TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Monday, November 17, 2014

Idea for the New Congress: End the Carried Interest Tax Break for the Elite

New York Times:  Idea for New Congress: End a Tax Break for the Elite, by James B. Stewart:

Now that Republicans control both houses of Congress, they need to show they can accomplish something, and President Obama has just two years to burnish his legacy. So the search is on for bipartisan consensus.

I have two suggestions: “tax reform” and “carried interest.” ... [S]ix years into the Obama administration, and more than seven since legislation was introduced to end the favorable treatment of carried interest, it seems astonishing that it lives on as a multibillion-dollar tax windfall for an elite group of super wealthy hedge fund, venture capital and private equity managers.

Continue reading

November 17, 2014 in Tax | Permalink | Comments (0)

How to Distort Income Inequality

Wall Street Journal op-ed:  How to Distort Income Inequality, by Phil Gramm (American Enterprise Institute) & Michael Solon (US Policy Metrics):

What the hockey-stick portrayal of global temperatures did in bringing a sense of crisis to the issue of global warming is now being replicated in the controversy over income inequality, thanks to a now-famous study by Thomas Piketty and Emmanuel Saez, professors of economics at the Paris School of Economics and the University of California, Berkeley, respectively. Whether the issue is climate change or income inequality, however, problems with the underlying data significantly distort the debate. ...

The Piketty-Saez study looked only at pretax cash market income. It did not take into account taxes. It left out noncash compensation such as employer-provided health insurance and pension contributions. It left out Social Security payments, Medicare and Medicaid benefits, and more than 100 other means-tested government programs. Realized capital gains were included, but not the first $500,000 from the sale of one’s home, which is tax-exempt. IRAs and 401(k)s were counted only when the money is taken out in retirement. Finally, the Piketty-Saez data are based on individual tax returns, which ignore, for any given household, the presence of multiple earners.

And now, thanks to a new studyin the Southern Economic Journal, we know what the picture looks like when the missing data are filled in [Levels and Trends in U.S. Income and its Distribution: A Crosswalk from Market Income towards a Comprehensive Haig-Simons Income Approach]. Economists Philip Armour and Richard V. Burkhauser of Cornell University and Jeff Larrimore of Congress’s Joint Committee on Taxation expanded the Piketty-Saez income measure using census data to account for all public and private in-kind benefits, taxes, Social Security payments and household size.

The result is dramatic. The bottom quintile of Americans experienced a 31% increase in income from 1979 to 2007 instead of a 33% decline that is found using a Piketty-Saez market-income measure alone. The income of the second quintile, often referred to as the working class, rose by 32%, not 0.7%. The income of the middle quintile, America’s middle class, increased by 37%, not 2.2%.

Continue reading

November 17, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 557

TaxProf Blog Weekend Roundup

TaxProf Blog Weekend Roundup

Sunday, November 16, 2014

Projected Lawyer Surpluses Worsen: 3 New Lawyers for Every Law Job in 2022

The American Lawyer:  States' Projected Lawyer Surpluses Deteriorate for 2022, by Matt Leichter:

[G]overnment employment projections can provide more insight into the number of future lawyer positions that will be available for prospective law students. In fact, estimates on lawyer employment in 2022 by state are now available, making it possible to update the calculations for the law graduate and lawyer surpluses.

The “law graduate surplus” measures the ratio of ABA law school graduates in each state in 2013 to the estimated annual lawyer job growth rate for the 2012-22 projection period. The “lawyer surplus” makes the same calculation but subs out law school graduates with the number of bar admits in all states and under all circumstances (including those entering on motion).

The law graduate surplus is useful because it uses a discrete number of individuals, but it includes people who never become lawyers while excluding people who join the bar without going to an ABA law school (for instance, by attending a foreign law school). By contrast, the lawyer surplus directly measures people who obtain a law license, except it duplicates many who seek bar admission in multiple states—a phenomenon that is likely to increase in the future as more jurisdictions adopt the Uniform Bar Exam. However, the lawyer surplus does provide information on the large number of lawyers who motion into the District of Columbia bar without attending a local law school or taking its bar exam.

State governments provide estimates of lawyer employment in 2012 and 2022 along with the projected annual growth rate. The following table breaks them down by state (which includes the District of Columbia and Puerto Rico) and region as delineated by the Bureau of Economic Analysis. ...

Here is a table of the law graduate and lawyer surpluses by state and region, ranked ... by the lawyer surplus for 2013 and compared against 2011.

States with the biggest lawyer surplus:
















North Dakota




















New Jersey




















New York










New Hampshire










District of Columbia







































States with the lowest lawyer surplus:





































































































Here are the totals for all fifty states:

US (State Data)









US (BLS Data)









Continue reading

November 16, 2014 in Legal Education | Permalink | Comments (2)

Undergraduate Prestige Affects Earnings Premium From Elite Graduate Programs

Wall Street Journal, Graduates of Elite Colleges See a Payoff:

Sure, it’s nice to have a graduate degree from Yale, but a new study finds that attending an elite undergraduate institution counts for an awful lot when it comes to lifelong earnings. A researcher at the Vanderbilt University Law School found that people with advanced degrees from elite schools and undergraduate diplomas from less-selective institutions earn less than people who attended elite schools for both their graduate and undergraduate degrees. The results hold up across a broad swath of graduate programs, from law degrees to M.B.A.s. And those who attended less elite undergraduate institutions are unlikely to ever close the salary gap, according to the study.

