

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Carbon Pricing And The Elasticity Of Co2 Emissions

This week, Tracey Roberts (Cumberland; Google Scholar) reviews Ryan Rafaty (Oxford; Google Scholar), Geoffroy Dolphin (Cambridge) & Felix Pretis (Victoria; Google Scholar), Carbon Pricing and the Elasticity of Co2 Emissions, (Aug. 12, 2022).

In December of 2014, at the 21st Conference of the Parties to the Framework Convention on Climate Change in Paris, nearly 200 countries agreed to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C.” These temperature goals are designed to avoid the extraordinary economic, social, and ecological damage likely to occur if we fail to address climate change in an effective way. To meet these goals, all countries will need to transform their economies to change their power generation and transmission systems, transportation systems, their industrial processes, their built environments, including heating and cooling systems, and land use policies for timberlands, grasslands, and farms. It will also require that we change our consumption habits. The next question was: “How can we do all of that?”

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Opportunity Zones: A Program In Search Of A Purpose By Eldar & Garber

This week, Michelle Layser (San Diego; Google Scholar) reviews Ofer Eldar (Duke; Google Scholar) and Chelsea Garber (J.D. 2023, Duke), Opportunity Zones: A Program in Search of a Purpose, 102 B.U. L. Rev. 1397 (2022).

When I give talks about place-based tax incentives, the discussion nearly always turns to an important question: What is the purpose of providing tax breaks for investment in low-income communities? Or, more directly, am I sure that the purpose of these laws is to benefit low-income residents? My answer: Not really (see here), but they tend to be sold as such, so it’s worth thinking about how they could be designed to advance that purpose. (Some of my thoughts about that are set forth in How Place-Based Tax Incentives Can Reduce Geographic Inequality, 74 Tax L. Rev. 1 (2020)).

That said, it is overwhelmingly clear that most place-based tax incentives are not designed to benefit low-income communities, and they may even harm them. 

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Kysar’s Interpreting By The Rules

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Rebecca Kysar (Fordham; Google Scholar), Interpreting by the Rules, 99 Tex. L. Rev. 1115 (2021).

Famed Senate Parliamentarian Floyd Riddick said that “[t]he rules of the Senate are perfect. And if they changed every one of them, the rules will be perfect.”[1] The statement shows how rules define both the U.S. Senate and House of Representatives. Recently, scholars have turned their attention to the rules and process of the legislation as a form of pushback against strict textualist approaches to statutory interpretation. These process-based approaches are often invoked in interpreting tax and mandatory spending statutes. But as Rebecca Kysar shows in her piece, Interpreting by the Rules, such an approach requires context and caution. As Riddick’s quote notes, the rules are malleable, and furthermore, they are made to be broken.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Klein’s The Corporate Tax Paradox

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Israel Klein (Ariel University; Google Scholar), The Corporate Tax Paradox, 42 Va. Tax Rev. __ (2022).

In The Corporate Tax Paradox, Israel Klein presents (and offers a resolution to) a puzzle: After the IRS began requiring certain corporate taxpayers to report uncertain tax positions in 2010, the net dollar value of these positions increased annually for large public companies, growing from $162 billion in 2013 to $241 billion in 2020. If the IRS has quantitative and qualitative information on these uncertain tax positions, why doesn’t it audit each and every one of them to conclusion? Alternatively, why do large public companies continue to report these uncertain (and, in Klein’s terminology, unsustainable) positions, if they’re required to be disclosed to both shareholders and the IRS?

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Grimmelmann's Programming Languages And Law

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a new work by James Grimmelmann (Cornell; Google Scholar), Programming Languages and Law (2nd ACM Symposium on Computer Science and Law, forthcoming 2022).

