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Full-Text Articles in Law

Enforcing Dividend Withholding On Derivatives, Reuven S. Avi-Yonah Nov 2008

Enforcing Dividend Withholding On Derivatives, Reuven S. Avi-Yonah

Articles

The United States imposes a 30 percent withholding tax on dividends paid to nonresident aliens. However, this tax is rarely paid by portfolio investors because they can swap into U.S. securities, receiving payments to match both capital gain and dividends. Treasury has ruled that swap payments have an origin in the taxpayer’s residence so there is no withholding obligation on payments that match dividends. The proposal would impose withholding tax on dividend equivalents on the ground that there is no policy justification for a distinction between dividends, substitute dividends under securities lending transaction (which are treated as dividends and are …


Will The Tax Man Cometh To Coach Rodriguez?, Douglas A. Kahn, Jeffrey H. Kahn Aug 2008

Will The Tax Man Cometh To Coach Rodriguez?, Douglas A. Kahn, Jeffrey H. Kahn

Articles

There has been much in the news recently about coaches of major college sports teams moving to a new school and incurring an obligation to make payment to their old school under a buyout provision in their contract. The most recent example is the highly publicized move of Richard Rodriguez from West Virginia University to the University of Michigan. Coach Rodriguez had a contract with his former employer that required him to pay $4 million dollars to West Virginia if he left for another coaching position. After a suit was filed, it was reported that the parties agreed that the …


Condemnation Without Justification, Douglas A. Kahn Jan 2008

Condemnation Without Justification, Douglas A. Kahn

Articles

On August 6-8, 2007, Prof. Neil Buchanan posted in Michael Dorf’s blog (http://michaeldorf.org/; for the blog entry regarding the death tax, see http:// michaeldorf.org/2007/08/dishonest-tax-rhetoric-part-3- of-3.html) a three-part series on what he deemed to be examples of political use of terminology to describe tax issues in a manner that is likely to mislead the public. Prof. Buchanan described this practice as ‘‘dishonest tax rhetoric.’’ He awarded first, second, and third prizes for the most egregious examples of dishonest rhetoric. I, however, found no objection to the usages he considered to be the two worst examples. Let us consider his first and …


Foreign Income And Domestic Deductions, James R. Hines Jr. Jan 2008

Foreign Income And Domestic Deductions, James R. Hines Jr.

Articles

To what extent should taxpayers deduct expenses incurred domestically that contribute to foreign income production? It is widely believed that if the home country does not tax foreign income, then it also should not permit deductions for that portion of domestic expenses attributable to earning foreign income. This prescription is, however, inconsistent with the decision to exempt foreign income from taxation in the first place. The paper shows that, for any system of taxing foreign income, the consistent and efficient treatment is to permit domestic expense deductions for all expenses incurred domestically. This differs from the current U.S. regime, under …


Genes As Tags: The Tax Implications Of Widely Available Genetic Information, Kyle D. Logue, Joel Slemrod Jan 2008

Genes As Tags: The Tax Implications Of Widely Available Genetic Information, Kyle D. Logue, Joel Slemrod

Articles

Advances in genetic research promise to loosen the tradeoff between progressivity and effi ciency by allowing tax liability (or transfer eligibility) to be based in part on immutable characteristics of individuals (“tags”) that are correlated with their expected lot in life. Use of genetic tags would reduce reliance on tax bases (such as income) that are subject to individual choices and, therefore, subject to ineffi cient distortion to those choices. If genetic information can be used by private employers and insurers, the case for basing tax in part on it becomes more compelling, as genetic inequalities would be exacerbated by …


Third-Party Tax Administration: The Case Of Low- And Moderate-Income Households, Michael S. Barr, Jane K. Dokko Jan 2008

Third-Party Tax Administration: The Case Of Low- And Moderate-Income Households, Michael S. Barr, Jane K. Dokko

Articles

Using a unique household-level data set, this article investigates the taxfiling experiences and refund behavior of low- and moderate-income (LMI) households. We document households' tax-filing behavior, attitudes about the withholding system, use of tax refunds to consume and save, and the mechanisms by which households would prefer to receive their income. We also document the prevalence of the use of tax-preparation services and the receipt of tax refunds and refund-anticipation loans. Finally, we argue that there may be a role for tax administration to enable LMI households to make welfare-improving financial decisions.


Comment On Yin, Reforming The Taxation Of Foreign Direct Investment By Us Taxpayers, Reuven S. Avi-Yonah Jan 2008

Comment On Yin, Reforming The Taxation Of Foreign Direct Investment By Us Taxpayers, Reuven S. Avi-Yonah

Articles

In this excellent article, George Yin addresses an important proposal by the President's Advisory Panel on Federal Tax Reform. The Advisory Panel proposed that the United States should permanently switch from taxing the parent corporation of U.S. multinationals on worldwide income to a modified territorial regime under which dividends paid out of active business income would be exempt from U.S. tax.' The Joint Committee on Taxation made a similar recommendation.2