TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, April 14, 2018

This Week's Ten Most Popular TaxProf Blog Posts

21st Annual Critical Tax Theory Conference At South Carolina

South Carolina Logo (2018)South Carolina hosts the 21st Annual Critical Tax Theory Conference today and tomorrow:

The Critical Tax Theory Conference has a long history of fostering the work of both established and emerging scholars whose research challenges and enriches the tax law and policy literature. Critical tax scholars question assumptions of objectivity in tax, as their work explores how tax law and policy impact historically marginalized groups. At a time when tax policy is once again at the forefront of politics and public discourse, the work of these and other critical tax scholars supports a more robust discussion of the role for tax law in current and future social and economic policy.

Panel #1: Inequality and the Current Political Climate

  • Shu-Yi Oei (Boston College) (Chair)
  • Charlotte Crane (Northwestern), A Matter of Legislative Grace: The Net Income Norm in the Implementation of the Income Tax
  • Goldburn P. Maynard Jr. (Louisville), Hold on to Your Student Loan... I'll Take the Cash Instead
  • Nancy Shurtz (Oregon), Horizontal Inequity Under the Tax Cuts and Jobs Act of 2017

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April 14, 2018 in Conferences, Scholarship, Tax | Permalink | Comments (1)

WSJ: Meghan Markle’s U.S. Citizenship Will Cause Post-Marriage Tax Headaches For British Royal Family

Following up on my previous post:  Wall Street Journal, Look Out, Meghan Markle! The IRS Is Watching:

Dear Meghan,

Congratulations on finding your Prince Charming! I don’t want to be the bad fairy at the festivities, but we need to have a serious talk about taxes.

Meghan, I know you lived as a U.S. citizen in Canada and may be aware of tax issues faced by the seven million or so Americans living abroad. And I know you’re committed to Harry, because you’ve given up a lot since you two became serious, including your lucrative acting career and your lifestyle website.

But I don’t think you know the tax torment many American expats face when they marry non-U.S. citizens—as you’re about to do. Nearly every financial move they make, and other moves they don’t think of as financial, raises a U.S. tax issue.

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April 14, 2018 in Celebrity Tax Lore, Tax | Permalink | Comments (6)

Tax Prof Nancy Shurtz Returns To Oregon Law School After Wearing Blackface To 2016 Halloween Party

Register-Guard, UO Professor Who Wore Blackface Costume at 2016 Halloween Party Returns to Law School:

Nancy Shurtz, the University of Oregon Law School professor who ignited a campus-wide controversy after being photographed in blackface at a Halloween party in 2016, has returned to the university.

UO spokesman Tobin Klinger confirmed Shurtz has resumed working at the law school following a brief leave and a year-long sabbatical.

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April 14, 2018 in Legal Education, Tax | Permalink | Comments (1)

Friday, April 13, 2018

Brown Presents The Hegemony Of International Tax Reform Today At Georgetown

Brown (Karen)Karen B. Brown (George Washington) presents The Hegemony of International Tax Reform at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

The vast needs of the developing world, especially after the great recession of 2008, underscore the urgency of allowing these countries a meaningful voice in international tax reform. Twentyfirst century international tax reform has diminished power to conquer the challenges of the global marketplace when it ignores, minimizes, or undervalues the perspective and input of developing countries. The continued export of terrorism and the rising tide of political and economic refugees from these neglected areas of the world will shed a harsh light on efforts to ignore the importance of these nations to the economic and political stability of the remainder of the world.

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April 13, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup: Mazur Reviews Morse's Government-To-Robot Enforcement

This week, Orly Mazur (SMU) reviews a new work by Susan C. Morse (Texas), Government-To-Robot Enforcement, 2018 U. Ill. L. Rev. ___.

Mazur (2017-2)As Tax Day approaches, millions of people are using tax software, such as TurboTax, to prepare their tax returns. But what if you make a legal error on your tax return as a result of the tax preparation software? Under current law, the legal liability for the error is directly on you - the taxpayer.

In her new work, Susan Morse proposes to fundamentally change the way regulatory law is enforced. She proposes government-to-robot enforcement. Specifically, Morse argues that an automated law system, which is any machine that produces a legal determination, should be held directly liable for compliance errors made by its users. Therefore, if you use TurboTax to prepare your taxes and you correctly input your facts, but the system produces a return that understates your tax liability, you would not be directly liable for this error. Instead, if the error is discovered, the IRS would pursue enforcement against and impose liabilities directly on TurboTax.

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April 13, 2018 in Orly Mazur, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Legal Education In 'Perilous Moment' As Leaders Gather To Examine Its Future

National Law Journal, Legal Education in 'Perilous Moment' as Leaders Gather to Examine Its Future:

Times are troubled for legal education. That’s the tenor of the conversation among legal education leaders from across the nation who have gathered in Miami this week.

At the Summit on the Future of Legal Education and Entry to the Profession, the first panel discussion on Thursday quickly turned to issues of declining law school enrollment, soaring student debt, a stagnant entry-level job market and the justice gap.

“We’re in a perilous moment,” warned James Leipold, executive director of the National Association for Law Placement during the first panel of the two-day summit, co-sponsored by Florida International University College of Law and the Law School Admission Council. “There is a push-pull between admission offices and the job market.” ...

