Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Mehrotra's The Intellectual Origins Of The Modern International Tax Regime

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews a new work by Ajay K. Mehrotra (Northwestern; Google Scholar), The Intellectual Origins of the Modern International Tax Regime: Edwin R. A. Seligman, Economic Allegiance, and the League of Nations’ 1923 Report, 5 J. L. & Political Econ. 995 (2025).

As someone deeply fascinated by history and its nuanced narratives, I find immense value in exploring works that shed light on pivotal moments in intellectual and policy evolution. This Article reflects one such cornerstone of tax history literature by offering a unique opportunity to glimpse into how Edwin R. A. Seligman and the League of Nations’ 1923 Report shaped the development of international tax governance. Through a detailed exploration of historical context, intellectual contributions, and lasting impacts, Mehrotra does a great job uncovering the foundational principles that continue to influence contemporary tax policy.

The devastation of World War I left many economies in disarray, burdened with immense debts and the need for reconstruction.

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Glogower's The Constitutional Limits To The Taxing Power

This week, David Elkins (Netanya, Google Scholar) reviews Ari Glogower (Northwestern; Google Scholar), The Constitutional Limits to the Taxing Power, 93 Fordham L. Rev. 782 (2024).

Moore v. United States, decided in June of this year, has sparked a renewed interest in Constitutional issues by tax scholars. Much of the discussion focuses on the issue of whether the term “income” as used in the sixteenth amendment requires realization. Others have gone further, asserting that under the original Constitution, Congress has the power to impose tax on income, whether realized or not, and the sixteenth amendment was therefore unnecessary. At the heart of this broader outlook lies the Constitutional mandate that direct taxes be apportioned among the states by population. This provision would probably invalidate almost any direct tax except a capitation tax. For example, if an income tax were to be apportioned among the states proportionally by population, the tax rate in poorer states would need to be higher than it is in richer states. Thus, a key question is what the Constitution means by the term “direct tax.” The broader one interprets this term, the more one narrows Congress’s power to choose the tax base that it wishes, and vice versa.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews A Roadmap To NIL And Taxation By Narotzki & Brauner

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews a new work by Doron Narotzki (Akron; Google Scholar) and Yariv Brauner (Florida; Google Scholar), A Roadmap to NIL and Taxation, 14 Am. U. Bus. L. Rev. 1 (2024):

The evolution of collegiate sports has significantly shifted following the emergence of Name, Image, and Likeness (NIL) policies. It changed the structure and financial dynamics of collegiate sports to that of professional leagues such as the NFL, NBA, and MLB. It transformed student-athletes from non-earning amateurs into individuals capable of leveraging their personal brands for substantial financial gain. In this Article, Doron Narotzki and Yariv Brauner explore the multifaceted impact of these changes. They analyze the implications of NIL rights, particularly through the lens of taxation.  Their analysis offers a historical perspective, practical applications of NIL rights, and an exploration of the everyday tax implications. 

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Reconsidering Citizenship Taxation By Dagan & Mason

This week, Blaine Saito (Ohio State; Google Scholar) reviews Tsilly Dagan (Oxford; Google Scholar) & Ruth Mason (Virginia; Google Scholar), Reconsidering Citizenship Taxation, in Taxing People: The Next One Hundred Years (Tsilly Dagan & Ruth Mason, eds. Cambridge University Press 2025). 

There is truth to the hackneyed phrase that we live in a more globalized world. Tax discussions in recent years has focused on the mobility of capital, which in turn led toward efforts to protect the tax base from multinational entities’ profit shifting techniques. The common view was that people and labor were stickier. But the results of the pandemic along with various changes in laws that allowed digital nomads and golden pathways to citizenship for wealthy people has allowed a growing group of people to break loose from the traditional bonds of community of the nation-state. In their piece Reconsidering Citizenship Taxation, which will be a chapter in their upcoming anthology Taxing People: The Next One Hundred Years, Tsilly Dagan and Ruth Mason talk about recent rumblings to use citizenship as the basis for taxation. 

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Schaffa's Reimagining The Employee Compensation Deduction

This week, Michelle Layser (San Diego; Google Scholar) reviews Daniel Schaffa (Richmond; Google Scholar), Reimagining the Deduction for Employee Compensation, 57 Mich. J. L. Reform 417 (2024).