Joni Hersch of Vanderbilt Law School said the survey results came as somewhat of a surprise, but suggests that it’s not really undergraduate education driving the pay disparity, but instead the social status of graduates of elite colleges. ...

Among those who attended top-tier graduate institutions, the pay gap between graduates of top-tier and lower-tier undergraduate schools was considerable.


Joni Hersch (Vanderbilt), Catching Up Is Hard to Do: Undergraduate Prestige, Elite Graduate Programs, and the Earnings Premium:

Continue reading

November 16, 2014 in Legal Education | Permalink | Comments (0)

Top 5 Tax Paper Downloads

The IRS Scandal, Day 556

Saturday, November 15, 2014

Federalist Society Panel: Is Higher Education Run for the Benefit of Students, Faculty or Administrators?

Federalist SocietyAt today's 2014 National Lawyers Convention: Millennials, Equity and the Rule of Law:

Showcase Panel III:  Higher Education: Run for the Benefit of Students or Faculty or Administrators?:

Success in today’s global economy virtually requires a college or post graduate degree, but colleges and law schools have raised tuition enormously. The government subsidizes students to take huge loans to pay for college and law schools, loans which inflict an increasing burden on students, including law students in a troubled economy. Do these loans pay as much for faculty research and administrators as for direct student education? Are faculties producing research that justifies these costs? Are students getting a good deal now? Could or will on line education provide students with similar education at a fraction of the cost? Is it time to ask some hard questions about higher education? Does education policy benefit average and below average students or does it merely benefit the top of the class? This panel will focus to a significant degree on law schools.

  • Paul F. Campos (Colorado)
  • Daniel Polsby (Dean, George Mason)
  • Richard Kent Vedder (Ohio University)
  • Thomas D. Morgan (George Washington) (moderator)

November 15, 2014 in Conferences, Legal Education | Permalink | Comments (7)

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation concludes today in Santa Fe. Tax Prof speakers include:

The Philosophy of Taxation:
Session Chair:  Brian Galle (Boston College)

Discussants:  Brian Galle (Boston College), Linda Sugin (Fordham)

Continue reading

November 15, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

WSJ: California State Bar in Turmoil After Shake-up Triggers Whistleblower Claim

California State Bar (2014)Wall Street Journal, California State Bar in Turmoil After Shake-up Triggers Whistleblower Claim:

The California State Bar was thrown into turmoil this week after its ousted executive director struck back with retaliation claims alleging that he was fired for complaining about ethical breaches inside the organization.

Joseph Dunn, a Democratic former California state senator, claims in a whistleblower lawsuit filed in California state court Thursday that the state bar fired him from his job last week after he accused the bar’s top disciplinary officer of lying about the organization’s handling of attorney misconduct complaints.

The bar’s leadership won’t say what was behind the shake-up, and Mr. Dunn says he wasn’t given an explanation when the bar notified him of his termination when was in San Francisco giving a speech on Nov. 7.

The bar put out a statement Thursday saying that it had terminated Mr. Dunn and that the bar’s president, Craig Holden, and a deputy executive director would be assuming Mr. Dunn’s duties on a temporary basis. It did not have an immediate comment on Friday.

The bar, an arm of the California Supreme Court, is the state’s legal gatekeeper, overseeing bar admissions and managing the state’s attorney discipline system for its 181,000 active members.

Mr. Dunn alleges that the bar’s chief trial counsel, Jayne Kim, who oversees investigations into complaints about attorneys, “unlawfully removed” backlog cases from official reports. “This was done to benefit Ms. Kim in her upcoming evaluation and to fraudulently inflate the productivity of her office,” the complaint says.

Continue reading

November 15, 2014 in Legal Education | Permalink | Comments (4)

The IRS Scandal, Day 555

IRS Logo 2Yahoo! Finance:  Politicization of the IRS: Full Disclosure Network Special Video Report:

Watch this 8 minute FDN Video where it is revealed that Obama Administration officials were directing the IRS campaign against political groups critical of the President's policies according to the documents obtained by Paul Orfanedes, Director of Litigation for the public interest law firm Judicial Watch. Orfanedes reveals the tactics used by IRS Director Lois Lerner that deceived the media by where public documents had been withheld from Freedom of Information Act Requests (FOIA) filed by Judicial Watch. He also explains why Judicial Watch is determined to find all the missing Lois Lerner emails and how the IRS was able to shut down Patriot and Tea Party organizations by denying them Tax Exempt Status. 

Continue reading

November 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, November 14, 2014

Weekly Tax Roundup

November 14, 2014 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Arctic Blast Sweeps the Nation; Californians Break Out Their Winter Clothes

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

November 14, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

November 14, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Class Crits VII Conference Kicks Off Today at UC-Davis

Class CritsThe two-day Class Crits VII Conference on Poverty, Precarity, & Work: Struggle & Solidarity in an Era of Permanent(?) Crisis kicks off today at UC-Davis.  Tax Prof speakers include:

Debt & Taxes:

Continue reading

November 14, 2014 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (2)

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation continues today in Santa Fe. Tax Prof speakers include:

Conceptualizing the Social and Regulatory Nature of Taxation:

Session Chair:  David Gamage (UC-Berkeley)

  • David Hasen (Colorado), Income Taxation and Risk-Taking
  • Tracey Roberts (UC-Hastings), Law,  The Taxing Power as a Check on Private Property Rights and a Source of Regulatory Authority
  • Theodore Seto (Loyola-L.A.), Some Implications of Preference-Shifting for Optimal Tax Theory

Discussants: David Gamage (UC-Berkeley), Leandra Lederman (Indiana)

Hitting the Target: Public and Private Savings:
Session Chair:  Travis St. Clair (Maryland)

Discussants:  Elizabeth Chorvat (Illinois), Jason Seligman (Ohio State), Travis St. Clair (Maryland)

Continue reading

November 14, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Buffett to Buy Duracell from P&G in Cash-Rich Split-Off, Save $1 Billion in Taxes

Bloomberg, Buffett Set to Save More Than $1 Billion on Taxes in Swap:

DuracellWarren Buffett is again showing how to use the U.S. tax code to his advantage. For the third time in a year, the billionaire chairman of Berkshire Hathaway has structured a deal in which he buys businesses in exchange for stock that has appreciated. The transactions, called cash-rich split-offs, allow him to avoid capital gains taxes that would be incurred if he sold the shares in the open market.

Berkshire announced today that it would turn over about $4.7 billion in Procter & Gamble stock in exchange for P&G’s Duracell battery business, which will be infused with about $1.7 billion in cash. Since Buffett’s cost basis on the shares was about $336 million, and corporate capital gains are typically taxed at 35 percent, structuring the deal in this way could save Berkshire more than $1 billion. P&G also stands to reduce its tax liability on the sale. ...

Continue reading

November 14, 2014 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

Innovation, Ingenuity and Leadership in American Law Schools

David Barnhizer (Cleveland State), Innovation, Ingenuity and Leadership: ‘De-Accrediting’ the ABA, Nationalizing Bar Admission and Redefining the Right to Practice Some Forms of Law:

In a system such as is represented by US law schools even its failures and inadequacies were insufficient stimuli to drive honest self-assessment. This was because until the recent dramatic plunge in applicants law schools were not in any way accountable for their failure to be self-aware in mission, teaching, scholarly activity or cost in ways that compelled faculty to seek to understand the true nature of what they were doing both individually and collectively. Over the past three to four decades many law schools became such self-contained institutions that they were increasingly disconnected from the needs of the legal profession and the judiciary. After all, the practice of law was sort of morally “dirty”, anti-intellectual and mundane.

Law schools are now trumpeting that they really are concerned with educating students to become effective lawyers. The schools are releasing press release after release announcing how they have (finally) seen the light and are innovatively committed to the mission of educating lawyers. The problem with the PR is that innovation doesn’t just happen. It requires a unique combination of special leadership working with a critical mass of people who want to innovate. Even that is not enough.   The “innovators” must possess the insights and skills needed to “invent new forms” and those “inventions” will often require that they and others change the nature and focus of what they have long been doing and adapt. The willingness to transform oneself in that way is not a common feature in American law schools. To innovate effectively the Body comprised of a law school dean and faculty need to understand the existing system sufficiently well that they know how to preserve its strengths while eliminating the barriers created by our human tendency to consider what we have always done as the only (or best) way to do things.

This is particularly difficult to achieve in the amorphous system of American legal education. The problems have several elements. One of the most critical is that no one in a law school has sufficient power to compel faculty to act cohesively. This is exacerbated by the fact that members of law faculties are master “word smiths” capable of manipulating and blurring the reality of any situation with elevated rhetoric. They are also traditionalists locked into the existing hierarchy and ways of doing things who are far closer to being entitled feudal lords with individual fiefdoms rather than employees.

Significant innovation becomes close to impossible when it is dependent on the decisions of an atomistic collection of “uber-individuals” empowered by lifetime employment guarantees that cannot be altered without great expense and for very significant cause. Virtually no one can actually tell an American law professor what to do and this creates very high barriers to innovation. Nonetheless there are several approaches that can trigger systemic innovation with significant impacts on legal education and the profession.

In my judgment there are three steps that are needed to “crack open” the current monopoly over legal education and the right to provide law-related services that are operating as barriers to innovation and to the best ways to provide legal services to those in need.

Continue reading

November 14, 2014 in Legal Education | Permalink | Comments (5)

The IRS Scandal, Day 554

IRS Logo 2Breitbart, The IRS-Benghazi Congress:

Benghazi and the IRS dominated the news this year thanks to Judicial Watch’s work in exposing smoking gun documents in both scandals – work that left Congress and much of the other media looking feeble. JW’s work can change history. Our intent is to get the truth, and we spared neither party from criticism. But voters were outraged at our findings and the scandals were a major factor in the election. 

Almost half, 49 percent, said the results of the 2012 presidential election would have been different if the public knew the facts then that it knows now about the Obama administration’s initial, misleading story about what happened in Benghazi and the targeting of conservative groups through the IRS. 

In no small way, this new Congress is the Benghazi-IRS Congress. The expanded House majority, which has a historic number of Republican members, and the massive wave that led to the Republican takeover of the Senate were the result of voter concerns about Obama’s IRS abuse and the Benghazi deaths and cover-up. 48 percent of voters said the IRS scandal influenced their vote, and of those concerned Americans, 71 percent voted for Republicans to take over the Senate. The numbers are similar for Benghazi; 39 percent said the scandal influenced their vote and 64 percent who were concerned about the terrorist attack this president lied about to get reelected say they voted for Republicans in the Senate. ...