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April 13, 2018 in Legal Education | Permalink | Comments (1)

Netflix Accused Of Violating Tax Law In Bonuses To Top Executives

NetflixHollywood Reporter, Netflix Accused of Violating U.S. Tax Law in Bonuses to Top Executives:

When Congress passed sweeping tax changes at the end of last year, Netflix became one of the first companies to restructure its compensation to top executives. The amended tax law no longer allowed companies to deduct performance-based bonuses to those managers making more than $1 million. So in light of the change, Netflix scrapped cash bonuses in favor of a higher salary. A new lawsuit first filed under seal late last week questions what Netflix was doing before the change.

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April 13, 2018 in Tax | Permalink | Comments (0)

No Consensus Among Pre-Law Students On Use Of The GRE In Law School Admissions

KaplanKaplan Test Prep Survey, No Consensus Among Pre-Law Students on Law Schools Accepting the GRE for Admission:

As momentum builds among law schools to allow applicants to submit GRE scores instead of LSAT® scores, those most directly impacted by the admissions policy are largely split on the issue. A Kaplan Test Prep survey of nearly 2,000 pre-law students finds them roughly evenly divided: 39 percent are against law schools offering applicants a GRE option; 33 percent are in favor of it; and 28 percent are unsure*. The survey also found aspiring lawyers divided on taking the GRE had they been given the option, with 28 percent saying they would have; 28 percent saying they would not have; and 44 percent unsure.

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April 13, 2018 in Legal Education | Permalink | Comments (0)

Herzig & Brunson: Let Prophets Be (Non) Profits

David Herzig (Valparaiso) & Samuel D. Brunson (Loyola-Chicago), Let Prophets Be (Non) Profits,  52 Wake Forest L. Rev. 1111 (2017):

In this article, we take a step back and ask whether the Supreme Court’s application of the fundamental public policy rule as espoused in the Bob Jones case is the normatively correct position. In our analysis, we conclude that using fundamental public policy as a filter in granting tax exemption gets both tax and public policy wrong. Our conclusion is informed by the history of the role played by public charities espousing minority views. We believe that a legitimate space in society should exist and populated by nonprofits to both espouse popular and unpopular minority views. But it is also informed by tax policy: applying the fundamental public policy rule to qualification for tax exemption misunderstand how exemption fits into the corporate income tax.

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April 13, 2018 in Scholarship, Tax | Permalink | Comments (0)

Dan Markel's Parents Break Their Silence Tonight On NBC's Dateline

Thursday, April 12, 2018

Fleischer Presents The Architecture Of A Basic Income Today At Duke

Fleischer (Miranda)Miranda Perry Fleischer (San Diego) presents The Architecture of a Basic Income (with Daniel Hemel (Chicago)) at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway across the globe, including in Canada, Finland, Italy, Kenya, and Uganda. Here in the United States, the city of Stockton, California, has partnered with a nonprofit organization to give checks of $500 a month—no strings attached—to several dozen families. And prominent voices from across the ideological spectrum have taken up the UBI idea as well: libertarian Charles Murray, Facebook co-founder and Obama campaign strategist Chris Hughes, and former labor leader Andy Stern all have offered proposals for nationwide programs that resemble a UBI.

To be sure, even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years—if not decades—ahead. And accordingly, one might argue that hashing out the nitty-gritty programmatic specifications of a UBI puts the cart before the horse. But as we seek to show below, these design details in many cases are the horse. What might seem like technical aspects of a UBI (e.g., whether it is paid monthly or annually; whether an individual’s future stream of UBI payments can be posted as collateral for a loan; and whether a spouse’s income is factored into the calculation of a phaseout) turn out to be essential elements that affect whether a future UBI will live up to the high expectations that supporters have set.

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April 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Bird-Pollan Presents Sovereignty, Tax, And Bilateral Investment Treaties Today At Indiana

Bird-Pollan (2017)Jennifer Bird-Pollan (Kentucky) presents The Sovereign Right to Tax: How Bilateral Investment Treaties Threaten Sovereignty at Indiana today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

Bilateral Investment Treaties, or “BITs,” are both a response to and likely at least partly responsible for the significant increase in international investments in the last fifty years. BITs provide potential private investors government assurances regarding a variety of factors relevant to their investments. Among these assurances, BITs regularly address the tax authority that the host government has with regard to the foreign investor, often protecting that foreign private investor against changes to the host country’s tax system. If an investor believes the host country has violated the terms of the BIT, that investor can bring a claim against the country in front of an independent arbitration panel, whose decision will be final and binding. Because the power to tax is at the heart of what makes a sovereign authority a sovereign, restrictions on a sovereign’s ability to tax foreign investors, which can be enforced by an external body, threaten that sovereign’s very essence. As a result, tax provisions in BITs and the adjudication of those provisions by arbitration bodies must be carefully examined and potentially reconsidered, to protect the sovereign rights of governments to assess tax, to evolve their tax policies, and administer the laws of their countries in the best interests of their people. This Article explains the background and use of BITs, explores theories of sovereignty, and then demonstrates that the current use of BITs to restrict governments’ ability to assess and collect tax within their borders threatens sovereign rights. The Article concludes by suggesting ways that the regulation of the taxation of international investments could be modified to protect sovereign rights.

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April 12, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Wallace: Centralized Review Of Tax Regulations

Clint Wallace (South Carolina), Centralized Review of Tax Regulations, 70 Ala. L. Rev. __ (2018):

Centralized oversight of agency policymaking and spending by the President’s Office of Management and Budget is a hallmark of the modern administrative state. But tax regulations have almost never been subject to centralized review. Scholars and policymakers have provided various incomplete justifications for excepting tax policy from centralized review, including concerns about politicizing tax administration, resource constraints within OMB, and a perception that tax is somehow different from other types of regulatory policy in ways that matter for the desirability of centralized review.

