Law Commons^™

Transfer Pricing: Un Guidelines -- Brazil, Richard Thompson Ainsworth

Faculty Scholarship

The UN Practical Manual on Transfer Pricing for Developing Countries endeavors to provide “clearer guidance on the policy and administrative aspects of applying transfer pricing analysis.” Chapter 10 is particularly noteworthy. It sets out specific country practices. The rules in Brazil, China, India and South Africa are offered as templates for developing countries to follow.

This article considers the Brazilian contribution to Chapter 10. Although some writers believe that developing countries should adopt the Brazilian model this article suggests otherwise. Even though it is a theoretically simple system, some aspects of the Brazilian model consistently work to the fiscal disadvantage …

Central Falls Retirees V. Bondholders: Assessing Fear Of Contagion In Chapter 9 Proceedings, Maria O'Brien

Faculty Scholarship

Modern Chapter 9 litigation has been characterized by extraordinary protections for municipal bondholders, and Central Falls is no exception. Although not well understood by politicians, fear of contagion has encouraged the adoption of legal arrangements that have limited the bankruptcy courts’ ability to include bondholders in the cost of restructuring municipal debt. This preference for bondholders (and, by extension, their insurers) has meant increased misery for taxpayers and retirees. Given that all of these actors appear to have been complicit to some degree in the creation and maintenance of the fiscally imprudent conditions that triggered bankruptcy and that evidence of …

Breaking Bankruptcy Priority: How Rent-Seeking Upends The Creditors' Bargain, Frederick Tung, Mark J. Roe

Faculty Scholarship

Bankruptcy reallocates value in a faltering firm. The bankruptcy apparatus eliminates some claims and alters others, leaving a reduced set of claims to match the firm’s diminished capacity to pay. This restructuring is done according to statutory and agreed-to contractual priorities, so that lower-ranking claims are eliminated first and higher ranking ones are preserved to the extent possible. Bankruptcy scholarship has long conceptualized this reallocation as a hypothetical bargain among creditors: creditors agree in advance that if the firm falters, value will be reallocated according to a fixed set of predetermined rules and contracts. In any given reorganization case, creditors …

Legally Blind: The Therapeutic Illusion In The Support Study Of Extremely Premature Infants, George J. Annas, Catherine L. Annas

Faculty Scholarship

Physician-researchers follow a protocol to generate generalizable knowledge; physicians have a duty to treat patients in ways they and their patients think best. In both activities, research and treatment, physicians often see themselves simply as physicians, practicing medicine. Sick people have similar perception difficulties, and prefer to think of their physician-researcher simply as their physician, even when their treatment is ² determined by a protocol or the flip of a coin. Almost 20 years ago, in this Journal, one of us suggested that at least some researchers use language "to obscure; to blur or eliminate the distinctions between research …

The Dangerous Law Of Biological Race, Khiara Bridges

Faculty Scholarship

The idea of biological race -- a conception of race that postulates that racial groups are distinct, genetically homogenous units -- has experienced a dramatic resurgence in popularity in recent years. It is commonly understood, however, that the U.S. Supreme Court has rejected the idea that races are genetically uniform groupings of individuals. Almost a century ago, the Court famously appeared to recognize the socially constructed nature of race. Moreover, the jurisprudence since then appears to reaffirm this disbelief: within law, race is understood to be a social construction, having no biological truth to it at all. Yet upon closer …

Injunctive And Reverse Settlements In Competition-Blocking Litigation, Keith N. Hylton, Sungjoon Cho

Faculty Scholarship

We distinguish standard settlements, in which the status quo is preserved, and injunctive settlements, which prohibit the defendant's activity. The reverse (payment) settlement is a special type of injunctive settlement. We examine the divergence between private and social incentives to settle and policies that would minimize socially undesirable injunctive and reverse settlements (e.g., banning reverse settlements). The results are applied to competition-blocking litigation, such as patent infringement and antidumping.

Approval And Withdrawal Of New Antibiotics And Other Antiinfectives In The U.S., 1980-2009, Kevin Outterson, John H. Powers, Enrique Seoane, Rosa Rodriguez-Monguio, Aaron S. Kesselheim

Faculty Scholarship

Concerns about a dearth of antibiotic innovation have spurred calls for incentives to speed the development of new antibiotics. Our data demonstrates that many of the new molecular entity (NME) antibioticsintroduced in the last 3 decades were withdrawn from the market, at more than triple the rate of other drug classes. Adjusted for these withdrawals, the net introduction of NME antibiotics is not as troubling of a trend. The reduction in NME antibiotics was partially offset by a surge in the introduction of NME antiretrovirals for HIV/AIDS and other drug classes (such as cardiovascular drugs) posted similar declines.

