Law Commons^™

Overcoming Political Polarization: Federal Funding Of Education Is The Key, Reuven S. Avi-Yonah

Law & Economics Working Papers

The best way of overcoming political polarization in the US (the last two elections were both decided by fewer than 100,000 votes in WI, MI, PA (2016) and WI, AZ, GA (2020)) is to reduce disparities in education. But how can we do that?

The basic problem arises from the US system of funding K-12 education from property taxes. While the picture above refers to college education, it is K-12 education that determines both college admissions and college readiness.

Thus, the only viable solution is a federal solution. As President Nixon proposed in 1972, the United States should adopt an …

Overcoming Political Polarization: Federal Funding Of Education Is The Key, Reuven S. Avi-Yonah

Law & Economics Working Papers

The best way of overcoming political polarization in the US (the last two elections were both decided by fewer than 100,000 votes in WI, MI, PA (2016) and WI, AZ, GA (2020)) is to reduce disparities in education. But how can we do that? The basic problem arises from the US system of funding K-12 education from property taxes. While the picture above refers to college education, it is K-12 education that determines both college admissions and college readiness. Thus, the only viable solution is a federal solution. As President Nixon proposed in 1972, the United States should adopt an …

Recovery For Causing Tax Overpayment - Lyeth V. Hoey And Clark Revisited, Douglas A. Kahn, Jeffrey H. Kahn

Law & Economics Working Papers

The question has arisen in numerous cases as to the extent to which a settlement between arms’ length parties is dispositive in tax cases of the claims on which the settlement is based. Another issue that often arises is whether the receipt of compensation for a tax payment that was incurred because of the negligence of the payor is excluded from gross income. While those two issues were central to the proper resolution of a recent case in the United States Court of Appeals for the Eleventh Circuit, McKenny v. United States, the court failed even to note one of …

Recovery For Causing Tax Overpayment - Lyeth V. Hoey And Clark Revisited, Douglas A. Kahn, Jeffrey H. Kahn

Law & Economics Working Papers

The question has arisen in numerous cases as to the extent to which a settlement between arms’ length parties is dispositive in tax cases of the claims on which the settlement is based. Another issue that often arises is whether the receipt of compensation for a tax payment that was incurred because of the negligence of the payor is excluded from gross income. While those two issues were central to the proper resolution of a recent case in the United States Court of Appeals for the Eleventh Circuit, McKenny v. United States, the court failed even to note one of …

Do Lawyers Need Economists? Review Of Katja Langenbucher, Economic Transplants: On Lawmaking For Corporations And Capital Markets (Cambridge U. Press, 2017), Reuven S. Avi-Yonah

Law & Economics Working Papers

Katja Langenbucher’s outstanding book seeks to address the question of why and in what ways have lawyers been importing economic theories into a legal environment, and how has this shaped scholarly research, judicial and legislative work? Since the financial crisis, corporate or capital markets law has been the focus of attention by academia and media. Formal modelling has been used to describe how capital markets work and, later, has been criticized for its abstract assumptions. Empirical legal studies and regulatory impact assessments offered different ways forward. This excellent book presents a new approach to the risks and benefits of interdisciplinary …

Class Actions And Private Antitrust Litigation, Albert H. Choi, Kathryn E. Sprier

Law & Economics Working Papers

When firms collude and charge supra-competitive prices, consumers can bring antitrust lawsuits against the firms. When the litigation cost is low, firms accept the cost as just another cost of doing business, whereas when the cost is high, the firms lower the price to deter litigation. Class action is modeled as a mechanism that allows plaintiffs and attorneys to obtain economies of scale. We show that class actions, and the firms' incentive to block them, may or may not be socially desirable. Agency problems, settlement, fee-shifting, treble damages, public enforcement, and sustaining collusion through repeat play are also considered.

