Law Commons^™

Time To Step Up: Modeling The African American Ethnivestor For Self Help Entrepreneurship In Urban America, Roger M. Groves

ExpressO

Almost $6 billion in taxes paid by the American people have been rather ubiquitously placed in the hands of a federal subsidy program for investors in low income communities. The subsidy is in the form of a tax credit. The program is entitled the New Markets Tax Credit (“NMTC”) initiative. Under the program, the tax credit is used to lure investors to provide equity capital into low income areas, urban and/or rural (i.e. a new market for equity funding). According to my companion law review article (Florida Tax Review, Spring, 2007; The Florida Tax Review was ranked 1st among tax …

Imagining A Progressive And Comprehensive Consumption Tax, Sean K. Raft

ExpressO

The income tax system has become quite a mess. Unfortunately, the brunt of that mess falls primarily on the backs of the individual taxpayer, who is required to sift through the tens of thousands of pages of instructions and tax rules just to calculate, file, and pay what they owe. The filing burden and costs of compliance are already exorbitant, but they are only increasing.

In response to the complaints over the increasing complication, economists and tax scholars have imagined ways to improve or replace the income tax. Yet, the alternatives are either regressive or fail to generate enough revenue …

The De-Gentrification Of New Markets Tax Credits, Roger M. Groves

ExpressO

This article provides the most comprehensive analysis to date of the New Markets Tax Credits program established by Congress. The purpose of the NMTCs is to use tax credits as incentives for investors to provide equity funds into low income areas. The article reveals that over $2 billion of federal tax subsidies that have been allocated to gentrified projects for the wealthy, rather than the intended beneficiaries – low income residents in the urban core – as Congress intended. The article proposes amendments to the statute and regulations to close unintended loopholes.

Taxing Emotional Injury Recoveries: A Critical Analysis Of Murphy V. Internal Revenue Service, Gregory L. Germain

ExpressO

Does Congress have the power under the United States Constitution to tax compensatory personal injury awards? Several months ago, the D.C. Circuit Court of Appeals said "no" in Murphy v. Internal Revenue Service. The court theorized that Ms. Murphy’s compensatory damages award did not constitute “income,” as understood by the enactors of the 16th Amendment, because the award merely made Ms. Murphy whole rather than increasing her wealth.

This paper disputes virtually every aspect of the Murphy decision. The court made errors from the beginning in analyzing the statutory issues. While the court ultimately reached the correct preliminary conclusion – …

A Complete Property Right Amendment, John H. Ryskamp

ExpressO

The trend of the eminent domain reform and "Kelo plus" initiatives is toward a comprehensive Constitutional property right incorporating the elements of level of review, nature of government action, and extent of compensation. This article contains a draft amendment which reflects these concerns.

Fiction, Form And Substance In Subchapter K -- Approaching Partnership Mergers, Divisions And Incorporations, Heather M. Field

ExpressO

The tax consequences of substantively equivalent partnership mergers, divisions and incorporations can vary dramatically depending on the form of the transaction. This disparate treatment arises because the tax analysis of these partnership transactions inconsistently adheres to the “form” of the transaction and limits the use of legal “fictions”. This part-form, part-fiction approach distorts parties’ incentives about whether and how to undertake such transactions and can make the transactions less efficient, all without materially advancing other policy goals. This result is exacerbated by non-tax business exigencies that restrict parties’ abilities to implement certain transaction forms and by the increase in “formless” …

Tribal-State Gaming Compacts And Revenue Sharing Provisions: Are The States Upping The Ante? , Richard L. Skeen

ExpressO

In the ten years following, the Supreme Court’s ruling in the Seminole Tribe v. Florida, Indian Gaming has grown to over a $19 billion a year industry, in 26 States, involving over 241 Approved Class III Tribal Gaming Ordinances. States have been eager to get a piece of this ever-increasing pie. Some commentators have predicted that States will be reluctant to enter into new compacts or renew existing compacts, however, other’s have indicated that States will continue to demand a percentages of Gaming revenues.

This comment addresses the central issue of whether the Tribal-State compacts entered into subsequent to the …

Revitalizing Our Urban Core Without Marginalizing Our Core People: Closing Tax Credit Loopholes For The Wealthy While Generating Ethnic Entrepreneurial Self Help Alternatives To Subsidized Gentrification, Roger M. Groves

ExpressO

This article provides the most comprehensive analysis to date of the New Markets Tax Credits program established by Congress. The purpose of the NMTCs is to use tax credits as incentives for investors to provide equity funds into low income areas. The article reveals that over $2 billion of federal tax subsidies that have been allocated to gentrified projects for the wealthy, rather than the intended beneficiaries – low income residents in the urban core – as Congress intended. The article proposes amendments to the statute and regulations to close unintended loopholes.