This Article undertakes a holistic analysis of the advantages and disadvantages of centralized review of tax regulations, as well as the challenges arising from such review. I conclude that none of the reasons offered in the past for a default rule of no review is sufficient in light of the normative benefits of centralized review.

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April 12, 2018 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Mulvaney, OMB Prevail Over Mnuchin, Treasury In Turf Battle Over Tax Regs; White House Reverses 35-Year Exemption From Cost-Benefit Review

OMBIRSFollowing up on my previous posts:

Politico, Mulvaney Prevails in Turf Battle Over Tax Regs:

White House budget director Mick Mulvaney won his fight to grab some regulatory power from the Treasury Department, with possibly major ramifications for the new tax law.

Treasury and OMB released a joint Memorandum of Agreement on Thursday that gives the budget office significant new authority to review tax regulations before they take effect. For instance, OMB's Office of Information and Regulatory Affairs will be able to review proposed regulations that affect the economy by $100 million or more, raise new legal or policy issues, or run counter to actions planned by another agency.

The agreement also bars Treasury from publishing in the Federal Register "or otherwise publicly" releasing "any tax regulatory action" covered by the memo, "unless OIRA notifies Treasury that it has waived or concluded its review." ...

Over the objections of Treasury Secretary Steven Mnuchin, Mulvaney pushed to scrap a 34-year agreement that gave Treasury a relatively free hand in writing tax rules and regulations.

Wall Street Journal, OMB Will Review More Tax Rules:

The Trump administration ended an internal dispute and the result will shape regulations under last year’s tax law, giving the Office of Management and Budget more involvement and authority in the process.

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April 12, 2018 in IRS News, Tax | Permalink | Comments (1)

ABA: Golden Gate Law School Does Not Meet Admissions Accreditation Standard

Golden Gate Logo (2018)ABA Journal, Golden Gate Does Not Meet Admissions Standard, Says ABA Accreditation Committee:

Golden Gate University School of Law in San Francisco is “significantly out of compliance” with an accreditation standard requiring that schools admit candidates who appear capable of finishing law school and passing a bar exam, according to a letter released by the American Bar Association's Section of Legal Education and Admissions to the Bar.

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April 12, 2018 in Legal Education | Permalink | Comments (1)

Trump’s Company Is Suing Towns Across The Country To Get Breaks On Taxes

Pro PublicaProPublica, Trump’s Company Is Suing Towns Across the Country to Get Breaks on Taxes:

President Donald Trump is famous for bragging about his net worth. Publicly, he claims he’s worth more than $10 billion. He even sued an author over the issue and lobbied the editors of Forbes about his ranking on their billionaires list.

Yet quietly in another setting, the Trump Organization says the president’s holdings are worth far less than he has proclaimed. Across the country, the Trump Organization is suing local governments, claiming it owes much less in property taxes than government assessors say because its properties are worth much less than they’ve been valued at. In just one example, the company has asserted that its gleaming waterfront skyscraper in Chicago is worth less than than its assessed value, in part because its retail space is failing and worth less than nothing.

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April 12, 2018 in Tax | Permalink | Comments (2)

ABA: Duncan Law School Does Not Meet Admissions Accreditation Standard

LMU LogoABA Journal, Duncan School of Law Does Not Meet Admissions Standard, ABA Accreditation Committee Says:

Duncan School of Law at Lincoln Memorial University in Knoxville, Tennessee, is “significantly out of compliance” with an accreditation standard requiring that schools admit candidates who appear capable of finishing law school and passing a bar exam, according to an April 5 letter released by the American Bar Association's Section of Legal Education and Admissions to the Bar.

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April 12, 2018 in Legal Education | Permalink | Comments (0)

Azam: International Tax Norms In The Era Of Globalization And BEPS

Rifat Azam (Radzyner), Ruling the World: Generating International Tax Norms in the Era of Globalization and BEPS, 50 Suffolk U.L. Rev. 517 (2017):

In this innovative and comprehensive article, I will explore how international tax norms are generated in the era of globalization within the theoretical framework of international relations that studies International Regimes and tries to answer questions of formation, implementation, compliance, effectiveness, and spectrum of success. I will study the multilateral efforts that preceded BEPS to predict the prospects of BEPS. I deeply examine regulatory, institutional and political aspects of the key multilateral initiatives on international taxation to better understand the structure and politics of international tax law making in the global digital economy and infer from this past experience with regards to the prospects and feasibility of the BEPS project. This interdisciplinary article is the first to systematically study these previous initiatives, gauge their impacts, and apply these lessons to the current BEPS endeavor. The article contributes to an emergent line of interdisciplinary scholarship that integrates political economy literature into the analysis of the current international tax regime and its challenges. This innovative method of scholarship has contributed substantially to the current academic understanding of international taxation in the 21st century and offers potential solutions to the obstacles facing international taxation.

