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Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue

Law & Economics Working Papers Archive: 2003-2009

This Article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the tax law is substantively uncertain – that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, two interesting questions arise: First, as a normative matter, how certain should a taxpayer be before she relies on a particular interpretation of a substantively uncertain tax rule? That is, if a particular position is not clearly prohibited, but neither is it clearly allowed, under the tax law, what is the appropriate threshold …

Tribal Bondage: Statutory Shackles And Regulatory Restraints On Tribal Economic Development, Gavin Clarkson

Law & Economics Working Papers Archive: 2003-2009

Upwards of $50 billion in capital needs go unmet each year in Indian Country in such vital sectors as infrastructure, community facilities, housing, and enterprise development, in part due to the restrictions imposed on tribal access to the capital markets, specifically the ability of tribal governments to issue tax-exempt debt. Section 7871 of the Internal Revenue Code requires tribal tax-free bond proceeds to be used only for “essential governmental functions,” a restriction not applicable to state and municipal bonds, and Section 7871(e) further limits the scope of available tax-exempt bonding to activities “customarily performed by State and local governments with …

Insider Trading Laws And Stock Markets Around The World (Former Title: Do Insider Trading Laws Matter? Some Preliminary Comparative Evidence), Laura N. Beny

Law & Economics Working Papers Archive: 2003-2009

The primary goal of this article is to bring empirical evidence to bear on the largely theoretical law and economics debate about insider trading. The article first summarizes various agency cost and market theories of insider trading propounded over the course of this perennial debate. The article then proposes three testable hypotheses regarding the relationship between insider trading laws and several measures of stock market performance. Using international data, the paper finds that more stringent insider trading laws are generally associated with more dispersed equity ownership, greater stock price accuracy and greater stock market liquidity. These results suggest the appropriate …

Lawful Personal Use, Jessica D. Litman

Law & Economics Working Papers Archive: 2003-2009

Whenever someone makes a copy of a copyrighted work, that copy is either authorized by the copyright owner, permitted by some express provision of the copyright statute (such as the ephemeral copy provision in section 112 or the fair use provision in section 107), or infringing. That's what we tell our colleagues and what we teach our students. But most of us don't actually believe it, and this article argues that that understanding of the copyright law is wrong.

I make this argument by examining the copyright law through the lens of personal use. Unlike many other jurisdictions, the United …

Greed And Pride In International Bankruptcy: The Problems And Proposed Solutions To “Local Interests”, John A. E. Pottow

Law & Economics Working Papers Archive: 2003-2009

From just-enacted (2005) chapter 15 of the U.S. Bankruptcy Code to the U.K. Enterprise Act of 2002, legislative reforms to international bankruptcy are on the rise. One of the thorniest issues facing scholars and policymakers alike in these efforts is what to do with the nettlesome problem of “local interests.” What exactly are these “local interests,” and what is it that we are we trying to protect? Literature to date has been elusive in pinning this down and has offered, for the most part, only undifferentiated anxiety that an international bankruptcy regime may impinge undesirably upon “local concerns.” This article …

Affirmative Action In American Law Schools: A Critical Response To Richard Sander's "A Reply To Critics", Richard O. Lempert, William C. Kidder, Timothy T. Clydesdale, David L. Chambers

Law & Economics Working Papers Archive: 2003-2009

Richard Sander’s Stanford Law Review article, “A Systemic Analysis of Affirmative Action in American Law Schools,” has generated considerable attention and criticism. This included a critical essay in the May 2005 Stanford Law Review by the four of us, as well as others in the same issue by Professors Ian Ayres and Richard Brooks, Michele Landis Dauber, and David Wilkins. Sander’s “A Reply to Critics” also appeared in the same issue. For those following this empirical debate about the costs and benefits of affirmative action, we provide this working paper as a response to Sander’s “A Reply to Critics.” We …