Tax Law Commons^™

Through A Latte, Darkly: Starbucks' Window Into Stateless Income Tax Planning, Edward D. Kleinbard

University of Southern California Law and Economics Working Paper Series

This paper uses Starbucks Corporation, the premier roaster, marketer and retailer of specialty coffee in the world, as an example of stateless income tax planning in action. “Stateless income” comprises income derived for tax purposes by a multinational group from business activities in a country other than the domicile of the group’s ultimate parent company, but which is subject to tax only in a jurisdiction that is neither the source of the factors of production through which the income was derived, nor the domicile of the group’s parent company.

The paper reviews both Starbucks’ recent U.K. tax ...

Internal Revenue Code Section 4061(B), Manufacturers' Excise Tax On Parts And Accessories Of Motor Vehicles, Jerome L. Bleiweis

Pepperdine Law Review

No abstract provided.

From Here To Eternity: The Folly Of Perpetual Trusts, Lawrence W. Waggoner

University of Michigan Program in Law and Economics

Trusts that can operate for as many as a thousand years or even forever, typically for the benefit of the settlor’s descendants living from time to time, now and in the future, are all the rage in banking and estate-planning circles. Before 1986, when Congress passed the federal generation-skipping transfer tax (GST tax), settlors had little incentive and probably little desire to establish perpetual trusts, even though they were permitted to do so under the law of Wisconsin, South Dakota, or Idaho. The GST tax created an artificial incentive for the wealthy to establish such trusts.

The origin of ...

Practicalities And Peculiarities: The Heightened Due Process Standard For Notice Under Jones V. Flower, Emily Riley

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Carrots, Sticks, And Salience, Brian D. Galle

Boston College Law School Faculty Papers

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 that the ...

Benefit Expenses: How The Benefit Corporation's Social Purpose Changes The Ordinary And Necessary, Emily Cohen

William & Mary Business Law Review

The recent spread of Benefit Corporations formally challenges the assumption that for-profit companies are strictly profit maximizing entities. Businesses can now incorporate under charitable business purposes that were once restricted to 501(c)(3) non-profit organizations. While incorporating under a charitable purpose is no longer restricted to only non-profit entities, Benefit Corporations are not able to receive the same income tax exemption under the Internal Revenue Code. While for-profit entities do receive some tax benefits for their charitable behavior, such as the charitable donation deduction, the current tax structure does not provide an equal amount of tax benefits for charitable ...

The Supercharged Ipo, Victor Fleischer, Nancy Staudt

University of Southern California Law and Economics Working Paper Series

A new innovation on the IPO landscape has emerged in the last two decades, allowing owner-founders to extract billions of dollars from newly-public companies. These IPOs—labeled supercharged IPOs—have been the subject of widespread debate and controversy: lawyers, financial experts, journalists, and Members of Congress have all weighed in on the topic. Some have argued that supercharged IPOs are a “brilliant, just brilliant,” while others have argued they are “underhanded” and “bizarre.”

In this article, we explore the supercharged IPO and explain how and why this new deal structure differs from the more traditional IPO. We then outline various ...

Corporate Capital And Labor Stuffing In The New Tax Rate Environment, Edward D. Kleinbard

University of Southern California Law and Economics Working Paper Series

Federal tax legislation enacted on January 2, 2013 to resolve the “fiscal cliff” policy controversy has reintroduced substantially higher maximum individual income tax rates on ordinary income, but has retained the 2003-2012 innovation of taxing dividend income at the same relatively low rate as long-term capital gains. At the same time, corporate tax reform is likely to lead to a substantially lower statutory corporate tax rate than current law’s 35 percent. The combination of these three factors will in the near future usher in the return, for the first time in a generation, of the taxable corporation as a ...

The Normative Underpinnings Of Taxation, Sagit Leviner

Nevada Law Journal

No abstract provided.

Poverty, Not Inequality: Federal Taxes And Redistribution, David Kamin

New York University Law and Economics Working Papers

The federal tax system, and the income tax in particular, is often held out as a key — perhaps the key tool — for combatting income inequality. Especially given the rapid rise in inequality seen over the last 30 years, it is natural to look to the tax code and ask what can be done in response. However, this article’s answer to that question is “not much,” because of the practical constraints on policymaking. Put simply, the effect of the federal tax system on income inequality is — and is likely to continue to be — decidedly limited. When it comes to the ...