The new Congress has a strong mandate to pursue Obama’s abuse of power in the IRS scandal, hold him accountable for the Benghazi lies, protect our borders, close the door on amnesty, end Obamacare, confront government secrecy, and ensure the integrity of our elections. Judicial Watch has been happy to do the job of Congress, the establishment media, and the Justice Department for six years. Again, this election shows that Americans want Congress to follow our lead and get Washington back under the rule of law.

Continue reading

November 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, November 13, 2014

7th Circuit Rejects Constitutional Challenge to § 107 Housing Allowance for 'Ministers of the Gospel' on Standing Grounds

Freedom From Religion Foundation v. Lew, No. 14-1152 (7th Cir. Nov. 13, 2014):

Housing AllowanceThe Freedom from Religion Foundation and its two co-presidents (collectively “the plaintiffs”) filed this suit to challenge the constitutionality of § 107 of the Internal Revenue Code, also known as the parsonage exemption. The exemption excludes the value of employer-provided housing benefits from the gross income of any “minister of the gospel.” 26 U.S.C. § 107. The plaintiffs conceded in the district court that they did not have standing to challenge § 107(1), which applies to in-kind housing provided to a minister, but argued that they did have standing to challenge § 107(2), which applies to rental allowances paid to ministers. The district court agreed that the plaintiffs had standing to challenge § 107(2), and held that the subsection is an unconstitutional establishment of religion under the First Amendment.

We conclude that the plaintiffs lack standing to challenge § 107(2). We therefore do not reach the issue of the constitutionality of the parsonage exemption. ...

Continue reading

November 13, 2014 in Tax | Permalink | Comments (0)

Forget the 1%: It Is the 0.01% Who Are Really Getting Ahead in America

The Economist, Forget the 1%: It Is the 0.01% Who Are Really Getting Ahead in America:

Among the most controversial of Thomas Piketty’s arguments in his bestselling analysis of inequality, Capital in the Twenty-First Century, is that wealth is increasingly concentrated in the hands of the very rich. Rising wealth inequality could presage the return of an 18th century inheritance society, in which marrying an heir is a surer route to riches than starting a company. Critics question the premise: Chris Giles, the economics editor of the Financial Times, argued earlier this year that Mr Piketty’s data were both thin and faulty. Yet a new paper suggests that, in America at least, inequality in wealth is approaching record levels.

Earlier studies of American wealth have tended to show only small increases in inequality in recent decades. A 2004 study of estate-tax data by Wojciech Kopczuk of Columbia University and Emmanuel Saez of the University of California, Berkeley, found an almost imperceptible rise in the share of wealth held by the top 1% of families, from about 19% in 1976 to 21% in 2000 [Top Wealth Shares in the United States, 1916-2000: Evidence From Estate Tax Returns]. A more recent investigation of the Federal Reserve’s data on consumer finances, by Edward Wolff of New York University showed a continued but gentle increase in inequality into the 2000s [Recent Trends in Household Wealth in the United States: Rising Debt and the Middle Class Squeeze — An Update to 2007]. Mr Piketty’s book, which drew on this previous work, showed similarly modest rises in wealth inequality in America.

A new paper by [Emmanuel Saez & Gabriel Zucman, Wealth Inequality in the United States Since 1913: Evidence From Capitalized Income Tax Data] reckons past estimates badly underestimated the share of wealth belonging to the very rich. ... The results are enough to make Mr Piketty blush.


The outsize fortunes of the few would not be too worrying were they largely the product of entrepreneurial activity: riches amassed by hardworking billionaires who are as likely as not to give their bounty away through philanthropy. Messrs Saez and Zucman find some evidence for this dynamic. Wealthy families are younger than they were a generation or two ago, and they earn a larger share of the country’s income from labour: 3.1% in 2012 versus less than 0.5% prior to 1970.

Yet one should not yet rule out the return of Mr Piketty’s “patrimonial capitalism”. The club of young rich includes not only Mark Zuckerbergs, the authors argue, but also Paris Hiltons: young heirs to previously accumulated fortunes. What’s more, the share of labour income earned by the top 0.1% appears to have peaked in 2000. In recent years the proportion of the wealth of the very rich held in the form of shares has levelled off, while that held in bonds has risen. Since the fortunes of most entrepreneurs are tied up in the stock of the firms that they found, these shifts hint that America’s biggest fortunes may be starting to have less to do with building businesses, just as Mr Piketty warned.

November 13, 2014 in Tax | Permalink | Comments (0)

Fleming & Peroni: A Hitchhiker's Guide to International Tax Reform

J. Clifton Fleming Jr. (BYU) & Robert J. Peroni (Texas), A Hitchhiker's Guide to Outbound International Tax Reform, 18 Chapman L. Rev. 133 (2014):

In this article, we argue that although some U.S. international income tax reforms, such as limitations on earnings stripping, can be handled by targeted legislative action, broad reform of the U.S. international income tax system should take place only as part of a general revision of the U.S. corporate income tax. We further argue that U.S. international income tax reform should not lose revenue, should take fairness issues into account, and should discount the competitiveness and complexity arguments. We also explain that broad U.S. international income tax restructuring should eschew both an explicit territorial system and formulary apportionment (although either would be better than the current U.S. regime) and, instead, should revise the current, badly flawed, U.S. worldwide system into a real worldwide system by abolishing deferral and severely limiting cross-crediting. We recommend strengthening this real worldwide system by correcting flaws in the source rules, limiting earnings stripping, repealing the Section 911 exclusion, and expanding the Section 904(j) de minimis rule and making it mandatory.

