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Tribute To Professor Erik Jensen, Deborah A. Geier

Law Faculty Articles and Essays

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The New Flat Tax: A Modest Proposal For A Constitutionally Apportioned Wealth Tax, John Plecnik

Law Faculty Articles and Essays

This Article is the first to propose a solution that complies with the Apportionment Clause without imposing different rates in different states. This Article discusses the practical and administrative issues with implementing a wealth tax in the United States as well as the substantive fairness of such a tax relative to the income and consumption tax regimes. This article describes the Apportionment Clause, so-called direct taxes, and the constitutional issues with implementing a wealth tax. It also describes prior proposals to circumvent the Apportionment Clause for the sake of a wealth tax. It also outlines a modest proposal to pass …

Officers Under The Appointments Clause, John Plecnik

Law Faculty Articles and Essays

Much ink has been spilled, and many keyboards worn, debating the definition of "Officers of the United States" under the Appointments Clause of Article II, Section 2, Clause 2 of the Constitution. The distinction between Officers and employees is constitutionally and practically significant, because the former must be appointed by the President, with or without the advice and consent of the Senate, Courts of Law, or Heads of Departments. In contrast, employees may be hired by anyone in any manner.

Appointments Clause controversies are triggered when a government official who was hired as an employee is accused of unconstitutionally wielding …

The Future Of Corporate Tax Reform: A Debate, Deborah A. Geier, Omni Y. Marian, David S. Miller, Adam H. Rosenzweig

Law Faculty Articles and Essays

Professor Geier participated in a Lincoln-Douglas style debate, where the debaters were assigned different roles, so the opinions expressed were not necessarily their own. On the first point debated, Professor Geier was assigned to argue: The Affirmative: We Need to Tax Corporationsat the Entity Level. Others argued the negative: The United States Should Repeal the Corporate Income Tax. On the second point debated, Professor Geier argued the negative, that Dividend Exemption Is NOT the Best Method of Corporate/Shareholder Integration, and is in fact the worst method. On the third point, Professor Geier argued in the affirmative, that the corporate tax …

Abolish The Inflation Tax On The Poor And Middle Class, John Plecnik

Law Faculty Articles and Essays

Inflation erodes the purchasing power of money and distorts some income tax liabilities upward, which in turn discourages savings and investment. When inflation is caused by the central bank “printing” money to fund deficit spending, it results in a transfer of real wealth from the holders of dollars or assets denominated in dollars to the government and, in normative terms, may be conceptualized as a tax. The effect of the so-called inflation tax is regressive, because low-income taxpayers often lack the sophistication or liquidity to invest in hedges against inflation. Following the double-digit inflation of the late 1970s and early …

Op Ed: Throwing Cold Water On Expensing Of Assets, Deborah A. Geier

Law Faculty Articles and Essays

Deborah A. Geier rebuts a proposal for full expensing (except for 10-year depreciation of buildings) for all assets and all taxpayers to accomplish simplification, arguing that such a proposal would need to be combined with a repeal of the interest deduction.

Op Ed: Loose Application Of Depreciation Doctrine, Deborah A. Geier

Law Faculty Articles and Essays

Deborah A. Geier responds to the interpretation of the capitalization doctrine by Andy A. Torosyan and Joseph M. Johnson.

Advance Trade Discounts: A Reprise, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah A. Geier, in a response to a recent article by Robert Willens on advance trade discounts, discusses the differences between the courts' analyses and some academics' approaches to measuring the income tax base properly.

Another Take On The Mortgage Debt Relief Situation, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah A. Geier responds to Prof. Stephen Cohen's viewpoint on the mortgage debt relief debate.

Expensing And The Interest Deduction, Deborah A. Geier

Law Faculty Articles and Essays

The difficulty of envisioning an effective provision that would deny interest deductions in this context may be reason enough to advocate for the alternative proposal described at the beginning of this viewpoint. The mixing of consumption tax provisions with the income tax treatment of debt in the U.S. tax system already provides too many opportunities for tax arbitrage. The expensing proposal would exacerbate these problems. The alternative proposal of broadening the base and lowering the rates (especially if coupled with eliminating the capital gains preference and integrating the corporate and individual taxes) would go far toward reducing the unfortunate mixing …

No Credit For Gross Withholding Taxes On Portfolio Investments?, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah Geier discusses the creditability of foreign gross withholding taxes on portfolio investments.

