Paul L. Caron
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Saturday, November 16, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, November 15, 2019

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

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

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

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

Saturday, November 9, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, November 8, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Listokin's Posner on Tax: The Independent Investor Test

This week, David Elkins (Netanya) reviews a new work by Yair Listokin (Yale), Posner on Tax: The Independent Investor Test, 86 U. Chi. L. Rev. 1159 (2019):

Elkins (2018)

Richard Posner is one of the most influential legal scholars of recent generations. He is perhaps best known as a leading figure in the school of Law and Economics. Complimenting his academic work, he served as a judge on the Seventh Circuit Court of Appeals for 36 years before retiring in 2017. In the field of taxation, one of his more memorable decisions was Exacto Springs Corp. v. Commissioner, 196 F3d 833 (7th Cir. 1999), which concerns the characterization of payments from closely held corporations to individuals who are both shareholders and employees: is the payment properly classified as a salary or as a distribution?

The question of how to characterize payments to shareholders arises whenever shareholders provide services or sell property to the corporation that they control. If a shareholder leases property to a corporation, is the payment that the parties describe as rent truly rent or is it only partly rent and partly a distribution? The issue of classification is particularly significant in the field of international taxation. For example, if a corporation operating in Country A pays what it describes as a royalty to a parent (or otherwise related) corporation in Country B, is the payment actually a deductible royalty or is it a nondeductible distribution? The answer to that question may determine whether Country A can collect tax from the economic activity in its territory.

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November 8, 2019 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Monday, November 4, 2019

TaxProf Blog Weekend Roundup

Saturday, November 2, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, November 1, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Glogower & Kamin's The Progressivity Ratchet

This week, Sloan Speck (Colorado) reviews a new work by Ari D. Glogower (Ohio State) & David Kamin (NYU), The Progressivity Ratchet, 104 Minn. L. Rev. ___ (2020):

Speck (2017)In The Progressivity Ratchet, Ari Glogower and David Kamin provide further reasons to dislike the headline business tax changes in the 2017 legislation commonly known as the Tax Cuts and Jobs Act, namely the “pass-through” deduction under § 199A and the general reduction in corporate tax rates to 21%. Glogower and Kamin argue that these poorly targeted tax preferences, coupled with private-sector tax gaming and political economy constraints, create the potential for what they term the “progressivity ratchet,” in which lawmakers cannot readily reverse revenue-losing tax preferences by raising nominal rates on high-earning taxpayers. To escape this predicament, Glogower and Kamin suggest restoring the relative penalty for operating in corporate solution, eliminating existing tax preferences, or better targeting those tax preferences that policymakers choose to keep.

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November 1, 2019 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, October 25, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Viswanathan's Tax: A Unified Theory of Tax Progressivity

This week, Hayes Holderness (Richmond) reviews Manoj Viswanathan (UC Hastings), A Unified Theory of Tax Progressivity:

Holderness (2017)I assume I am not the only tax professor who has stood before a group of bright-eyed tax students and explained to them that progressive taxes impose higher tax rates on taxpayers as their income rises, proportionate taxes impose the same tax rates regardless of income, and regressive taxes impose lower tax rates as income rises. I offer to the students that the federal income tax rate brackets provide an example of progressivity; sales taxes an example of regressivity. In A Unified Theory of Tax Progressivity, Manoj Viswanathan reminds me of just how much I have been glossing over in my introductory tax policy lessons.

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October 25, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Monday, October 21, 2019

TaxProf Blog Weekend Roundup

Saturday, October 19, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, October 18, 2019

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Does Government Play Favorites? Evidence From Opportunity Zones

This week, Michelle Layser (Illinois) reviews Ofer Eldar (Duke) and Chelsea Garber (Duke), Does Government Play Favorites? Evidence from Opportunity Zones (Oct. 3, 2019).

Layser (2018)

With the 2020 Census on the horizon, investors nationwide have been lobbying states to expand the areas designated for tax preferred investment under the federal Opportunity Zones law. In 2017, state governors selected 8,764 census tracts for Opportunity Zone designation. These tracts were selected from a pool of 30,981 low-income census tracts and 10,237 contiguous tracts that were eligible under the federal statute. Whether the IRS will permit states to expand or revisit their Opportunity Zone designations after the Census is yet to be seen. In the meantime, Professors Ofer Eldar and Chelsea Garber have provided a fascinating quantitative analysis of factors that may have driven the initial designation process.

