Law and Economics Commons^™

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Green Dividends: A Case Study In Green Dividends And The Conditions For Private Ordering Solutions, Anne M. Tucker

Seattle University Law Review

This Essay introduces a novel private ordering solution to facilitate corporate investments in pro-social and environmental initiatives: Green dividends. Green dividends are an optional increase in shareholder dividends that are returned to the company to be reinvested in environmental initiatives or kept by a shareholder.

Green dividends pose an alternative to the current gridlocked debate that corporations can’t, won’t, shouldn’t, and shouldn’t even try to act in pro-social or environmental ways. Turning the common refrains on their head converts each narrative into an element for a successful private ordering solution: authority, accountability, shareholder buy-in, and government- backed enforcement. With Green …

Does Climate Disclosure Work To Reduce Greenhouse Gas Emissions? Emerging Evidence Suggests Cautious Optimism, Cynthia A. Williams

Seattle University Law Review

Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions will be discussed. First, what does the empirical evidence …

Virtual Currency As Real Currency, Jeffrey A. Maine

Faculty Publications

Convertible virtual currency is increasingly equated with the notion of real currency. Indeed, the increased acceptance of virtual currency as a payment method among retailers and consumers, the evolution of new types of virtual currency that alleviate price volatility, and the recent expansion of foreign country initiatives confirm the strong trajectory toward virtual currency’s function as a transactional currency. Yet, the tax system continues to classify all forms of virtual currency as “property,” and not “currency,” which results in immediate taxation every time someone buys something with virtual currency. This Article argues that the adopted tax treatment of virtual currency …

Taxing People, Not Residents, Yariv Brauner

UF Law Faculty Publications

Essentially all states tax their residents’ worldwide income. This norm is difficult to justify beyond vague notions of state provided benefits enjoyed by residents. Recent increased mobility (particularly tax-motivated mobility of wealthy individuals) and the growing importance of remote work and digital nomadism present a serious challenge to this linking of residence and taxing rights. This article examines whether exclusive source taxation of individuals could replace the existing rules which are based on a compromise between residence and source taxation. The article concludes that exclusive source taxation of individuals is both feasible and desirable, mainly due to its fairness and …

Spending Clause Standing, Edward Webre Plaut

Michigan Law Review

The Biden Administration’s American Rescue Plan Act allotted almost $220 billion to state, local, and tribal governments to help combat the COVID-19 pandemic. This money, the Coronavirus State and Local Fiscal Recovery Fund, gave recipients wide spending discretion to address their struggling economies. But the legislation had one key limitation: Recipients could not use the money to “directly or indirectly” cut their taxes. If a recipient violated this “Offset Provision,” the Department of the Treasury might recoup the funds.

Nearly two-dozen states alleged that the Offset Provision was unduly coercive and ambiguous, violating the Spending Clause. However, with no threatened …

Shaping Preferences With Pigouvian Taxes, Gary M. Lucas Jr.

Faculty Scholarship

A Pigouvian tax is a tax that is imposed to correct an externality, which arises when a person engages in behavior that harms others without their consent. Pigouvian taxes are popular among academics—with prominent economists and legal scholars arguing for their imposition on myriad goods and activities that harm third parties, like carbon emissions and alcohol. Policymakers have recently been receptive to at least some of these arguments as evidenced by taxes imposed on or proposed for a variety of externality-generating goods, including guns, plastic bags, and sugary drinks.

The conventional economic rationale for Pigouvian taxes assumes that they affect …

A New Governance Framework In Cross-Border Tax Policymaking, Tamir Shanan, Doron Narotzki, Noam Zamir

Brooklyn Journal of Corporate, Financial & Commercial Law

The first tax treaty can probably be traced to the end of the 19th century: the treaty between the Swiss Federal Council (on behalf of the Canton of Vaud) and Great Britain. However, most tax scholars refer to the period following World War I, including the work of the League of Nations, as the formative period in which the international tax regime was founded. In the 1920s, the League of Nations formed a committee of four renowned economists that was asked to formulate a set of rules that would assist states in allocating taxing rights of cross-border income and gains …

Taxation's Limits, Luís C. Calderón Gómez

Northwestern University Law Review

Countless pages have been devoted to the question of why everyone should pay tax, yet its opposite has gone largely unnoticed: why should some people and organizations not pay tax? Our tax system exempts from ordinary income taxation a wide and diverse array of people and organizations engaged in significant economic activity—from parents providing childcare services for their family to consular activities and charities operating animal shelters—seemingly without a convincing explanation. Perhaps because of the dizzying diversity of tax-exempt activities, scholars and policymakers have avoided comprehensively or coherently justifying our exemption regimes.

This Article develops a novel normative theory that …

Tax Delegation Post-Loper Bright, Reuven S. Avi-Yonah

Law & Economics Working Papers

In its recent decision in Loper Bright, the Supreme Court has fundamentally shifted the contours of judicial deference to administrative interpretations by repealing the Chevron doctrine. However, while the Court has curtailed deference, it simultaneously underscored the legitimacy of statutory delegation to agencies. The Internal Revenue Code (Code) is the most intricate legislative text within the U.S. legal framework, necessitating significant technical expertise for its application. It is, therefore, unsurprising that Congress often delegates authority to the IRS for the execution of the statute. In light of the Court's decision in Loper Bright, it becomes imperative to clarify the parameters …

University Of The District Of Columbia Law Review, University Of The District Of Columbia Law Review

University of the District of Columbia Law Review

No abstract provided.

Dol Fiduciary Rule 3.0 Strikeout, Base Knock, Or Home Run?, Antolin Reiber

DePaul Business & Commercial Law Journal

No abstract provided.

Money Is Morphing - Cryptocurrency Can Morph To Be An Environmentally And Financially Sustainable Alternative To Traditional Banking, Clovia Hamilton

DePaul Business & Commercial Law Journal

No abstract provided.

Survey Evidence In Trademark Actions, Ioana Vasiu And Lucian Vasiu

DePaul Business & Commercial Law Journal

No abstract provided.

Corporate Governance And Compelled Speech: Do State-Imposed Board Diversity Mandates Violate Free Speech?, Salar Ghahramani

DePaul Business & Commercial Law Journal

No abstract provided.

The Real Persons Are The Corporations We Made Along The Way, Leonard Brahin

DePaul Business & Commercial Law Journal

No abstract provided.

Front Matter

DePaul Business & Commercial Law Journal

No abstract provided.

Artful Imbalance: How The Us Tax Code And State Trust Laws Enable The Growth Of Inequality Through High-Value Art Collections, Mimi Strauss

Brooklyn Law Review

The United States has become the leading jurisdiction for those who wish to buy and store high-value art and NFTs, pay as few taxes as possible, and ultimately secure their wealth for generations. This “onshore” tax crisis is the result of tax loopholes, money laundering, the securitization of art and NFTs, and the state-by-state trust system. These forms of tax dodging—both legal and illegal—contribute to wealth inequality and deplete the welfare state. As natural disasters and pandemics become ever more present, the United States will rely more heavily on taxes, and that burden should be carried by everyone, not just …

A Roadmap To Nil And Taxation, Doron Narotzki, Yariv Brauner

American University Business Law Review

The landscape of college sports has dramatically changed in recent years. What was once considered a place for amateur athletes pursuing education now partially mirrors, at least for some student-athletes, the structure and financial dynamics of professional leagues such as the NFL, NBA, and MLB. However, the collegiate sports ecosystem still remains distinct, shaped by unique regulatory frameworks governed by the NCAA. This article reviews and analyses the implications of these changes, and focuses on the tax considerations surrounding Name, Image, and Likeness (NIL) rights and how the evolving nature of college sports also presents certain tax implications, some of …

Charter Schools And Emos: Who's In Charge, Brendan Glynn

American University Business Law Review

Charter schools are a popular sight in the educational field today. For the IRS to consider a charter school a 501(c)(3) organization, nonprofit charter schools must be organized and operated exclusively for educational purposes, meaning purposes relating to the instruction of individuals to improve their capabilities. To be organized for educational purposes, the articles of the organization must limit the entity to educational purposes while also preventing the organization from engaging in substantial noneducational activities. To operate exclusively for educational purposes, an organization’s activities must be substantially in furtherance of educational purposes while also not substantially benefitting a private individual. …

Henderson And The Objective Observer Standard: The Future Of Race-Conscious Standards Post-Students For Fair Admissions, Gabriela Dionisio

Seattle University Law Review

On June 29, 2023, the Supreme Court of the United States decided Students for Fair Admissions v. President & Fellows of Harvard College, which struck down race-conscious admissions policies. Within just a year after its ruling, Students for Fair Admissions has already had a sweeping impact, reaching beyond higher education. Although the Supreme Court did not indicate whether Students for Fair Admissions applies to sectors beyond higher education, law firms, and other employers have already modified their diversity policies and initiatives, erasing race and company diversity considerations. Given those dramatic changes, there is growing fear that Students for Fair Admissions …