Murphy And The Evolution Of "Basis", Deborah A. Geier

Law Faculty Articles and Essays

Marrita Murphy received compensatory damages of $45,000 for emotional distress or mental anguish and $25,000 for injury to professional reputation after bringing a complaint with the Department of Labor under various whistle-blower statutes. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit unanimously held, in an opinion written by Chief Judge Douglas Ginsburg, that Murphy's damages were not due to physical injury and thus could not be excluded under the authority of section 104(a)(2) of the Internal Revenue Code but that the government nevertheless could not, under the Constitution, tax those damages as income. The government …

"Expense" Deductions On "Personal" Gross Income, Deborah A. Geier

Law Faculty Articles and Essays

Prof. Deborah A. Geier responds to Tom Daley's letter on the taxation of contingent attorney fees.

The Taxation Of Income Available For Discretionary Use, Deborah A. Geier

Law Faculty Articles and Essays

The signature tax policy tension of the last two decades (at least) has been whether the federal tax base ought to reach income or only consumption. At the individual level, the current Internal Revenue Code (payroll taxes aside) incorporates an income tax base with numerous consumption tax components - provisions that allow either immediate deduction of a non-consumption capital expenditure (as under a cash-flow consumption tax), such as qualified pension plan and IRA savings, or exclusion of the returns to capital (as under a wage tax), such as the exclusion for home sale gain and Section 103 interest. (A more …

On Capital Gains And Marginal Tax Rates, Deborah A. Geier

Law Faculty Articles and Essays

The current tax treatment of qualified residence interest is far from perfect. The President's Advisory Panel on Federal Tax Reform's proposal related to the current home mortgage interest deduction does little to advance Congress' clearly-stated policy of encouraging homeowership while, at the same time, it will have an almost-certain negative effect on home prices. The author asserts that those whose home is their most valuable asset have much to fear should the Panel's recommendations come to fruition.

The Payroll Tax Liabilities Of Low And Middle Income Taxpayers, Deborah A. Geier

Law Faculty Articles and Essays

This 2005 article explores how using the "average" increase in wages rather than the "median" increase in wages to determine the yearly increase in the payroll tax wage bases - at a time of increasing inequality - has contributed markedly to the increased tax burden on labor income of the poor and middle classes.

Incremental Versus Fundamental Tax Reform And The Top One Percent, Deborah A. Geier

Law Faculty Articles and Essays

This article describes the historical shift from consumption taxation at the federal level to income taxation with the enactment of the 16th amendment (the intent of which was chiefly to tax the capital income of the wealthy) and the incremental shifts since then back toward consumption taxation (which frees capital from tax) through expansion of both the payroll taxes as well as the consumption tax features of our current hybrid income/consumption tax that target the middle class.

It then addresses the issue of whether we ought to expand consumption tax treatment to the very wealthy by reviewing two recently published …

Simplifying And Rationalizing The Federal Income Tax Law Applicable To Transfers In Divorce, Deborah A. Geier

Law Faculty Articles and Essays

This 2002 article explores the tax consequences of transfers in divorce and suggests how the tax consequences can be both simplified and rationalized. This article was written as an "Academic Adviser" to the Joint Committee on Taxation in connection with a study mandated by Congress on the overall state of the Federal tax system (June 2000 through April 2001) and was first published at JOINT COMMITTEE ON TAXATION, STUDY OF THE OVERALL STATE OF THE FEDERAL TAX SYSTEM AND RECOMMENDATIONS FOR SIMPLIFICATION JCS-3-01, VOLUME III (ACADEMIC PAPERS), April, 2001, at 19.

Integrating The Tax Burdens Of The Federal Income And Payroll Taxes On Labor Income, Deborah A. Geier

Law Faculty Articles and Essays

This 2002 article explores the increasing burden of federal income and payroll taxes on labor income and how those tax burdens might be integrated.

Point & Counterpoint - Plaintiff's Attorney Fees And Costs, Deborah A. Geier

Law Faculty Articles and Essays

Discusses a series of recent and controversial cases that raised the issue of how plaintiffs must treat attorney fees and costs that are paid out of otherwise includable settlement or litigation awards.