The deduction for employee compensation is among the most longstanding and least controversial deductions in the Tax Code. Unlike many deductions, which move the tax law away from a comprehensive tax base, the compensation deduction helps measure net income accurately. Perhaps for this reason, the treatment of employee wages has undergone few significant changes since the early years of the income tax. In a forthcoming article, Prof. Daniel Schaffa proposes a radical departure from the conventional approach. He reimagines the compensation deduction as an economic incentive for hiring and a subsidy for employee wages.

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Weekly SSRN Tax Article Review And Roundup: Kern Reviews Clausing's The Green Transformation And Tax Policy Criteria

This week, Adam Kern (San Diego; Google Scholar) reviews an article by Kimberly Clausing (UCLA), The Green Transformation and Tax Policy Criteria.

Climate change is an existential threat, and fiscal policy contains many of the tools for tackling it. But scholars of tax law have not given much attention to climate policy. (There are a few notable exceptions, including Reuven Avi-Yonah, Daniel Hemel, Mitchell Kane, Roberta Mann, Janet Milne, Tracey Roberts, Clint Wallace, and David Weisbach.) My sense is that many tax scholars shy away from climate policy because they see it as a daunting subfield that requires special technical knowledge.

In The Green Transformation and Tax Policy Criteria, Kimberly Clausing bridges this divide. She shows that traditional criteria for good tax policy—such as revenue, distribution, administrability, and efficiency—are at stake in climate policy as well.

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Weekly SSRN Tax Article Review And Roundup: Narotzki Reviews The Effect Of Government Transparency On Corporate Tax Avoidance

This week, Doron Narotzki (Akron; Google Scholar) reviews The Effect of Government Transparency on Corporate Tax Avoidance: Evidence from State Freedom of Information Laws by Dongdi (Grace) Gu (University of Texas-Dallas), Jiapeng He (Chinese University of Hong Kong), Ying Huang (University of Texas-Dallas), and Ningzhong Li (University of Texas-Dallas). 

They say sunlight is the best disinfectant, and in the case of corporate tax avoidance, a little transparency can go a long way. In The Effect of Government Transparency on Corporate Tax Avoidance: Evidence from State Freedom of Information Laws, Dongdi (Grace) Gu, Jiapeng He, Ying Huang, and Ningzhong Li put this idea to the test, revealing how government openness can help diminish the somewhat murky practices of aggressive tax planning.

The paper addresses a timely question: how do changes in state Freedom of Information (FOI) laws affect corporate tax behavior? Furthermore, the paper fills a notable gap in the literature by linking government transparency directly to tax compliance. The authors utilize staggered changes in FOI laws as a natural experiment, employing a difference-in-differences (DiD) methodology.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Taxing The Wealthy At The State Level By Galle, Gamage & Shanske

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a recent article by Brian D. Galle (Georgetown; Google Scholar), David Gamage (Missouri; Google Scholar), & Darien Shanske (UC-Davis; Google Scholar), Money Moves: Taxing the Wealthy at the State Level, 112 California L. Rev. __ (2025). 

While there are many tax reform proposals to tax the super-rich these days, the discussion has centered on the federal or national tax level. On the other hand, Brian Galle (Georgetown), David Gamage (Missouri), and Darien Shanske (UC Davis) have been brilliantly contributing to state-level tax policies to address inequality. A notable piece is Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. 1257 (2023, reviewed here), where the authors developed the unliquidated tax reserve accounts (ULTRA) system as a part of drafting comprehensive annual wealth tax reform proposal for the state of California. Recently, the authors produced another excellent piece on the state-level tax proposal for taxing the super-rich—Money Moves: Taxing the Wealthy at the State Level, 112 Calif. L. Rev. ___ (2025), which is worth introducing for this week's review.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews A Theory Of The REIT By Oh & Verstein

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Jason Oh (UCLA) & Andrew Verstein (UCLA; Google Scholar), A Theory of the REIT, 133 Yale L.J. 755 (2024).

In A Theory of the REIT, Jason Oh and Andrew Verstein reconceptualize the connections between corporate law and tax law to illuminate the viability and attractiveness of real estate investment trusts (REITs) as an investment vehicle. Oh and Verstein ask why public equity REITs have burgeoned in size and number over the last three decades, when their “Rube Goldberg governance structure” runs contrary to well-traveled tenets of corporate law (818). More specifically, Oh and Verstein observe that REITs are largely immune to hostile takeovers and generally prohibited from retaining earnings. 