November 13, 2014 in Scholarship, Tax | Permalink | Comments (0)

Time: The Real Student Debt Problem No One is Talking About

Time (2014)Time:  The Real Student Debt Problem No One is Talking About, by Jon Marcus:

Graduate students make up just 14% of university enrollment, but account for nearly 40% of student debt

Much of the concern about ballooning student debt has focused on undergrads taking out steep loans to pay for the rising cost of college. Largely overlooked are a principal source of the problem: graduate students ... who are less likely to have support from parents or other sources, and who face almost no limits on how much they borrow.

Graduate students now collectively owe as much as 40 percent of the estimated $1.2 trillion in outstanding student debt, according to the New America Foundation, even though they make up only 14 percent of all university enrollment.


Continue reading

November 13, 2014 in Legal Education | Permalink | Comments (2)

GAO: IRS Lacks Adequate Internal Controls

GAOGovernment Accountability Office, IRS's Fiscal Years 2014 and 2013 Financial Statements (GAO-15-173):

In GAO's opinion, the Internal Revenue Service's (IRS) fiscal years 2014 and 2013 financial statements are fairly presented in all material respects. However, in GAO's opinion, IRS did not maintain effective internal control over financial reporting as of September 30, 2014, because of a continuing material weakness in internal control over unpaid tax assessments. ...

During fiscal year 2014, IRS continued to make important progress in addressing deficiencies in internal control over its financial reporting systems. However, GAO identified new and continuing deficiencies in internal control over information security, including missing security updates, insufficient monitoring of financial reporting systems and mainframe security, and ineffective maintenance of key application security, that constituted a significant deficiency in IRS's internal control over financial reporting systems. Until IRS fully addresses existing control deficiencies over its financial reporting systems, there is an increased risk that its financial and taxpayer data will remain vulnerable to inappropriate and undetected use, modification, or disclosure.

Continue reading

November 13, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

The National Jurist's 25 Most Influential People in Legal Education

National JuristNational Jurist, 4 New Faces Join list of Most Influential People in Legal Education:

The National Jurist’s list of the Most influential People in Legal Education will include four new names when it is unveiled in its entirety in January, the publication announced.

Paul Caron, Professor at Pepperdine University, Eric Janus, Dean at William Mitchell School of Law, Michael Hunter Schwartz, Dean at University of Arkansas at Little Rock and Maureen A. O’Rourke, Dean at Boston University School of Law all made the list for the first time. Philip J. Weiser, Dean at University of Colorado Law School will return to the list after a one-year absence.

Janus made news late last year as the dean of the first school to get ABA approval for a distance-learning program for J.D. students. Michael Hunter Schwartz and Maureen A. O’Rourke have each spearheaded legal education reforms at their schools. ... Caron, who is new to the list, is an editor of a popular blog that covers legal education in addition to tax law issues.

The National Jurist seeks nominations from every law school and then narrows the list down to 50 nominees. Law school deans, the magazine’s editors and other influencers in legal education then vote.

Twenty honorees return to the list. They are listed below in alphabetical order:

Continue reading

November 13, 2014 in Legal Education | Permalink | Comments (4)

NTA 107th Annual Conference on Taxation

NTA CoverThe National Tax Association 107th Annual Conference on Taxation kicks off today in Santa Fe. Tax Prof speakers include:

Tax Enforcement and Collections Discretion:
Session Chair:  Leigh Osofsky (Miami)

  • Joshua Blank (NYU), Reconsidering Corporate Tax Privacy
  • Andrew Hayashi (Virginia), An Economic Analysis of Taxpayer Liquidity
  • Shu-Yi Oei (Tulane), What is Fair Tax Administration?
  • Leigh Osofsky (Miami),  Announcing Enforcement Priorities

Discussants:  Leandra Lederman (Indiana), Diane Ring (Boston College)

Municipal, Local, and Global Tax Incentives:
Session Chair:  Neil Buchanan (George Washington)

  • Mirit Eyal-Cohen (Alabama), Urban Mavericks
  • Omri Marian (Florida), Corporate Inversions, Tax Residence, and Real Economic Effects: A Case Study Approach
  • Agustin Leon-Moreta (New Mexico), Tax-Expenditure Limitations and Special District Finance in the United States
  • Erin Scharff (Arizona State), Powerful Cities, Efficient Revenues: Limits on Municipal Taxing Authority and What to do About it

Discussant:  Neil Buchanan (George Washington)

Continue reading

November 13, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

40th Annual Notre Dame Tax and Estate Planning Institute

ND_TaxEstate_booklet coverThe 40th Annual Notre Dame Tax and Estate Planning Institute kicks off today:

The 40th Annual Institute will present topics relevant for all individuals, even those not exposed to the estate tax because of the high exemptions. Several sessions are designed to evaluate financial products and planning techniques so that one can better understand and evaluate these products and proposals in determining not only the tax and financial advantages they offer, but also their limitations. In addition, the Institute offers topics not found in most estate planning CLE programs such as protecting the elderly from scams and exploitation. As part of the objective of refreshing areas that can expand one’s practice, a session will review the income tax consequences of debt cancellation, foreclosures, and debt restructuring. Recognizing the importance of the income tax, the Institute will continue to devote sessions to income tax planning techniques clients can use immediately.

