Business Commons^™

The Tao Of The Dao: Taxing An Entity That Lives On A Blockchain, David J. Shakow

All Faculty Scholarship

In this report, Shakow explains how a decentralized autonomous organization functions and interacts with the U.S. tax system and presents the many tax issues that these structures raise. The possibility of using smart contracts to allow an entity to operate totally autonomously on a blockchain platform seems attractive. However, little thought has been given to how such an entity can comply with the requirements of a tax system. The DAO, the first major attempt to create such an organization, failed because of a programming error. If successful examples proliferate in the future, tax authorities will face significant problems in getting …

The Salience Theory Of Consumer Financial Regulation, Natasha Sarin

All Faculty Scholarship

Prior to the financial crisis, banks’ fee income was their fastest-growing source of revenue. This revenue was often generated through nefarious bank practices (e.g., ordering overdraft transactions for maximal fees). The crisis focused popular attention on the extent to which current regulatory tools failed consumers in these markets, and policymakers responded: A new Consumer Financial Protection Bureau was tasked with monitoring consumer finance products, and some of the earliest post-crisis financial reforms sought to lower consumer costs. This Article is the first to empirically evaluate the success of the consumer finance reform agenda by considering three recent price regulations: a …

Dual Residents: A Sur-Reply To Zelinsky, Michael S. Knoll, Ruth Mason

All Faculty Scholarship

In this article, we respond to Professor Zelinsky’s criticism of our arguments regarding the constitutionality of New York’s tax residence rule. We argue that the Supreme Court’s decision in Wynne requires reconsideration of the New York Court of Appeal’s decision in Tamagni.

On The Disparate Treatment Of Business And Personal Salt Payments, Michael S. Knoll

All Faculty Scholarship

The Tax Cuts and Jobs Act, H.R. 1, would eliminate the federal income tax deduction for nonbusiness state and local taxes while maintaining the deduction for business state and local taxes. That disparate treatment has generated a storm of negative commentary. In this short essay, I consider whether the federal tax law should allow a deduction for business state and local taxes assuming that there is no deduction for nonbusiness state and local taxes. I argue that investors and businesses, including pass-through businesses, should be allowed to deduct state and local property and sales taxes, but not general income taxes.

Optimizing Regulation For An Optimizing Economy, Cary Coglianese

All Faculty Scholarship

Much economic activity in the United States today emanates from technological advances that optimize through contextualization. Innovations as varied as Airbnb and Uber, fintech firms, and precision medicine are transforming major sectors in the economy by customizing goods and services as well as refining matches between available resources and interested buyers. The technological advances that make up the optimizing economy create new challenges for government oversight of the economy. Traditionally, government has overseen economic activity through general regulations that aim to treat all individuals equally; however, in the optimizing economy, business is moving in the direction of greater individualization, not …

Antitrust And The Design Of Production, Herbert J. Hovenkamp

All Faculty Scholarship

Both economics and antitrust policy have traditionally distinguished “production” from “distribution.” The former is concerned with how products are designed and built, the latter with how they are placed into the hands of consumers. Nothing in the language of the antitrust laws suggests much concern with production as such. Although courts do not view it that way, even per se unlawful naked price fixing among rivals is a restraint on distribution rather than production. Naked price fixing assumes a product that has already been designed and built, and the important cartel decision is what should be each firm’s output, or …

The Empty Idea Of “Equality Of Creditors”, David A. Skeel Jr.

All Faculty Scholarship

For two hundred years, the equality of creditors norm—the idea that similarly situated creditors should be treated similarly—has been widely viewed as the most important principle in American bankruptcy law, rivaled only by our commitment to a fresh start for honest but unfortunate debtors. I argue in this Article that the accolades are misplaced. Although the equality norm once was a rough proxy for legitimate concerns, such as curbing self-dealing, it no longer plays this role. Nor does it serve any other beneficial purpose.

Part I of this Article traces the historical emergence and evolution of the equality norm, first …

Governance By Contract: The Implications For Corporate Bylaws, Jill E. Fisch

All Faculty Scholarship

Boards and shareholders are increasing using charter and bylaw provisions to customize their corporate governance. Recent examples include forum selection bylaws, majority voting bylaws and advance notice bylaws. Relying on the contractual conception of the corporation, Delaware courts have accorded substantial deference to board-adopted bylaw provisions, even those that limit shareholder rights.

This Article challenges the rationale for deference under the contractual approach. With respect to corporate bylaws, the Article demonstrates that shareholder power to adopt and amend the bylaws is, under Delaware law, more limited than the board’s power to do so. As a result, shareholders cannot effectively constrain …