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October 18, 2019 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

Monday, October 14, 2019

TaxProf Blog Weekend Roundup

Saturday, October 12, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, October 11, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Shaviro's Digital Services Taxes

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Daniel Shaviro (NYU), Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents.

KimEarlier this week, the OECD released the Secretariat Proposal for a "Unified Approach" for the new tax nexus and profit allocation rules to address the tax challenges of the increasingly digitalized economy. The proposal covers highly digitalized business models, but is increased in scope to include consumer-facing businesses. The Unified Approach creates 1) a new nexus rule, not dependent on physical presence and instead largely based on sales, and 2) a new profit allocation rule using a formulaic approach to determine a share of residual, or non-routine, profit allocated to market countries. In addition, if a taxpayer has a traditional nexus in the market country, an additional amount of profit consisting of a fixed return for certain baseline marketing and distribution functions that take place in the market country may further be allocated to the market country. In exchange for this new taxing right of market countries, the countries should agree to a binding and effective dispute prevention and resolution mechanism even if there might be cases where there are more functions in the market countries—that is, more allocable profits to market countries—than the baseline marketing and distribution functions.

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October 11, 2019 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (1)

Monday, October 7, 2019

TaxProf Blog Weekend Roundup

Saturday, October 5, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, October 4, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Kornhauser’s Conservative Women’s Groups And Tax Lobbying

This week, Ariel Jurow Kleiman (San Diego) reviews Conservative Women’s Groups & Tax Lobbying, Part 5 in Marjorie E. Kornhauser’s (Tulane) forthcoming book, American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936.

Stevenson“Women Start Meat Strike,” the 1935 Danville Morning News headline read.  Outraged over the rising price of meat, Detroit housewives boycotted butcher shops and ignited shared outrage among homemakers across the nation. Mary Zuk, whom the newspaper (gratuitously) describes as the “five-foot Polish American originator” of the strike and a “fiery, dark complexioned” woman, blamed the high prices in part on processing taxes levied under the Agricultural Adjustment Act (AAA). As Kornhauser explains in the fourth chapter of her forthcoming book, American Voices in a Changing Democracy, Zuk and her fellow protestors believed that butchers used these taxes as an excuse to gouge consumers. Zuk took her protest to Washington to demand repeal of the tax. Although Congress demurred, the Supreme Court later declared the tax unconstitutional.  What started as a local news headline gained national momentum, offering a colorful example of how women’s voices contributed to the burgeoning national conversation about taxes and government spending.

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October 4, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Saturday, September 28, 2019

This Week's Ten Most Popular TaxProf Blog Posts

  1. Bryan Camp (Texas Tech), Lesson From The Tax Court: The Functional Definition Of 'Return'
  2. Enjuris, Law School Enrollment by Race & Ethnicity
  3. Matthew Smith (U.S. Treasury Department), Danny Yagan (UC-Berkeley), Owen Zidar (Chicago) & Eric Zwick (Chicago), Capitalists in the Twenty-First Century, 135 Q. J. Econ ___ (2019)
  4. Tallahassee Democrat, Five Years After Dan Markel's Murder, Trial Of Two Suspects Begins Today
  5. Fatih Guvenen (Minnesota), Gueorgui Kambourov (Toronto), Burhanettin Kuruscu (Toronto), Sergio Ocampo-Diaz (Minnesota) & Daphne Chen (Econ One), Efficiency Gains from Wealth Taxation
  6. Bryce Clayton Newell (Kentucky), 2019 Meta-Ranking of Flagship US Law Reviews
  7. Washington Post, How Excel's Automatic Data Formatting Can Cause Errors In Published Research
  8. Derek Muller (Pepperdine), A Few Thoughts On Free Casebooks For Law Students
  9. Symposium, Mindfulness and Well-Being in Law Schools and the Legal Profession, 48 Sw. L. Rev. 199-412 (2019)
  10. Sahar Aziz (Rutgers), Identity Politics Is Failing Women in Legal Academia, 69 J. Legal Educ. ___ (2019)

September 28, 2019 in Legal Ed News, Legal Education, Tax, Tax News, Weekly Legal Ed Roundup, Weekly Tax Roundup, Weekly Top 10 TaxProf Blog Posts | Permalink | Comments (0)

Friday, September 27, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Cooper's The State Death Tax Credit And The SALT Deduction

This week, David Elkins (Netanya) reviews Jeffrey A. Cooper (Quinnipiac), Red States, Blue States: Lessons from the State Death Tax Credit and the “SALT” Deduction, 73 Tax Law. __ (2020) (forthcoming).

