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 Deliberative Process Privilege, Robert D. Probasco, John Galotto, Michael Kearns, Richard Goldman

Robert Probasco

No abstract provided.

The Limitations Of Retirement Plan Law, Peter M. Van Zante

ExpressO

It is widely believed that employers determine whether or not their employees receive retirement benefits and the type and amount of any benefits that are received. This belief is mistaken. While sponsorship of a retirement plan is a voluntary choice on the part of the sponsoring employer and the sponsoring employer directly controls the type of plan and the level of benefits provided, the employer's choices on these matters are controlled by its employees' preferences for different forms of compensation. An employer must spend the funds available for employee compensation so as to provide its employees with those forms of …

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. …

Toward A Small Donor Democracy: The Past And Future Of Incentive Programs For Small Political Contributions, Thomas J. Cmar

ExpressO

Political contribution incentive programs are a promising, under-explored means to address the problem of political equality in the American system of campaign finance. If properly designed, these programs -- which include tax credits, refunds, and vouchers -- could allow all Americans to participate on an equal basis in the crucial early-stage decisions that determine which candidates decide to run and are able to compete effectively. This article, written on behalf of U.S. PIRG, proposes a tax credit for political contributions as a first step toward building a "small donor democracy."

Federal Taxation, Donald R. Bly, Michael H. Plowgian

Mercer Law Review

In 2003 the United States Court of Appeals for the Eleventh Circuit published few tax decisions of any importance. In the Circuit's highest profile tax case of 2003, the court vacated a lower court decision that had held section 527(j) of the Internal Revenue Code unconstitutional. In other procedural cases, the court held that Rule 183 of the Tax Court Rules of Practice and Procedure did not raise due process concerns, and, in a case of first impression, ruled that in determining the total revenue lost in cases concerning fraudulent corporate and personal returns, the losses from unreported corporate income …

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 …

Fuel Efficiency: The Disconnect Between Environmental Policy And Tax Policy, John J. Marciano

ExpressO

The recent high gas prices in America have intensified the debate over oil and gas efficiency, use, and reserves. As the national average for a gallon tops $2.10, Congress and the President strive to find a common position to foster energy independence, protect the environment, and bolster the struggling economy.

President Bush’s energy policy and recent Senate and House bills have not contemplated their effects on the environmental state of our nation or its impact on the internal revenue code. In this time of uncertainty, energy independence and measured use of resources may be at odds, but must we stray …

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 …

Fishing For Rainbows, The Fsc Repeal And Extraterritorial Income Exclusion Act, Stuart Smith

San Diego International Law Journal

On August 30, 2002, the final decision was released in the case of United States-Tax Treatment for "Foreign Sales Corporations". The World Trade Organization arbitration panel report authorizes the European Communities to levy $4.043 billion in annual trade sanctions against imports from the United States because of a provision in the U.S. tax code. "The FSC Repeal and Extraterritorial Income Exclusion Act of 2000", the most recent of 40 years worth of half-hearted attempts by the United States to comply with world trading body regulations, is the current offender. According to the arbitration panel, the act subsidizes foreign sales by …

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 …

Corporate Cancellation Of Indebtedness Income And The Debt-Equity Distinction, Katherine Pratt

ExpressO

This Article considers whether a corporation should have cancellation of indebtedness income (COD income) when it issues new stock or debt in exchange for its outstanding debt. It challenges the conventional wisdom about our current tax treatment of these exchanges and suggests alternative approaches. It also stresses the relationship between the COD income rules and the corporate interest deduction rules, and highlights the error correction function of the COD income rules. The current COD income rules applicable in debt-for-debt and stock-for-debt exchanges were enacted without regard for certain economic incentives they create. Consideration of these economic incentives may warrant a …

Making A List And Checking It Twice: Must Tax Attorneys Divulge Who's Naughty And Nice?, Richard Lavoie

ExpressO

This article analyzes the ability of tax attorneys to shield a client’s identity from disclosure to the Internal Revenue Service under the attorney-client privilege. The article concludes that, on policy grounds, the attorney-client privilege should be limited in the context of tax planning. Consequently, client identity should not be privileged irrespective of whether a tax shelter is involved. The article also concludes that the privilege would not be available under the current judicial approach to client identity questions. As a result, recent regulations requiring tax attorneys to maintain lists of clients engaging in specified tax motivated transactions represent an appropriate …

Tax, Corporate Governance, And Norms, Steven Bank

ExpressO

This paper examines the use of federal tax provisions to effect changes in state law corporate governance. There is a growing academic controversy over these provisions, fueled in part by their popularity among legislators as a method of addressing the recent spate of corporate scandals. In order to better understand and distinguish between the possible uses of tax as a tool of corporate governance, this paper takes a historical approach by focusing on two measures enacted during the New Deal – the undistributed profits tax in 1936 and the overhaul of the tax-free reorganization provisions in 1934 – and considers …

A Good Old Habit, Or Just An Old One? Preferential Tax Treatment For Reorganizations, Yariv Brauner

BYU Law Review

No abstract provided.

The E.L. Wiegand Lecture: Administrability-Based Tax Simplification, Steve R. Johnson

Nevada Law Journal

No abstract provided.

The Dividend Divide In Anglo-American Corporate Taxation, Steven Bank

ExpressO

Why did the U.S. and U.K. -- two countries with similarly developed economies and corporate cultures -- originally diverge in their approaches to corporate income taxation and why have they continued to vacillate on this issue over time? This Article concludes that it is a result of a divergence in firm dividend policies in the two countries. While firms in both countries maintained liberal dividend policies during the nineteenth century, U.S. firms began to retain more earnings after the turn-of-the-century and this necessitated a change in the method of taxing corporate income. In subsequent years, both countries have undergone major …

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, …

Review Of Foundations Of International Income Taxation, By Michael Graetz, Hugh Ault

Hugh J. Ault

No abstract provided.

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.

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.

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.