Paul L. Caron
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Friday, February 23, 2024

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

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

Blaine saito

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

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

Friday, February 16, 2024

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

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

Michelle-layser

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

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

Friday, February 9, 2024

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

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

Roberts (2020)

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

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

Friday, February 2, 2024

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

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

Kim (2023)

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

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

Friday, January 26, 2024

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

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

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

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

Friday, January 19, 2024

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

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

Elkins (2018)

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

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

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

Friday, January 12, 2024

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

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

Sloan-speck

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

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

Friday, December 8, 2023

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

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

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

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

Friday, December 1, 2023

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

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

Kim (2023)

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

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

Friday, November 10, 2023

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

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

Elkins (2018)

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

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

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

Friday, November 3, 2023

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

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

Sloan-speck

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

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

Friday, October 27, 2023

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

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

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

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

Friday, October 13, 2023

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

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

Mirit-eyal-cohen

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

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

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

Friday, October 6, 2023

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

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

Kim (2023)

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

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

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

Friday, September 29, 2023

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

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

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

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

Friday, September 22, 2023

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

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

Elkins (2018)

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

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

Friday, September 15, 2023

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

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

Sloan-speck

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

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

Friday, September 8, 2023

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

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

Saito-blaine-800x800-1

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

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

Friday, September 1, 2023

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

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

Michelle-layser

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

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

Saturday, August 19, 2023

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

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

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

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

Friday, August 11, 2023

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

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

Kim (2023)

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

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

Friday, August 4, 2023

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

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

Mirit-eyal-cohen

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

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

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

Friday, July 28, 2023

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

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

Elkins (2018)

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

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

Friday, July 21, 2023

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

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

Sloan-speck

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

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

Friday, July 14, 2023

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

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

Saito-blaine-800x800-1

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

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

Friday, July 7, 2023

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

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

Michelle-layser

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

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

Friday, June 30, 2023

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

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

Roberts (2020)

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

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

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

Friday, June 23, 2023

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

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

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

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

Friday, May 26, 2023

Weekly SSRN Tax Article Review And Roundup: Speck Reviews A Critical Evaluation Of The Qualified Small Business Stock Exclusion By Polsky & Yale

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Gregg D. Polsky (Georgia; Google Scholar) & Ethan Yale (Virginia; Google Scholar), A Critical Evaluation of the Qualified Small Business Stock Exclusion, 42 Va. Tax Rev. 353 (2023).

Sloan-speck

After 2017’s Tax Cuts and Jobs Act, some commentators predicted a renaissance in taxpayers’ use of the statutory exclusion for gain from qualified small business stock under § 1202. In 2015, Congress made permanent the provision’s 100 percent exclusion that emerged in the wake of the Great Recession, and the TCJA’s fourteen-point reduction in corporate rates heralded new benefits to bucking longstanding conventional wisdom that taxpayers should operate nonpublic companies as passthroughs. These predictions didn’t really come to pass, as Polsky and Yale observe in their magisterial exegesis of § 1202, A Critical Evaluation of the Qualified Small Business Stock Exclusion. 

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May 26, 2023 in Scholarship, Sloan Speck, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 19, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Automated Agencies By Blank & Osofsky

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by Joshua D. Blank (UC-Irvine; Google Scholar) & Leigh Osofsky (North Carolina; Google Scholar), Automated Agencies, 107 Minn. L. Rev. 2114 (2023). 

Saito-blaine-800x800-1

A lot of the news these days are around the rise of AI like ChatGPT. But already, we have weaker forms of virtual assistants. These days, I can often “chat” with an airline’s chatbot when my flight is delayed. Federal agencies, like the IRS, have implemented similar tools to present people with user friendly answers to their questions. But in their new article, Automated Agencies, 104 Minn. L. Rev. 2115 (2023), Joshua D. Blank and Leigh Osofsky raise some concerns. Building on their work on Simplexity, a term the authors coined for government pronouncements to the general public that tend to oversimplify the actual underlying complicated and nuanced law, they note that automated legal guidance tools may actually exacerbate the problems of Simplexity to a frightening extent. And often agency officials are unaware of these problems.

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May 19, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 12, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Predictive Analytics And The Tax Code By Soled & Thomas

This week, Michelle Layser (San Diego) reviews Jay A. Soled (Rutgers; Google Scholar) and Kathleen DeLaney Thomas (UNC; Google Scholar), Predictive Analytics and the Tax Code, 51 Fla. St. U. L. Rev. __ (2023).

Michelle-layserI am obsessed with ChatGPT. If you haven’t seen it yet, I suggest that you finish grading and then go check it out (in that order). It is at once fascinating and terrifying, and it leaves little doubt that the artificial intelligence (AI) tools of the future will dramatically impact most aspects of the legal profession. And the future may not be so far off. In a forthcoming article, Professors Jay A. Soled and Kathleen DeLaney Thomas argue that today’s predictive analytics tools are already capable of fundamentally changing the application of the tax code’s civil tax penalty regime.

To demonstrate how, the authors begin with a review of current theory about taxpayer compliance and the civil tax penalty regime. 