Programming language and law are conceptually and methodologically similar. They both use words. Computer science and law are both linguistic professions whose practitioners use language to create, manipulate, and interpret complex abstractions. Such similarity creates a unique opportunity for programming-language theory (PL theory) to contribute to law. But how and to what extent? A lawyer with no programming background might find it difficult to answer. I would like to introduce a recent paper, Programming Languages and Law (2nd ACM Symposium on Computer Science and Law, forthcoming 2022), by James Grimmelmann. Grimmelmann is a professor at Cornell Law School and Cornell Tech, and his interdisciplinary background makes the paper accessible to lawyers. The paper presents three case studies of the use of PL theory for law and ten promising topics for potential research. This review will introduce several examples that resonate with a tax audience. Please note that I edited some examples to make them accessible to a broader tax audience.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Shaviro's Stanley Surrey And The Public Intellectual Practice Of Tax Policy

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Daniel Shaviro (NYU; Google Scholar), ‘Moralist’ Versus ‘Scientist’: Stanley Surrey and the Public Intellectual Practice of Tax Policy (July 2022).

The dichotomy of tax—as pure scientific neutral field versus encompassing a moral and social agenda—received much attention with recent years’ renewed spotlight on critical tax theory. In an interview in 1974 Firing Line TV Dialog, Stanley Surrey was confronted with this dichotomy when host William Buckley blamed Surrey that although he asserts relying on scientific observations, he is truly a tax moralist who aims to improve the world based on his own personal value principles. Following A Half-Century with the Internal Revenue Code: The Memoirs of Stanley S. Surrey (Lawrence Zelenak (Duke) & Ajay Mehrotra (Northwestern; Google Scholar) eds. Carolina Academic Press 2022), in this Essay, Shaviro explores Surrey’s tax moralism as it is self-professed in this autobiographical collection and evaluates the effect it has on the tax expenditure analysis.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Hemel's The Passthrough Entity Tax Scandal

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by Daniel J. Hemel (NYU; Google Scholar), The Passthrough Entity Tax Scandal (2022).

One of the more fascinating aspects of the 2017 Tax Cuts and Jobs Act concerns the limitation on deducting state and local income taxes. Prior to the enactment of the TCJA, state and local income taxes were fully deductible when computing federal tax liability. The TCJA capped that deduction for individuals at $10,000. In itself the cap was not particularly remarkable. There are innumerable sections in the Code that cap deductions at some arbitrary amount. What was fascinating about the SALT cap was the politics involved. The TCJA cap primarily strikes at the wealthiest taxpayers: the vast majority of individuals pay much less than $10,000 in state and local income taxes. One might therefore expect that, were there to be any political bickering on the issue, it would be the Democrats who would fully support the cap and the Republicans who would resist. It did not play out that way. The highly contentious measure was proposed by the Republicans and fiercely denounced by the Democrats. The reason for this seeming reversal of the usual political positions was pure partisan politics: blue states tend to have higher income taxes than red states (the only states with top marginal rates higher than 10% are California, New York, and New Jersey).

In this week’s feature article, Professor Daniel Hemel describes how states have attempted to bypass the SALT cap by enacting pass-through entity taxes (PETs).

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Implicit Legislative Bias And The Mortgage Interest Deduction By Osofsky & Thomas

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Leigh Osofsky (North Carolina; Google Scholar) & Kathleen DeLaney Thomas (North Carolina; Google Scholar), Implicit Legislative Bias: The Case of the Mortgage Interest Deduction, 56 U.C. Davis L. Rev. ___ (2022).

Why do so many bad tax policies stick around for so long? The story told is often one of public choice theory and capture. Legislators optimize getting reelected and that leads toward catering to certain interest groups. To be sure, this account does have some explanatory force. But there is often more to the story. Using the mortgage interest deduction (MID) as an example, Leigh Osofsky and Kathleen DeLaney Thomas show that cognitive biases, including implicit racial assumptions and other heuristics, also play a role in keeping this problematic policy. These cognitive biases conspire to create a self-reinforcing system that perpetuates racial inequalities. The article is thus important to broader conversations on how to think about enacting tax policy and for the discussions of racial justice.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Galler's Tax Opinion Policies And Procedures

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Linda Galler (Hofstra), Tax Opinion Policies and Procedures, 75 Tax Law. 443 (2022).