Only Congress Can Create Deductions, Deborah A. Geier

Law Faculty Articles and Essays

A series of recent and controversial cases has raised the issue of how plaintiffs must treat attorneys' fees and costs that are paid out of otherwise includable settlement or litigation awards. Everyone seems to agree that under tax policy and theory plaintiffs should not be saddled with this burden. Many have expressed the desire that Congress amend the Code to correct the problem. The more difficult question, which the author addresses, is whether courts can act to protect these plaintiffs in the absence of Congressional action.

Some Meandering Thoughts On Plaintiffs And Their Attorneys' Fees And Costs, Deborah A. Geier

Law Faculty Articles and Essays

This article examines statutory interpretation in general and the common-law doctrines at issue in particular (the assignment-of-income doctrine as well as the doctrine first identified in the seminal case of Old Colony Trust). While the author believes that these plaintiffs ought--as a matter of policy and income tax theory--to escape taxation on the amounts paid to their attorneys, she belives that the issue is truly a " deduction" issue, not a "gross income" issue. The article concludes, however, that the ill-fitting application of "gross income" doctrine in this context leads to indefensible distinctions that sound superficially plausible under the rubric …

Some Thoughts On The Incidence Of Foreign Taxes, Deborah A. Geier

Law Faculty Articles and Essays

This 2000 article was prompted by the fact pattern and Tax Court decision in Compaq Computer v. Commissioner, 113 T.C. 363 (1999). While other commentary has focused on the application of the "economic substance" doctrine in this case, this article focuses instead on the ability to take foreign tax credits based not on economic incidence but on legal incidence and how this allows for crediting of foreign taxes economically borne by other actors in the marketplace.

The Unconstitutionality Of Eliminating Estate And Gift Taxes, James G. Wilson

Law Faculty Articles and Essays

The recent proposal to eliminate estate and gift taxes is not only immoral and a poor allocation of resources, but also is unconstitutional. Irrespective of their ideology, virtually all American lawyers will initially dismiss this accusation as frivolous because it conflicts with their tradition of equating conceptions of "constitutionality" with United States Supreme Court opinions. The Court has long been highly deferential to Congress in federal tax law cases. It is inconceivable that the current Court would find anything "irrational" in a facially neutral law eliminating all estate and gift taxes. Indeed, if I sat on that bench, I would …

And The 1999 Award For The Worst Opinion In A Tax Case Goes To -, Deborah A. Geier

Law Faculty Articles and Essays

This article critiques the opinion in Owen v. United States by Judge Jerome Turner of the Western District of Tennessee.

The Myth Of The Matching Principle As A Tax Value, Deborah A. Geier

Law Faculty Articles and Essays

This 1998 article explores why the "matching principle" in financial accounting should be considered irrelevant to federal income taxation, where its application can result effectively in consumption taxation (as opposed to income taxation).

A Brilliant Instance Of Flabby Thinking, Deborah A. Geier

Law Faculty Articles and Essays

This article provides a short history of the lower-of-cost-or-market rule.

Cognitive Theory And The Selling Of The Flat Tax, Deborah A. Geier

Law Faculty Articles and Essays

In this article, Professor Deborah A. Geier brings to bear the insights of Professor Edward J. McCaffery, regarding the interaction of cognitive theory and the tax world, to the flat tax proposal. The article explores how the perceptual biases described by Professor McCaffery might affect both taxpayers' impressions of the contours of the proposed tax base and their behavioral reponses to the same incentive. The author warns that any errors in her application of Professor McCaffery's work to the flat tax are entirely her own.

Simon Says: A Liddle Night Music With Those Depreciation Deductions, Please, Deborah A. Geier, Joseph M. Dodge

Law Faculty Articles and Essays

This 1995 article, co-authored with Joseph M. Dodge, explores why the decision in Simon v. Commissioner, 103 T.C. 247 (1994), was wrong, effectively allowing premature deduction of a capital expenditure and, thus, consumption taxation (as opposed to income taxation).

Interpreting Tax Legislation: The Role Of Purpose, Deborah A. Geier

Law Faculty Articles and Essays

This 1995 article uses tax cases to explore various methods of statutory interpretation.