Elkins (2018)One of the more politically contentious provisions of the 2017 Tax Cuts and Jobs Act is the capping of the deduction for state and local taxes (SALT) at $10,000 per married couple. Opponents of the change have argued that it was designed to punish those states that voted for Hillary Clinton in the 2016 presidential elections. In an attempt to reverse the legislation, the leaders of four of these states have sued the federal government. Proponents claim that the cap is necessary to prevent high-tax states from imposing the costs of their expensive programs on the federal government and, indirectly, on residents of low-tax states.

In a timely article, Professor Cooper places the issue in historical context by comparing the SALT deduction to the federal estate tax state death tax credit that was established in 1924 and repealed in 2001. He posits that viewing the 2017 legislation within the broader historical context reveals trends and patterns, providing greater insight than would a study of the SALT deduction in isolation. He considers not only the rhetoric surrounding the various legislative changes but also how states responded to the adoption and then to the repeat of the state death tax credit and examines whether such behavior might be a harbinger of state reaction to the SALT deduction cap.

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September 27, 2019 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Saturday, September 21, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, September 20, 2019

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Hemel's Taxing Wealth In An Uncertain World

This week, Mirit Eyal-Cohen (Alabama) reviews Daniel Jacob Hemel (Chicago), Taxing Wealth in an Uncertain World, 72 Nat’l Tax J. ___ (2019).

Mirit-Cohen (2018)Lately, many political candidates are asked to comment about, and many of them have released, proposals to narrow the economic inequity gap by taxing wealth more heavily. This Essay highlights three alternative capital taxation regimes, namely annual wealth tax, mark-to-market, and retrospective capital gains through their exposure to different types of uncertainties.

An annual wealth tax and a mark-to-market income tax are similar in their operation. The annual wealth tax would require taxpayers to estimate the value of all of their assets each year and pay a tax equal to a percentage of that value (perhaps after subtracting the value of liabilities). Thus, an annual wealth tax would have minimal information requirements and will rely only on a point-in-time snapshot of net worth. Yet, under an annual wealth tax, taxpayers will not have to account for assets sold during the year if the proceeds were consumed before the next valuation date. Such a regime was featured in Senator Elizabeth Warren’s proposal to impose 2% tax on $50 million net worth and 3% on $1 billion of net worth.

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September 20, 2019 in Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (3)

Saturday, September 14, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, September 13, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Osofsky's Agency Legislative Fixes

This week, Sloan Speck (Colorado) reviews a new work by Leigh Osofsky (North Carolina), Agency Legislative Fixes, 105 Iowa L. Rev. __ (2020).

Speck (2017)In Agency Legislative Fixes, Leigh Osofsky develops a framework for understanding and analyzing agency actions to correct technical and drafting errors in legislation. Osofsky motivates this framework primary through various examples from the December 2017 tax legislation known as the Tax Cuts and Jobs Act. In addition, Osofsky alludes to a number of other high-profile legislative mistakes in the Affordable Care Act, the Dodd-Frank Act, and elsewhere. Osofsky adeptly interweaves her tax-oriented story with academic work on legislation and administrative law, yielding a rich critique of Treasury’s current practices in handling gaps between Congress’s presumptive or purported intent and prevailing interpretations of statutory text, as enacted. Osofsky concludes by addressing several possible reforms, including an interesting proposal to adjust the revenue baseline in budget reconciliation to account for erroneous scores attributable to congressional mistakes.

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September 13, 2019 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Saturday, September 7, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, September 6, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Drumbl's Tax Attorneys As Defenders Of Taxpayer Rights

This week, Hayes Holderness (Richmond) reviews Michelle Lyon Drumbl (Washington & Lee), Tax Attorneys as Defenders of Taxpayer Rights, 91 Temple L. Rev. ___ (2019):

Holderness (2017)Tax attorneys serve many purposes. Two examples have been recently explored in this review series: tax attorneys may provide de facto insurance to their clients or may serve as agents of social justice. To these examples, Michelle Drumbl’s forthcoming essay adds another: tax attorneys defend taxpayer rights. One might be tempted to respond, “Well, of course they do; each tax attorney’s job is to make sure her clients only pay the tax they owe.” The strength of Drumbl’s essay is not to contradict this observation or to dwell on it, but to expose it as too narrow a view of the tax attorney’s function.