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April 12, 2018 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, April 11, 2018

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2016)The Virginia Tax Review has published Vol. 37, No. 2 (Winter 2018):

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April 11, 2018 in Scholarship, Tax | Permalink | Comments (0)

Law Profs Should Impose Mandatory Pro Bono On Themselves

Rima Sirota (Georgetown), Making CLE Voluntary and Pro Bono Mandatory: A Law Faculty Test Case, 78 La. L. Rev. 547 (2017):

The vast majority of attorneys in this country are required to complete 10 to 15 hours of continuing legal education (“CLE”) every year, an experience well summarized by one attendee’s observation that “[k]nowledge is good, but coerced seat time is wasteful [and] insulting.” The primary rationale for mandatory CLE is to help ensure competent client representation, but the mandatory system fails to achieve that goal. Instead, mandatory CLE has become a self-perpetuating industry that earns hundreds of millions of tuition dollars for course purveyors but demonstrates little, if any, connection to better serving the public.

By contrast, almost no attorney is required to complete a single hour of pro bono service. Although the American Bar Association (“ABA”) recognizes the “critical” need for free legal services for “persons of limited means,” attorneys simply are encouraged to volunteer their time. This voluntary pro bono system has proven to be so woefully inadequate that Justice Sonia Sotomayor recently declared her support for a “forced labor” approach to attorneys’ pro bono responsibilities.

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April 11, 2018 in Legal Education, Scholarship | Permalink | Comments (7)

The Awakening: Women And Power In The Academy

ChronicleChronicle of Higher Education, The Awakening: Women and Power in the Academy:

"When it comes to silencing women," writes Mary Beard, "Western culture has had thousands of years of practice." Academe is no exception. A recent conference at Stanford University featured 30 speakers — all of them men, all of them white. The incident sparked ridicule and outrage, as well as a sense that higher education is facing a reckoning. Over the past few months, amid mounting revelations of sexual harassment, The Chronicle Review asked presidents and adjuncts, scientists and humanists, senior scholars and junior professors to take on the theme of women and power in academe.

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April 11, 2018 in Legal Education | Permalink | Comments (2)

The Richest 1% Will Own 64% Of All Wealth By 2030

1%The Guardian, Richest 1% on Target to Own Two-Thirds of All Wealth by 2030:

The world’s richest 1% are on course to control as much as two-thirds of the world’s wealth by 2030, according to a shocking analysis that has lead to a cross-party call for action.

World leaders are being warned that the continued accumulation of wealth at the top will fuel growing distrust and anger over the coming decade unless action is taken to restore the balance.

An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world’s wealth by 2030.

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April 11, 2018 in Tax | Permalink | Comments (1)

Pepperdine Law School's Place In The World

President Trump Nominates Emin Toro (Covington & Burling) To U.S. Tax Court

ToroPresident Trump has nominated Emin Toro to be U.S. Tax Court Judge:

Emin Toro is a partner in the Washington, D.C., office of Covington & Burling, where he represents and counsels multinational companies in tax controversies. Mr. Toro’s tax controversy experience includes audits, administrative appeals, litigation, as well as advance pricing agreement and competent authority proceedings. He is also a Fellow of the American College of Tax Counsel. Upon graduation from law school, Mr. Toro served as a law clerk to Judge Karen LeCraft Henderson of the U.S. Court of Appeals for the District of Columbia Circuit and to Justice Clarence Thomas of the Supreme Court of the United States.

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April 11, 2018 | Permalink | Comments (1)

Law School Applicants With LSATs Of 160+ Surge 21%

LSAC

National Law Journal, Law School Applications Are Up, Especially Among High LSAT Scorers:

The rebound in law school applicants that the legal academy has long hoped for looks like it’s finally arrived.

The number of people who have applied to law schools nationwide this application cycle has increased more than 8 percent over last year, according to new figures from the Law School Admission Council. Perhaps even more importantly, the number of applicants with high scores on the Law School Admission Test has surged.

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April 11, 2018 in Legal Education | Permalink | Comments (6)

Shanske: Interpreting State Fiscal Constitutions

Darien Shanske (UC-Davis), Interpreting State Fiscal Constitutions: A Modest Proposal, 69 Rutgers L. Rev. 1331 (2017):

The fiscal constitutions of many states limit the ability of governments to raise taxes. These same constitutions typically do not impose similar limits on the ability of governments to impose a fee, say a building permit fee. But what if a locality chose to levy a gigantic building permit fee and used the proceeds to fund general services? Such a fee would — and should — be considered a “hidden tax” and thus subject to the same limitations as ordinary taxes.

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April 11, 2018 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, April 10, 2018

Varner Presents Millionaire Migration And Taxation Of The Elite Today At Georgetown

VarnerCharles Varner (Stanford) presents Millionaire Migration and Taxation of the Elite: Evidence from Administrative Data (with Ithai Lurie (Office of Tax Analysis, U.S. Treasury Department), Richard Prisinzano (Pennsylvania) & Cristobal Young (Stanford)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by Lilian Faulhaber and Itai Grinberg:

A growing number of U.S. states have adopted “millionaire taxes” on top income-earners. This increases the progressivity of state tax systems, but it raises concerns about tax flight: elites migrating from high-tax to low-tax states, draining state revenues, and undermining redistributive social policies. Are top income-earners “transitory millionaires” searching for lower-tax places to live? Or are they “embedded elites” who are reluctant to migrate away from places where they have been highly successful? This question is central to understanding the social consequences of progressive taxation. We draw on administrative tax returns for all million-dollar income-earners in the United States over 13 years, tracking the states from which millionaires file their taxes. Our dataset contains 45 million tax records and provides census-scale panel data on top income-earners. We advance two core analyses: (1) state-tostate migration of millionaires over the long-term, and (2) a sharply-focused discontinuity analysis of millionaire population along state borders. We find that millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance.