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May 12, 2023 in Michelle Layser, Scholarship, Tax, Tax Daily, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, May 5, 2023

Weekly SSRN Tax Article Review And Roundup: Roberts Reviews Clausing’s Capital Taxation And Market Power

This week, Tracey Roberts (Cumberland; Google Scholar) reviews a new work by Kimberly Clausing (UCLA; Google Scholar), Capital Taxation and Market Power.

Roberts (2020)

On Tuesday the Wall Street Journal reported that Americans are facing continued price increases, not because of pandemic-related supply-chain disruptions or because of rising energy costs following the Russian invasion of Ukraine, but because corporations are simply padding their profits. How is this possible in a free market? Well, the market is not exactly free. Mergers and consolidations have given large corporations the ability to exercise market power. Because so few companies compete with one another for customers, they can set monopolistic prices. Likewise, when there are fewer companies competing for workers or resources, they can engage in monopsony, paying lower wages and lower prices than they would be able to claim in a competitive market. Scholars and journalists have reported that employers are forcing employees across many sectors to work longer, for less pay, and in more difficult conditions, and are effectively reducing employment opportunities.

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May 5, 2023 in Scholarship, Tax, Tax Daily, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 28, 2023

Weekly SSRN Tax Article Review And Roundup: Kim Reviews The Internet Tax Freedom Act At 25 By Hellerstein & Appleby

This week, Young Ran (Christine) Kim (Cardozo; Google Scholar) reviews Walter Hellerstein (Georgia) and Andrew Appleby (Stetson; Google Scholar), The Internet Tax Freedom Act at 25, 107 Tax Notes St. 7 (Jan. 2, 2023).

Kim (2023)Policy on how to tax digital platforms, such as Google or Facebook, presents heated debate across the globe. Digital Services Taxes and Pillar One of the global tax deal are notable examples. Domestically, the debate occurs at the state and local tax level. At least ten states in recent years entertained imposing a Digital Advertising Tax, while Maryland did implement one. Maryland’s Digital Ad Tax has been challenged in courts, and the oral argument at the Maryland Supreme Court is scheduled for Friday, May 5, 2023. One of the main issues is whether the tax violates the Internet Tax Freedom Act (ITFA) by discriminating against the digital economy, as it taxes only digital advertising platforms and not traditional advertising. 

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April 28, 2023 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 21, 2023

Weekly SSRN Tax Article Review And Roundup: Eyal-Cohen Reviews Layser's The Unknown Consequences Of Place-Based Tax Incentives

This week, Mirit Eyal-Cohen (Alabama; Google Scholar) reviews Michelle D. Layser (San Diego; Google Scholar), The Unknown Consequences of Place-Based Tax Incentives, 56 Loy. L.A. L. Rev. __ (2023):

Mirit-eyal-cohen

I like history, and I like tax. So it’s always fun to review articles that combine them both and utilize tax history to inform us about important lessons from the past. This essay briefly utilizes this methodology in the context of urban poverty tax incentives. While tax scholars such as Ellen April have long warned against the use of economic incentives to solve inner-city poverty and promote low-income neighborhood investment, such large zone-based tax benefits have proliferated substantially despite tangible evidence that they indeed revitalize distressed neighborhoods and improve the position of low-income communities. Economic mobility has long been linked to the local environment and neighborhoods in which people grow up. Yet, despite their popularity, we know little about how place-based tax incentives affect communities. Existing economic studies on the enterprise zone, opportunity zone, and new market tax benefits have not produced meaningful evidence of beneficial effects on poverty or the labor market. Current location-based tax incentives are limited as they subsidize a wide range of activities without a clear link to anti-poverty efforts.

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April 21, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 14, 2023

Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Repetti’s International Tax Policy’s Harm to Manufacturing and National Interests

This week, David Elkins (Netanya, visiting NYU 2021-2023; Google Scholar) reviews a new paper by James R. Repetti (Boston College; Google Scholar), International Tax Policy's Harm to Manufacturing and National Interests, 2023 Wis. L. Rev. __ :

Elkins (2018)

The discourse in the field of international tax avoidance has always contained an underlying tension. On the one hand, politicians, the popular press, and member of the academic community often lament that international tax avoidance can involve little more than shuffling papers, that the change in structure is not reflective of any change in actual economic activity. Prototypical examples include corporate inversions, the placing of intellectual property in tax havens, and routing royalties and interest through strings of related entities. Sensitive to such objections, Congress or the Treasury may impose restrictions that deny beneficial tax treatment to maneuvers that lack economic substance. The problem is that corporations may respond by moving their real economic activity abroad, and the same pundits who condemn the form-over-substance of certain types of tax avoidance will now decry the substance, namely loss of American jobs and other harm to the domestic economy.

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April 14, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, April 7, 2023

Weekly SSRN Tax Article Review And Roundup: Speck Reviews U.S. International Tax Policy And Corporate America By Hanna & Wilson

This week, Sloan Speck (Colorado; Google Scholar) reviews a new work by Christopher H. Hanna (SMU) & Cody A. Wilson (Gibson, Dunn & Crutcher, LLP), U.S. International Tax Policy and Corporate America, 48 J. Corp. L. 261 (2023).