Federal Forum Provisions And The Internal Affairs Doctrine, Dhruv Aggarwal, Albert H. Choi

Law & Economics Working Papers

A key question at the intersection of state and federal law is whether corporations can use their charters or bylaws to restrict securities litigation to federal court. In December 2018, the Delaware Chancery Court answered this question in the negative in the landmark decision Sciabacucchi v. Salzberg. The court invalidated “federal forum provisions” (“FFPs”) that allow companies to select federal district courts as the exclusive venue for claims brought under the Securities Act of 1933 (“1933 Act”). The decision held that the internal affairs doctrine, which is the bedrock of U.S. corporate law, does not permit charter and bylaw provisions …

A Case For Higher Corporate Tax Rates, Edward G. Fox, Zachary D. Liscow

Law & Economics Working Papers

In this report, Fox and Liscow argue that, while conventional wisdom holds that we should lower taxes on corporations because of international competition, two recent changes militate in favor of higher corporate taxes, which would close the deficit, fund social programs, and reduce inequality. First, changes in tax law have increasingly targeted the corporate tax at economic “rents,” the supersized returns that businesses receive when they enjoy advantages like market power. Because taxing rents is progressive and does little to harm economic activity, a higher rate is justified. Second, shifts in the American economy have allowed companies to earn more …

Taxes In The Time Of Coronavirus: Is It Time To Revive The Excess Profits Tax?, Reuven S. Avi-Yonah

Law & Economics Working Papers

A recent NY Times headline summarizes one of the biggest economic impacts of the current pandemic: “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” At a time when most American citizens and businesses suffer catastrophic economic damage from the Coronavirus Recession, some corporations such as Amazon, 3M, Gilead, and Zoom see their profits rise dramatically because of the pandemic. Given that most corporations are losing money but some are now earning excess profits due to the crisis, it is time to revive the wartime excess profits taxes that the US deployed in WW1 and WW2 to prevent the …

Covid-19 And Us Tax Policy: What Needs To Change?, Reuven S. Avi-Yonah

Law & Economics Working Papers

The COVID-19 Pandemic already feels like a historical turning point akin to Word Wars I and II and the Great Depression. It may signal the end of the second period of globalization (1980-2020) and a change in the relative positions of the US and China. It could also lead in the US to significant changes in tax policy designed to bolster the social safety net which was revealed as very porous during the pandemic. In what follows I will first discuss some short-term effects of the pandemic and then some potential longer-term effects on US tax policy.

Taxation And Business: The Human Rights Dimension Of Corporate Tax Practices, Reuven S. Avi-Yonah

Law & Economics Working Papers

If we want to narrow the North-South divide that threatens our world, some limits on tax competition are inevitable. The world faces a crucial choice in the 2020s. We can either continue retreating from globalization in favor of xenophobic nationalism, tariffs, immigration restrictions, and exchange controls. That road leads ultimately to war, as it did in the 1930s. Or we can revive globalization by investing in a robust social safety net, infrastructure, education, and job creation. While more needs to be done, we have made significant progress in curbing tax competition in the last decade. The key move now is …

Legitimacy And Agency Implementation Of Title Ix, Samuel R. Bagenstos

Law & Economics Working Papers

Because Title IX of the Education Amendments of 1972 involves a subject that remains highly controversial in our polity (sex roles and interactions among the sexes more generally), and because it targets a highly sensitive area (education), the administration of that statute by the Department of Education's Office for Civil Rights has long drawn criticism. The critics have not merely noted disagreements with the legal and policy decisions of the agency, however. Rather, they have attacked the agency’s decisions for being illegitimate—for reflecting the agency’s improper imposition of value judgments on the statute. Three key applications of Title IX have …

Should Us Tax Law Be Constitutionalized? Centennial Reflections On Eisner V. Macomber (1920), Reuven S. Avi-Yonah

Law & Economics Working Papers

The US Supreme Court last decided a federal tax case on constitutional grounds in 1920, a century ago. The case was Eisner v. Macomber, and the issue was whether Congress had the power under the Sixteenth Amendment (authorizing an income tax, 1913) to include stock dividends in the tax base. The Court answered no because “income” in the Sixteenth Amendment meant “the gain derived from capital, from labor, or from both combined.” A stock dividend, since it did not increase the wealth of the shareholder, was not “income.” Macomber was never formally overruled, and it is sometime still cited by …

