Law Commons^™

The Political Economy Of Taxation: A Critical Review Of A Classic, Nancy Staudt

Faculty Working Papers

This book review reexamines Henry Simons famous contribution to the tax policy literature, "Personal Income Taxation: The Definition of Income as Problem in Fiscal Policy" (1938). It argues that while Professor Simons was concerned with tax fairness and the redistribution of income, he adopted a definition of income that worked to undermine the interests of many of the poor individuals in society that he sought to support.

The Judicial Power Of The Purse: How Courts Fund National Defense In Times Of Crisis (An Introduction), Nancy Staudt

Faculty Working Papers

This introduction to a forthcoming book (Spring 2011) briefly describes judges' hidden purse powers along with a theory for how and why judges will utilize these powers to keep the nation safe in times of foreign policy crisis. Ultimately, the book-length project investigates the empirical implications of the theory with both qualitative and quantitative data and finds substantial support for the idea that judges's use their financial powers differently in times of peace and in times of crisis

Tax Theory And "Mere Critique": A Reply To Professor Zelenak, Nancy Staudt

Faculty Working Papers

In this symposium essay, I briefly explore the usefulness of critical scholarship generally and then point to the manner in which this type of analysis can (and does) advance Professor Zelenak's aim of devising technical solutions to difficult policy problems. I then turn to Zelenak's critique of my article, "Taxing Housework." I argue that far from undermining my proposal to tax imputed income, Zelenak's work highlights several reasons for considering the proposal as an alternative to the existing tax structure. Importantly, I do not claim that taxing women's household labor is a perfect solution to the social and economic problems …

The Theory And Practice Of Taxing Difference, Nancy Staudt

Faculty Working Papers

This is a review essay that examines Professor Edward McCaffery's important book, "Taxing Women." It argues that while McCaffery provides a detailed and nuanced analysis of the feminist and economic issues, his work is problematic in several ways. First, it is not clear that the optimal theory of taxation leads to the policy reform he proposes-it may be both underinclusive and overinclusive. Second, even if McCaffery has identified a clear economic rationale for taxing married women at a lower rate than men and single women, feminists may object to this proposed tax structure on a number of grounds. Finally, McCaffery's …

The Hidden Costs Of The Progressivity Debate, Nancy Staudt

Faculty Working Papers

In this Article, I argue that.by reaching the agreement that the poor should have no tax liability, the contest over progressivity has centered improperly on the rights and responsibilities of relatively wealthy citizens. The wealthy are widely perceived to have valuable property that, if shared with society, will enable the smooth operation of the democratic state. At the same time, the wealthy are perceived to have liberty interests, which if violated, could lead to the ruin of the domestic economy

Although the debate over progressivity has lasted for more than a century, traditional tax theorists have limited their discussion to …

Taxing Housework, Nancy Staudt

Faculty Working Papers

This article examines the tax policy rationale for excluding non-market household labor from the tax base and argues that the conventional rationals no longer withstand scrutiny. The article goes on to argue that it is possible to include non-market household labor into the tax base, while at the same time avoiding the imposition of costs upon the (mostly) women who supply the labor. Moreover, and mort important, tax policy reform along these line would increase householder laborers' access to public retirement benefits and signal the important of the work to society generally.

U.S. International Tax System At A Crossroads, Barbara Angus, Tom Neubig, Eric Solomon, Mark Weinberger

Northwestern Journal of International Law & Business

The current U.S. international tax system, the administration's international tax proposals, and other potential international tax reforms all have ramifications for U.S. businesses, American workers, and the U.S. economy that must be fully discussed and understood. This report focuses on some of the most important facts and perspectives that should be considered as part of that discussion. This process starts by asking, at a minimum, questions like these: (1) How have the dynamics of the global economy changed? (2) What role should differences between the U.S. tax system and those of other countries play in determining an advantageous international tax …

Economic Trends And Judicial Outcomes: A Macrotheory Of The Court, Thomas Brennan, Lee Epstein, Nancy Staudt

Faculty Working Papers

In this symposium essay, we investigate the effect of economic conditions on the voting behavior of U.S. Supreme Court Justices. We theorize that Justices are akin to voters in political elections; specifically, we posit that the Justices will view short-term and relatively minor economic downturns—recessions—as attributable to the failures of elected officials, but will consider long-term and extreme economic contractions—depressions—as the result of exogenous shocks largely beyond the control of the government. Accordingly, we predict two patterns of behavior in economic-related cases that come before the Court: (1) in typical times, when the economy cycles through both recessionary and prosperous …

Taxation And Gendered Citizenship, Nancy Staudt

Faculty Working Papers

This essay notes that the feminist tax policy theorists have made numerous important contributions to our understanding of tax policy's affect on women's lives and experiences. It argues that in doing so, the extant literature has also prioritized the idea of citizenship rights but has failed to acknowledge the importance of citizenship obligations and duties.