Tax Profs with speaking roles include:

Continue reading

November 13, 2014 in Conferences, Tax | Permalink | Comments (0)

Johnston: A Ray of Sunlight on Secretive Corporate Welfare

Al Jazeera:  A Ray of Sunlight on Secretive Corporate Welfare, by David Cay Johnston (Syracuse):

Each year billions of your state and local tax dollars get diverted from public coffers for corporate subsidies. Just how much you are forced to pay for corporate welfare could soon move from the darkness of official secrecy into the light — but only if you act now.

A proposed rule requiring state and local governments to disclose the total amount of property tax and some other abatements in any year is being considered by the little-known private rule-making body known as the Government Accounting Standards Board (GASB).

In 44 states, laws let county, city and other local officials grant tax reductions or exemptions to companies, often with little disclosure and no accountability. Exemptions from taxes benefit thousands of companies, from online retailer Amazon to shampoo maker Zotos International.

The proposal is tepid and narrow, but far better to let in a ray of light than to allow these deals the cover of total darkness in which they are typically carried out.

Continue reading

November 13, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 553

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

Continue reading

November 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, November 12, 2014

CBO: The Distribution of Household Income and Federal Taxes, 2011

Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2011:

Overall, federal taxes are progressive, meaning that average tax rates generally rise as income increases. Households in the lowest income quintile paid about $500 in federal taxes in 2011, on average, which amounted to an average federal tax rate of about 2 percent, CBO estimates. Households in the middle quintile paid about $7,000 in federal taxes, and households in the highest quintile paid about $58,000 in federal taxes, which results in average federal tax rates of approximately 11 percent and 23 percent, respectively.

As a result of the progressive federal tax structure, households in the highest quintile of before-tax income paid a greater share of federal taxes in 2011 than they received in before-tax income, while households in each of the other quintiles paid a smaller share of federal taxes than they received in before-tax income (see figure below). Households in the highest income quintile received a little more than half of total before-tax income and paid more than two-thirds of all federal taxes in 2011. In contrast, households in the lowest income quintile received approximately 5 percent of total before-tax income in 2011 and paid less than 1 percent of all federal taxes, CBO estimates.

Chart 1A

CBO estimates that average federal tax rates under 2013 law would be higher—relative to tax rates in 2011—across the income spectrum. The estimated rates under 2013 law would still be well below the average rates from 1979 through 2011 for the bottom four income quintiles, slightly below the average rate over that period for households in the 81st through 99th percentiles, and well above the average rate over that period for households in the top 1 percent of the income distribution.

Chart 2A

Government transfers and federal taxes lessen income inequality because federal taxes are progressive and payments from government transfer programs generally decline as a share of income as income rises. Between 1979 and 2011, government transfers reduced income inequality to a greater extent than federal taxes, based on a standard measure of inequality known as the Gini index. In 2011, government transfers accounted for approximately two-thirds of the reduction in income inequality observed between market income and after-tax income.

Chart 18

Continue reading

November 12, 2014 in Congressional News, Tax | Permalink | Comments (0)

Organ: MBE Is More to Blame Than Deteriorating Student Quality for Lower Bar Pass Rates

Following up on my earlier posts (here and here):  The Legal Whiteboard:  What Might Have Contributed to an Historic Year-Over-Year Decline In the MBE Mean Scaled Score?, by Jerry Organ (St. Thomas):

The National Conference of Bar Examiners (NCBE) has taken the position that the historic drop in the MBE Mean Scaled Score of 2.8 points between the July 2013 administration of the bar exam (144.3) and the July 2014 administration of the bar exam (141.5) is solely attributable to a decline in the quality of those taking a bar exam this July. ... I am not persuaded. (Neither is Brooklyn Law School Dean Nicholas Allard, who has responded by calling the letter “offensive” and by asking for a “thorough investigation of the administration and scoring of the July 2014 exam.” Nor is Derek Muller, who earlier today posted a blog suggesting that the LSAT profile of the class of 2014 did not portend the sharp drop in MBE scores.)  ...

If one looks at the LSAT distribution of the matriculants in 2011 (who became the graduating class of 2014) and compares it with the LSAT distribution of the matriculants in 2010 (who became the graduating class of 2013), the NCBE probably is correct in noting that the group that sat in July 2014 is slightly “less able” than the group that sat in July 2013.  But for the reasons set forth below, I think the NCBE is wrong to suggest that this alone accounts for the historic drop in the MBE Mean Scaled Score. Rather, a comparison of the LSAT profile of the Class of 2014 with the LSAT profile of the Class of 2013 would suggest that one could have anticipated a modest drop in the MBE Mean Scaled Score of perhaps .5 to 1.0.  The modest decrease in the LSAT profile of the Class of 2014 when compared with the Class of 2013, by itself, does not explain the historic drop of 2.8 reported in the MBE Mean Scaled Score between July 2013 and July 2014. ...

In his article, Unpacing the Bar: Cut Scores, Competence and Crucibles, Professor Gary Rosin of the South Texas College of Law developed a statistical model for predicting bar passage rates for different LSAT scores.  I used his bar passage prediction chart to assess the “relative strength” of each entering class from 2001 through 2013. 


Prediction of Bar Exam Success Based on Lowest LSAT in Range





















Continue reading

November 12, 2014 in Legal Education | Permalink | Comments (0)

Kleinbard: Invisible Man -- Losing Sight of the Real Adam Smith

Commonweal:   Invisible Man:  Losing Sight of the Real Adam Smith, by Edward D. Kleinbard (USC):

Adam SmithIf contemporary economists fielded a football team, it would no doubt be named the Smiths, in honor of the illustrious eighteenth-century Scot who is rightly regarded as the founder of modern economic theory. But the team mascot as presented by those economists would have as much in common with the real Adam Smith the as the Washington Redskins’ mascot has in common with a real Native American. Few thinkers of Smith’s stature have been so routinely misrepresented and misappropriated. 