Figure 1

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April 10, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Furman Presents Should Policymakers Care Whether Inequality Is Helpful Or Harmful For Growth? Today At NYU

FurmanJason Furman (Harvard) presents Should Policymakers Care Whether Inequality Is Helpful or Harmful For Growth? at NYU today as part of its Tax Policy Colloquium Series hosted by Lily Batchelder and Daniel Shaviro:

The view that inequality is harmful for growth is increasingly fashionable among policymakers around the world. In the strongest form of this argument, high levels of inequality can make sustained growth impossible or even cause recessions. In a weaker form, lower levels of inequality are good for growth. Among policymakers this view has almost entirely supplanted the traditional economic view that there was a tradeoff between inequality and growth, and that greater inequality might be the cost of higher levels of growth.

This paper is not a fresh attempt to assess the empirical evidence on inequality and growth or a survey of the existing literature. Instead this paper addresses the question of whether policymakers should even be interested in this question in its traditional form, answering with a resounding no for three reasons. ...

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April 10, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

What Motivates Faculty To Teach Well?

Inside Higher Ed, What Motivates Good Teaching?:

[M]any professors do teach well, and a new study [Faculty Members’ Motivation For Teaching and Best Practices] explores what motivates them to do so. More precisely, the study’s authors wanted to test a model of faculty motivation for teaching as a predictor of using best teaching practices. ...

As it turns out, certain factors predict professors’ intrinsic and “identified” motivation for teaching (the latter form meaning doing something because it's seen as important), in support of the authors’ conceptual model. And those kinds of “autonomous” motivations in turn predict greater use of proven, effective teaching methods — namely instructional clarity and higher-order, reflective and integrative, and collaborative learning.

“Simply put, faculty who teach because they enjoy and value it tend to teach in the most effective ways,” said Robert H. Stupnisky, the study’s lead author and an associate professor of education and human development at the University of North Dakota.

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April 10, 2018 in Legal Education | Permalink | Comments (0)

Leviner Presents Public Opinion And Tax Justice Today At Sapir School of Law

Leviner (2018)Sagit Leviner (Ono Academic College, Israel) presents In the Eye of the Beholder: Public Opinion on Tax Justice at Sapir School of Law today as part of its Faculty Seminar Series:

The tax system is one of the most influential of civic institutions of our time. Taxes often detract at least one third of our income and they present an immediate and consequential effect with respect to a broad array of actions we make daily, when we choose to get married, have kids, go to college, or buy a loaf of bread. And, even though tax cuts and reforms are accordingly appealing to many people, it is worth taking time to ponder over the consequences of such cuts and reforms. This essay addresses the issue of fairness in taxation and how the tax system is perceived desirable not from a purely academic or theoretical perspective, but rather from a public opinion prism.

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April 10, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Abreu & Greenstein: Rebranding Tax/Increasing Diversity

Alice Abreu (Temple) & Richard Greenstein (Temple), Rebranding Tax/Increasing Diversity, 96 Denv. L. Rev. ___ (2018):

Tax gets a bad rap. It is generally thought to be coercive, burdensome, complicated, unpleasant, and boring. The annual ritual of filing tax returns underscores the taking aspect of taxation by reminding even those who receive refunds that money has been taken from them. This view of tax—that it is about taking—is not only inaccurate and incomplete, but it may have had two related, significant, deleterious, but unexamined effects. Viewing the tax system only as an instrument of taking may contribute to the creation of a tax bar that is more white and less diverse than the bar in general, and that may, in turn, contribute to the existence of a tax system that disproportionately favors the relatively non-diverse population of taxpayers at the top of the income distribution. This Article examines the first of these effects. We attempt to answer to a question that has gone unasked for far too long: Why is the tax bar so white?

AG2

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April 10, 2018 in Scholarship, Tax | Permalink | Comments (0)

Pepperdine Seeks To Hire An Assistant Dean For Career Development

Pepperdine Law School (2017) (Logo)Pepperdine Law School Seeks To Hire An Assistant Dean For Career Development:

Pepperdine School of Law in Malibu, California, is seeking an enthusiastic and motivated candidate for an Assistant Dean for Career Development position.  If you are at Pepperdine Law, you are at a place where:

  • Dean Caron and the entire administrative leadership team are highly supportive of the law school's career services programs and efforts;
  • The university and the law school encourages and supports entrepreneurship, vision, and a can-do attitude on the part of its administration, faculty, and staff;
  • The law school's recruiting program results and employment outcomes are on the rise — the new Assistant Dean will be joining and leading a team that is already successful and looking to build upon its positive trajectory;  
  • The Career Development Office is staffed with a close-knit, passionate, committed, professional, collegial, and supportive team of career counselors and recruiting and administrative professionals who work constantly to deliver, and also to enhance, the office's services for students and alumni;  
  • And last but certainly not least . . . The law school's location in beautiful Malibu, at the base of the Santa Monica Mountains and overlooking the Pacific Ocean, provides a wonderful backdrop to our daily work environment.

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April 10, 2018 in Legal Education | Permalink | Comments (0)

ABA Considers Tossing LSAT Requirement, Disagreement Ensues

GRELSAT2Following up on my previous posts (links below):  Law.com, ABA Considers Tossing LSAT Requirement, Disagreement Ensues:

The debate over the GRE in law school admissions is headed to Washington this week.

The American Bar Association is holding a public hearing April 12 on a proposed change to its law school standards that would drop the requirement that schools use the Law School Admission Test when selecting students.