Same Crime, Different Time: Sentencing Disparities In The Deep South & A Path Forward Under The Fourteenth Amendment, Hailey M. Donovan

Seattle University Law Review

The United States has the highest incarceration rate of any country in the world. The American obsession with crime and punishment can be tracked over the last half-century, as the nation’s incarceration rate has risen astronomically. Since 1970, the number of incarcerated people in the United States has increased more than sevenfold to over 2.3 million, outpacing both crime and population growth considerably. While the rise itself is undoubtedly bleak, a more troubling truth lies just below the surface. Not all states contribute equally to American mass incarceration. Rather, states have vastly different incarceration rates. Unlike at the federal level, …

Public Primacy In Corporate Law, Dorothy S. Lund

Seattle University Law Review

This Article explores the malleability of agency theory by showing that it could be used to justify a “public primacy” standard for corporate law that would direct fiduciaries to promote the value of the corporation for the benefit of the public. Employing agency theory to describe the relationship between corporate management and the broader public sheds light on aspects of firm behavior, as well as the nature of state contracting with corporations. It also provides a lodestar for a possible future evolution of corporate law and governance: minimize the agency costs created by the divergence of interests between management and …

Robo-Voting: Does Delegated Proxy Voting Pose A Challenge For Shareholder Democracy?, John Matsusaka, Chong Shu

Seattle University Law Review

Robo-voting is the practice by an investment fund of mechanically voting in corporate elections according to the advice of its proxy advisor— in effect fully delegating its voting decision to its advisor. We examined over 65 million votes cast during the period 2008–2021 by 14,582 mutual funds to describe and quantify the prevalence of robo-voting. Overall, 33% of mutual funds robo-voted in 2021: 22% with ISS, 4% with Glass Lewis, and six percent with the recommendations of the issuer’s management. The fraction of funds that robo-voted increased until around 2013 and then stabilized at the current level. Despite the sizable …

The Limits Of Corporate Governance, Cathy Hwang, Emily Winston

Seattle University Law Review

What is the purpose of the corporation? For decades, the answer was clear: to put shareholders’ interests first. In many cases, this theory of shareholder primacy also became synonymous with the imperative to maximize shareholder wealth. In the world where shareholder primacy was a north star, courts, scholars, and policymakers had relatively little to fight about: most debates were minor skirmishes about exactly how to maximize shareholder wealth.

Part I of this Essay discusses the shortcomings of shareholder primacy and stakeholder governance, arguing that neither of these modes of governance provides an adequate framework for incentivizing corporations to do good. …

The Pioneers, Waves, And Random Walks Of Securities Law In The Supreme Court, Elizabeth Pollman

Seattle University Law Review

After the pioneers, waves, and random walks that have animated the history of securities laws in the U.S. Supreme Court, we might now be on the precipice of a new chapter. Pritchard and Thompson’s superb book, A History of Securities Law in the Supreme Court, illuminates with rich archival detail how the Court’s view of the securities laws and the SEC have changed over time and how individuals have influenced this history. The book provides an invaluable resource for understanding nearly a century’s worth of Supreme Court jurisprudence in the area of securities law and much needed context for …

Three Stories: A Comment On Pritchard & Thompson’S A History Of Securities Laws In The Supreme Court, Harwell Wells

Seattle University Law Review

Adam Pritchard and Robert Thompson’s A History of Securities Laws in the Supreme Court should stand for decades as the definitive work on the Federal securities laws’ career in the Supreme Court across the twentieth century.1 Like all good histories, it both tells a story and makes an argument. The story recounts how the Court dealt with the major securities laws, as well the agency charged with enforcing them, the Securities and Exchange Commission (SEC), and the rules it promulgated, from the 1930s into the twenty-first century. But the book does not just string together a series of events, “one …

On The Value Of History: A Review Of A.C. Pritchard & Robert B. Thompson’S A History Of Securities Law In The Supreme Court, Joel Seligman

Seattle University Law Review

A.C. Pritchard and Bob Thompson have written a splendid history of securities law decisions in the Supreme Court. Their book is exemplary because of its detailed use of the long unpublished papers of Supreme Court justices, including those of Harry Blackmun, William O. Douglas, Felix Frankfurter and Lewis F. Powell, primary sources which included correspondence with other Justices and law clerks as well as interviews with law clerks. The use of these primary sources recounted throughout the text and 67 pages of End Notes deepens our understanding of the intentions of the Justices and sharpens our understanding of the conflicts …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents