Law Commons^™

Tax Complexity And Technology, David I. Walker

Faculty Scholarship

The Federal Income Tax Code has become increasingly complex over time with the implication that many taxpayers no longer understand the connection between their life decisions and their taxes. Some commentators have suggested that increasing computational complexity may be attributable in part to the proliferation of tax preparation software that renders such complexity manageable at filing time, but otherwise does nothing to mitigate the "black box" nature of the tax system. While such complexity and opacity undercut explicit incentives embedded in the Code, make planning more difficult, and undermine political accountability for taxes, they may also reduce the inefficient distortion …

Systemic Risk Of Contract, Tal Kastner

Scholarly Works

Complexity and uncertainty define our world, now more than ever. Scholars and practitioners have celebrated modular contract design as an especially effective tool to manage these challenges. Modularity divides complex structures into relatively discrete, independent components with simple connections. The benefits of this fundamental drafting approach are intuitive. Lawyers divide contracts into sections and provisions to make them easier to understand and reduce uncertainty. Dealmakers constructing complex transactions use portable agreements as building blocks to reduce drafting costs and enable innovation. Little attention, however, has been paid to the risks introduced by modularity in contracts. This Article demonstrates how this …

Appreciating The Overlooked Contributions Of The New Harvard School, Christopher S. Yoo

All Faculty Scholarship

My colleague, Herbert Hovenkamp, is almost universally recognized as the most cited and the most authoritative US antitrust scholar. Among his many honors, his status as the senior author of the authoritative Areeda and Hovenkamp treatise makes him the unquestioned leader of the New Harvard School, which has long served as the bellwether for how courts are likely to resolve emerging issues in modern antitrust doctrine. Unfortunately, its defining tenets and its positions on emerging issues remain surprisingly obscure. My contribution to this festschrift explores the core commitments that distinguish the New Harvard School from other approaches to antitrust. It …

Clearing Opacity Through Machine Learning, W. Nicholson Price Ii, Arti K. Rai

Articles

Artificial intelligence and machine learning represent powerful tools in many fields, ranging from criminal justice to human biology to climate change. Part of the power of these tools arises from their ability to make predictions and glean useful information about complex real-world systems without the need to understand the workings of those systems.

Why Financial Regulation Keeps Falling Short, Dan Awrey, Kathryn Judge

Faculty Scholarship

This article argues that there is a fundamental mismatch between the nature of finance and current approaches to financial regulation. Today’s financial system is a dynamic and complex ecosystem. For these and other reasons, policy makers and market actors regularly have only a fraction of the information that may be pertinent to decisions they are making. The processes governing financial regulation, however, implicitly assume a high degree of knowability, stability, and predictability. Through two case studies and other examples, this article examines how this mismatch undermines financial stability and other policy aims. This examination further reveals that the procedural rules …

The Architecture Of Property, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

Avoiding the reduction of property to a bundle or rights or to the working out of a single master principle, the architectural theory of property sees property as an integrated system or structure anchored in certain unifying principles. Because our world is neither chaotic nor additiviely simple, property law and institutions must achieve their plural ends in a fashion that manages the inherent complexity of the interaction of valued resource attributes and human actions. In managing complexity, some of the law’s structures receive functional explanations and justifications, which can be different from the explanations and justifications that apply to the …

Submarine Statutes, Christian Turner

Scholarly Works

I define as “submarine statutes” a category of statutes that affect the meaning of later-passed statutes. A submarine statute calls for courts to apply future statutes differently than they would have otherwise. An example is the Religious Freedom Restoration Act, which requires, in some circumstances, exemptions for religious exercise from otherwise compulsory statutory requirements. A new statute can only be understood if its interaction with RFRA is also understood. While scholars have debated the constitutionality of some statutes like these, mainly analyzing the legitimacy of their entrenching quality, I argue that submarine statutes carry an overlooked cost. Namely, they add …

Digital Surveillance And Preventive Policing, Manuel A. Utset

Scholarly Publications

No abstract provided.

Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr

Book Chapters

This chapter focuses on the use of mandatory pre-dispute arbitration clauses in a subset of consumer contracts – those involving consumer finance and investor products and services. Arbitration clauses are pervasive in financial contracts – for credit cards, bank accounts, auto loans, broker-dealer services, and many others. In the wake of the recent financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). Dodd-Frank authorises the new Consumer Financial Protection Bureau (CFPB) and the Securities and Exchange Commission (SEC) to prohibit or condition the use of arbitration clauses in consumer finance and investment contracts, …

Newsroom: Kuckes On Legal Fees Ruling 7/20/2016, Sheri Qualters, Roger Williams University School Of Law

Life of the Law School (1993- )

No abstract provided.

Slides: Water Governance Innovation And Transnational Networks, Michele-Lee Moore

Coping with Water Scarcity in River Basins Worldwide: Lessons Learned from Shared Experiences (Martz Summer Conference, June 9-10)

Presenter: Michele-Lee Moore, Assistant Professor, Department of Geography, University of Victoria; Water, Innovation, and Global Governance Lab

10 slides

Is An American Value Added Tax Inevitable?, Steve R. Johnson

Scholarly Publications

No abstract provided.

Disclosure 2.0: Can Technology Solve Overload, Complexity, And Other Information Failures?, Erik F. Gerding

Publications

In recent years, securities law scholars have either renewed an old attack on mandatory issuer disclosure or questioned the effectiveness of securities disclosure in the context of modern financial instruments. Some scholars argue that mandatory disclosure rules prove ineffective because investors suffer from “information overload.” Others claim that securities disclosure cannot describe adequately the complexity of modern firms and finance. These academic criticisms of mandatory securities disclosure provide some of the intellectual underpinnings for recent efforts to roll back some mandatory securities disclosure rules, such as the SEC’s Disclosure Effectiveness initiative.

This Article questions these critiques of securities disclosure, including …

Mandatory Arbitration In Consumer Finance And Investor Contracts, Michael S. Barr

Articles

Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts—for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute. The …

Slides: Perspectives On Water Management In Arizona, Kathy Jacobs

Innovations in Managing Western Water: New Approaches for Balancing Environmental, Social and Economic Outcomes (Martz Summer Conference, June 11-12)

Presenter: Kathy Jacobs, Director, Center for Climate Adaptation Science and Solutions (CCASS), Department of Soil, Water and Environmental Science, University of Arizona

25 slides

Judge Posner’S Simple Law, Mitchell N. Berman

All Faculty Scholarship

The world is complex, Richard Posner observes in his most recent book, Reflections on Judging. It follows that, to resolve real-world disputes sensibly, judges must be astute students of the world’s complexity. The problem, he says, is that, thanks to disposition, training, and professional incentives, they aren’t. Worse than that, the legal system generates its own complexity precisely to enable judges “to avoid rather than meet and overcome the challenge of complexity” that the world delivers. Reflections concerns how judges needlessly complexify inherently simple law, and how this complexification can be corrected.

Posner’s diagnoses and prescriptions range widely—from the Bluebook …

Unhcr As A Subsidiary Organ Of The Un: Plurality, Complexity And Accountability, Niamh H. Kinchin

Faculty of Law, Humanities and the Arts - Papers (Archive)

The global space is a place where decision-making and regulation involve diverse actors who act outside of State control yet who affect the rights and obligations of individuals and groups. Its innate plurality speaks against the temptation to understand accountability as a predetermined concept. Instead, it is argued that accountability within the global context should be reconceptualised through the relationships of global decision-making bodies. The United Nations High Commissioner for Refugees (UNHCR) is a subsidiary organ of the UN. If an enquiry into what UNHCR is accountable for is undertaken through an examination of its relationship with the UN according …

The Natural Complexity Of Patent Eligibility, Jacob S. Sherkow

Articles & Chapters

It has long been assumed that the doctrine of patent eligibility’s prohibition of patents on “laws of nature,” “natural phenomena,” and “products of nature” rests on legalistic interpretations of those terms. But there is good reason to doubt this assumption. Since the doctrine’s inception, the Supreme Court has yet to provide any framework, formula, or factors explaining these “natural” terms. Rather, the Court has increasingly fixated on a list of scientific tropes, such as gravity, the heat of the Sun, and extracted metals, that it believes are true examples of “natural laws,” “phenomena,” and “products.”

An actual examination of scientific …

Those Who Know, Those Who Don't, And Those Who Know Better: Balancing Complexity, Sophistication, And Accuracy On Tax Returns, Michelle Lyon Drumbl

Scholarly Articles

Refundable credits, particularly the earned income tax credit (EITC) and the child tax credit, serve an important anti-poverty measure for low-income taxpayers. Annually, millions of taxpayers who do not owe any federal income tax must file a tax return in order to claim these credits that are in the nature of social benefits. The eligibility requirements for refundable credits are complex, and these returns are particularly prone to audit: EITC audits comprise one-third of all individual income tax audits. Because of the large dollar amounts at stake, a taxpayer’s mistaken understanding of the eligibility requirements for these refundable credits can …

Fraudulent Corporate Signals: Conduct As Securities Fraud, Manuel A. Utset

Scholarly Publications

Paying a dividend, repurchasing shares, underpricing an initial public offering, pledging collateral, and borrowing using short-term, instead of long-term debt, are all forms of corporate communications. They are “corporate signals” that tell investors certain things about a company’s operations and current financial position, and about the managers’ confidence in its future performance. This Article provides the first comprehensive analysis of the relationship between corporate signals and securities fraud. The incentive to communicate using corporate signals has increased in recent years, a phenomenon that, I argue, is due to the grow-ing complexity of public corporations, and, importantly, to a number of …

The Public Speaks: An Empirical Study Of Legal Communication, Christopher R. Trudeau

Faculty Scholarship

No abstract provided.