Proponents and opponents of the change have already laid out their arguments in written comments submitted before the hearing, and the legal academy appears markedly split on the issue. Unsurprisingly, the organizations behind both standardized tests are at odds over whether the ABA’s Council of the Section of Legal Education and Admissions to the Bar should eliminate the LSAT rule.

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April 10, 2018 in Legal Education | Permalink | Comments (2)

Hackney: Subsidizing The Heavenly Chorus — Labor Unions And Tax Exemption

Philip Hackney (LSU), Subsidizing the Heavenly Chorus: Labor Unions and Tax Exemption, 91 St. John's L. Rev. 315 (2017):

Labor Unions are nonprofit organizations that provide laborers a voice before their employer and before governments. They are classic interest groups. United States federal tax policy exempts labor unions from the income tax, but effectively prohibits labor union members from deducting union dues from the individual income tax. Because these two policies directly impact the political voice of laborers, I consider primarily the value of political fairness in evaluating these tax policies rather than the typical tax critique of economic fairness or efficiency. I apply a model that presumes our democracy should aim for one person, one political voice. For the model, political voice means the ability of citizens to participate in setting and discussing the political agenda and to vote on any final decision. In a modern democratic state, citizens largely depend upon organized interest groups to fulfill this role of political voice. In the Article, I demonstrate that tax policy applicable to labor unions likely modestly harms political voice equality.

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April 10, 2018 in Scholarship, Tax | Permalink | Comments (0)

Monday, April 9, 2018

Scharff Presents Green Fees: Pricing Externalities Under State Law Today At UC-Irvine

Scharff (2017)Erin Scharff (Arizona State) presents Green Fees: The Challenge of Pricing Externalities under State Law at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

Policymakers at the state and local level are increasingly interested in using market-based pricing mechanisms as regulatory tools. At the state level, Massachusetts, Rhode Island, and Washington have recently considered state-level carbon pricing, while California is moving forward with its own cap-and-trade program. At the local level, municipal governments are increasingly turning to stormwater remediation fees to pay for the treatment of municipal runoff required by the Clean Water Act. And Philadelphia, Berkeley, and Seattle all recently joined Chicago and impose a soda tax on high-caloric beverages.

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April 9, 2018 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Brooks: Don’t Let The GOP Dismantle Obama’s Student Loan Reforms

New York Times op-ed:  Don’t Let the G.O.P. Dismantle Obama’s Student Loan Reforms, by John R. Brooks (Georgetown):

One of the most important — but least known — achievements of the Obama administration was the expansion of the income-driven repaymentprogram for federal student loans. The program aims to make student loan payments affordable for everyone, regardless of their income. But Republicans, in their endless quest to undo everything Mr. Obama did, are now trying to dismantle the program under the guise of reform, citing misleading claims of high costs and low effectiveness. In fact, the program’s costs are low, and the student loan system as a whole is financially self-sustaining. More important, we should be increasing investment in higher education and support for students, not the reverse.

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April 9, 2018 in Legal Education | Permalink | Comments (0)

Kaplow And Shavell And The Priority Of Income Taxation And Transfer

David Blankfein-Tabachnick (Michigan State) & Kevin A. Kordana (Virginia), Kaplow and Shavell and the Priority of Income Taxation and Transfer, 69 Hastings L.J. 1 (2017):

This Article rejects a central claim of taxation and private law theory, namely, Kaplow and Shavell’s prominent thesis that egalitarian social goals are most efficiently achieved through income taxation and transfer, as opposed to egalitarian alterations in private law rules. Kaplow and Shavell compare the efficiency of rules of tort to rules of tax and transfer in meeting egalitarian goals, concluding that taxation and transfer is always more efficient than other private law legal rules. We argue that Kaplow and Shavell reach this conclusion only through inattention to the body of private law that informs the very basis of their discussion: underlying property entitlements. This Article contends that Kaplow and Shavell’s comparison of rules of taxation to rules of tort fails to take proper account of the powerful role that (re)assigning underlying property entitlements plays in achieving egalitarian goals, even at the level of formal theory.

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April 9, 2018 in Scholarship, Tax | Permalink | Comments (0)

Jukin’ The Stats: The Gaming Of Law School Rankings And How To Stop It

U.S. News 2019Darren Bush (Houston) & Jessica Peterson (Durham Jones & Pinegar, Salt Lake City), Jukin’ the Stats: The Gaming of Law School Rankings and How to Stop It, 45 Conn. L. Rev. 1235 (2013):

“Jukin' the stats” means manipulating pertinent information to advance one's position. In the case of law schools, manipulation of law school rankings, put forth by U.S. News and World Report, potentially enables the school to gain advantage relative to competitors. This Article describes the U.S. News Law School rankings methodology followed by prospective law students everywhere. The Article then discusses how law schools manipulate their data submissions in order to change their relative rankings. The Article also describes the inability of the stakeholders in the rankings process to obtain adequate recourse for rankings manipulation, and the lack of incentive U.S. News possesses to strongly police data submissions.

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April 9, 2018 in Law School Rankings, Legal Education, Scholarship | Permalink | Comments (0)

Simkovic: U.S. News And Pepperdine — There But For The Grace Of God Go We All

U.S. News 2019Following up on my previous posts (links below):  Michael Simkovic (USC), U.S. News.com and Pepperdine: There But For The Grace Of God Go We All:

Pepperdine’s law school recently made an error when submitting enrollment data to U.S. News.com.  Pepperdine contacted U.S. News promptly after uncovering the error and submitted corrected data in time for U.S. News to use the corrected data in its ranking.  Although the erroneous data was more positive than the corrected data, no reasons have been given to believe that Pepperdine intentionally sought to deceive U.S. News. 