In Tax Opinion Policies and Procedures, Linda Galler analyzes and discusses the results of a 2021 survey of tax professionals’ approaches to opinion practice. In this fourteen-question survey, the American College of Tax Counsel (ACTC) asked its limited membership of lawyers and accountants about their firms’ procedures for reviewing and issuing opinions. Although the ACTC survey’s results are more impressionistic than comprehensive, Galler notes that the survey “provides an excellent starting point” for establishing the current landscape of tax opinion practice (473). After detailing the form and function of tax opinions, as well as ethical considerations in opinion practice, Galler highlights the ACTC survey’s critical results and offers various recommendations for firms and future study.

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Stanley Surrey's Memoirs Edited By Zelenak & Mehrotra

This week, Tracey Roberts (Cumberland; Google Scholar) reviews A Half Century with the Internal Revenue Code, The Memoirs of Stanley S. Surrey (Carolina Academic Press 2022), edited by Lawrence A. Zelenak (Duke) and Ajay K. Mehrotra (Northwestern; Google Scholar).

Stanley Surrey devoted five decades to shaping and elucidating the structures of the income tax, to decrying its use as a mechanism to grant unwarranted financial favors to select interest groups, and to training generations of students and lawyers for leadership in government, in academia, and in private practice in the U.S. and internationally. Surrey served as an advisor and Tax Legislative Counsel to the Department of Treasury from 1937 to 1947, as the Assistant Secretary of the Treasury from 1961 to 1969, and as a professor of law at the University of California, Berkeley School of Law and at Harvard Law School, where he founded the International Tax Program. Surrey saw himself as an activist scholar. In their introduction to their edited edition of Surrey’s memoirs, Larry Zelenak and Ajay Mehrotra survey Surrey’s extraordinary career as largely one of unified thought and action in service to fairness, equity, the integrity nation’s tax system, and its effectiveness in securing the federal fisc. 

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Dean's The Casual Racism Of The Tax Law

This week, Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar) reviews a new work by Steven A. Dean (Brooklyn), Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. __.

In response to a growing recognition of the absence of demographic data in federal datasets, including tax data, President Biden signed Executive Order 13985 in 2021, which, inter alia, established an Interagency Working Group on Equitable Data. The Treasury Department is also undertaking a comprehensive research initiative to study the relationship between the U.S. tax code and racial inequities. Senate Finance Committee Chair Ron Wyden (D-OR) has called for the IRS to collect and disclose more information relating to the tax code’s effect on different demographics because it makes no sense to blind lawmakers to the key data that would illuminate injustice in our tax laws. Those recent developments are the results of hard work by dedicated scholars like Alice Abreu, Jeremy Bearer-Friend, Dorothy Brown, Wei Cui, Steven Dean, Francine Lipman, and Goldburn Maynard. In this review, I would like to recognize Steven Dean's recent essay, Filing While Black: The Casual Racism of the Tax Law, 2022 Utah L. Rev. ___. Dean's essay is adapted from his testimony given before the Committee on Ways and Means of the U.S. House of Representatives on June 10, 2021, and was presented at the 2021 Utah Law Review Symposium, entitled #includetheirstories: Rethinking, Reimagining, and Reshaping Legal Education, for which I was an organizer. (Video clips are available here.)

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews AI, Taxation, And Valuation By Soled And Thomas

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Jay Soled (Rutgers; Google Scholar) & Kathleen DeLaney Thomas (North Carolina; Google Scholar), AI, Taxation, and Valuation, 108 Iowa L. Rev. __ (2023).

Artificial intelligence (AI) is improving our lives by utilizing technology and machine learning to accomplish tasks that require considerable human labor. It can deliver similar and often better outcomes in a cost-effective manner. I have written here that calculative actions do not require much creativity thus are the most obvious fields in which machines are superior to humans. It is very fitting to ask, then, how can AI improve tax enforcement and compliance? Valuation is one of the most calculative and arduous areas in tax administration that automation can greatly improve. 