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Speck's The Realization Rule As A Legal Standard

This week, David Elkins (Netanya, Google Scholar) reviews Sloan G. Speck (Colorado; Google Scholar), The Realization Rule as a Legal Standard, 16 Colum. J. Tax L. ___ (2024):

Moore v. United States, decided by the Supreme Court in June of this year, reignited discussion about the concept of realization in the income tax. While statutory law generally conforms to the principle of realization as a matter of policy, the question raised by Moore is whether Congress could tax unrealized gain if it so desired.

In this week’s feature article, Prof. Speck begins with an extensive review of the controversy regarding the Constitutional realization requirement. He opens with the Supreme Court’s famous holding from 1920 in Eisner v. Macomber that the 16th Amendment does not authorize Congress to impose tax on unrealized income (without an impractical apportioning among the states in accordance with population). He then describes how in a 1941 article, Prof. Stanley Surrey contended that realization is not in fact a Constitutional requirement. 

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Osofsky's Wellness And The Tax Law

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Leigh Osofsky (North Carolina; Google Scholar), Wellness and The Tax Law, 59 Ga. L. Rev. __ (2025).

There is little doubt that the U.S. tax system’s patchwork treatment of medical care yields significant inequities, many of which reproduce broader problems with non-tax public health policy in the United States. In Wellness and the Tax Law, Leigh Osofsky explores these inequities as they arise in the context of individuals’ spending on wellness practices that foster physical and mental well-being. Medical research shows that these wellness practices are significantly correlated with preventing, mitigating, and treating identifiable health problems, with potential savings at both the individual and societal levels. Concomitantly, tax law has deployed the concept of “medical care” in more contexts, and with less consistency. Within this dynamic context, Osofsky revisits the structure and justifications for tax benefits for health-oriented spending.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews Marks’s Winning By Losing: The Strategy Of Adverse Letter Rulings

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Noah Hertz Marks (Duke), Winning by Losing: The Strategy of Adverse Letter Rulings, 66 B.C. L. Rev. __ (2025).

Tax law is rich with sources. We have sources of binding law in the forms of statutes, regulations, and court cases. But there is also a rich set of sub-regulatory guidance. One of note are Private Letter Rulings (PLRs). While PLRs are only binding on the IRS with respect to a specific taxpayer, those in practice frequently consult PLRs, as they provide insight into the IRS’s reasoning on key issues for which there may be no other form of guidance. PLRs are issued through a collaborative process. When the IRS determines that there may be an adverse ruling in a PLR, it provides numerous off-ramps. Yet, these adverse PLRs exist. Noah Marks explores this puzzle in Winning by Losing: The Strategy of Adverse Letter Rulings. Marks shows that adverse letter rulings exist for numerous reasons, including strategic normative power. His work thus adds not only to tax scholarship, but also our understanding of the long shadow of agency actions.

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Weekly SSRN Tax Article Review And Roundup: Kern Reviews Deferring Income With Tiered And Circular Partnerships By Sanchirico & Shuldiner

This week, Adam Kern (San Diego; Google Scholar) reviews an article by Chris William Sanchirico (Penn; Google Scholar) and Reed Shuldiner (Penn), Deferring Income with Tiered and Circular Partnerships.

Taxes can be deferred when partnerships have different taxable years from their partners. A partnership might take account of its income in, say, January, while a partner might only take account of its income in December. In that case, the partner would defer taxes on its distributive share of partnership income for 11 months.

The academic literature has assumed that this opportunity for deferral is limited. In “Deferring Income with Tiered and Circular Partnerships,” Chris Sanchirico and Reed Shuldiner show that it is not. Taxpayers can achieve a large—indeed, unbounded—extent of deferral with tiered and circular partnerships. Moreover, while the partnership structures described by Sanchirico & Shuldiner are ingenious, they are not so large or complex as to be obviously infeasible. This is a genuine opportunity that taxpayers might well seize.

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Weekly SSRN Tax Article Review And Roundup: Narotzki Reviews Escajeda's Bad Tax Policy Breeds Bad Blood Between Songwriters And Poets

This week, Doron Narotzki (Akron; Google Scholar) reviews an article by Hilary G. Escajeda (Mississippi College; Google Scholar), Bad Tax Policy Breeds Bad Blood Between Songwriters and Poets 183 Tax Notes Fed. 1625 (May 27, 2024).