I know and respect Paul Caron, the current Dean of Pepperdine.  While we don’t always agree on technical or political issues, the notion that he would intentionally commit fraud—and then immediately correct his error—is outlandish.  (In the interest of disclosure, Leiter Reports joined a network of legal education blogs that Paul organized, but Leiter Reports and Caron’s blog, TaxProf, often compete and advance different perspectives.  I have vocally criticized some of the research covered on TaxProf blog.).

Nevertheless, U.S. News punished Pepperdine by making it an “unranked” law school this year.  Those who are not familiar with the reasons for this move in the rakings might mistakenly believe that Pepperdine fell outside the top 100.  According to analyses by Bill Henderson and Andy Morriss, if not for the penalty imposed by U.S. News, in all likelihood Pepperdine’s rank this year would have risen from 72 to between 64 and 62. ...

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April 9, 2018 in Law School Rankings, Legal Education | Permalink | Comments (0)

Lesson From The Tax Court: One Year At A Time

Tax Court (2017)

Last week the Tax Court issued 19 opinions, including one articulate opinion on Collection Due Process that teaches an interesting, albeit esoteric, lesson about the bulk-processing nature of tax administration.  I will save that case, Scott T. Blackburn, v. Commissioner, 150 T.C. No. 9, for another week, or perhaps our colleagues over at Procedurally Taxing will blog it.

In today’s post I want to look at two of last week’s opinions that I think teach a more basic lesson about the important way in which each tax year is separate from all others.  The two cases are: (1) Shane Havener and Amy E. Costa v. Commissioner, T.C. Sum. Op. 2018-17 (Apr. 4, 2018); and (2) Gary K. Sherman and Gwendolyn L. Sherman v. Commissioner, T.C. Sum. Op. 2018-15 (Apr. 2, 2018). 

Notice that both of these are what are called “Summary” Opinions.  That means the taxpayer in each one elected the small case procedures allowed by IRC §7463 and implemented by Tax Court Rules 170 et. seq.  As most readers no doubt know, the upside of that election is relaxed procedural rules (notably rules of evidence) and the downside is that the loser may not appeal to a higher court.  The idea is that these are cases where the dispute between the taxpayer and the IRS is really one about factual matters and not about the law. That is why when you access these cases through the Tax Court website, the website pops up the following message in all-caps: “Pursuant To Internal Revenue Code Section 7463(b), This Opinion May Not Be Treated As Precedent For Any Other Case.” 

The very reason why these cases make for lousy precedent, however, is why they often make for good lessons about basic tax concepts.  The lesson I see in these two cases is about the appropriate accounting period, a particularly timely lesson this week since April 16th (the deadline for filing returns this year since April 15th falls on a Sunday) is right around the proverbial corner. 

To economists, the most accurate accounting period is one’s lifetime.  That is, the best measure of income is what happens over our lifetime.  But because governments need revenue sooner, because not all taxpayers die (think corporations), and because even if tax revenue would even out in the long, long, long run, the transition costs to a lifetime accounting period would be untenable, Congress created a yearly accounting period for income tax (and shorter accounting periods for excise taxes such as the employment tax). 

That yearly period ends on December 31st for most of us mere mortals.  The yearly questions we ask are “how much income did I have during the last year?” and “what expenditures did I make that I can deduct from the income I made?”  The point of today's lesson is that we must ask those questions every year and just because we get a wrong answer in one year does not entitle us to continue using that wrong answer in later years. 

More below the fold.

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April 9, 2018 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (4)

The Rule Of Law Is Not A Rule Of Law: Thoughts On Solum And Meyer

Pardon me while I diverge from the topic of legal education to talk about something abstract like "the rule of law," provoked by recent work of two of my favorite legal educators.  

Solum-lawrence_1On April 4, Larry Solum (Georgetown) delivered the Regula Lecture at the University of Akron on "Surprising Originalism", which you can watch here.  I am always interested in what Larry has to say, first, because we share some common interests in language and philosophy, and, second, because he delivers it so well.  If I can summarize his point quickly, it is that (1) sensible originalism is possible if we look not at the founders' intentions, but what the words of the constitutional text actually meant at the time they were uttered; and (2) that originalism in constitutional interpretation is preferable to alternatives like the "living constitution" because the former is more likely to preserve the rule of law - that is, as a restraint on rule by pure power and might.  Larry's particular contribution is the application of the work of the philosopher of language H.P. Grice to the constitutional text - looking not merely at the semantics of the sentences as written, but at their pragmatics as well.  At the time they were written, what did they say but, more importantly, what did they implicate to the public that would have read or heard the words?

I am not a constitutional scholar, but I have my own reasons for being interested in Grice.  Robin Bradley Kar and Margaret Radin have just placed the first Harvard Law Review article on contract law in over ten years.  They use Grice's principles to argue that extensive boilerplate and click-throughs in consumer and other contracts ought not to be considered part of the parties' actual agreement.  I wrote a response, not necessarily disagreeing with the policy issues regarding boilerplate, but taking issue with, among other things, the references to Grice.

I didn't take issue with Larry Solum's point (1) above, at least in terms of thinking about constitutional meaning as guided by Grice.  What I wondered about, as I listened to his lecture, was the move in point (2) - that hewing to a philosophy of constitutional originalism was central to the rule of law.  What went through my head was a line I have used before: "the rule of law is not a rule of law."