Valuation often requires many efforts determining fair market value (FMV) when there is no willing buyer and seller that negotiate the asset’s purchase price. Because of the essential role that asset valuations play in determining tax liabilities, there is a high sensitivity by the IRS and taxpayers to their accuracy. Transactions between related parties or not at arm’s length such as transfer of bequests, nonfungible real estate, or closely held business interests present complex valuation issues as there is no clear FMV. Congress uses a traditional carrot-and-stick approach to valuation by encouraging taxpayers to comply through clarifying and simplifying reporting obligations, along with imposing penalties for misstating the value of assets.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews International Response To The U.S. Tax Haven By Noked & Marcone

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews Noam Noked (Chinese University of Hong Kong (CUHK); Google Scholar) & Zachary Marcone (CUHK), International Response to the U.S. Tax Haven, 48 Yale J. Int’l L. ___ (2022):

The term “tax haven” tends to evoke images of sparsely populated Caribbean islands with pristine beaches and whose most important industry is the registration of corporations. Alternatively, it may bring to mind countries such as Switzerland or Luxembourg, whose banking laws have traditionally provided for strict secrecy, enabling wealthy individuals to shield their capital and income from the prying eyes of their home countries’ tax authorities.

Wherever they may be and whatever function they serve, tax havens have been the subject of intense scrutiny and criticism in recent years. The United States has been particularly active in this regard. One of the primary tools in its arsenal is the Foreign Account Tax Compliance Act (FATCA) that prohibits foreign financial institutions from aiding and abetting tax evasion by U.S. persons. Foreign financial institutions that run afoul of these regulations are subject to stiff penalties (even, it may be noted, when abiding by the regulations would constitute a violation of local law).

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Blue J's Use Of Machine Learning To Predict Tax Litigation Results

This week, Sloan Speck (Colorado; Google Scholar) reviews new works by: 

• Benjamin Alarie (Toronto; Google Scholar) & Stefanie Di Giandomenico (Blue J Legal), Timing Is Everything: The Step Transaction Doctrine in GSS Holdings, 174 Tax Notes Fed. 1849 (Mar. 28, 2022)
• Benjamin Alarie (Toronto; Google Scholar) & Christopher Yan (Blue J Legal), Using Machine Learning to Evaluate the Existence of a Trade or Business: Olsen, 174 Tax Notes Fed. 1231 (Feb. 28, 2022)
• Benjamin Alarie (Toronto; Google Scholar) & Bettina Xue Griffin (Blue J Legal), Using Machine Learning to Crack the Tax Code, 174 Tax Notes Fed. 661 (Jan. 31, 2022)

Since 2014, Ben Alarie and his team at Blue J Legal have worked to apply machine learning (ML) principles to the process of tax advising (among other areas of law). Through a series of articles in Tax Notes Federal, Alarie and his coauthors provide a window into their artificial intelligence prediction engine. Their commentary is crucial: big data has arrived in legal and accounting practice, and some degree of transparency may improve tax equity and administration. In addition, these articles yield important and interesting insights about various doctrines in tax law.

In winter 2022, Alarie and his coauthors gave us three short articles: a general review of ML’s potential in tax practice and two applications of Alarie’s ML model to existing controversies.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews A New Framework For Digital Taxation By Avi-Yonah, Kim & Sam

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Reuven Avi-Yonah (Michigan; Google Scholar), Christine Kim (Utah; moving to Cardozo; Google Scholar) & Karen Sam (Michigan), A New Framework for Digital Taxation, 63 Harv. Int’l L.J. __ (2022).

Last October, the OECD/G20 announced a global deal that sought to remake the international tax system. Key to that change was the commitment of the many nations, including the U.S. and members of the E.U., to support, in principle, two pillars. Pillar One focused on eliminating physical presence requirements thereby allowing market countries to tax digital platforms. Pillar Two created a minimum tax backstop in residence countries. But as Reuven Avi-Yonah, Young Ran “Christine” Kim, and Karen Sam, show in their article A New Framework for Digital Taxation, forthcoming in the Harvard Journal of International Law, for Pillar One, the declaration of victory is premature. And so-called Digital Service Taxes (DSTs) may not be so terrible either.

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Taxation, Aristocracy, And The Constitution

This week, Tracey Roberts (Cumberland; Google Scholar) reviews new works by:

• Jeremy Bearer-Friend (George Washington; Google Scholar) & Vanessa Williamson (Brookings; Google Scholar), Thomas Paine and Taxation as Freedom from Aristocracy, 26 Fla. Tax Rev. __ (2022)
• John R. Brooks (Fordham; Google Scholar) and David Gamage (Indiana; Google Scholar), Taxation and the Constitution, Reconsidered, 74 Tax L. Rev. __(2022)

Recently, ProPublica uncovered troves of tax information for the wealthiest Americans, revealing numerous pathways by which they avoid taxes. Last year the Department of the Treasury estimated that the tax gap, the difference between taxes that are owed and the taxes that have been paid, has increased to approximately $600 billion per year. Over the next ten years, this comes to $7 trillion in lost tax revenue, important resources that might be used to reduce the federal debt, for those concerned about such matters, and to address other needs as COVID 19 recedes and we recover from its impacts. Using tax data, Emmanuel Saez and Gabriel Zucman have estimated that the top one percent of taxpayers are responsible for one-third of that tax gap. These recent reports demonstrate that the federal income tax and the estate and gift taxes are inadequate in ensuring that the ultrawealthy in the United States pay their fair share. Two recent papers delve into historical resources, constitutional caselaw, and constitutional history to underscore that concerns about adequate taxation of the wealthy are not new, but are instead central to our nation’s founding, to the periods in which our country has faced its greatest challenges, and to democracy.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Sanchirico's A Game-theoretic Analysis of Global Minimum Tax Design

This week, Young Ran (Christine) Kim (Utah, moving to Cardozo; Google Scholar) reviews a new work by Chris William Sanchirico (Penn; Google Scholar), A Game-theoretic Analysis of Global Minimum Tax Design (March 2022).

In the globalized, open economy, multinational enterprises (MNEs) can easily shift their profits from high tax jurisdictions to low tax jurisdictions. Many countries, especially developing countries, were increasingly squeezed by MNEs to provide lower corporate tax rates and tax holidays as conditions for receiving foreign direct investment. Furthermore, those countries had to compete with peer countries vying to attract foreign capital to their economy. The epitome of such rivalry is “tax competition.” As tax competition has grown, global effective corporate tax rates have continued to be cut, creating a “race-to-the-bottom.” In order to curb harmful tax competition, the OECD/Inclusive Framework has proposed a global minimum tax at 15% rate and to impose a top-up tax to the extent that the effective tax rate paid by the MNE falls short of the said minimum tax rate.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Thimmesch's Tax, Incorporated: Dynamic Incorporation And The Modern Fiscal State

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Adam B. Thimmesch (Nebraska; Google Scholar), Tax, Incorporated: Dynamic Incorporation and the Modern Fiscal State, 53 Ariz. St. L. J. __ (2021):

States’ fiscal stability is crucial to providing residents with health, economic security, and physical safety. Most states rely heavily on the personal income tax, which is often an unpredictable source of revenue. Yet, even more so, states increase the volatility of that stream of tax revenues by relegating tax-writing authority to Congress through referral or fully incorporating the federal tax code (the “Tax Code”) into their own laws.  

In this Article, Thimmesch reviews the practice of incorporation—also known as conformity, piggybacking, or delegating up, thereby excusing states from having to devise tax policy or craft income tax de novo. Perhaps the most notable examples to this phenomenon include the referral to federal level AGI, determination of a taxable gift, calculating tax basis, or allowing deductibility of business meal expenses, among others. 

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Oxford Business Tax Policy Brief On Pillar 2

This week, David Elkins (Netanya, visiting NYU 2021-2022; Google Scholar) reviews a new paper by Michael P. Devreux (Oxford; Google Scholar), John Vella (Oxford) & Heydon Wardell-Burrus (Oxford), Pillar 2: Rule Order, Incentives, and Tax Competition (2022).

International taxation is undergoing a transformation the likes of which have not been seen for a century, responding to challenges of globalization and digitalization that the current international tax regime is ill-equipped to handle. Twenty-five years have passed since the OECD shot the first arrow across the bow, twenty-five years during which the discourse has expanded to include over 140 countries in the Inclusive Framework and the goals of the project have been constantly evolving. Whether and to what extent the transformation will come to fruition and, if it does, will survive the test of time is a matter of speculation.

The latest iteration on the subject is the Pillar Two Global Minimum Tax Model Rules released on December 22, 2021. In this week’s feature article, three scholars from the Oxford University Centre for Business Taxation examine how the Model Rules deal with two of the more controversial questions relating to Pillar Two: the extent to which it will allow countries to engage in tax competition, and which countries will collect the tax revenue that it generates. 

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Parsons’ Tax’s Digital Labor Dilemma

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Amanda Parsons (Columbia), Tax’s Digital Labor Dilemma, 71 Duke L.J. __ (2022).

In Tax’s Digital Labor Dilemma, Amanda Parsons develops a compelling challenge to conventional frameworks for international tax reform by reconceptualizing traditional distinctions between consumers and workers in digital economy enterprises. Parsons generally agrees with the critics of the 1920s compromise: the historical allocation of taxing authority between source and residence countries fails in the world of today. Under longstanding international tax norms, market countries—in which an enterprise’s goods and services are consumed or used—receive little consideration and less tax revenue. Parsons, among many others, sees justice in transferring some measure of taxing authority to these market countries. The sticky question—and where Parsons shows her careful creativity—is how policymakers should address this shared goal.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Davis’s Taxing Choices

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Tessa Davis (South Carolina), Taxing Choices, 15 Fla. Int'l U. L. Rev. __ (2022).

Choice is often bandied about in tax discussion. Indeed, the very notion of marginal effects that taxation is based on the idea of either inducing or avoiding such inducement of choices. We also use choice as a proxy to determine what should count or not count as an item of income or deduction. But as Tessa Davis argues in her piece Taxing Choices, forthcoming in the Florida International University Law Review, there is a choice problem in taxation. Too often, we use choice and related concepts like neutrality, to hide our value judgments and normative frames. In pushing an idea called “choice as heuristic” and in drawing from some of the debates about choice in Contract Law, Davis forces us to rethink what we are doing when we use the concept of choice in our tax discussions.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Aprill's Governmental And Semi-Governmental Federal Charitable Entities

This week, Michelle Layser (Illinois; Google Scholar) reviews Ellen Aprill (Loyola-L.A.; Google Scholar), Governmental and Semi-Governmental Federal Charitable Entities (2022).

The federal tax deduction for charitable contributions is sometimes defended on the theory that charitable organizations provide public goods that may be under-produced by the government. This understanding of tax-exempt nonprofits imagines charities as existing in a sphere that is separate and distinct from the government. Professor Ellen Aprill challenges the conventional view, arguing that government and charities are better understood as “resting on a continuum rather than in separate spheres.”

Aprill begins by reviewing the basics of the charitable contribution deduction under I.R.C. § 170. Contributions to 501(c)(3) nonprofits, commonly called charitable organizations, are undoubtedly the most familiar deductible donations. But Aprill points out that section 170 also authorizes a deduction for contributions or gifts to the United States, provided that the gifts are used for “exclusively public purposes.” In other words, taxpayers can claim a charitable contribution deduction for gifts to the federal government itself. Congress can also authorize federal agencies to accept charitable deductions, and in some cases it has done so. In a sense, the federal government and its agencies represent an extreme end of the spectrum of what Aprill calls “federal charitable entities.”

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Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Love's Measuring The Flow Of Partnership Income To Tax Havens

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by Michael Love (Berkeley), Where in the World Does Partnership Income Go? Evidence of a Growing Use of Tax Havens.

In 2016, in The Hidden Wealth of Nations, UC Berkeley Associate Professor of Economics Gabriel Zucman quantified the amount of the world’s assets held in tax havens, clarified the ways large-scale tax evasion undermined global markets, and explained the connection between tax evasion and financial, budgetary and democratic crises occurring throughout the world. He argued that tax evasion can be stopped, but only if we have statistics to measure it, if we implement policies and penalties to address it, and if we monitor our progress. In his recent research, Michael Love has made important progress in measuring the flow of partnership income to tax havens and monitoring the effects of the Foreign Account Tax Compliance Act (FATCA) in improving reporting and compliance by U.S. investors.

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