Law Commons^™

Taxation And Inequality: A Case For The Vat., Reuven S. Avi-Yonah

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The author shows that a progressive income tax has had little effect on after-tax income inequality. Social programs, however, do create a more equal society. He proposes a national sales tax—a value-added tax—to finance more such social programs as America's best route to a more equal society.

Unwinding The Ceiling Rule, Leigh Osofsky

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This article closely examines the unwinding of the ceiling rule. Congress and partnership tax experts historically have assumed perfect unwinding of the ceiling rule on liquidation or sale of a partnership interest. However, this assumption glosses over a significantly more complicated reality. This article closely examines the history of section 704(c) and the interaction between the ceiling rule and the rules regarding sales and liquidations of partnership interests to reveal the extent to which the assumption does not hold. By debunking long-held assumptions about the perfect unwinding of the ceiling rule, this article displays that there is no reasonable justification …

Corporate Taxation And Corporate Social Responsibility, Reuven S. Avi-Yonah

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This Article will address the question of whether publicly traded U.S. corporations owe a duty to their shareholders to minimize their corporate tax burden through any legal means, or if instead, strategic behaviors like aggressive tax-motivated transactions are inconsistent with corporate social responsibility (“CSR”). I believe the latter holds true, regardless of one’s view of the corporation. Under the “artificial entity” view, such behavior undermines the constitutive relationship between the corporation and the state. Under the “real view,” such behavior runs contrary to the normal obligation of citizens to comply with the law (even absent effective enforcement). And under the …

What Makes A Dutch Company Dutch? The Evolution Of Us Limitation-On-Benefits Provisions, Patricia A. Brown

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No abstract provided.

Apportioning State Personal Income Taxes To Eliminate The Double Taxation Of Dual Residents: Thoughts Provoked By The Proposed Minnesota Snowbird Tax, Edward A. Zelinsky

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As a matter of both tax policy and constitutional law, it is time to apportion state personal income taxes to eliminate the double taxation of dual residents. Individuals who, for income tax purposes, are residents are two or more states should be taxed along the lines recently proposed by Minnesota Governor Mark Dayton for “snowbirds”: As to income with respect to which a state has source jurisdiction, that state should tax such income. As to income which two or more states tax only on the basis of residence, such states should apportion, based on the dual resident’s relative presence in …

Why The Buffett-Gates Giving Pledge Requires Limitation Of The Estate Tax Charitable Deduction, Edward A. Zelinsky

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The Buffett-Gates Giving Pledge, under which wealthy individuals promise to leave a majority of their assets to charity, is an admirable effort to encourage philanthropy. However, the Pledge requires us to confront the paradox that the federal estate tax charitable deduction is unlimited while the federal income tax charitable deduction is capped. If a Giving Pledger leaves his wealth to charity, the federal fisc loses significant revenue since the Pledger thereby avoids federal estate taxation as charitable bequests are deductible without limit for federal estate tax purposes. Despite its laudable qualities, the Giving Pledge is a systematic (albeit inadvertent) threat …

Codifying And Miscodifying Judicial Anti-Abuse Tax Doctrines, Linda Jellum

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No abstract provided.

The Aftermath Of Hobby Lobby: Hsas And Hras As The Least Restrictive Means, Edward A. Zelinsky

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In Burwell v. Hobby Lobby Stores, Inc., the United States Supreme Court held that the Religious Freedom Restoration Act of 1993 (RFRA) does not require closely-held corporations’ employer-sponsored medical plans to provide forms of contraception that shareholders of such corporations object to on religious grounds. The question now raised is how the President, Congress, and the departments of Health and Human Services (HHS), Treasury and Labor, ought to respond to the Hobby Lobby decision.

Lgbt Families, Tax Nothings, Anthony C. Infanti

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The federal tax laws have never been friendly territory for LGBT families. Before the enactment of the federal Defense of Marriage Act (DOMA), the federal tax laws turned a blind eye to the existence of LGBT families by tacitly embracing state law discrimination against same-sex couples. When it enacted DOMA in 1996, Congress ensured that it would be able to continue to turn a blind eye to LGBT families even if one or more states were to legally recognize families headed by same-sex couples. In a real sense, LGBT families have been, and continue to be, tax outlaws.

This overt …

A Critical Research Agenda For Wills, Trusts And Estates, Bridget J. Crawford, Anthony C. Infanti

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The law of wills, trusts, and estates could benefit from consideration of its development and impact on people of color; women of all colors; lesbian, gay, bisexual, and transgendered individuals; low-income and poor individuals; the disabled; and nontraditional families. One can measure the law’s commitment to justice and equality by understanding the impact on these historically disempowered groups of the laws of intestacy, spousal rights, child protection, will formalities, will contests, and will construction; the creation, operation and construction of trusts; fiduciary administration; creditors’ rights; asset protection; nonprobate transfers; planning for incapacity and death; and wealth transfer taxation. This essay …

Citizens United And Social Welfare Organizations: The Tangled Relationships Among Guidance, Compliance, And Enforcement, Frances R. Hill

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No abstract provided.