1864So I was delighted to see that Linda Meyer (Quinnipiac) happens to have just posted an essay that expands far more eloquently on that thought.  It is not a direct response to Larry Solum's argument; I'm the one making that connection!  Her essay is Sisyphus and the Clockmaker: Two Views of the Rule of Law in Keally McBride's 'Mr. Mothercountry: The Man Who Made the Rule of Law.'  You can see from the abstract why it caught my eye:

This essay is an engagement with Keally McBride's excellent book, "Mr. Mothercountry: The Man Who Made the Rule of Law," and argues that the rule of law is not a law of rules, but a culture of self-restraint and humility.

Some comments below the break.

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April 9, 2018 in Books, Jeff Lipshaw, Legal Education, Miscellaneous, Scholarship | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, April 8, 2018

Chicago-Kent Is 18th Law School To Accept GRE For Admissions

LSAT GREChicago-Kent College of Law Now Accepting GRE Scores From Law School Applicants:

Effective immediately, Chicago-Kent College of Law will accept scores from the Graduate Record Examination (GRE), as well as from the Law School Admission Test (LSAT), from applicants seeking admission for the upcoming academic year.

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April 8, 2018 in Legal Education | Permalink | Comments (0)

Zelinsky: The Church Of The Holy Sepulchre And Jerusalem’s Property Tax

Exterior Dome of Church of the Holy SepulchreOxford University Press Blog:  The Church of the Holy Sepulchre and Jerusalem’s Property Tax, by Edward Zelinsky (Cardozo):

When is a property tax dispute between a church and a municipality an international controversy? When the church is the Church of the Holy Sepulchre and the municipality is the city of Jerusalem.

The Church of the Holy Sepulchre is one of the holiest sites in Christianity. The Church takes its name from what is traditionally believed to be the tomb of Jesus located within the Church. For many Christian pilgrims coming to the Holy Land, the Church of the Holy Sepulchre is the highlight of their pilgrimages.

Israeli municipalities levy a property tax known as the arnona. Jerusalem exempts churches in general from this property tax and the religious buildings of the Church of the Holy Sepulchre in particular. Besides these holy sites, the Church also owns extensive commercial real estate. This real estate investment is the source of the current controversy.

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April 8, 2018 | Permalink | Comments (2)

Lawyer Is America's Loneliest Profession

Harvard Business Review LogoHarvard Business Review, America’s Loneliest Workers:

For our survey of 1,624 full-time employees, all participants in a longitudinal study of 4,000 American workers, our goals were two-fold: First, to identify those employees most at risk for feeling lonely at work; and second, to identify key drivers that maximize the benefits of increased social cohesion among employees. Participants provided details on the degrees of loneliness and social support they experienced on a daily basis, both in and out of the workplace.

Our analysis found distinct groups at both ends of the loneliness spectrum: the who’s who of loneliness, so to speak, as well as their more fortunate counterparts, the “unlonely.” Our data also yielded concrete insights for ways to tackle workplace loneliness that end up helping both your employees — and your company’s bottom line. ...

In a breakdown of loneliness and social support rates by profession, legal practice was the loneliest kind of work, followed by engineering and science. This is perhaps not surprising, given the known high prevalence of depression among lawyers. At the other end of the spectrum were occupations involving high degrees of social interaction: social work, marketing, and sales. ...

The solitude of the ivory tower seems to be a real phenomenon, as well. Graduate degree holders in our sample reported higher levels of loneliness and less workplace support than respondents who had only completed undergraduate or high school degrees. Professional degrees (law and medical degrees) were the loneliest by far, scoring 25% lonelier than bachelor’s degrees, and 20% lonelier than PhDs. ...

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April 8, 2018 in Legal Education | Permalink | Comments (0)

The Top Five New Tax Papers

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #1:

  1. [644 Downloads]   Evaluating the New US Pass-Through Rules, by Dan Shaviro (NYU)
  2. [522 Downloads]  Choice-of-Entity Decisions Under the New Tax Act, by Brad Borden (Brooklyn)
  3. [340 Downloads]  The Elephant Always Forgets: U.S. Tax Reform and the WTO, by Reuven Avi-Yonah (Michigan) & Martin Vallespinos (S.J.D. 2018, Michigan)
  4. [291 Downloads]  Explaining Choice-of-Entity Decisions by Silicon Valley Start-Ups, by Gregg Polsky (Georgia)
  5. [275 Downloads]  The Impact of the 2017 Act's Tax Rate Changes on Choice of Entity, by Jim Repetti (Boston College)

April 8, 2018 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, April 7, 2018

This Week's Ten Most Popular TaxProf Blog Posts

Abreu: Tax 2018 — Requiem For Ability To Pay

Alice Abreu (Temple), Tax 2018: Requiem for Ability to Pay, 52 Loyola L.A. L. Rev. ___ (2018):

This is not just another tax reform piece. Although the tax system changed at midnight on New Year’s eve, 2017, in the flurry of activity to understand the new legislation and its effects, almost no attention has been paid to analyzing whether the income tax system has been transformed in any fundamental way. But transformed, it has been.

The new legislation, informally known as the Tax Cuts and Jobs Act, (or “TCJA”), transforms the income tax system in at least four fundamental ways, significantly undermining one of the bedrock principles of our tax system — horizontal equity — and ignoring ability to pay.

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April 7, 2018 in Scholarship, Tax | Permalink | Comments (0)