Constitutional Politics And Balanced Budgets, Nancy Staudt

Faculty Working Papers

Unbalanced budgets have sparked decades of debate among legislators, scholars, and the public at large. Although the controversy has abated somewhat in recent years, many continue to believe that Congress has a tendency to pursue a level of public debt that is both inefficient and unfair. Foremost among those who criticize the federal budgeting process are fiscal constitutionalists, a group of public choice scholars who believe the constitutional constraints are the only means by which the public will obtain protection from legislative fiscal irresponsibility. This article explores the public choice argument for a balanced budget amendment and argues that it …

Taxation Without Representation, Nancy Staudt

Faculty Working Papers

Poll taxes are unconstitutional and yet Americans continue to link political rights to economic status. When taxpayers claim, "We pay taxes and therefore should decide how public monies are spent," they claim a privileged position in society based on their monetary contributions to the state and federal fiscal position that, by implication, nontaxpaying Americans should not have. Not only do taxpayers claim they deserve special political privileges, but the law itself continues to couple political rights to taxpaying status in ways that legal scholars have largely left unexplored. This article examines a range of political benefits tied to the payment …

International Tax Reform Should Begin At Home: Replace The Corporate Income Tax With A Territorial Expenditure, William B. Barker

Northwestern Journal of International Law & Business

The present U.S. system of international taxation is riddled with problems because it does not satisfy critical principles of economics, justice, or common sense. It fails to accomplish the most important goals that an international system should achieve - that is, protecting the domestic tax base in a way that fosters domestic economic development and the creation of jobs. This paper explores alternatives to the present system to see if they do a better job. Some of the alternatives fail for the same reasons as the present system because they are predicated on the same outmoded theories. Some are clearly …

President's Economic Recovery Advisory Board: Suggested Considerations In Fundamental Reform Of The United States Tax Treatment Of Income From Cross Border Trade And Investment, Robert H. Dilworth

Northwestern Journal of International Law & Business

The President's Economic Recovery Advisory Board ("PERAB") has as part of its mandated inquiry the reform of the U.S. tax treatment of income from cross border trade and investment. This paper sets forth a short set of recommendations as to tax reform methodology and some substantive proposals. Tax reform should not "start over," or undertake significant changes, without a fairly detailed understanding of what the present regime actually does, or does not do, and identifying the relationship (if any) between the various existing provisions and whatever "the problem" is perceived to be. The present architecture results from the striking of …

Incremental International Tax Reform: A Review Of Selected Proposals, David L. Cameron, Philip F. Postlewaite

Northwestern Journal of International Law & Business

Business people, tax practitioners, and legal academics generally agree that the United States' international tax regime is broken. Criticisms abound that the system is overly complicated, disadvantageous to American businesses competing in a global economy, and frequently subject to manipulation and abuse. In the recent past, individuals and groups across the political spectrum have proposed numerous reforms to address these problems, some of which seek simply to modify current requirements while others jettison the current system in favor of dramatic alternatives. Two of the more ambitious proposals regarding international tax reform have centered on implementing changes that would significantly modify …

Credit Vs. Exemption: A Comparative Study Of Double Tax Relief In The United States And Japan, Lawrence Lokken, Yoshimi Kitamura

Northwestern Journal of International Law & Business

The overriding issue in international taxation is the problem of double taxation. Under the tax laws of most countries, income may be taxed on the basis of either residence or source. That is, a country may tax residents of the country on worldwide income and may tax nonresidents on income from sources within the country. Thus, if a resident of one country has income from a business activity or investment in another country, the person may be taxed on the income on a residence basis by its home country and on a source basis in the other country. Most countries …

Transfer Pricing And Fin 48: Removing Uncertainty Through The Advanced Pricing Agreement Process, Christopher Capuzzi

Northwestern Journal of International Law & Business

The increasing globalization of companies is indisputable, and the multinational enterprise offers many heuristic challenges. Among these are jurisdiction-specific taxation and accounting standards and principles. Enterprises often operate without regard to legal entity structures but rather along business lines. While entities may operate without regard to jurisdictional lines, local taxing and accounting regimes are steadfast on ensuring adherence to their respective principles. Chief among these is ensuring that there is a proper allocation of the tax base. The proper allocation of the tax base has long been at the forefront of concerns, so much so that normative transfer pricing principles …

Inversions Under Section 7874 Of The Internal Revenue Code: Flawed Legislation, Flawed Guidance, Jefferson P. Vanderwolk

Northwestern Journal of International Law & Business

The Obama Administration's international tax proposals would, if enacted, be likely to increase the U.S. tax costs of many multinational groups that are owned by a U.S. entity. One possible response by the managers or owners of such a group would be to restructure the group via an inversion transaction so that the group would have a foreign corporate parent instead of a US parent entity. Inversions were in vogue in the late 1990s and the early years of this decade until Congress passed the American Jobs Creation Act of 2004, adding section 7874 to the Internal Revenue Code. The …