George Stigler, a Nobel laureate economist, wrote that Adam Smith’s great work The Wealth of Nations demonstrated that “the efficiency property of competition” was “the crucial argument for unfettered individual choice in public policy.” Politicians and pundits alike regularly invoke Smith’s name to contrast the efficiency of markets in allocating goods and services with what they see as the damage done by government when it constrains “unfettered individual choice.” And in doing so, they regularly misapply Smith’s most famous metaphor, turning the “invisible hand” into an embodiment of the virtues of an unfettered market.

But all this is the Adam Smith of legend. The real Adam Smith was a sophisticated thinker about moral virtues as well as efficient markets, not a cartoon spokesperson for laissez-faire economic policy. Smith never intended his metaphor of the invisible hand to become synonymous with an omniscient and efficient Mr. Marketplace. Specialists have known this all along, but the caricature version of Smith continues to distort our policy discourse.

Continue reading

November 12, 2014 in Tax | Permalink | Comments (3)

Closing The Law School Gender Gap: 'Gender Inequality In Grading Is Sensitive to Pedagogy'

Gender GapInside Higher Ed, Closing the Law School Gender Gap:

Reducing class size and shaking up grading systems could help close the gender gap in professional schools, suggests new research in the Journal of Legal Studies [A Natural Experiment in Law]. Authors Daniel Ho and [Vice Dean] Mark Kelman, both professors of law at Stanford University, say that common professional school pedagogies, such as the Socratic and adversarial methods, may put women at a disadvantage when class sizes are big. In their study, Ho and Kelman analyzed 15,689 grades assigned by 91 instructors to 1,897 students from 2001-12.  

Continue reading

November 12, 2014 in Legal Education, Scholarship | Permalink | Comments (3)

Death of Ginny Chung

Chung 2Ginny Chung, Acting Deputy International Tax Counsel at the Treasury Department, died of colon cancer last Saturday at the age of 43.  From her Washington Post obituary:

She earned her undergraduate degree from Wellesley College, her JD from Emory University, and a Master of Laws in Taxation from Georgetown University. Ginny spent all of her professional life working for the United States Government, first for the IRS and most recently serving as the Acting Deputy International Tax Counsel for the Department of the Treasury. ...

Ginny is survived by her husband Aaron King; two children [ages 5 and 10]; her parents George and Grace Chung of New Jersey; and sister Christine Chung of London.

Continue reading

November 12, 2014 in IRS News, Obituaries, Tax | Permalink | Comments (1)

Vanderbilt Roundtable on Comptroller v. Wynne

Vandy 2The Vanderbilt Law Review En Banc Roundtable takes up Maryland State Comptroller of the Treasury v. Wynne, to be argued today in the Supreme Court:

In Wynne, the Court considers whether the Constitution bans a state from taxing its residents’ income, wherever earned, by requiring a credit for taxes paid on income taxed in other states. The Court could answer many questions: How far is the reach of the dormant Commerce Clause in the context of income taxation? What is the extent of a state’s power to enforce personal income taxes on its residents? What kinds of residents are subject to double taxation and why? .

November 12, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Muller: Class of 2014 LSAT Scores Did Not Portend Sharp Drop in MBE Scores

Unlike Brits, Americans Don't Think Tax Is Morally Right

YouGov, Unlike Brits, Americans Don't Think Tax Is Morally Right:

Most Americans think that their moral right to keep the money they earn trumps their duty to contribute towards public services, the exact opposite of attitudes in Britain.


(Hat Tip: Bruce Bartlett.)

November 12, 2014 in Tax | Permalink | Comments (2)

2014 Businessweek Business School Rankings

BloombergBloomberg Businessweek, The Complete 2014 Business School Rankings (methodology: 45% employer reputation; 45% student reputation; 10% faculty research):

  1. Duke
  2. Pennsylvania
  3. Chicago
  4. Stanford
  5. Columbia
  6. Yale
  7. Northwestern
  8. Harvard
  9. Michigan
  10. Carnegie Mellon
  11. UCLA
  12. North Carolina
  13. Cornell
  14. MIT
  15. Dartmouth
  16. Indiana
  17. Maryland
  18. Emory
  19. UC-Berkeley
  20. Virginia
  21. USC
  22. NYU
  23. Texas
  24. Georgetown
  25. Rice

Congratulations to  Pepperdine's Business School, ranked #63.

November 12, 2014 in Law School Rankings, Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 552

Continue reading

November 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, November 11, 2014

Steuerle Presents How to Restore Fiscal Freedom and Rescue Our Future Today at Columbia

DeadC. Eugene Steuerle (Urban Institute) presents Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex RaskolnikovDavid Schizer, and Wojciech Kopczuk:

Eugene Steuerle argues that these seemingly separable economic and political problems are actually symptoms of a common disease, one unique to our time. Unless that disease and the history of how it spread over time is understood, Steuerle says, it is easy for politicians and voters alike to fall prey to believing in simple but ineffective nostrums, hoping that a cure lies merely in switching political parties or reducing the deficit or protecting and expanding our favorite program.