These data …

Self-Regulation Of Insider-Trading In Mutual Funds And Advisers, Tamar Frankel

Faculty Scholarship

Mutual funds are required to impose Codes of Ethics on many of their employees. Did this requirement make a difference? After all, similar Codes proliferate in many other financial and business corporations! ⁴ with fairly miserable results. In fact, the temptations facing employees and managers of many business corporations that published self-imposed Codes are relatively weaker than the temptations facing employees and managers of mutual funds. Yet as compared to mutual funds, these business companies have failed to prevent insider-trading!

I believe that regulated mutual funds are less prone to insider-trading than non-regulated funds and traders because their Codes of …

Rwanda -- Cutting-Edge Vat Compliance, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

On August 26, 2013 the Ministerial Order on Modalities of Use of Certified Electronic Billing Machine, No. 002/23/10TC of 31/07/2013, was published in the Official Gazette of Rwanda. This Order has set loose a technology revolution in VAT compliance that promises business efficiencies, and revenue enhancements that are only imagined in more developed countries. To open the door to technology Rwanda has taken the traditional digital invoice security model, and connected it to a central security portal at the Rwanda Revenue Authority (RRA). Rwanda will now be able to securely monitor transactions in close to real-time (oversight is on-demand).

Millennium Development Goals And The Protection Of Displaced And Refugee Women And Girls, Susan M. Akram

Faculty Scholarship

The international protection regime of refugee, stateless and displaced women and girls has significant deficiencies. As refugees and displaced persons, women and girls experience unique challenges. They suffer abuse disproportionately as women through rape, human trafficking, and female genital mutilation. Women and girl refugees face greater challenges and risks to safety at every stage of displacement: in refugee camps, in urban spaces, in transit to safe haven, and in the process of obtaining legal status. They are frequently at the mercy of male family members in making claims to refugee and asylum status, as females are often unable to obtain …

Capital Income, Risky Investments, And Income And Cash-Flow Taxation, Theodore S. Sims

Faculty Scholarship

It has become conventional wisdom, based partly on postulated portfolio adjustments by investors in risky assets, (1) to view an income tax as equivalent to a tax levied only on the risk free return to capital and as therefore equivalent to a wealth tax; and (2) to view the difference between an income tax and a cash-flow consumption tax as limited to tax on the risk free return. I show that the propositions (1) equating an income tax to a tax on the risk free return, and (2) distinguishing an income tax from a cash-flow tax only by tax on …

Book Review Of The Verdict Of Battle: The Law Of Victory And The Making Of Modern War, Robert D. Sloane

Faculty Scholarship

This is a brief review of The Verdict of Battle: The Law of Victory and the Making of Modern War (2012), by James Q. Whitman, a remarkably erudite and original contribution to scholarship on military history and the law of war. It sketches the work’s compelling historical arguments and then critiques its (comparatively modest) polemical dimensions and normative conclusions.

Dice – Digital Invoice Customs Exchange, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

A digital invoice customs exchange (DICE) is a technology-intensive tax compliance regimen for VAT/GST that utilizes invoice encryption to safeguard transactional data exchanged between seller and buyer in both domestic and import/export contexts while simultaneously notifying concerned jurisdictions of the transaction details.

DICE facilitates real-time VAT/GST enforcement as well as real-time commercial contract verification. It is a commercial invoice validation system that prevents tax evasion, most notably missing trader fraud and the non-declared import of trade-able services. DICE mimics the most effective administrative enforcement effort ever undertaken by the US IRS – the requirement to disclose the social security numbers …

Vat -- East African Community: The Tradable Services Problem World-Class Solution, Richard Thompson Ainsworth, Goran Todorov

Faculty Scholarship

The value added taxes (VATs) of the East African Community (EAC) are open to manipulation and are leaking revenue from tradable services transactions. The EAC’s response has been to adopt a unique Reverse VAT mechanism. Something more is needed – a Digital Invoice Customs Exchange. Together these adjustments will provide a world-class solution to a world-wide problem. The EAC appears to be moving in this direction.

The vulnerability of the EAC VATs to tradable services is not surprising. The EAC borrowed VAT designs from the major VAT models, the EU VAT and the New Zealand Goods and Services Tax (NZ …

American Vat – The Carousel Fraud Threat: Will The Eu Show The Us The 'Way Forward', Richard Thompson Ainsworth

Faculty Scholarship

On Thursday, March 29, 2007 the European Commission, Directorate-General for Taxation and Customs Union, will host a one-day Conference on Fiscal Fraud – Tackling VAT Fraud: Possible Ways Forward. The conference is based on the Communication of May 31, 2006 explaining the need to develop a coordinated strategy to improve the fight against fiscal fraud. This paper indicates that the EU examination of carousel fraud points the way forward for advocates of a US VAT as well.