The article also creates a model for a …

Revitalizing Our Urban Core Without Marginalizing Our Core People: Closing Tax Credit Loopholes For The Wealthy While Generating Ethnic Entrepreneurial Self Help Alternatives To Subsidized Gentrification, Roger M. Groves

ExpressO

This article provides the most comprehensive analysis to date of the New Markets Tax Credits program established by Congress. The purpose of the NMTCs is to use tax credits as incentives for investors to provide equity funds into low income areas. The article reveals that over $2 billion of federal tax subsidies that have been allocated to gentrified projects for the wealthy, rather than the intended beneficiaries – low income residents in the urban core – as Congress intended. The article proposes amendments to the statute and regulations to close unintended loopholes.

The article also creates a model for a …

Five Recommendations To Law Schools Offering Legal Instruction Over The Internet, Daniel C. Powell

ExpressO

This article addresses the emerging market for legal distance education. The market is being driven by recent changes in ABA regulations, as well as specialization in the curriculum, and expanding costs of traditional education. We are seeing the emergence of legal distance education consortiums, which offer a platform for the trading or selling of courses and programs.

However, much skepticism remains about the ability of distance education technology to offer law schools and law students a sufficiently interactive pedagogy. In the words of Supreme Court Justice Ruth Bader Ginsburg legal education is a “shared enterprise, a genuine interactive endeavor” that …

Substance Over Form? Phantom Regulations And The Internal Revenue Code, Amandeep S. Grewal

ExpressO

This paper addresses the appropriate response to tax statutes that call for the issuance of regulations, but that have been ignored by the Secretary. The courts and the IRS have taken the unusual step of treating these statutes as self-executing, notwithstanding the absence of regulations, and have invoked phantom regulations to enforce the statutes. Several commentators have analyzed the Tax Court's and the IRS's approaches, but have focused mostly on cases interpreting delegations found in the Internal Revenue Code. Because those cases themselves are inconsistent, it is not possible to extract a clear rule from analysis of those cases alone. …

The Partnership: Preserving Capital Gains On Real Estate Investments, Charles E. Mcwilliams

ExpressO

This paper considers the use of partnerships as an effective tool for preserving capital gains on real estate investments. For tax purposes, the Internal Revenue Service generally treats a limited liability company as a partnership. This form of organization is widely used for real estate investments, and by taking a few simple precautions an LLC may ensure that any gain on its investments in undeveloped real property will be treated as capital gains. Such treatment may reduce the LLC’s tax costs substantially.

The Fifth Circuit developed a framework that has proven invaluable for analyzing the activity of the LLC to …

Finding The Constitutional Right To Education In San Antonio School District V. Rodriguez, John H. Ryskamp

ExpressO

In Lawrence v. Texas, the Supreme Court abolished the scrutiny regime because it impermissibly interfered with an important fact, liberty. And yet, even in earlier cases which ostensibly upheld the scrutiny regime, it is difficult to see that the Court ever did so to the detriment of facts it considered important. In short, the Court often (always?) found itself raising the level of scrutiny for a fact in the same case it upheld the regime, leaving us to wonder if the scrutiny regime ever actually had any effect at all, or even whether the Court felt it was relevant. As …

Constitutional Limits On State Taxation Of Nonresident Trusts: Gavin Misinterprets And Misapplies Both Quill And Mcculloch, Joseph W. Blackburn

ExpressO

No abstract provided.

Working For Free: A New Tax Dodge For The Wealthy Magnifies Employment Tax Defects, Richard Winchester

ExpressO

Employment taxes account for an enormous share of federal tax receipts. And it is widely acknowledged that taxes on the self-employed are collected under a dysfunctional set of laws that is long overdue for repair. Yet, there is surprisingly little legal scholarship in the field. This article fills a portion of that gap. It examines some fundamental flaws that plague our nation’s employment tax laws, focusing on how President Bush’s dividend tax cut created an incentive for wealthy individuals to exploit those flaws at the government’s expense when they work for a corporation that they also own and control. Specifically, …

The Option Conundrum In Tax Law: After All These Years, What Exactly Is An Option?, Kevin J. Liss

ExpressO

Some of the latest financial products that have become prevalent on Wall Street defy easy categorization for tax purposes. Certain products, such as economic derivatives or weather derivatives, bear the trappings of options, but lack an underlying property component. Other products, such as credit default swaps, have option-type payouts, but are cast in the form of financial swaps. Which of these products are truly options and why? When and how to tax these instruments depends on proper resolution of this fundamental classification issue. With respect to credit default swaps, arguably the single most important product innovation on Wall Street in …

A Republic Of The Mind: Cognitive Biases, Fiscal Federalism, And The Tax Code, Brian Galle

ExpressO

Our federal government annually donates more than $75 billion in potential revenue to the States under section 164 of the Tax Code, the provision allowing itemizing taxpayers to deduct the cost of the state and local income, property, and sales taxes they paid during the tax year. This Article argues that expenditure may be a massive mistake. The deduction is, in theory, supposed to further federalism, by shifting revenues -- and therefore regulation -- downwards from the federal government to states and their local subsidiaries. What few commentators seem yet to have recognized, though, is that using the deduction for …

The Different Tax Treatment Of Investment Advisory Fees And Brokerage Fees; The Lower The Fiduciary Duty The Better The Tax Consequences, Barry W. Rickert

