Law Commons^™

Keep Charitable Oversight In The Irs, Philip Hackney

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Critics are increasingly calling for Congress to remove charity regulation from the IRS. The critics are wrong. Congress should maintain charity regulation in the IRS. What is at stake is balancing power between the state, charity as civil society, and the economic order. In a well-balanced democracy, civil society maintains its independence from the state and the economic order. Removing charitable jurisdiction from the IRS would blind the IRS to dollars placed in the charitable sector increasing tax and political shelters and wealthy dominance of charities as civil society. A new agency without understanding of, or jurisdiction over, tax cannot …

Public Good Through Charter Schools?, Philip Hackney

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Should nonprofit charter schools be considered “charitable” under § 501(c)(3) of the Internal Revenue Code and be entitled to the benefits that go with that designation (income tax exemption, charitable contribution deduction, etc.)? Current tax law treats them as such; the question is whether there is a good rationale for this treatment. In addition to efficiency and equity, I consider political justice as a value in evaluating tax policy. By political justice, I mean a democratic system that prioritizes the opportunity for more people to have a voice in collective decisions (political voice equality or PVE). Thus, a tax policy …

A More Capacious Concept Of Church, Philip Hackney, Samuel D. Brunson

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United States tax law provides churches with extra benefits and robust protection from IRS enforcement actions. Churches and religious organizations are automatically exempt from the income tax without needing to apply to be so recognized and without needing to file a tax return. Beyond that, churches are protected from audit by stringent procedures. There are good reasons to consider providing a distance between church and state, including the state tax authority. In many instances, Congress granted churches preferential tax treatment to try to avoid excess entanglement between church and state, though that preferential treatment often just shifts the locus of …

Lecture In Human Rights: Tax Policy, Global Economics, Labor And Justice In Light Of Covid-19, Reuven S. Avi-Yonah

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International Tax Law has extensive ramifications on the wealth gap between wealthy developed nations and poor developing nations. This divide in prosperity has been made clear again in the global response to the COVID-19 pandemic. Developing nations are currently ill-equipped to adapt to, and regulate, an equitable system of taxation on a domestic level. A further challenge is the difficulty of ensuring that foreign investors, especially multinational corporations, are able to comply with tax regulations. Developed nations such as the United States and members of the European Union must continue to work with developing nations to reduce tax evasion and …

Dark Money Darker? Irs Shutters Collection Of Donor Data, Philip Hackney

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The IRS ended a long-time practice of requiring most nonprofits to disclose substantial donor names and addresses on the nonprofit annual tax return. It is largely seen as a battle over campaign finance rather than tax enforcement. Two of the nonprofits involved, social welfare organizations and business leagues, are referred to as “dark money” organizations because they allow individuals to influence elections while maintaining donor anonymity. Many in the campaign finance community are concerned that this change means wealthy donors can avoid campaign finance laws and have no reason to fear being discovered. In this Article, I focus on whether …

Political Justice And Tax Policy: The Social Welfare Organization Case, Philip Hackney

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In addition to valuing whether a tax policy is equitable, efficient, and administrable, I argue we should ask if a tax policy is politically just. Others have made a similar case for valuing political justice as democracy in implementing just tax policy. I join that call and highlight why it matters in one arena – tax exemption. I argue that politically just tax policy does the least harm to the democratic functioning of our government and may ideally enhance it. I argue that our right to an equal voice in collective decision making is the most fundamental value of political …

Taxes As Pandemic Controls, Ashley C. Craig, James R. Hines Jr.

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Tax policy can play important roles in limiting the spread of communicable disease and in managing the economic fallout of a pandemic. Taxes on business activities that bring workers or customers into close contact with each other offer efficient alternatives to broad regulatory measures, such as shutdowns, that have been effective but enormously costly. Corrective taxation also helps raise the revenue required to cover elevated government expenditure during a pandemic. Moreover, the restricted consumer choice that accompanies a pandemic reduces the welfare cost of raising tax revenue from higher-income taxpayers, making it a good time for deficit closure. Current U.S. …

Does Capital Bear The U.S. Corporate Tax After All? New Evidence From Corporate Tax Returns, Edward Fox

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This article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957–2013, corporations had been subject to a hypothetical corporate cash flow tax—that is, a tax allowing for the immediate deduction of investments in long-lived assets like equipment and structures—rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995–2013) differed little from that under the hypothetical cash flow tax. This result has three important implications. First, capital owners appear to bear a large fraction of …

America's (D)Evolving Childcare Tax Laws, Shannon Weeks Mccormack

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Proponents have touted the ability of the Tax Cuts and Jobs Act (the TCJA) — enacted in the twilight of 2017 — to help American working families. But while the TCJA expanded some benefits available to parents with dependent children, these parental tax benefits may be claimed regardless of whether or to what extent childcare costs are incurred to work outside the home. To help working parents with these costs (which are often their largest expense), Congress might have turned to two other mechanisms in the tax law — the “child and dependent care credit” and the “dependent care exclusion.” …