May Hospitals Withhold Ventilators From Covid-19 Patients With Pre-Existing Disabilities? Notes On The Law And Ethics Of Disability-Based Medical Rationing, Samuel R. Bagenstos

Law & Economics Working Papers

Thanks to the coronavirus pandemic, the threat of medical rationing is now clear and present. Hospitals faced with a crush of patients must now seriously confront questions of how to allocate scarce resources—notably life-saving ventilators—at a time of severe shortage. In their protocols for addressing this situation, hospitals and state agencies often employ explicitly disability-based distinctions. For example, Alabama’s crisis standards of care provide that “people with severe or profound intellectual disability ‘are unlikely candidates for ventilator support.’” This essay, written as this crisis unfolds, argues that disability-based distinctions like these violate the law. The Americans with Disabilities Act, the …

Acknowledgements As A Window Into Legal Academia, W. Nicholson Price Ii, Jonathan Tietz

Law & Economics Working Papers

Legal scholarship in the United States is an oddity—an institution built on student editorship, a lack of peer review, and a dramatically high proportion of solo authorship. It is often argued that this makes legal scholarship fundamentally different from scholarship in other fields, which is largely peer-reviewed by academics. We use acknowledgments in biographical footnotes from law-review articles to probe the nature of legal knowledge co-production and de facto peer review in legal literature. Using a survey of authors and editors and a textual analysis of approximately thirty thousand law-review articles from 2008 to 2017, we examined the nature of …

The 'Authority' Of Law: Joseph Raz Reconsidered, Andrew Stumpff Morrison

Law & Economics Working Papers

The article presents a critical reassessment of the legal philosophical writings of Joseph Raz. The critique develops from the author’s previous argument that law is – contra recent near-consensus – best understood as “the command of the sovereign, backed by force.” Given that this is the distinctly defining feature of law, Raz’s extended preoccupation with “reasons for obeying law” is misplaced and even nonsensical.

Constructive Dialogue: Beps And The Tcja, Reuven S. Avi-Yonah

Law & Economics Working Papers

US international tax law is commonly conceived as developed in the US and influencing the development of other countries' international tax law. This paper will argue that in the case of the TCJA, the US legislation was heavily influenced by the OECD BEPS project, and that the continuing OECD work in Pillars I and II is likely to have a similar influence on the future development of US international tax law.

Why Study Tax History?, Reuven S. Avi-Yonah

Law & Economics Working Papers

This book review addresses the question why studying tax history is helpful to tax policy makers and practitioners.

Breaking The Silence: Why International Organizations Should Acknowledge Customary International Law Obligations To Provide Effective Remedies, Kristina Daugirdas, Sachi Schuricht

Law & Economics Working Papers

To date, international organizations have remained largely silent about their obligations under customary international law. This chapter urges international organizations to change course, and to expressly acknowledge customary international law obligations to provide effective remedies. Notably, international organizations’ obligations to afford effective remedies need not precisely mirror States’ obligations to do so. Instead, international organizations may be governed by particular customary international law rules. By publicly acknowledging obligations to afford effective remedies, international organizations can influence the development of such particular rules. In addition, by acknowledging obligations to afford effective remedies — and by actually providing effective remedies — international …

Member States' Due Diligence Obligations To Supervise International Organizations, Kristina Daugirdas

Law & Economics Working Papers

There are two reasons to consider obligations to supervise international organizations as a distinct category of due diligence obligations. First, due diligence obligations typically require states to regulate third parties in some way. But it is harder for states to regulate international organizations unilaterally than to regulate private actors within their own territories because international law protects the autonomy of those organizations. Second, such due diligence obligations merit attention because they may compensate for the dearth of mechanisms to hold international organizations accountable when they cause harm. These accountability concerns are especially acute when it comes to private individuals who …