Law Commons^™

Mutual Funds, Fairness, And The Income Gap, Samuel D. Brunson

Samuel D. Brunson

The rich, it turns out, are different from the rest of us. The wealthy, for example, can assemble a diversified portfolio of securities, or can invest through hedge and private equity funds. When the rest of us invest, we do so largely through mutual funds. Nearly half of American households own mutual funds, and mutual funds represented a significant portion of the financial assets held by U.S. households.

The tax rules governing mutual funds create an investment vehicle with significantly worse tax treatment than investments available to the wealthy. In particular, the tax rules governing mutual funds force shareholders to …

Taxing Polygamy: Married Filing Jointly (And Severally?), Samuel D. Brunson

Samuel D. Brunson

The tax law treats married and unmarried taxpayers differently in several respects. Married persons, for example, can file and pay their taxes as a unified taxpayer, with rates that are different than those that apply to unmarried taxpayers. This different treatment of married persons has elicited criticism over the years. Some of the more salient criticisms include that married persons do not necessarily function as an economic unit, that joint filing discourages women from working, and that the various exclusions from the joint filing regime—including gay couples—is unfair.

This Article looks at joint filing through the lens of polygamy. Polygamy …

Reigning In Charities: Using An Intermediate Penalty To Enforce The Campaigning Prohibition, Samuel D. Brunson

Samuel D. Brunson

Congress has prohibited public charities from campaigning for or against any candidate for office continuously since 1854. However, the IRS routinely fails to penalize public charities that accidentally violate or deliberately flout the prohibition. And the IRS’s reluctance is understandable: the penalty for violating the campaigning prohibition is loss of the public charity’s tax-exempt status, a death-knell for many public charities. This Article argues that the IRS’s underenforcement of the prohibition is predictable. The prohibition has provoked firestorms of debate among academics, policymakers, and directors of public charities themselves. Where the penalty for violating controversial laws is a hard shove, …

Grown-Up Income Shifting: Yesterday's Kiddie Tax Is Not Enough, Samuel D. Brunson

Samuel D. Brunson

In 1986, concerned that wealthy parents were sheltering some of their income from taxes by giving some portion of their securities portfolios to their children, Congress enacted the “kiddie tax,” which taxes a child’s passive income at the child’s parents’ tax rate. By doing so, Congress intended to reduce tax-motivated income-shifting. Since its passage, however, there has been little serious consideration of whether the kiddie tax successfully prevents the targeted income-shifting.

This Article reexamines the kiddie tax and concludes that it is both over- and underbroad. The kiddie tax subjects all of a child’s passive income, not just income resulting …

Reforming The Kiddie Tax, Samuel D. Brunson

Samuel D. Brunson

In 1986, concerned that wealthy parents were sheltering some of their income from taxes by giving some portion of their securities portfolios to their children, Congress enacted the “kiddie tax,” which taxes a child’s passive income at the child’s parents’ tax rate. By doing so, Congress intended to reduce tax-motivated income-shifting. Since its passage, however, there has been little serious consideration of whether the kiddie tax successfully prevents the targeted income-shifting.

This Article reexamines the kiddie tax and concludes that it is both over- and underbroad. The kiddie tax subjects all of a child’s passive income, not just income resulting …