Sloan-speck

Over the last decade, conversations about corporate tax reform in the United States have reflected a broad range of competing visions for cross-border business taxation. In U.S. International Tax Policy and Corporate America, Christopher Hanna and Cody Wilson argue that the Tax Cuts and Jobs Act in 2017 and the Inflation Reduction Act in 2022—each significant legislative changes to U.S. international taxation—may foreshadow a third major shift. Hanna and Wilson speculate that this next step could yield “a worldwide no-deferral system at a low corporate tax rate.” Potentially more surprising: this new regime could garner support from “Corporate America,” which Hanna and Wilson define as U.S.-based publicly traded corporations.

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April 7, 2023 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 31, 2023

Weekly SSRN Tax Article Review And Roundup: Layser Reviews Revisiting The Tax Treatment Of Alimony By Davis, Soled & Soled

This week, Michelle Layser (San Diego) reviews Tessa R. Davis (South Carolina; Google Scholar), Amy H. Soled (Rutgers) & Jay A. Soled (Rutgers; Google Scholar), Revisiting the Tax Treatment of Alimony, 72 Kansas L. Rev. __ (2023):

Michelle-layserLike many tax professors, I teach my students that the tax laws that exist today reflect choices about what, when, and who to tax. In many cases, lawmakers have options, and the best approach is not always obvious. The tax treatment of alimony is a case in point. When it comes to support payments made by a divorced person to a former spouse, Congress has three options: tax the recipient, tax the payer, or tax them both. For many years, the law allowed alimony payers to deduct the payments, and it required recipients to include alimony in their income. The Tax Cuts and Jobs Act changed the tax treatment of alimony by disallowing the deduction for alimony payers and allowing recipients to exclude the payments from income. But did the change reflect good policy?

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March 31, 2023 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 24, 2023

Weekly SSRN Tax Article Review And Roundup: Saito Reviews Multibillion-Dollar Tax Questions By Alm, Soled & DeLaney

This week, Blaine Saito (Northeastern; Google Scholar) reviews a new work by James Alm (Tulane; Google Scholar), Jay A. Soled (Rutgers; Google Scholar) & Kathleen DeLaney Thomas (North Carolina; Google Scholar), Multibillion-Dollar Tax Questions, 84 Ohio St. L.J. __ (2023).

Saito-blaine-800x800-1

The tax gap is an enduring problem. We should raise quite a bit more revenue than is collected by the IRS. Efforts to address the tax gap usually focus on greater audits and enforcement as well as new reporting requirements. But these measures are facing increasing political pressure. One need only look to the vilification of the increase in IRS funding, something for which tax policy experts have long advocated, to see this problem. Given these constraints, what then can we do? James Alm, Jay A. Soled, and Kathleen DeLaney Thomas in their piece, Multibillion Dollar Tax Questions, 84 Ohio St. L.J. __ (2023), say that compliance may be improved by asking the right questions in the right way.

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March 24, 2023 in Blaine Saito, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 17, 2023

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

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

Roberts (2020)

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

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March 17, 2023 in Scholarship, Tax, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 10, 2023

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

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

Kim (2023)

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

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March 10, 2023 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, March 3, 2023

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

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

Mirit-eyal-cohen

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

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March 3, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 24, 2023

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

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

Sloan-speck

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

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February 24, 2023 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 17, 2023

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

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

Elkins (2018)

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

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

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February 17, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 10, 2023

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

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

Saito-blaine-800x800-1

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

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February 10, 2023 in Blaine Saito, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, February 3, 2023

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

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

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

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

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February 3, 2023 in Michelle Layser, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 27, 2023

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

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

Roberts (2020)

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

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January 27, 2023 in Scholarship, Tax, Tax Scholarship, Tracey Roberts, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 20, 2023

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

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

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

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January 20, 2023 in Christine Kim, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 13, 2023

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

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

Mirit-eyal-cohen

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

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January 13, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, January 6, 2023

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

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

Elkins (2018)The ability of multinational enterprises (MNEs) to reduce their tax liability by exploiting fissures in the international tax regime prompted the OCED to launch its BEPS (Base Erosion and Profit Shifting) initiative. The most recent iteration of that initiative, known as BEPS 2.0, rests upon two pillars. Pillar 1 is designed to allocate taxing rights to countries in which the consumers of digital services are located. Pillar 2 (also referred by the rather inelegant acronym GloBE, for Global Anti-Base Erosion) is intended to guarantee that MNEs are subject to a global minimum tax rate of at least 15%. As Wardell-Burrus points out, one of the novelties of Pillar 2 is that that it treats states as strategic actors, competing with each other to attract investment. Accordingly, many of the rules are designed to limit the capacity of states to engage in certain types of tax competition.

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January 6, 2023 in Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink

Friday, December 16, 2022

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

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

Sloan-speck

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

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December 16, 2022 in Scholarship, Sloan Speck, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink