Tax Law Commons^™

The Intriciacies Of Tax And Globalization, Sagit Leviner Dr.

Sagit Leviner Dr.

This article reviews Avi-Yonah, Sartori, and Marian’s Global Perspectives on Income Taxation Law (Oxford, 2011). It outlines the book’s key features and strengths in the quest for understanding the effect of globalization on taxation. In this process, the article also looks into available data to explore global trends in taxation over the past three and a half decades to evaluate whether and to what extent globalization leads to convergence or divergence of national tax policies. The article concludes that as Global Perspectives on Income Taxation Law illustrates, while globalization may lead to at least some observed trends in taxation—including the …

Exotic Dancing: Taxable Trash Or Exempt Art, John O. Hayward

John O. Hayward

Exotic dancers usually embroil themselves in censorship battles with local authorities. But recently they have drawn the attention of tax authorities who have tussled with the owners of so-called “gentlemen’s clubs” over whether the exotic dancing performed in their establishments are subject to taxation. This paper examines two recent cases where state authorities choose to tax exotic dancing while at the same time exempting what some jurists regard as comparable choreographic performances. In the opinion of these commentators, the tax authorities exhibited a bias against low-brow artistic expression, thus engaging in impermissible content discrimination. It advances the proposition that judges …

Curb Your Enthusiasm For Pigouvian Taxes, Victor Fleischer

Victor Fleischer

Pigouvian (or "corrective") taxes have been proposed or enacted on dozens of products and activities that may be harmful in excess: carbon, gasoline, fat, sugar, guns, cigarettes, alcohol, traffic, zoning, executive pay, and financial transactions, among others. Academics of all political stripes are mystified by the public’s inability to see the merits of using Pigouvian taxes more frequently to address serious social harms.

This enthusiasm for Pigouvian taxes should be tempered. A Pigouvian tax is easy to design—as a uniform excise tax—if one assumes that each individual causes the same amount of harm with each incremental increase in activity on …

Virtual Currencies: Bitcoin & What Now After Liberty Reserve, Silk Road, And Mt. Gox?, Lawrence J. Trautman

Lawrence J. Trautman Sr.

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies; cybercrimes and payment systems; darknets, Tor and the “deep web;” Bitcoin; Liberty Reserve; Silk Road and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly. Virtual currencies present particularly difficult law enforcement challenges because of their: ability to transcend national borders in the fraction of a second; unique jurisdictional issues; …

The Fair Income Tax, Joseph M. Dodge

Joseph M Dodge

Abstract for: The Fair Income Tax

This article argues that the classic “accretion” Haig-Simons formulation of personal income, namely, an individual’s consumption plus net increases in wealth for the taxable year, not only was not actually advocated by Simons himself, but also is (in part) contrary to fundamental political values and raises unnecessary practical problems. Contrary to what is commonly supposed, consumption is best seen not an independent category of income, but only a deduction-disallowance principle. Likewise, the “accretion” notion of “changes in wealth” – requiring the annual valuation of asset values – is (mostly) impractical, psychologically unacceptable, and contrary …

The Smokable Goods Tax: Crafting A Constitutional Marijuana Tax, Nima H. Mohebbi, Samuel T. Greenberg

Nima H. Mohebbi

Marijuana legalization and decriminalization has become a hot policy issue. Roughly twenty U.S. states have partially legalized marijuana (generally for medicinal purposes) and two states – Colorado and Washington – have legalized it for general adult recreational use. Given the likely hyper-growth of the cannabis market in view of the possible wide-scale legalization of marijuana, states might enjoy a potential budgetary windfalls from marijuana excise taxes. Marijuana, however, remains a federally controlled substance, the sale or use of which is subject to substantial penalties. For the states, this presents a potential problem in collecting excise taxes on marijuana – namely, …

Less Is More: Applying A Modified Reasonable Compensation Standard To Eliminate The Inconsistencies In The Payroll And Net Investment Income Tax Bases, John S. Treu

John S. Treu

The original policy for the implementation of payroll taxes was to impose a tax on wages as both a funding mechanism for, and a limitation to, qualifying for social security. However, the self-employment tax base developed severe inconsistencies with this original policy and among different tax entities by including certain returns on capital investments in the tax base. At present, different payroll tax obligations arise for similarly situated tax payers based solely on the type of entity the owner elects to be taxed as under the check-the-box regulations. These inconsistencies resulted from misguided efforts by congress and the treasury to …

Bounties For Bad Behavior: Rewarding Culpable Whistleblowers Under The Dodd-Frank Act And Internal Revenue Code, Jennifer M. Pacella

Jennifer M. Pacella, Esq.

In 2012, Bradley Birkenfeld received a $104 million reward or “bounty” from the Internal Revenue Service (“IRS”) for blowing the whistle on his employer, UBS, which facilitated a major offshore tax fraud scheme by assisting thousands of U.S. taxpayers to hide their assets in Switzerland. Birkenfeld does not fit the mold of the public’s common perception of a whistleblower. He was himself complicit in this crime and even served time in prison for his involvement. Despite his conviction, Birkenfeld was still eligible for a sizable whistleblower bounty under the IRS Whistleblower Program, which allows rewards for whistleblowers who are convicted …

Tax, State, And Utopia, Tsilly Dagan, Avital Margalit

Tsilly Dagan

This article examines the appropriate tax treatment of communities through the unique example of the Israeli kibbutz, a community that is traditionally governed by the maxim "from each according to his ability, to each according to his needs.” The case of the kibbutz highlights the tension between communities and the market in governing human interactions as well as the tension that exists between communities and the state in applying private schemes of redistribution.

The challenge communities pose for tax law is whether, and to what extent, the taxation regime should accommodate a community’s values and practices when they diverge …

Is There A Justification For Imposing Criminal Liability On Corporate Managers In Tax Legislation?, Karnit Malka

Karnit Malka

No abstract provided.

Taxation Without Limitation: The Prohibited Pretext Doctrine V. The Sebelius Theory, Brett W. Hastings

Brett W Hastings

The Article posits that the Supreme Court erred in its ruling regarding the Affordable Care Act by overlooking a well established constitutional principle, dubbed the Prohibited Pretext Doctrine. This doctrine, which prohibits the exercise of a prohibited power through the pretextual use of a power granted, faded from memory due to the post Lochner era expansion of the Commerce Clause. Nevertheless, the doctrine remains valid law. In overlooking the Prohibited Pretext Doctrine, the Supreme Court established a new and contradictory doctrine, dubbed the Sebelius Theory. The Sebelius Theory turns the Prohibited Pretext Doctrine on its head by explicitly allowing the …

"Shut Up. Pay More. This Is What You Voted For." Why You Don't See Me At San Francisco's Hall Of Justice., David D. Butler

David D. Butler

This 2,285 essay combines California's often violent history with European and American high and low culture to explain my decision to leave San Francisco in the 1970's and to study and practice law in other states. At the time, I was platflorm man (operator) on the 30 Stockton electric trolley through South of Market, the Financial District, Chinatown, Pacific Heights, and the Marina. Nevertheless, at the time the Nation of Islam had at least one armed group, the Zebra killers, murdering Whites, often slowly with machetes. I joined the White, Middle-Class, Taxpaying majority in their diaspora to safer places. My …

A Market For Tax Compliance, Walter E. Afield Iii

Walter E Afield III

It is becoming increasingly clear that, due to political realities and budgetary constraints, the IRS is going to have to attempt to enforce the tax laws by doing more with less. Current enforcement efforts have yielded a tax gap (i.e., the difference between the amount of taxes that should be paid and the amount that are collected) of roughly $450 billion annually. Faced with this task, one of the steps that the IRS has recently taken is to try to improve the quality in services performed by paid tax preparers, a group that historically has been subject to little IRS …

Moving Money: International Financial Flows, Taxes, Money Laundering & Transparency, Richard Gordon, Andrew P. Morriss

Andrew P Morriss

Recent publicity over enormous estimates of “missing” wealth and the use of sophisticated tax strategies by companies like Apple, Google, and Starbucks have produced a demand that the wealthy pay a “fair” amount of tax regardless of their compliance with the letter of tax laws. In particular, the Tax Justice Network’s claim that $21-$32 trillion of “hidden” wealth remains untaxed has garnered considerable attention. In this paper we argue that these claims rest on poor data and analysis and mistakes about how financial transactions work. We further argue that the disputes are about fundamentally conflicting visions of how financial transactions …

The Problem Of Nonprofit Executive Pay?: Evidence From U.S. Colleges And Universities, Brian D. Galle, David I. Walker

Brian D. Galle

Nonprofit organizations suffer from agency problems that are similar to or perhaps even more severe than those observed at for-profit companies. As a result, one might expect the executive pay setting process in the two sectors to reflect similar deficiencies. This Article explains why the managerial power theory that was developed to help explain for-profit executive pay is plausibly applicable to nonprofits. More importantly, this Article offers new evidence based on data from a large panel of colleges and universities collected across a nine year period that supports the idea that potential stakeholder outrage plays a role in limiting nonprofit …

Legal Mirrors Of Entrepreneurship, Mirit Eyal-Cohen

Mirit Eyal-Cohen

Small businesses are regarded the engine of the economy. But just what is a “small” business? Depending on where one looks in the law, the definitions vary and they differ from one section to another. Unfortunately, what these various size classifications fail to assess, are the policy considerations and the legislative intent for granting regulatory preferences to small concerns to begin with.

In the last century, the U.S. government has been cultivating one such policy of fiscal and economic growth. Consequently, Congress and private institutions have been acting to incentivize, support and reward entrepreneurship through the law in order to …

Protecting Those Who Need It Most: A Call For Change To The Tax Application Of Qualified Domestic Relations Orders When Placed Into Special Needs Trusts, Conor Francis Linehan

Conor Francis Linehan

This note calls for a change to the way the Internal Revenue Code is applied towards qualified domestic relations orders when used to fund or partially fund special needs trusts, specifically irrevocable (d)(4)(B) trusts created under § 1396p.

The current status of the law is that an individual can roll over a qualified domestic relations order into a new retirement account in a tax-free transfer. If an individual elects to not roll over into a new retirement fund, some additional exemptions to various early termination penalties and lump sum payments have already been carved out of the Code.

This note …

Critical Tax Policy: A Pathway To Reform?, Nancy J. Knauer

Nancy J. Knauer

The Global Recession of 2008 and ensuing austerity measures have renewed the urgency surrounding the call for fundamental tax reform. Before embarking on fundamental tax reform, this Article proposes adding a critical lens to existing US tax policy to ensure that any proposals for change are informed, transparent, and responsive to the needs (and abilities) of individual taxpayers. This Article makes the case for a specific method of inquiry – Critical Tax Policy – that is built on the articulation of difference rather than false assumptions of sameness. Critical Tax Policy incorporates the insights of a growing international tax equity …

Still On The Repayment Of Indirect Taxes, Hugo B. Machado

Hugo de Brito Machado Segundo

The repayment of indirect taxes raises questions in many parts of the world, mainly because of the so called “passing-on defense”. Brazilian Courts has given inadequate treatment to this subject, which, in fact, denies the judicial review of the tax relationship, violating the the idea of rule of law. European Court of Justice has different concerns when examining the matter, recognizing that the shift of the tax burden is very difficult to determine and measure. It happens in relation to all taxes, to a greater or lesser extent, and should be taken into consideration by the legislature in fixing the …

The Unruly World Of Tax: A Proposal For An International Tax Cooperation Forum, Noam S. Noked, Mohamed S. Helal

Mohamed S. Helal

International cooperation in tax policy is deeply fractured. Inconsistencies, loopholes and ineffective mechanisms—that could be avoided if efficient collaboration between countries existed—have created significant inefficiency losses for decades. This paper focuses on the institutional infrastructure underlying international cooperation in tax issues and argues that the current forums in which international cooperation in tax issues occurs do not provide an adequate platform in which countries with similar interests can effectively promote collaborative effort. To facilitate cooperation, this paper puts forward a proposal to create a new institution that is currently missing from the international tax policy-setting arena: an informal forum for …

Slump Sale Transactions - Taxation Issues In India, Mubashshir Sarshar

Mubashshir Sarshar

No abstract provided.

Pfics Gone Wild!, Monica Gianni

Monica Gianni

No abstract provided.

