Law Commons^™

Risk, Rents, And Regressivity: Why The United States Needs Both An Income Tax And A Vat, Reuven S. Avi-Yonah

Articles

In this article, Prof. Avi-Yonah argues that the legal academic debate about fundamental tax reform from 1974 onward has been skewed by the assumption that a consumption tax must replace the income tax. He addresses three of the major issue in recent writings on the income/consumption tax debate, and shows how none of the arguments in favor of the consumption tax are conclusive. Avi-Yonah also addresses the various consumption tax proposals that have been made and shows that they are all deficient in comparison with a VAT, as well as failing to achieve the goals of an income tax. Finally, …

Further Thoughts On Kanter And Ballard, Steve R. Johnson

Scholarly Publications

On December 7, 2004, the Supreme Court will hear oral arguments in the consolidated Kanter and Ballard cases. The Tax Court had substantially upheld the IRS’s determinations of large deficiencies and fraud penalties against several taxpayers. The taxpayers argued in part that the Tax Court's application of its Rule 183 violated both due process and applicable statutes. I disagreed with those arguments then, and I continue to do so now. On appeal, the taxpayers' challenges to Rule 183 were rejected by the Fifth, Seventh, and Eleventh Circuits. The decisions of those circuits are sound and should be affirmed.

Both an …

Recent Developments In Federal Income Taxation, Ira B. Shepard

William & Mary Annual Tax Conference

No abstract provided.

Could One Simple Election Solve The Attorney Fee Problem?, Jeffrey H. Kahn

Scholarly Publications

No abstract provided.

The Matthew Effect And Federal Taxation, Martin J. Mcmahon Jr.

UF Law Faculty Publications

The “Matthew Effect” is a synonym for the well-known colloquialism, “the rich get richer and the poor get poorer.” This Article is about the Matthew Effect in the distribution of incomes in the United States and the failure of the federal tax system to address the problem. There has been a strong Matthew Effect in incomes in the United States over the past few decades, with an increasing concentration of income and wealth in the top one percent. Nevertheless, there has been a continuing trend of enacting disproportionately large tax cuts for those at the top of the income pyramid. …

The U.S. Consumption Tax: Evolution, Not Revolution, Daniel S. Goldberg

Faculty Scholarship

The article expresses the view that the current Internal Revenue Code has evolved into a hybrid income tax and consumption tax. It begins by explaining the difference between an income tax and a consumption tax and provides the backgrounds of the alternative forms of consumption tax: (1) consumed income, (2) yield exemption, and (3) point-of-sale taxation. Under the consumed income tax model of consumption tax, the individual taxpayer includes all items of income, both from labor and from capital, in its tax base, and then subtracts or deducts the portion of that income that he saves or invests. The resulting …

Untaxing Taxes: An Attempt To Compare Philippine And Us Laws On Tax-Free Corporate Reorganizations, Salvador B. Belaro Jr.

Cornell Law School J.D. Student Research Papers

In comparing tax-free corporate reorganizations between Philippine and US law, the author wishes to learn how the US legal system would approach similar tax situations in the Philippines so he could apply it in the practice of law. Labyrinthine as they may be, US tax rules are so well-developed that they are excellent subjects for a comparative study. This paper validates the fact that Philippine and US tax laws on tax-free corporate exchanges have a lot in common. It also shows that in a lot of areas where Philippine law is silent, US tax laws have already devoted extensive treatment …

The Ingenious Kerry Tax Plan, Reuven S. Avi-Yonah

Articles

The tax plan proposed by Democratic presidential candidate John Kerry at Wayne State University on March 26 is an ingenious set of ideas to encourage domestic job creation. Its greatest strength, however, may be its contribution to long-term economic growth, fairness, and tax law simplification. In this article I will first describe the Kerry proposal, then analyze its advantages, and finally address some counterarguments.