Evaluating Beps: A Reconsideration Of The Benefits Principle And Proposal For Un Oversight, Reuven Avi-Yonah, Haiyan Xu

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The Financial Crisis of 2008 and Great Recession that followed have exacerbated income inequality within and between countries. In the aftermath of the economic turbulence, politicians have turned their attention to the twin problems of individual tax evasion and corporate tax avoidance. U.S. legislators enacted the Foreign Account Tax Compliance Act (FACTA), leading to the United States signing a series of Intergovernmental Agreements (IGAs) for the exchange of tax information. The Organization for Economic Co-operation and Development (OECD) developed the Multilateral Agreement for Administrative Assistance in Tax Matters (MAATM) and initiated the Base Erosion and Profit Shifting (BEPS) project to …

Taxation As Regulation: Carbon Tax, Health Care Tax, Bank Tax And Other Regulatory Taxes, Reuven S. Avi-Yonah

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This paper addresses three questions: 1. Is regulation a legitimate goal for taxation? 2. Which tax is best suited for regulation? 3. Would it be better to allocate just one goal per tax among the major taxes (individual and corporate income tax and VAT)? It then analyzes the proposed bank tax and the enacted health care tax as regulatory taxes, and concludes that the first is desirable (as is a carbon tax) but the second is not.

Structuring A Us Federal Vat, Reuven S. Avi-Yonah

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On 18 and 19 February 2009, the American Tax Policy Institute (ATPI) sponsored a conference in Washington, DC, on “Structuring a Federal VAT: Design and Coordination Issues.” The purpose of the conference was to lay the ground for a potential future adoption of a federalVAT in the United States by discussing some of the technical issues related to two broad topics: firstly, how should such a US federal VAT be designed and, secondly, how should it be coordinated with the existing state retail sales taxes (RST). In this article, the author summarized the conference presentations.

Acquiring Innovation, Xuan-Thao Nguyen, Jeffrey A. Maine

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In recent years, the innovation market has witnessed a new business model involving companies that are mere patent holding shells and not operating entities. They have no customers or products to offer, but they do have an aggressive tactic of using patent portfolios to threaten other operating companies with potential infringement litigation. The strategy is executed with the end goal of extracting handsome settlements. Acquisitions of patents for offensive use have become a major concern to operating companies because such acquisitions pose the threats of patent injunction, interrupting the business and crippling further innovation.

While many operating companies today know …

Taxing Consumption And Other Sins, James R. Hines Jr.

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Federal and state governments in the United States use income and payroll taxes as their primary tools to collect revenue. In the rest of the world, governments also use income and payroll taxes, but rely much more heavily than does the United States on taxing consumption. Consumption taxes take many forms, including general sales taxes, value-added taxes, and excise taxes on the consumption of specific items including gasoline, alcohol, tobacco products, firearms, air travel, telephone communication, and others. The U.S. government does not use a value-added tax, making the United States unique among high-income countries and a rarity in the …

Taxing The New Intellectual Property Right, Xuan-Thao Nguyen, Jeffrey A. Maine

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Current, albeit arbitrary, rules exist governing the tax treatment of traditional forms of intellectual property, such as patents, trade secrets, copyrights, trademarks, and trade names. While tax principles exist for these traditional intellectual property and intangible rights, specific tax rules do not exist for new intellectual property rights, such as domain names, that are emerging with the arrival of global electronic commerce transactions on the Internet. This article explores the proper tax treatment of domain name registration and acquisition costs, addressing these parallel questions? Are domain names merely variations of traditional forms of intellectual property and other intangible rights to …

Gifts, Gafts And Gefts: The Income Tax Definition And Treatment Of Private And Charitable 'Gifts' And A Principled Policy Justification For The Exclusion Of Gifts From Income, Douglas A. Kahn, Jeffrey H. Kahn

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Gifts have been given special treatment by the income tax laws since the first post-16th Amendment tax statute was adopted in 1913. The determination of how the income tax law should treat gifts raises a number of issues. For example: should gifts be given special treatment? If so, what should qualify as a gift? Should gifts to a private party be taxable to the donee? Should gifts to a private party be deductible by the donor? Should the donee's basis in a gift of property be determined by reference to the basis that the donor had, and should any modifications …

Why The Corporate Amt Should Be Retained, Reuven S. Avi-Yonah

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The corporate AMT is under attack. Repeal has been proposed by the White House, endorsed by the ABA/AICPA/TEI tax simplification project, and included in the stimulus bill passed by the House of Representatives. Repeal is supported on two principal grounds: That the corporate AMT increases complexity, and that it is pro-cyclical.

The American Dream In Legislation: The Role Of Popular Symbols In Wealth Tax Policy, William S. Blatt

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No abstract provided.

Taxation Of Business Intangible Capital, George Mundstock

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No abstract provided.