Qualification Of Taxable Entities And Treaty Protection, Anthony C. Infanti, Bernard Moens

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This report was prepared for the 2014 International Congress of the International Fiscal Association. The general reporters for the Congress asked IFA branches around the world to prepare a report designed to provide information on how countries address (1) the question of when domestic and foreign entities are treated as transparent or taxable and (2) conflicts between different countries’ treatment of entities as transparent or taxable for treaty purposes. This report constitutes the IFA U.S.A. Branch’s submission to the general reporters.

The report is divided into two sections. The first section of the report provides a general description of how …

The House Of Windsor: Accentuating The Heteronormativity In The Tax Incentives For Procreation, Anthony C. Infanti

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Following the Supreme Court’s decision in United States v. Windsor, many seem to believe that the fight for marriage equality at the federal level is over and that any remaining work in this area is at the state level. Belying this conventional wisdom, this essay continues my work plumbing the gap between the promise of Windsor and the reality that heteronormativity has been one of the core building blocks of our federal tax system. Eradicating embedded heteronormativity will take far more than a single court decision (or even revenue ruling); it will take years of work uncovering the subtle …

Sentencing In Tax Cases After Booker: Striking The Right Balance Between Uniformity And Discretion, Scott A. Schumacher

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It has been nearly ten years since the Supreme Court’s seminal decision in United States v. Booker, in which the Court invalidated the mandatory application of the United States Sentencing Guidelines. In the cases that followed, the Court addressed subsidiary issues regarding the application of the Guidelines and the scope of appellate review. However, despite — or perhaps because of — these opinions, there is little consensus regarding the status and extent of appellate review, as well as the discretion afforded sentencing courts. More troubling, what consensus there is seems to permit judges to impose any sentence they wish, as …

A Response To Professor Leff’S Tax Planning 'Olive Branch' For Marijuana Dealers, Philip Hackney

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Professor Benjamin Leff argues in a forthcoming article entitled Tax Planning for Marijuana Dealers that a tax-exempt social welfare organization described in Internal Revenue Code section 501(c)(4) may sell medical marijuana without putting its exempt status in jeopardy. He argues that (1) the “public policy” doctrine applicable to charitable organizations under section 501(c)(3) does not apply to social welfare organizations, and (2) a social welfare organization may consider “community” law and ignore federal law in considering whether its activity meets the idea of social welfare. I argue that Leff is wrong and that the public policy doctrine applicable to charitable …

Big (Gay) Love: Has The Irs Legalized Polygamy?, Anthony C. Infanti

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Within days in December, a federal judge in Utah made news by loosening that state’s criminal prohibition against polygamy and the Attorney General of North Dakota made news by opining that a party to a same-sex marriage could enter into a different-sex marriage in that state without first obtaining a divorce or annulment. Both of these opinions raised the specter of legalized plural marriage. What discussions of these opinions missed, however, is the possibility that the IRS might already have legalized plural marriage in the wake of the U.S. Supreme Court’s decision last June in United States v. Windsor, which …

Rethinking Erisa's Promise Of Income Security In A World Of 401(K) Plans, Lawrence A. Frolik

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This article discusses the evolution of retirement income funds from defined benefit packages to 401(k) and IRA accounts and how the changing dynamic has reshaped the way retirees think about post-retirement income. The article outlines the mechanics of 401(k) accounts and rollover IRAs in the post-retirement period and presents questions about the ability of retirees to successfully address the complex issues relating to investment choices including, what entity they entrust their savings to, the volume and source of distributions, and long-term sufficiency planning. The article suggests that an increase in the use of annuities may help to resolve some of …

Understanding The Amt, And Its Unadopted Sibling, The Amxt, James R. Hines Jr., Kyle D. Logue

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Four million Americans with extensive tax preferences are subject to the Alternative Minimum Tax (AMT). By taxing a broad definition of income, the AMT makes it possible to have a tax system that both encourages certain activities with generous tax preferences and maintains a semblance of distributional equity. The same rationale supports the imposition of an Alternative Maximum Tax (AMxT), which would cap tax liabilities of individuals with very few preference items and thereby afford Congress greater flexibility in designing the income tax. The original 1969 AMT proposal included an AMxT; it is difficult to justify imposing one without the …

A Proposed Replacement Of The Tax Expenditure Concept And A Different Perspective On Accelerated Depreciation, Douglas A. Kahn

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Over 32 years ago, I published an article on accelerated depreciation in which I concluded that some amount of acceleration was consistent with normal tax principles and should not be classified as a tax expenditure. Over the intervening years, from time to time, I have exchanged comments with authors who have questioned that conclusion. It is time to revisit that topic and renew the consideration of how tax depreciation may properly operate. This Essay’s analysis of depreciation provides one example of how the tax expenditure budgets are flawed. The treatment of some accelerated depreciation as a tax expenditure is based …

Magnifying Deterrence By Prosecuting Professionals, Scott A. Schumacher

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This article examines the recent series of criminal prosecutions against tax professionals and offshore bankers. These criminal cases, brought against the largest Swiss bank (UBS), the oldest Swiss bank (Wegelin), one of the largest accounting firms in the world (KPMG), as well as numerous lawyers and accountants, was a dramatic shift for the U.S. Department of Justice. After decades of tolerating abusive tax shelters and tax haven banks, the Government changed its policy. However, rather than indicting the individuals and corporations who invested in tax shelters or hid money in offshore accounts, the Justice Department indicted the lawyers, accountants, and …