Escajeda offers a compelling and thought-provoking critique of the U.S. tax system's treatment of artists, an area that is not often discussed. With a lively and accessible writing style, Escajeda highlights an important but often overlooked disparity in how tax policy favors songwriters over poets. Using popular cultural references, such as Taylor Swift’s music, the article skillfully engages readers while discussing the more technical aspects of tax law which makes the topic relatable and easier to digest.

Escajeda’s main argument is clear and very persuasive: current U.S. tax laws offer preferential capital gains treatment to songwriters but at the same time subject poets and other non-musical artists to ordinary income tax rates. 

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Schön's International Tax Scholarship And International Tax Activism

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews a recent article by Wolfgang Schön (Max Planck), International Tax Scholarship and International Tax Activism (August 2024).       

While writing a scholarly article, tax scholars sometimes develop an idea based on their personal experience or political stance in addition to a pure scientific, doctrinal analysis. What are the merits of inviting activism to tax scholarship? Is there any limitation? Wolfgang Schön (Max Planck)'s recent article, International Tax Scholarship and International Tax Activism, provides insightful answers to this question, focusing on recent international tax debate.  

The international tax community over the last couple of decades has experienced dynamic changes in focus. Prior to the late 20th century, legal scholars loved to discuss complex cases (like triangular cases on withholding taxation and entity classification) and treaty analysis at a high level.

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Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Weisbach's An APA For Tax

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews a new work by David A. Weisbach (Chicago; Google Scholar), An APA For Tax.

The Administrative Procedure Act (APA) is a cornerstone of administrative law in the United States, providing a framework for the procedures and processes that federal agencies must follow. Its relevance to tax law has become increasingly significant as tax administration faces new challenges and reforms. This Article is one more piece in a series of articles, where scholars supporting tax exceptionalism (e.g. Caron, Lederman, Puckett, Weisbach, Walace, Zelenak, and others) debate anti-tax exceptionalism colleagues (e.g. Abreu & Greenstein, Hickman, Hoffer, Johnson, Infanti, Walker, and others) on the question of whether Treasury (and the IRS as its extension) violates the requirements of administrative law as laid out by the APA.  

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Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Oei's Disentangling Power And Preferences In Tax Treaties Between Developing And OECD Countries

This week, David Elkins (Netanya, Google Scholar) reviews a new work by Shu-Yi Oei (Duke; Google Scholar), Disentangling Power and Preferences in Tax Treaties between Developing and OECD Countries Using Multilevel Modeling.

One of the linchpins of the international tax regime is the network of over 3,000 bilateral tax treaties. Of those, as noted by Prof. Oei, about 40% are between developed and developing countries. The primary goals of tax treaties are to prevent double taxation and to divide up taxing rights between the taxpayer’s country of residence (the home country) and the country from which the income is derived (the source country). However, it is often not necessary to conclude a tax treaty to prevent the taxation of the same income by more than one country. Foreign tax credits and territorial taxation are unilateral means by which counties can and do prevent double taxation. Moreover, these unilateral measures tend to give precedence to source countries. The question that has been raised in the literature is why developing countries, which to a great extent rely upon source taxation, would enter into treaties, the effect of which is to limit their ability to tax income deriving from their own territory.

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Weekly SSRN Tax Article Review And Roundup: Speck Reviews Chaim's The Common Ownership Tax Strategy

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Danielle A. Chaim (Bar-Ilan; Google Scholar), The Common Ownership Tax Strategy, 101 Wash. U. L. Rev. 501 (2023).

Over the last decade-and-a-half, economists and corporate law scholars have unpacked the consequences of index-based mutual funds’ burgeoning ownership of equity in public companies. In The Common Ownership Tax Strategy, Danielle Chaim synthesizes and extends this literature as it applies to taxation. Chaim argues that mutual funds’ substantial stakes in broad swaths of companies—“diversified-yet-concentrated” ownership—facilitate a tax avoidance strategy that Chaim terms “corporate flooding.” Essentially, firms can simultaneously increase their overall tax avoidance, overwhelming the IRS’s enforcement capacities and driving down the odds that the IRS will detect abusive practices by any one firm. This rising tide of tax avoidance raises all mutual funds’ boats, and the costs are distributional: fund managers and their moderate- to upper-income clientele benefit.

