Law Commons^™

Never Let A Good Crises Go To Waste, Richard Pomp

Faculty Articles and Papers

A problem with temporary tax study commissions is that by the time their findings are released, changes in the political environment may have rendered their suggestions worthless. Permanent standing commissions are needed. The temporary crisis of the current pandemic, an opportunity for tax reform, illustrates this point.

In this article, Professor Pomp argues for the creation of a permanent state body tasked with managing tax reform. It would perform research and analysis, educate legislatures about how current law operates, initiate proposals, and draft legislation. Being permanent, such a body would be proactive enough to respond to a temporary crisis.

In …

What Can The Oecd Learn From The States?, Richard Pomp

Faculty Articles and Papers

In this article, Professor Pomp argues that the OECD should look to the American states for insight into taxing cross-jurisdictional corporations. In the early 20th century, the states had to respond to the challenge of taxing domestic interstate corporations. While these corporations posed no tax problem at the federal level, states had to respond to the reality of corporations shifting profits into neighboring tax havens. They needed a better alternative to federal transfer pricing and sourcing rules. In the 1930’s, some states began combining domestic related entities.

The growth of multinational corporations created new problems for both the states and …

A Report To The Connecticut Office Of Policy And Management Regarding A Proposed Payroll Tax, Richard Pomp

Faculty Articles and Papers

This Report analyzes a 5% payroll tax that would be imposed on employers in the amount of the Connecticut wages they pay to their employees. An anticipated response to this tax is that employers would shift this tax to their employees by reducing their wages by the cost of the tax. In this case, there would also be a reduction of the existing personal income tax rates by 5 points, but only if there were a reduction in wages. The effect would be to eliminate the 3% and 5% brackets, and would only be applicable to wages; it would not …

Responding To Covid: How To Deal With Nearly $100 Billion In Wasted Incentives, Richard Pomp

Faculty Articles and Papers

This article urges policymakers to cut down on ineffective and costly tax expenditures. Tax expenditures aim to incentivize beneficial economic outcomes; the tax jurisdiction surrenders the right to a portion of its tax base in anticipation of economic benefits. While tax expenditures are not inherently bad or good, many believe that most tax incentive programs would fail a cost-benefit analysis.

Ideally, tax incentives target economic activity that would not occur in the absence of the incentive. And to be considered a success, the benefit of the activity must outweigh the cost of the incentive. For example, if the goal of …

Things Not Worth Doing Are Especially Not Worth Doing Poorly: The Maryland And Nebraska Taxes Of Digital Advertising, Richard Pomp

Faculty Articles and Papers

In this article, Professor Pomp reviews and critiques the recent attempts by Maryland and Nebraska to tax digital advertising.

Maryland has proposed a gross revenue tax on digital advertising with a progressive rate structure. Though the tax is based on Maryland revenue, the rate is determined by global revenue. While resembling an exemption with progression approach, commonly utilized in income taxes to assess a taxpayer’s ability to pay, gross receipts taxes like this one are not concerned with ability to pay. And the approach discriminates against taxpayers engaged in interstate commerce, since out-of-state business activity leads to a higher rate …