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September 6, 2019 in Hayes Holderness, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Saturday, August 31, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, August 30, 2019

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Hemel's A Place For Place In Federal Tax Law

This week, Michelle Layser (Illinois) reviews Daniel Hemel (Chicago), A Place for Place in Federal Tax Law, 45 Ohio N.U. L. Rev. ___ (2019). 

Layser (2018)

Place-based investment tax incentives are nothing new, but they were dragged into the spotlight when Opportunity Zones were introduced through the 2017 Tax Cuts and Jobs Act. Depending on who you ask, OZs are either a long overdue solution to the complicated and administratively inefficient incentives of the past—poised to drive large sums of much-needed capital into otherwise disinvested communities—or a misguided law that may create more problems than it solves. Many academic observers, including myself, view OZs with skepticism. Some are so skeptical that they would recommend we abandon our experiment with place-based investment tax incentives altogether. But Professor Daniel Hemel, expanding on remarks given at the 42nd annual Ohio Northern University Law Review Symposium, argues in his forthcoming essay that there is a place for “place” in federal tax law. I agree.

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August 30, 2019 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Trump's Taxes And Tax Returns

Saturday, August 24, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, August 23, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Chaffee's Collaboration Theory And Corporate Tax Avoidance

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Eric C. Chaffee (Toledo), Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 93 (2019).

KimAlthough there is a famous tax quote by Justice Oliver Wendell Holmes, "I like to pay taxes. With them I buy civilization."; there is nothing wrong with taxpayers’ efforts to minimize their tax liability in manners the legislative body deems permissible. Such “tax minimization” is legally permissible and distinguished from “tax evasion,” which is the illegal nonpayment or underpayment of taxes. Then, what about the gray area between tax minimization and tax evasion, commonly referred to as “tax avoidance?” Is it permissible to pursue tax avoidance, where taxpayers reduce their tax obligations in a manner that technically complies with the law but violates the spirit of the law?

Eric C. Chaffee's new work, Collaboration Theory and Corporate Tax Avoidance, 76 Wash. & Lee L. Rev. 91 (2019), is an effort to answer this difficult question in the corporate tax context. 

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August 23, 2019 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Saturday, August 17, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, August 16, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews The Property Tax Forty Years After Prop 13 and Alternative Local Government Revenues

This week, Ariel Jurow Kleiman (San Diego) reviews two recent articles on Californians’ perceptions of property taxes,by Ronald C. Fisher (Michigan State), Robert W. Wassmer (Cal State Sacramento), and Zachary Kuloszewski (Michigan State): Perspectives of the Property Tax Forty Years after Proposition 13 and Support for Alternative Local Government Revenues.

StevensonTax experts are befuddled and frustrated by Americans’ diehard aversion to the property tax, which contravenes professional wisdom on the tax’s salutary qualities and hamstrings local governments’ ability to provide necessary and popular public services.  The rich trove of survey research sparked by the 1970’s property tax revolt, e.g., here and here, speaks to decades of such consternation.  Two recent papers by Fisher, Wassmer, and Kuloszewski use 2016 CalSpeaks surveys to add modern texture to this body of data.

In Support for Alternative Local Government Revenues, the authors conclude that the property tax revolt is “alive and well in California forty years after Proposition 13.”  To arrive there, they asked survey respondents to choose a preferred revenue source to either: 1) make up for a public revenue shortage, or 2) raise revenue to improve inadequate services.  (Side note, data on respondents’ opinions of the adequacy of various public services is interesting on its own.)  In both cases, only about 15% of respondents preferred to raise property taxes, compared to about 30% who preferred to raise the sales tax, and 42-52% preferring to raise fees.  Unsurprisingly, they find that those who self-identify as progressive are more likely to support raising revenue via property taxes, and less likely to support doing so via fees.  Those who identify as conservative are more likely to support fees over taxes.  Aside from ideology, they also find that most other personal characteristics (such as race or education) are not correlated with tax preferences.  Two exceptions to this are homeowners and people with income above $150K, both of whom are less likely to prefer the property tax over other revenue sources. 