What Is Fiscal Responsibility? Long-Term Deficits, Generational Accounting, And Capital Budgeting, Neil H. Buchanan

Rutgers Law School (Newark) Faculty Papers

This article assesses three basic approaches to assessing the future effects of the government’s fiscal policies: traditional measures of the deficit, measures associated with Generational Accounting, and measures derived from applying Capital Budgeting to the federal accounts. I conclude that Capital Budgeting is the best of the three approaches and that Generational Accounting is the least helpful. Acknowledging that there might be some value in learning what we can from a variety of approaches to analyzing fiscal policy, I nevertheless conclude that Generational Accounting is actually a misleading or--at best--empty measure of future fiscal developments. The best approach to providing …

Administrability-Based Tax Simplification, Steve R. Johnson

Scholarly Publications

The Boyd School of Law is a vibrant place, and our trajectory continues to move strongly in the right direction. One of the things that has been so important to us is the excellent support we have received from so many in and around Nevada. An example of that support brings us together tonight. The Wiegand Foundation has endowed a professorship at the Law School to support the study of tax law. I am fortunate to be the current holder of that professorship. This address is the first formal event memorializing the Wiegand Foundation’s support for scholarship and for Law …

The Tax Efficiency Of Stock-Based Compensation, Michael S. Knoll

All Faculty Scholarship

Over the last two decades, the use of company stock and options thereon to compensate and motivate employees has become widespread. Defenders of stock-based compensation argue that it creates value for shareholders because it encourages employees to work harder and with a common purpose. Critics, however, are less sure and stock-based compensation has come under heavy attack from investors, commentators and academics. Critics argue that it imposes excessive risk on employees and overstates net income. To date, there has been very little detailed legal or economic analysis of the tax efficiency of stock-based compensation. What serious work there has been …

Can Treasury Overrule The Supreme Court?, Gregg D. Polsky

Scholarly Works

This article considers whether the Treasury's check-the-box regulations, which have been widely praised by tax practitioners, are valid. These regulations generally allow any unincorporated entity to elect whether it will be treated as a corporation or a partnership for tax purposes. When these regulations were first proposed, there was some debate as to whether such an elective regime was foreclosed by the statutory scheme, which requires that "associations" be taxed as corporations. This article argues that the focus of this debate was misplaced because, even assuming that the statutory scheme itself was sufficiently ambiguous as to permit an elective regime, …

Single And Paying For It, Shari Motro

Law Faculty Publications

Professor Motro argues that present-day income tax benefits to married couples, such as the privilege to file jointly, are unfair to unmarried taxpayers with or without children, and challenges these policies' societal values of encouraging marriage and subsidizing the support of children born to married couples.

Proposed Regulations On Noncompensatory Options: A Light At The End Of The Tunnel, Walter D. Schwidetzky

All Faculty Scholarship

It has become increasingly common for partnerships to issue options. There is a dearth of authority on the federal tax treatment of options to acquire interests in partnerships. In this context, there are two main categories of options, services options and noncompensatory options. Services options, unsurprisingly, are options to acquire partnership interests where the option is received in exchange for services. Noncompensatory options cover the rest of the waterfront. The simplest version of the latter would be partnership analog to normal options found outside the partnership context: the option holder pays the partnership an option premium to acquire an option …

Fighting Medicare Fraud In Long-Term Care Hospitals-Within-Hospitals: Oig Documents Ongoing Failures While Industry Groups Complain, Susan E. Cancelosi

Law Faculty Research Publications

No abstract provided.

Congress, Public Values, And The Financing Of Private Choice, Mary L. Heen

Law Faculty Publications

This Article examines the financing dimension of private choice, with a focus on Congress’s taxing and spending decision-making processes. The Article begins with an overview of the financing and performance dimensions of privatization decisions, followed by an analysis of how taxation relates to both dimensions. Private choice can be financed individually, that is, paid for by an individual’s own resources, facilitated by general tax reduction. Alternatively, private choice can be financed collectively by using tax revenues (or borrowed funds) to pay for privately provided goods and services. The tendency in political debate to conflate those two forms of financing, as …

Revisiting The Roles Of Legal Rules And Tax Rules In Income Redistribution: A Response To Kaplow & Shavell, Ronen Avraham, David Fortus, Kyle D. Logue

Articles

The debate over whether legal rules should be used to redistribute resources in society or whether redistribution should be left exclusively to the tax-and-transfer system has long occupied philosophers, political theorists, economists, and legal academicians. For many years, the conventional wisdom on this question among legal scholars seemed to be that blanket generalizations were inappropriate. All systems of redistribution distort individuals' choices and entail administrative costs. Therefore, the argument went, a universal preference for using the tax-and-transfer system to redistribute is not justified. Rather, the choice among institutions to accomplish society's redistributive goals was considered to be "an empirical one …

The Trouble With Taxes: Fairness, Tax Policy, And The Constitution, Leo P. Martinez

Faculty Scholarship

No abstract provided.

