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Full-Text Articles in Law

Recessions And The Social Safety Net: The Alternative Minimum Tax As A Countercyclical Fiscal Stabilizer, Brian Galle, Jonathan Klick Dec 2010

Recessions And The Social Safety Net: The Alternative Minimum Tax As A Countercyclical Fiscal Stabilizer, Brian Galle, Jonathan Klick

All Faculty Scholarship

As recent events illustrate, state finances are procyclical: during recessions, state revenues crash, worsening the effects of economic downturns. This problem is well known, yet persistent. We argue here that, in light of predictable federalism and political economy dynamics, states will be unable to change this situation on their own. Additionally, we note that many possible federal remedies may result in worse problems, such as by creating moral hazard that would induce states to take on excessively risky policy, both fiscal and otherwise. Thus, we argue that policymakers should consider so-called “automatic” stabilizers, such as are found in the federal …


A Comprehensive Theory Of Deal Structure: Understanding How Transactional Structure Creates Value, Michael S. Knoll, Daniel M. G. Raff Jan 2010

A Comprehensive Theory Of Deal Structure: Understanding How Transactional Structure Creates Value, Michael S. Knoll, Daniel M. G. Raff

All Faculty Scholarship

No abstract provided.


Paying To Save: Tax Withholding And Asset Allocation Among Low- And Moderate-Income Taxpayers, Michael S. Barr, Jane Dokko Nov 2007

Paying To Save: Tax Withholding And Asset Allocation Among Low- And Moderate-Income Taxpayers, Michael S. Barr, Jane Dokko

Law & Economics Working Papers Archive: 2003-2009

We analyze the phenomenon that low- and moderate-income (LMI) tax filers exhibit a “preference for over-withholding” their taxes, a measure we derive from a unique set of questions administered in a dataset of 1,003 households, which we collected through the Survey Research Center at the University of Michigan. We argue that the relationship between their withholding preference and portfolio allocation across liquid and illiquid assets is consistent with models with present-biased preferences, and that individuals exhibit self-control problems when making their consumption and saving decisions. Our results support a model in which individuals use commitment devices to constrain their consumption. …


Taxing Utility, Terrence Chorvat Feb 2005

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 Apr 2004

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 …


Taxing Sunny Days: Adjusting Taxes For Regional Living Costs And Amenities, Michael S. Knoll, Thomas D. Griffith Feb 2003

Taxing Sunny Days: Adjusting Taxes For Regional Living Costs And Amenities, Michael S. Knoll, Thomas D. Griffith

All Faculty Scholarship

Taxpayers pay tax on their nominal income without regard to their regional cost of living or the value of their regional amenities. Although commentators have argued that the income tax's failure to account for such differences is unfair - because residents of high-cost and low-amenity regions pay higher taxes than residents of low-cost and high-amenity regions - that argument is unpersuasive because migration tends to eliminate regional differences in living standards. The tax system's failure to adjust for regional differences is, however, likely to misallocate resources across regions in two ways. First, it is likely to discourage taxpayers from settling …


Simplifying The Transition To A (Progressive) Consumption Tax, Mitchell L. Engler, Michael S. Knoll Jan 2003

Simplifying The Transition To A (Progressive) Consumption Tax, Mitchell L. Engler, Michael S. Knoll

All Faculty Scholarship

No abstract provided.


The Case For Repealing The Corporate Alternative Minimum Tax, Terrence R. Chorvat, Michael S. Knoll Jan 2003

The Case For Repealing The Corporate Alternative Minimum Tax, Terrence R. Chorvat, Michael S. Knoll

All Faculty Scholarship

No abstract provided.


Put-Call Parity And The Law, Michael S. Knoll Jan 2002

Put-Call Parity And The Law, Michael S. Knoll

All Faculty Scholarship

A common literary theme is the conflict between appearance and reality. That conflict also frequently arises in the law, where it is usually cast as one between substance and form. Another discipline in which the conflict arises is finance, where it appears in the put-call parity theorem. That theorem states that given any three of the four following financial instruments--a riskless zero-coupon bond, a share of stock, a call option on the stock, and a put option on the stock--the fourth instrument can be replicated. Thus, the theorem implies that any financial position containing these assets can be constructed in …


Corporate Finance, Corporate Law And Finance Theory, Peter H. Huang, Michael S. Knoll Jan 2000

Corporate Finance, Corporate Law And Finance Theory, Peter H. Huang, Michael S. Knoll

All Faculty Scholarship

No abstract provided.


Designing A Hybrid Income-Consumption Tax, Michael S. Knoll Sep 1994

Designing A Hybrid Income-Consumption Tax, Michael S. Knoll

All Faculty Scholarship

No abstract provided.


Taxing Prometheus: How The Corporate Interest Deduction Discourages Innovation And Risk-Taking, Michael S. Knoll Jan 1993

Taxing Prometheus: How The Corporate Interest Deduction Discourages Innovation And Risk-Taking, Michael S. Knoll

All Faculty Scholarship

This paper uses recent developments in the theory of optimal capital structure to demonstrate how the federal corporate income tax with an interest deduction, but without a corresponding dividend deduction, misallocates capital within the corporate sector by encouraging investment in low-risk, low-growth projects employing tangible assets over high-risk, high-growth projects employing intangible assets.


Protecting The Public Fisc: Fighting Accrual Abuse With Section 446 Discretion, Karl S. Coplan Jan 1983

Protecting The Public Fisc: Fighting Accrual Abuse With Section 446 Discretion, Karl S. Coplan

Elisabeth Haub School of Law Faculty Publications

This Note suggests an approach under the current Code and current legal doctrine that would enable the Commissioner to disallow accrual accounting when manipulated to avoid taxation. At the outset, the Note defines and illustrates tax avoidance through accounting manipulation. The Note then considers within the framework of judicial review of agency action the source and nature of the Commissioner's discretion to reject accounting methods. This analysis demonstrates the validity of the Commissioner's action whenever it is based on legally relevant factors. The Note then develops the emerging content of the “clearly reflect income” language as the source of the …