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August 16, 2019 in Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (1)

Saturday, August 10, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Saturday, August 3, 2019

This Week's Ten Most Popular TaxProf Blog Posts

Friday, August 2, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Kysar's Unraveling The Tax Treaty

This week, David Elkins (Netanya) reviews Rebecca M. Kysar (Fordham), Unraveling the Tax Treaty, 103 Minn. L. Rev. __ (2019).

Elkins (2018)Tax treaties are a ubiquitous feature in the landscape of international taxation, with several thousand bilateral instruments operating to regulate the taxing power of their signatories. However, in recent years, scholars have begun to challenge the century-old principles underlying the tax treaty. Some of these challenges concern the capacity of an institution formed in the aftermath of the First World War to handle our digital and much more globalized economy. Other challenges concern the role of the tax treaty in protecting the interests of wealthier countries.

The bulk of Professor Rebecca Kysar’s essay is dedicated to a critical examination of the tax treaty, as currently constituted. Tax treaties have been justified as tools for preventing double taxation, combatting tax evasion, inhibiting double non-taxation, encouraging foreign direct investment, respecting comity, providing certainty and predictability, institutionalizing non-discrimination, and binding governments to follow good tax policy even when confronted with the demands of political expediency. Professor Kysar addresses each of these issues in turn. 

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August 2, 2019 in David Elkins, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, July 26, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Crawford's Magical Thinking And Trusts

This week, Hayes Holderness (Richmond) reviews Bridget J. Crawford (Pace), Magical Thinking and Trusts, 50 Seton Hall L. Rev. ___ (2019).

Holderness (2017)

Wealth inequality is a major concern in today’s United States. As wealth concentrates among the super-wealthy, lawmakers, academics, and commentators have proposed ways to diffuse that wealth, often through tax reform. Wealth remains concentrated in part through the use of legal rules and entities, perhaps in ways that lead to unintended results. Here there be trusts. Trusts—particularly family trusts—have long been a major tool of wealth conservation and potential tax avoidance. So when the Supreme Court heard this year’s Kaestner case questioning North Carolina’s authority to tax the income of a family trust, many hoped that the Justices would help dismantle the tax avoidance tool by blessing the state’s taxing authority.

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July 26, 2019 in Hayes Holderness, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (2)

Friday, July 19, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Nagato's Tax Consequences Of The Fukushima Nuclear Disaster

This week, Sloan Speck (Colorado) reviews a new work by Takayuki Nagato (Gakushuin University, Faculty of Law), Tax Losses and Excessive Risk Taking Under Limited Liability: A Case Study of the TEPCO Bailout After the Fukushima Nuclear Disaster, 32 Colum. J. Asian L. 137 (2019).

Speck (2017)On March 11, 2011, an earthquake and subsequent tsunami devastated the Fukushima Dai-ichi nuclear power plant, which lies roughly 150 miles north of Tokyo on Japan’s eastern coast. The Fukushima nuclear disaster caused tremendous and far-reaching economic—and, of course, personal—losses. By statute, the operator of the Fukushima plant, Tokyo Electric Power Company Holdings (TEPCO), was held strictly liable for approximately $80 billion of damages that stemmed from the disaster. In a compelling recent article, Takayuki Nagato explores the tax consequences of TEPCO’s damage payments as a vehicle to interrogate the treatment of tax losses and risk-taking more generally. Nagato’s excellent and engaging analysis also adds a parallel strand to scholarly conversations about taxation’s direct and indirect role in disaster relief, as well as current commentaries on Pacific Gas & Electric’s wildfire-driven bankruptcy.

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July 19, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, July 12, 2019

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Blank & Osofsky's Legal Calculators And The Tax System

This week, Michelle Layser (Illinois) reviews a new work by Joshua D. Blank (UC-Irvine) and Leigh Osofsky (North Carolina), Legal Calculators and the Tax System, 15 Ohio St. Tech. L.J. ___ (2019).

Layser (2018)

The IRS has long attempted to aid wary taxpayers by publishing informal guidance that translates tax laws into more understandable statements. In previous work, Professors Joshua Blank and Leigh Osofsky have argued that such plain language guidance often oversimplifies complicated tax laws, opening the door to errors. They have called this characteristic “simplexity.” In their newest article on the subject, Blank and Osofsky identify another—potentially more serious—example of tax guidance that reflects simplexity: automated legal calculators like the IRS’s Interactive Tax Assistant.

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July 12, 2019 in Michelle Layser, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, July 5, 2019

Weekly SSRN Tax Article Review And Roundup: Kim Reviews Schön's How To Tax The Digitalized Economy

This week, Young Ran (Christine) Kim (Utah) reviews a new work by Wolfgang Schön (Max Planck), One Answer to Why and How to Tax the Digitalized Economy (June 2019).

KimTaxation of the digitalized economy is without a doubt the most important topic of international taxation in 2019. The G20 and the OECD have already released three documents this year—a Policy Note in January, a Public Consultation Document in February, and a Programme of Work to Develop a Consensus Solution in May—to follow up on the Action 1 of the BEPS Project (Addressing the Tax Challenges of the Digital Economy) released in 2015 and the interim report published in 2018. The February 2019 Public Consultation Document outlines three proposals under its consideration: 1) the User Participation Proposal, 2) the Marketing Intangibles Proposal, and 3) the Significant Economic Presence Proposal. The subsequent May 2010 Programme of Work categorized important differences in the prior three proposals into new nexus rules and new profit allocation rules. In consideration of the new profit allocation rules, the Programme of Work addressed several options under a number of different labels, including the modified residual profit split method, fractional apportionment method, distribution-based approaches, and so on.

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July 5, 2019 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, June 28, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Data Analytics And Tax Law

This week, Ariel Jurow Kleiman (San Diego) reviews a new work by University of Toronto faculty members Benjamin Alarie, Anthony Niblett, and Albert Yoon, Data Analytics and Tax Law.

StevensonWhether you fear or celebrate big data likely depends on your background, biases, experiences, and, perhaps most importantly, which systems you imagine the data to be benefitting.  Benjamin Alarie, Anthony Niblett, and Albert Yoon’s recent paper falls squarely on the celebrate side of the debate—at least in the context of tax administration—and persuasively invites the reader to join them there.  In this brief essay, the authors explore how tax agencies and taxpayers can harness data analytics and machine learning to improve tax administration for both government and taxpayers.

For government, data analytics can narrow the tax gap by improving fraud detection.  Specifically, tax agencies can mine taxpayer data to predict noncompliance ex ante, rather than uncovering the noncompliance ex post via audit.  Such predictions can inform resource allocations, allowing tax agencies to shift resources to high-risk sectors and companies.  Augmenting taxpayer data with information from other government agencies would improve these efforts.

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June 28, 2019 in Ariel Stevenson, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, June 21, 2019

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Shanske's State Responses To Federal Tax Law

This week, Mirit Eyal-Cohen (Alabama) reviews Darien Shanske (UC-Davis), States Can and Should Respond Strategically to Federal Tax Law, 45 Ohio N.U. L. Rev. ___ (2019).

Mirit-Cohen (2018)Shanske writes this timely symposium piece as part of the aftermath of the Tax Cuts and Jobs Act (TCJA) as states are forced to respond to significant federal tax changes on conformity issues, namely whether and how to adapt to the changes made to federal tax law. The gist of Shanske’s argument is that as a matter of state tax policy, states do not need to conform to the TCJA. Rather, they should view conformity as an opportunity to be strategic and adopt only some federal law but not all in a particular area.

Nevertheless, states acting strategically may disincentivize behavior by taxing it thus undermine national goals.  For example, if a state chooses to levy a sufficiently high tax on an activity that the federal government incentivized (like a railroad system) as to thwart that activity altogether it could be very problematic. So Shanske is looking to draw the line that divides state autonomy and federal sovereignty. He outlines fiscal federalism in theory and practice and incorporates comparative constitutional perspectives to inform the appropriate – and actual – approach that constitutional law takes as to the preemption of state taxes.

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June 21, 2019 in Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, June 14, 2019

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Avi-Yonah's Does Customary International Tax Law Exist?

This week, David Elkins (Netanya) reviews a book chapter by Reuven S. Avi-Yonah (Michigan), Does Customary International Tax Law Exist.

Elkins (2018)Customary international law provides that when countries habitually adhere to certain norms because of a belief that customary international law requires them to do so, then those norms constitute binding international law. Note that the fact that countries adhere to certain norms is not sufficient to establish the existence of an international obligation. For a usage to become a custom, it must be shown not only that countries habitually act (or refrain from acting) in a certain manner, but that they do so because of their belief that they are so obliged under international customary law. Once a custom has been established, it is binding upon all countries, including countries that did not take part in creating it and countries that did not even exist when the customary norm was established.

The other source of international obligations is conventional international law, which provides that countries are bound by the term of treaties to which they are signatories. On occasion, customary and conventional international law overlap. 

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June 14, 2019 in David Elkins, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, June 7, 2019

Weekly SSRN Tax Article Review And Roundup: Speck Reviews Field's Tax Lawyers As Tax Insurance

This week, Sloan Speck (Colorado) reviews a new work by Heather Field (UC-Hastings), Tax Lawyers as Tax Insurance, 60 Wm. & Mary L. Rev. __ (2019).

Speck (2017)In Tax Lawyers as Tax Insurance, Heather Field explores the issuance of tax legal opinions as a form of de facto insurance against the risks of an adverse tax determination by governmental authorities. Field moves beyond the conventional framing of tax opinions as “insurance” against penalties, instead casting opinion practice as providing “a limited and conditional indemnity” to clients by way of the opinion writer’s malpractice insurance. Field contrasts this informal insurance with the burgeoning market in formal tax insurance policies, giving particular attention to intersections and entanglements that complicate the broader question of how individuals and firms address tax-related risk. Field argues that thinking about tax opinions through the lens of insurance yields insights into the value and limitations of transactional lawyering, among other things.

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June 7, 2019 in Scholarship, Sloan Speck, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, May 31, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Abreu & Greenstein's Tax: Different, Not Exceptional

This week, Hayes Holderness (Richmond) reviews Alice Abreu (Temple) and Richard Greenstein (Temple), Tax: Different, Not Exceptional, 71 Admin. L. Rev. __ (2019):

Holderness (2017)Tax is special. There is nothing quite like it. It has its own lingo, bar sections, courts, constitutional provisions, and even blogs. Most United States citizens are keenly aware of tax; indeed, there might not have been a United States without certain taxes. But many areas of law can make similar claims. Most citizens are aware of the criminal law; specialized blogs, bar sections, and courts exist for many types of law; and apparently “trolls” are a concern in patent law. So tax is special, but is it truly in a league of its own, different in kind from other areas of law? Is tax exceptional? “No,” argue Alice Abreu and Richard Greenstein, in a thought-provoking piece that questions the very meaning of “exceptional” in this context.

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May 31, 2019 in Hayes Holderness, Scholarship, Tax, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink | Comments (0)

Friday, March 9, 2018

Weekly SSRN Tax Article Review And Roundup: Mazur Reviews Thimmesch’s Nexus And The Dormant Commerce Clause

This week, Orly Mazur (SMU) reviews a new work by Adam B. Thimmesch (Nebraska), A Unifying Approach to Nexus Under the Dormant Commerce Clause, 116 Mich. L. Rev. Online ___ (2018).

Mazur (2017-2)Adam Thimmesch’s timely new essay considers whether and how the Supreme Court should regulate a state’s taxing power over online transactions if the Court abolishes the physical presence nexus rule. According to this rule, upheld in the 1992 case, Quill Corp. v. North Dakota, a state cannot collect sales and use taxes from out-of-state vendors unless the vendor has a physical presence in that state. The Supreme Court is set to reexamine the continued validity of the physical presence mandate this year in the case of South Dakota v. Wayfair.

Many legal scholars (including 60 tax professors) and policymakers have urged the Court to take this opportunity to overrule Quill and the physical presence rule and have provided numerous and persuasive reasons to support this position. Adam Thimmesch’s new work contributes to this literature by evaluating what the Court should do if the Court were to abandon the physical presence rule. He concludes that the Court’s best option in Wayfair is to repeal the physical presence rule and not replace it with a different nexus requirement. In other words, Thimmesch argues that a separate jurisdictional rule is not necessary to regulate the state’s ability to tax online transactions.

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March 9, 2018 in Scholarship, Tax, Weekly Tax Roundup | Permalink | Comments (0)