Tax Legislation And Democratic Discourse: The Rhetoric Of Revenue And Politics, Leo P. Martinez

Faculty Scholarship

No abstract provided.

Must The Reports Of Tax Court Special Trial Judges Be Disclosed?, Leandra Lederman

Articles by Maurer Faculty

No abstract provided.

Tax Protest, A Homosexual, And Frivolity: A Deconstructionist Meditation, Anthony C. Infanti

Articles

In this contribution to a symposium entitled Out of the Closet and Into the Light: The Legal Issues of Sexual Orientation, I recount and then ponder the story of Robert Mueller. Mueller, a gay man, spent more than a decade protesting the discriminatory treatment of gays and lesbians under the Internal Revenue Code. As a result of his tax protest, Mueller was jailed for more than a year, and then was twice pursued by the IRS for taxes and penalties. In pondering Mueller's story, I consider it both as a telling example of the forcible closeting of gay and lesbian …

Recent Developments In Federal Income Taxation: The Year 2003, Ira B. Shepard, Martin J. Mcmahon Jr.

UF Law Faculty Publications

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during 2003 - and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted. Amendments to the Internal Revenue Code generally are not discussed except to …

Abandoning Principles: Qualified Tuition Programs And Wealth Transfer Taxation Doctrine, Wayne M. Gazur

Publications

In 1996 Congress gave its imprimatur to a modest qualified tuition program provision. Over the course of the next five years the provision was expanded, providing additional wealth transfer taxation and income taxation benefits. This essay proposes that unless limited, such benefits are inconsistent with established taxation principles and also have the potential to undermine the integrity of the wealth transfer tax structure and the progressive nature of the income tax.

Taxing Political Donations: The Case For Corrective Taxes In Campaign Finance, David Gamage

Articles by Maurer Faculty

Command-and-control regulations are generally thought to be inferior to incentive-based alternatives. This essay proposes an incentive-based approach for regulating campaign finance. In place of our current regime of contribution ceilings, the essay calls for a graduated system of contribution taxes. Rather than capping the size of political donations at a specified dollar level, we should tax donations based on a schedule of graduated rates - the larger the size of a contribution, the higher the level of taxation.

Contribution taxes generate two primary advantages over contribution ceilings. First, contribution taxes preserve more total surplus. This surplus can be shared by …

"More Mighty Than The Waves Of The Sea": Toilers, Tariffs, And The Income Tax Movement, 1880-1913, Ajay K. Mehrotra

Articles by Maurer Faculty

No abstract provided.

Guaranteed Payments Made In Kind By A Partnership, Douglas A. Kahn, Faith Cuenin

Articles

If a partnership makes a payment to a partner for services rendered in the latter's capacity as a partner or for the use of capital, to the extent that the payment is determined without regard to partnership income, it is characterized by the Internal Revenue Code as a "guaranteed payment" and is treated differently from other partnership distributions.' In addition, if a partnership makes a payment in liquidation of a retiring or deceased partner's interest in the partnership, part of that payment may be characterized as a guaranteed payment by section 736(a)(2). We will discuss in Part VI of this …

Exchanges Of Multiple Stocks And Securities In Corporate Divisions Or Acquisitive Reorganizations, Douglas A. Kahn, Jeffrey S. Lehman

Articles

If specified conditions are satisfied, the Internal Revenue Code provides nonrecognition for gain or loss realized when stocks and securities of one corporation are exchanged for stocks and securities of another corporation. When the exchange is made as part of a corporate division (a split-off or a split-up), the principal nonrecognition provision is section 355; and when the exchange is made as part of an acquisitive reorganization, the principal nonrecognition provision is section 354. Complete nonrecognition is provided only when stock is exchanged solely for stock and securities are exchanged solely for securities of no greater principal amount. If, in …

When Are Capitalization Exceptions Justified?, Ethan Yale

Georgetown Law Faculty Publications and Other Works

It is a widely accepted general principle that a taxpayer should capitalize an expenditure that produces a benefit lasting beyond the current tax period. Yet rules putting this principle into practice are among the most controversial in all of federal income taxation. Many argue that a retreat from the general principle is warranted when designing capitalization rules, and even those who argue that capitalization rules ought to be sweeping usually conclude that exceptions are necessary or desirable. For instance, most commentators accept uncritically that expenses incurred to procure certain intangible capital should be expensed, as under current law, without exploring …