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Weekly SSRN Tax Article Review And Roundup: Saito Reviews The Conflictual Core Of Global Tax Cooperation By Oei & Ring

This week, Blaine Saito (Ohio State; Google Scholar) reviews a new work by Diane M. Ring (Boston College; Google Scholar) & Shu-Yi Oei (Duke; Google Scholar), The Conflictual Core of Global Tax Cooperation.

In Momentum has grown around Pillar Two created through the OECD/G20’s inclusive framework. But this growing moment of unity masks the conflict between developed countries and developing countries. In their piece, The Conflictual Core of Global Tax Cooperation, Shu-Yi Oei and Diane Ring shows how developing country critics of the inclusive framework and Pillar Two and developed country proponents of it seem to talk past each other. They also show that international tax issues need to fall within the broader frames of tensions between developing and developed nations that exist outside of tax as well.

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Weekly SSRN Tax Article Review And Roundup: Layser Reviews Shanske's The Future Of SALT

This week, Michelle Layser (San Diego; Google Scholar) reviews Darien Shanske (UC-Davis; Google Scholar), The Future of SALT (?): Using and Improving Formulas for Apportioning Income, Residence and Intangibles, 78 Tax Law. __ (2025). 

Formulas are a common feature of state tax law. The quintessential example is the formulary apportionment of income earned by multistate corporations, but formulas are used in other contexts as well. Some states use formulas to determine how individuals should apportion their income when they work remotely. Formulas are used to apportion income earned by professional athletes (let’s go Padres!). Emerging digital sales tax laws use formulas to apportion advertising income earned by platforms like Facebook to the states where their customers live.

Formulas help solve a fundamental problem: it is often theoretically and practically impossible to determine, with absolute accuracy, where a taxpayer earned their income. Formulas provide a simple solution: estimate how much income was earned in a state based on proxies (like the location of customers, employees, or property) or time (the number of days an employee worked in each state). 

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Weekly SSRN Tax Article Review And Roundup: Narotzki Reviews Utke's There Is No Carried Interest Loophole

This week, Doron Narotzki (Akron; Google Scholar) reviews Steve Utke (Connecticut; Google Scholar), There is No Carried Interest Loophole.

Steven Utke's paper presents a unique argument against the widespread criticism of the tax treatment of carried interest. Commonly referred to by many (including myself) as a "loophole," carried interest essentially allows private equity (“PE”) and hedge fund managers to lower their tax liability and pay taxes at long-term capital gains rates rather than higher ordinary income rates. Utke challenges this criticism, providing a comprehensive analysis that supports the current tax treatment mainly as both consistent with tax principles and beneficial for federal revenue.

Utke's paper makes three core arguments to support his claim: consistency with tax principles, revenue implications, and the consequences of changing the current tax treatment.

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Weekly SSRN Tax Article Review And Roundup: Kim Reviews Pillar One And Mobility – A Truly Global Solution? By Kostić & Navarro

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Svetislav Kostić (University of Belgrade Law School; Google Scholar) and Aitor Navarro (Max Planck Institute for Tax Law and Public Finance; Google Scholar)’s recent paper, Pillar One and Mobility – A Truly Global Solution?, 51 Intertax 840 (2023).   

The multilateral instrument to implement Pillar One is scheduled to be signed by the day after tomorrow, June 30, 2024. Although officials at the OECD are still making progress on readying a treaty, many commentators, including yours truly, suspect that the June 30th deadline will be met. Earlier this week, I visited the Max Planck Institute  for a conference on the global tax deal and encountered an interesting article, Pillar One and Mobility – A Truly Global Solution?, 51 Intertax 840 (2023), by Svetislav Kostić (University of Belgrade Law School; Google Scholar) and one of the conference co-organizers, Aitor Navarro (Max Planck Institute for Tax Law and Public Finance; Google Scholar). Although the future of Pillar One is not bright, it is worth introducing this paper for this week's review as it highlights many of the concerns that developing countries have about Pillar One.

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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).

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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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):

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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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).

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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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):

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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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.

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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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).

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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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).

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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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).

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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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).

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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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.

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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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): 

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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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.

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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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.

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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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).

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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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:

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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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).

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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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: 

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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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: 

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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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).

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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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).

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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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)

Phaseouts 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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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).

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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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.

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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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.

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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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).

Even 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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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).

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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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).

On 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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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). 

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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