Despite the despairing claims of many, Steuerle points out that we no more live in an age of austerity than did Americans at the turn into the twentieth century with the demise of the frontier. Conditions are ripe to advance opportunity in ways never before possible, including doing for children and the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains. Recognizing this extraordinary but checked potential is also the secret to breaking the political logjam that —as Steuerle points out —was created largely by now dead (or retired) men.

November 11, 2014 in Book Club, Colloquia, Scholarship, Tax | Permalink | Comments (0)

Predict Your Law School Class Rank Online Calculator

Rob Anderson (Pepperdine) has unveiled a nifty Predict Your Law School Class Rank Online Calculator:

This is a law school class rank calculator that uses publicly available data to predict law school class rank based on LSAT and undergraduate GPA. The calculator itself is fairly accurate for LSATs and GPAs that are between the 25th and 75th percentiles for each school. Its accuracy decreases for very low or very high LSATs or GPAs for a particular school.

Continue reading

November 11, 2014 in Legal Education | Permalink | Comments (0)

Buchanan: Legal Scholarship Makes the World a Better Place

WorldNeil H. Buchanan (George Washington), Legal Scholarship Makes the World a Better Place:

This article responds to claims that law professors are engaged in scholarly pursuits that fail to serve important social functions. I argue that legal scholarship “matters” in important ways, and in particular that the legal academy has improved its service to society by embracing interdisciplinary approaches to studying the law.

November 11, 2014 in Legal Education, Scholarship, Tax | Permalink | Comments (3)

France To Investigate ‘The Invisible Women’s Tax’

Think Progress, France To Investigate ‘The Invisible Women’s Tax’:

France’s finance ministry will investigate why products that are targeted to women cost more than ones targeted to men, following a petition that gathered over 30,000 signatures.

A campaign organized by the women’s group Georgette Sand found that products such as shampoo and razors that are advertised as “female” cost more than identical products marketed to men. They have called on stores, such as the chain Monoprix, where many examples of the gendered pricing was found, to get rid of what they call “invisible woman’s tax.” Monoprix has argued that the gap exists because there are additional manufacturing costs involved in women’s products.

The Local, Women in France Forced to Pay Hidden 'Pink Tax'

(Hat Tip: Francine Lipman.)

November 11, 2014 in Tax | Permalink | Comments (0)

Harvey: Corporate Inversions -- Background, Causes, and Policy Options

J. Richard Harvey (Villanova), Corporate Inversions -- Background, Causes, and Policy Options:

Corporate inversions have been front page news during most of 2014. In addition to providing background on inversions, this presentation discusses why inversions are occurring and various policy options.

Continue reading

November 11, 2014 in Scholarship, Tax | Permalink | Comments (0)

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 944 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through November 1, 2014) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):







Reuven Avi-Yonah (Mich.)


Reuven Avi-Yonah (Mich.)



Paul Caron (Pepperdine)


Ed Kleinbard (USC)



Louis Kaplow (Harvard)


D. Dharmapala (Chicago)



D. Dharmapala (Chicago)


Richard Ainsworth (BU) 



Vic Fleischer (San Diego)


Paul Caron (Pepperdine)



James Hines (Michigan)


Omri Marian (Florida)



Ted Seto (Loyola-L.A.)


Robert Sitkoff (Harvard)



Richard Kaplan (Illinois)


Katie Pratt (Loyola-L.A.)



Ed Kleinbard (USC)


Jen Kowal (Loyola-L.A.)



Katie Pratt (Loyola-L.A.)


David Gamage (UCBerkeley)



Dennis Ventry (UC-Davis)


Bridget Crawford (Pace)



Carter Bishop (Suffolk)


Brad Borden (Brooklyn)



Jen Kowal (Loyola-L.A.)


Jeff Kwall (Loyola-Chicago)



David Weisbach (Chicago)


Louis Kaplow (Harvard)



Chris Sanchirico (Penn)


Dan Shaviro (NYU)



Richard Ainsworth (BU)


Francine Lipman (UNLV)



Robert Sitkoff (Harvard)


James Hines (Michigan)



Brad Borden (Brooklyn)


Dick Harvey (Villanova)



Francine Lipman (UNLV)


Vic Fleischer (San Diego)



Bridget Crawford (Pace)


Richard Kaplan (Illinois)



David Walker (Boston Univ.)


Ted Seto (Loyola-L.A.)



Herwig Schlunk (Vanderbilt)


Carter Bishop (Suffolk)



Dan Shaviro (NYU)


Chris Sanchirico (Penn)



Wendy Gerzog (Baltimore)


Gregg Polsky (North Carolina)



Ed McCaffery (USC)


David Weisbach (Chicago)


Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

Continue reading

November 11, 2014 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

WSJ: MBE, Brooklyn Dean Debate Cause of Declining Bar Pass Rates: Students or the Test?

Wall Street Journal Law Blog, Decline in Bar Exam Scores Sparks War of Words:

A steep decline in bar exam scores on the most recent test has led to an outbreak of finger-pointing over who’s to blame for the downward swing.

In a sharply worded letter, the dean of Brooklyn Law School on Monday reproached the head of a national bar exam group for suggesting to law school leaders that their graduates who took the July exam were less prepared than students who sat for the test in previous years.

The dean’s letter came in response to an October memo by Erica Moeser, the president of the National Conference of Bar Examiners, addressed to law school deans across the country in which she defended the integrity of the group’s exam and raised concerns about the ability of the would-be lawyers who took it. ...

Continue reading

November 11, 2014 in Legal Education | Permalink | Comments (5)