Conserving A Place For Renewable Power, Jacob P. Byl

Jacob P. Byl

Promoting renewable power and conserving land are often conflicting goals because renewable power requires a lot of land. The conflict is becoming an important issue on lands encumbered by conservation easements. I argue that the current legal rule allowing oil and gas development, but not wind and solar development, on conserved land does not make sense in light of the threats of climate change. The best way to encourage renewable power while respecting the intent of landowners is to have the Internal Revenue Service promulgate rules that explicitly allow renewable power going forward and interpret existing easements with a set …

The Social Security Benefits Formula And The Windfall Elimination Provision: An Equitable Approach To Addressing ‘Windfall’ Benefits, Francine J. Lipman, Alan Smith

Francine J. Lipman

Please find attached our article and draft bill. Thank you so very much for your interest in our work.

Coase V. Pigou: A Still Difficult Debate, Enrico Baffi

enrico baffi

This paper examines the positions of Coase and Pigou about the problem of the externalities. From the reading of their most two important works it appears that Coase has a more relevant preference for a evaluation of efficiency at the total, while Pigou, with some exception, is convinced that is possible to reach marginal efficiency through taxes or responsibility. It’s interesting that Coase, who has elaborated the famous theorem, is convinced that is not possible to reach the efficiency at the margin every time and that sometimes is necessary a valuation at the total, that tells us which solution is …

Economists Are From Mercury, Policymakers Are From Saturn, Roberta F. Mann

Roberta F Mann

Men are from Mars, Women are from Venus is a book about communication between different types of people in a relationship. Lawyers and economists are different types of people who come together in the legislative and policymaking realm. Although legislators come from many backgrounds, law has been the most common profession of both House members and Senators since 1945. Sometimes policymakers rely on economic analysis to make decisions. Sometimes policymakers use economic analysis to support decisions already made. In particular, economic analysis has played a large role in the formation of tax and budgetary policy. Not only do economists and …

The Political Feasibility Of A Global E-Commerce Tax, Rifat Azam Dr.

Rifat Azam Dr.

In its strongest statement yet on progressive tax reform, the UN has recently called on countries to introduce a global carbon tax and financial transaction tax (FTT). In my recent article entitled Global Taxation of Cross Border E-commerce Income (31 Virginia Tax Review 639 (Spring 2012)), I proposed to impose a global e-commerce tax on cross border e-commerce income by a new supranational institution, The Global Tax Fund, to be established by countries through international treaty. According to my proposal, the global e-commerce tax revenues shall be spent to fund global public goods. I argued normatively that the proposed regime …

Partisan Politics And Income Tax Rates, William E. Foster

William E Foster

With income tax reform dominating so much of the current political discourse, now is an optimal time for tax scholars to reflect on the lessons and trends from a century of legislative tinkering with the primary revenue-generating device in the United States. Tax rate changes do not occur in a vacuum, and this article explores one increasingly prominent and often overlooked ingredient in the mixture of variables that can produce or inhibit tax reform―partisan politics. It does so by comparing individual income tax rates with partisan control of federal political bodies. This article reviews majority party status in the House …

Carrots, Sticks, And Salience, Brian D. Galle

Brian D. Galle

This Article considers the second-best design of Pigouvian taxes and subsidies in the presence of agents who are imperfectly aware of the instrument. Until very recently, the price instrument literature has assumed perfect rationality, and even the handful of prior attempts to account for “hidden” prices focus mainly on the income tax. I extend these efforts in several directions. First, I show that the best available instrument for correcting negative externalities is often one whose price is partially adjusted upwards -- or, in the case of subsidies, downwards -- to counter-act the neglect of irrational actors. In addition, I argue …

The Normative Underpinnings Of Taxation, Sagit Leviner Dr.

Sagit Leviner Dr.

Questions about the appropriate rules and mechanisms of taxation are, first and foremost, questions concerning the nature of society. What can be taxed, what cannot, for what purpose, when, and how, are all matters that go to the heart of society and, in particular, concern society’s underlying beliefs and values vis-à-vis the meaning and attainment of justice. This Article explores the role of normative values and theory in tax policymaking. It suggests that a candid elaboration of normative perspectives, and how they shed light on taxation, could lead to a better understanding of society as well as a better tax …