Fragmentation Nodes: A Study In Financial Innovation, Complexity, And Systemic Risk, Kathryn Judge

Faculty Scholarship

This Article resents a case study in how complexity arising from the evolution and proliferation of a financial innovation can increase systemic risk. The subject of the case study is the securitization of home loans, an innovation which played a critical and still not fully understood role in the 2007-2009 financial crisis. The Article introduces the term "fragmentation node" for these transaction structures, and it shows how specific sources of complexity inherent in fragmentation nodes limited transparency and flexibility in ways that undermined the stability of the financial system. In addition to shedding new light on the processes through which …

Judges, Lawyers, And A Predictive Theory Of Legal Complexity, Benjamin H. Barton

College of Law Faculty Scholarship

This Article uses public choice theory and the new institutionalism to discuss the incentives, proclivities, and shared backgrounds of lawyers and judges. In America every law-making judge has a single unifying characteristic; each is a former lawyer. This shared background has powerful and unexplored effects on the shape and structure of American law. This Article argues that the common interests, thought-processes, training, and incentives of Judges and lawyers lead inexorably to greater complexity in judge-made law. These same factors lead to the following prediction: judge-created law will be most complex in areas where a) elite lawyers regularly practice; b) judges …

Biological Metaphors For Whiteness: Beyond Merit And Malice, Brant T. Lee

Akron Law Faculty Publications

The problem of persistent racial inequality is grounded in a failure of imagination. The general mainstream conception is that unfair racial inequality occurs only when there is intentional racism. Absent conscious racial malice, no racism is seen to exist. The only generally available alternative explanation for racial inequality is the meritocratic system. Viewing the distribution of resources as a product of a generally fair meritocratic system provides a defense against any charge of racism, and justifies the status quo.

But in economics, business, computer science, and even biology, observers of complexity are coming to understand how dominant systems can prevail …

Formulary Apportionment: Myths And Prospects - Promoting Better International Policy And Utilizing The Misunderstood And Under-Theorized Formulary Alternative, Reuven S. Avi-Yonah, Ilan Benshalom

Articles

This article seeks to re-examine the formulary alternative to transfer pricing by inquiring whether partial integration of formulary concepts into current practices would offer a reasonable alternative to transfer pricing rules. We believe that the key to achieving an equitable and efficient allocation of MNE income is to solve the problem of the residual, i.e., how to allocate income generated from mobile assets and activities whose risks are borne collectively by the entire MNE group. These assets and activities generate most of the current transfer pricing compliance and administrative costs, as well as tax avoidance opportunities. A limited formulary tax …

The Three Phases Of Local Government State Of Environment Reports In Nsw Australia: Complexity, Intricacy And Creativity, Andrew H. Kelly

Faculty of Law - Papers (Archive)

This paper explores the three phases of State of Environment Reports (SoERs) prepared by local councils in NSW since the introduction of the Local Government Act 1993 (NSW), which heralded significant change to local government's powers, functions and requirements. NSW is the only Australian jurisdiction where local SoERs are required. The first phase was responsive to environmental concerns but provided considerable confusion. The second was more ambitious and complex. The current phase provides considerable flexibility. This article leads to questions such as whether the SoER should be enveloped into the new 'Community Strategic Plan' or stand alone as a separate …

Slides: Groundwater Declines, Climate Change And Approaches To Adaptation, Katharine Jacobs

Western Water Law, Policy and Management: Ripples, Currents, and New Channels for Inquiry (Martz Summer Conference, June 3-5)

Presenter: Katharine Jacobs, Director of the Arizona Water Institute, University of Arizona

37 slides

Environmental Crime Comes Of Age: The Evolution Of Criminal Enforcement In The Environmental Regulatory Scheme, David M. Uhlmann

Articles

The Rivers and Harbors Act of 1899 often is considered the first environmental criminal statute because it contains strict liability provisions that make it a misdemeanor to discharge refuse into navigable waters of the United States without a permit. When Congress passed the Rivers and Harbors Act, however, it was far more concerned with preventing interference with interstate commerce than environmental protection. For practical purposes, the environmental crimes program in the United States dates to the development of the modem environmental regulatory system during the 1970s, and amendments to the environmental laws during the 1980s, which upgraded criminal violations of …

Allocating Business Profits For Tax Purposes: A Proposal To Adopt A Formulary Profit Split, Reuven S. Avi-Yonah, Kimberly A. Clausing, Michael C. Durst

Articles

The current system of taxing the income of multinational firms in the United States is flawed across multiple dimensions. The system provides an artificial tax incentive to earn income in low-tax countries, rewards aggressive tax planning, and is not compatible with any common metrics of efficiency. The U.S. system is also notoriously complex; observers are nearly unanimous in lamenting the heavy compliance burdens and the impracticality of coherent enforcement. Further, despite a corporate tax rate one standard deviation above that of other OECD countries, the U.S. corporate tax system raises relatively little revenue, due in part to the shifting of …

Randomness And Complexity In Social Explanation: Evidence From Finance And Bankruptcy Law, Bernard Trujillo

Law Faculty Publications

No abstract provided.