About 40% of EU VAT fraud appears to be 'missing trader intra-community' (MTIC) or carousel fraud. The best estimates of EU losses to …

Tackling Vat Fraud: Thirteen Ways Forward, Richard Thompson Ainsworth

Faculty Scholarship

In a May 31, 2006 Communication to the Council, the European Parliament, and the European Economic and Social Committee, the European Commission indicated a need to develop a coordinated strategy to improve the fight against fiscal fraud [COM (2006) 254 final]. Although the Communication considers fiscal fraud broadly (VAT, excise duties and direct taxes) the most pressing need seems to be for a VAT strategy that will effectively deal with carousel fraud.

This paper considers thirteen proposals that deal with missing trader intra-community fraud (MTIC):

(1) Common VAT (origin system) (2) Vanistendael’s foreign tax offices proposal (3) CVAT (Compensating VAT) …

Explaining The ‘Unpredictable’: An Empirical Analysis Of U.S. Patent Infringement Awards, Samantha Zyontz, Michael J. Mazzeo, Jonathan Hillel

Faculty Scholarship

Patent infringement awards are commonly thought to be unpredictable, which raises concerns that patents can lead to unjust enrichment and impede the progress of innovation. We investigate the unpredictability of patent damages by conducting a large-scale econometric analysis of award values. We begin by analyzing the outcomes of 340 cases decided in US federal courts between 1995 and 2008 in which infringement was found and damages were awarded. Our data include the amount awarded, along with information about the litigants, case specifics and economic value of the patents-at-issue. Using these data, we construct an econometric model that explains over 75% …

A Tale Of Four Treatments: Preferential Taxation And Asset Valuation, Theodore S. Sims

Faculty Scholarship

Conventional wisdom is that preferential taxation of property income elevates asset values above their values in the absence of a tax, with those values strictly increasing in the marginal rate of the holder. I show that preferential tax rates (such as the rate on realized long-term capital gains) do indeed have that property. Preferential timing on the other hand -- pure "tax deferral" -- does not. The value of an asset subject to pure deferral does increase with the holder’s marginal rate, but only up to a point, at some marginal rate in excess of 50 percent. With increases in …

The Fiduciary Foundations Of Federal Equal Protection, Gary S. Lawson, Guy Seidman, Robert Natelson

Faculty Scholarship

In Bolling v. Sharpe, the Supreme Court invalidated school segregation in the District of Columbia by inferring a broad “federal equal protection” principle from the Due Process Clause of the Fifth Amendment. It is often assumed that this principle is inconsistent with the Constitution’s original meaning and with “originalist” interpretation.

This Article demonstrates, however, that a federal equal protection principle is not only consistent with the Constitution’s original meaning, but inherent in it. The Constitution was crafted as a fiduciary document of the kind that, under contemporaneous law, imposed on agents acting for more than one beneficiary – and on …

Tax The Patent Trolls, James Bessen, Brian Love

Shorter Faculty Works

This essay argues that Congress should increase the size and frequency of patent renewal fees to reduce patent troll activity. Patents owned by trolls are generally old — twelve years on average — when finally asserted in court. Many such patents were originally filed to protect inventions that long ago became obsolete, and today hold value only because they were written so broadly that they arguably can be interpreted to cover technologies developed much later by other inventors. To shackle the dead hand of old inventions, other countries charge patent owners annual fees that must be paid to keep the …

Reason, Morality, And Constitutional Compliance, David B. Lyons

Faculty Scholarship

The central claim of Abner Greene’s Against Obligation appears to be that the federal government should allow exemptions from some restrictive laws in order to accommodate religious and other such commitments of its subjects. Professor Greene says that the law should be seen as a source of normative authority on a par with independent sources of authority (such as ordinary subjects’ religious convictions), and the government should loosen its own commitment to the Constitution accordingly.

Interpretation Catalysts And Executive Branch Legal Decisionmaking, Rebecca Ingber

Faculty Scholarship

Recent years have seen much speculation over executive branch legal interpretation and internal decisionmaking, particularly in matters of national security and international law. Debate persists over how and why the executive arrives at particular understandings of its legal constraints, the extent to which the positions taken by one presidential administration may bind the next, and, indeed, the extent to which the President is constrained by law at all. Current scholarship focuses on rational, political, and structural arguments to explain executive actions and legal positioning, but it has yet to take account of the diverse ways in which legal questions arise …

A Room With Many Views: A Response To Essays On According To Our Hearts: Rhinelander V. Rhinelander And The Multiracial Family, Angela Onwuachi-Willig

Faculty Scholarship

At the outset, l should note that I am very grateful to all contributors in this issue-Professors Kerry Abrams, Jacquelyn Bridgeman, Jennifer Chacon, Robin Lenhardt, and Laura Rosenbury for their insightful, powerful, and stirring reactions to my book According to Our Hearts: Rhinelander v. Rhinelander and the Law of the Multiracial Family, and to Professor Melissa Murray for her elegant Foreword to this issue. Reading the responses of these scholars whom I admire and respect has been exhilarating and affirming. Indeed, seeing the many ways in which just a small group of these reviewers have examined, interpreted, and even "felt" …

Abortion Access In An Era Of Constitutional Infidelity, Khiara Bridges

Faculty Scholarship

Abner Greene’s Against Obligation and Louis Michael Seidman’s On Constitutional Disobedience offer provocative, subversive, and frequently convincing arguments against wholesale fidelity to the Constitution. Greene makes the case that individuals, at times, have no duty to obey the Constitution as it has been interpreted and articulates a methodology for how the government should accommodate these legitimate acts of disobedience. Seidman, however, makes the case that we should abandon the “pernicious myth” that we are obligated to obey the Constitution at all. He argues that if the fiction of constitutional obedience was jettisoned altogether, the national discourse about the issues that …

Against Agnosticism: Why The Liberal State Isn't Just One (Authority) Among The Many, Linda C. Mcclain

Faculty Scholarship

This article takes up the gauntlet thrown down by Professor Abner Greene’s recent book, Against Obligation: The Multiple Sources of Authority in a Liberal Democracy, to those scholars, politicians, and activists who believe that realizing the ideal of e pluribus unum (out of many, one) as well as constitutional principles of liberty and equality require a robust role for government. Government, Greene argues, is just one source of authority among many others, and citizens – or even public officials – have no general moral duty to obey the law. The political and constitutional order of the United States, he contends, …

Critical Reflections On Seidman's On Constitutional Disobedience, Hugh Baxter

Faculty Scholarship

This symposium contribution critically examines Louis Seidman’s book "Constitutional Disobedience" (2012). Seidman questions whether American constitutionalism really has the positive values commonly attributed to it. He suggests that citizens and legislators should shift away from claims that the Constitution requires or forbids certain governmental choices and toward more straightforward, “all-things-considered” political debate about “how to solve real, modern problems” and “about what will produce the best country.” I argue against Seidman's view that straightforward political talk will be less polarizing and divisive than constitution-invoking discussion. Seidman, I think, might romanticize ordinary political discussion in somewhat the same way that orthodox …

Qu'ils Mangent Des Contrats: Rethinking Justice In Eu Contract Law, Daniela Caruso

Faculty Scholarship

The concern for justice in the context of EU contract law was central to a scholarly initiative that led, in 2004, to the publication of a Social Justice Manifesto. The Manifesto had the explicit goal of steering the Commission’s harmonization agenda away from purely neoliberal goals and towards a socially conscious law of private exchange. Contract law would be designed at the EU level so as to become (or remain, depending on the baseline of each member state) palatable to weaker parties. Today, in the many parts of Europe devastated by rising poverty, dire unemployment rates, and collapsing social safety …

Fighting Cyber-Crime After United States V. Jones, Danielle K. Citron, David Gray, Liz Rinehart

Faculty Scholarship

In a landmark non-decision last term, five Justices of the United States Supreme Court would have held that citizens possess a Fourth Amendment right to expect that certain quantities of information about them will remain private, even if they have no such expectations with respect to any of the information or data constituting that whole. This quantitative approach to evaluating and protecting Fourth Amendment rights is certainly novel and raises serious conceptual, doctrinal, and practical challenges. In other works, we have met these challenges by engaging in a careful analysis of this “mosaic theory” and by proposing that courts focus …

Originalism Without Obligation, Gary S. Lawson

Faculty Scholarship

I am truly delighted that Boston University School of Law is hosting a conference on Abner Greene’s Against Obligation1 and Michael Seidman’s On Constitutional Disobedience. 2 Both books launch powerful and much-needed broadsides against the idea of a political obligation to obey the U.S. Constitution, and more generally (whether or not the authors embrace these implications) against the very idea of a political obligation to obey state authorities. I fully agree with both authors that the arguments normally made in favor of a duty of obedience to the Constitution, and by extension to state authorities of any kind, are remarkably …

Fit, Justification, And Fidelity In Constitutional Interpretation, James E. Fleming

Faculty Scholarship

With this event – a Symposium on Abner Greene’s Against Obligation2 and Michael Seidman’s On Constitutional Disobedience3 – we continue our Boston University Law Review series of symposia on significant recent books in law. The distinctive format is to pick two books that join issue on an important topic, to invite the author of each book to write an essay on the other book, and to invite several Boston University School of Law faculty members to write an essay on one or both books.