ExpressO

The current tax laws favor brokerage fees as compared to investment advisory fees, even though investment advisors are held to a higher standard of fiduciary duty. My article examines the different tax treatment of investment advisory fees and brokerage fees, analyzes the policy considerations of such treatment and proposes alternatives to the current system. Considering the large number of American investing in the securities markets, it is important that our tax laws be written in a way that encourages taxpayers to seek investment professionals who are held to higher standards of conduct. The policy implications of brokerage fees receiving preferable …

Should We Adopt William Vickrey’S Cumulative Averaging Income Tax System? Progressivity And Simplicity In Tax Reform, Neil H. Buchanan

ExpressO

This paper focuses on William Vickrey’s proposal to replace our current annual system of tax assessment with a new tax system that bases assessments on lifetime cumulative average income. After reviewing two key arguments in favor of the social goal of progressivity in taxation (a goal that Vickrey shared), I have examined whether adopting Vickrey’s cumulative averaging system would achieve a compelling change in the fairness of the tax system. While the current system undeniably creates a problem of horizontal inequity in that people with similar lifetime incomes can pay different tax rates based on the timing of those incomes, …

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

A Foundation For International Taxation: The Institutional Competence Of Nations, Eric T. Laity

ExpressO

This Article proposes a conceptual foundation for the field of international tax law. The Article refers to this foundation as the institutional competence of nations in global economic development. A nation’s institutional competence is its discretion to make decisions in pursuit of our collective goal of global economic development, discretion that is subject to a number of standards and limitations.

The Article constructs the institutional competence of nations in global economic development from institutional economics, simple game theory, and the literature on social norms. The Article expresses the institutional competence of nations through standards and limitations that reduce the abuse …

The High School Attainment Credit: A Tax Credit Encouraging Students To Graduate From High School, David Richard Hansen

ExpressO

High school dropouts are a serious problem facing America today. High school dropouts are more likely to be unemployed, earn less money when employed, place a larger burden on the government by requiring public assistance (welfare), and are more likely to be prone to a life of crime and violence than high school completers. While government at all levels continues to focus on schools and teachers in solving the dropout problem, this paper shows how parents are where the focus should lie. This paper proposes a revolutionary tax credit, the High School Attainment Credit (“HSAC”), which would cost-effectively eradicate the …

The Missing Preferred Return, Victor Fleischer

ExpressO

Managers of buyout funds typically offer their investors an 8% preferred return on their investment before they take a share of any additional profits. Venture capitalists, on the other hand, rarely offer a preferred return. Instead, VCs take their cut from the first dollar of nominal profits. This disparity between venture funds and buyout funds is especially striking because the contracts that determine fund organization and compensation are otherwise very similar. The missing preferred return might suggest that agency costs pose a larger problem in venture capital than previously thought. Is the missing preferred return evidence, perhaps, that VCs are …

Taxing Utility, Terrence Chorvat

George Mason University School of Law Working Papers Series

In order to assess the efficiency of a tax, we should examine its effect on the behavior of individuals. In general, the less a tax affects behavior, the more efficient it is thought to be. The standard example of a non-distorting tax is a lump-sum tax, which does not change with the behavior of the taxpayer. However, this article demonstrates that behavioral distortions can and do arise from a change in even a lump-sum tax. The only truly non-distortionary tax would be one based on utility itself. Utility, which has been used as a norm for distributional analysis, is also …

What Is Fiscal Responsibility? Long-Term Deficits, Generational Accounting, And Capital Budgeting, Neil H. Buchanan

Rutgers Law School (Newark) Faculty Papers

This article assesses three basic approaches to assessing the future effects of the government’s fiscal policies: traditional measures of the deficit, measures associated with Generational Accounting, and measures derived from applying Capital Budgeting to the federal accounts. I conclude that Capital Budgeting is the best of the three approaches and that Generational Accounting is the least helpful. Acknowledging that there might be some value in learning what we can from a variety of approaches to analyzing fiscal policy, I nevertheless conclude that Generational Accounting is actually a misleading or--at best--empty measure of future fiscal developments. The best approach to providing …

The Internal Revenue Code As Sodomy Statute, Anthony C. Infanti

ExpressO

This essay attempts to bridge the gap between gay and straight understanding of the Internal Revenue Code’s impact on gay and lesbian couples. Through a combination of personal narrative and legal analysis, I try to explain how, from a gay perspective, the Code can be viewed as discriminating against gay and lesbian couples – regardless of whether, on a net basis, they are required to pay more or less tax than similarly-situated straight couples.

A Broader View Of Corporate Inversions: The Interplay Of Tax, Corporate And Economic Implications, Orsolya Kun

ExpressO

Multinational corporations have, in substantial numbers, moved their corporate residence from the U.S. to Bermuda, for the purpuse of minimizing U.S. taxation on their worldwide income. This study reviews the forms of these "corporate inversion transactions," and explores their tax implications, as well as their corporate governance implications and motivations. It is the first scholarly study to examine the corporate governance implications of inversions, and it concludes that previously unexplored aspects of the change of corporate domicile result in substantial reduction of accountability of directors and officers and significant impediments to enforcement of shareholder rights.