United States National Report On Tax Privacy, Joshua D. Blank

New York University Law and Economics Working Papers

This National Report was prepared for a conference titled “Tax Secrecy and Tax Transparency - The Relevance of Confidentiality in Tax Law", which took place in July 2012 in Rust, Austria and was co-hosted by the Institute for Austrian and International Tax Law at the Vienna University of Economics and Business and by Örebro University, Sweden. The Report describes the current tax privacy protections that apply to taxpayers in the United States and provides an overview of the policy considerations that have contributed to their enactment. Portions of this Report were originally published, in part, in Joshua D. Blank, In Defense ...

The Cost Of “Choice” In A Voluntary Pension System, Jonathan B. Forman

Jonathan B. Forman

Unlike our mandatory universal Social Security system, America’s private pension system is replete with choice: choices about the type of pension plan, choices about the amount and timing of contributions, choices about investments, and choices about the timing and nature of distributions. It takes time to make all these choices, and sometimes employers and workers just throw up their hands and don’t make any choices at all. This “choice overload” or “analysis paralysis” imposes significant costs on employers, workers, and government; and this article recommends a variety of ways to reduce those costs.

A Comparatve Analysis Of Southeastern States' Income Tax Treatment Of Exporters, Ernest P. Larkins, Jorge Martinez-Vazquez, John J. Masselli

Maryland Journal of International Law

No abstract provided.

Michelin Tire Corp. V. Wages, Leslie D. Gradet

Maryland Journal of International Law

No abstract provided.

Horizontal Equity Revisited, James R. Repetti, Diane M. Ring

Boston College Law School Faculty Papers

From the introduction:

No tax policy analysis stands complete without examination of equity implications. But despite its role as a traditional pillar of tax policy analysis, equity itself remains a controversial concept. What is meant by the term equity? How should it be measured? Is there more than one type of equity? What is the relationship of different types of equity to each other? For decades, scholars and policy makers have explored the possibility that equity is best understood as two distinct concepts — vertical equity and horizontal equity — both of which must be evaluated. Horizontal equity (HE) is defined to ...

Tax Planning For Marijuana Dealers, Benjamin Leff

Benjamin Leff

In recent years, many states have legalized marijuana while the federal government continues to consider all marijuana sales and use illegal. But marijuana industry insiders consider not federal criminal law but federal tax law to be the biggest impediment to the development of a legitimate marijuana industry. State-sanctioned marijuana sellers are required to pay federal income taxes pursuant to § 280E, a formerly largely symbolic provision that Congress enacted to punish drug dealers, but which now could potentially drive legitimate marijuana sellers underground.

This paper proposes a tax strategy that enables state-sanctioned marijuana sellers to avoid the impact of § 280E by ...

Effectively Curbing The Gst Exemption For Perpetual Trusts, Lawrence W. Waggoner

University of Michigan Program in Law and Economics

Current law allows a married couple to transfer up to $10.24 million into a trust that is exempt from the federal generation-skipping transfer tax. The proposal would deny the GST exemption prospectively, unless the trust must terminate within one of three perpetuity periods: (1) 21 years after the death of a life in being; (2) 90 years after creation; or (3) after the death of the last living beneficiary who is no more than two generations younger than the settlor. Atrust now in existence would be allowed a grace period during which it could be modified to terminate within ...

Double Or Nothing: A Tax Treaty For The 21st Century, Reuven S. Avi-Yonah, Oz Halabi

University of Michigan Program in Law and Economics

The current tax treaty network was developed in the 1920s and 1930s in order to prevent double residence/source taxation. This kind of double taxation rarely exists any more because most countries have adopted either an exemption system or a foreign tax credit regime in their domestic (non‐treaty) law, which effectively prevents residence/source double taxation even in the absence of a treaty. Instead, as Tsilly Dagan has pointed out, the current treaties serve mostly to transfer revenue from the source country to the residence country. This suggests that treaties may be unnecessary because exemption from withholding taxes by ...

Contribution Of A Built-In Loss To A Partnership, Douglas A. Kahn

University of Michigan Program in Law and Economics

In 2004 Congress amended the code to prevent the use of a partnership contribution as a means of transferring a deduction for a built-in loss from one person to another. That amendment has undermined the application of the remedial method (and the traditional method with curative allocations) that the regulations provide for the allocation of a contributed built-in gain or loss, Kahn argues. He also asserts that the 2004 amendment distorts income reporting.

Sales Between A Partnership And Non-Partners, Douglas A. Kahn

University of Michigan Program in Law and Economics

Kahn argues that a 1986 amendment to section 707 invalidated several regulatory provisions promulgated under section 267.