Law and Economics Commons^™

Back To The Future: Marriage And Divorce Under The 2017 Tax Act, Mark Cochran

St. Mary's Law Journal

Abstract forthcoming

Humans Vs. Robots: Rethinking Tax Policy For A More Sustainable Future, Kathryn Kisska-Schulze, Karie Davis-Nozemack

Maryland Law Review

No abstract provided.

In Memory Of Professor James E. Bond, Janet Ainsworth

Seattle University Law Review

Janet Ainsworth, Professor of Law at Seattle University School of Law: In Memory of Professor James E. Bond.

Remutualization, Erik F. Gerding

Publications

Policymakers need to rediscover the organizational form of business entity as a tool of financial regulation. Recent and classic scholarship has produced evidence that financial institutions organized as alternative entity forms – including investment bank partnerships and banks and insurance companies organized as mutual or cooperatives – tend to take less risk, exploit customers/consumer less, or commit less misconduct compared to counterparts organized as investor-owned corporations. This article builds off the work of Hill and Painter on investment banks organized as partnerships, Hansmann on the history and economics of banks and insurance companies organized as mutuals and cooperatives, and other …

The Oecd Multilateral Tax Instrument: A Model For Reforming The International Investment Regime?, Wolfgang Alschner

Brooklyn Journal of International Law

The international tax and investment regimes display striking similarities. They are both based on thousands of bilateral treaties that follow similar principles but differ in fine print. They each facilitate the free flow of international capital by respectively disciplining fiscal and regulatory host state conduct. Finally, they share common historical foundations and have experienced similar periods of rapid diffusion and deep contestation. Yet, while the international tax regime recently accomplished a sweeping reform to solve a decades-old legitimacy crisis, the investment regime is still grappling with its own legitimacy crisis and reform. In 2018, the multilateral tax instrument (MLI) entered …

Global Implementation Of Soda Taxes: Is There A Better Solution For Combatting Obesity?, Lauren Cedeno

Brooklyn Journal of International Law

As incidences of overweight and obese populations continue to increase around the world, countries are looking for ways to decrease the prevalence of this epidemic. Soda and SSB taxes have increased in prevalence as countries seek to address the health problems associated with consumption of soda and other sugary beverages. This Note explores the implementation of these taxes in Mexico, Europe, and the United States. In analyzing these taxes, this Note seeks to gain a greater understanding of whether these taxes have impacted overweight and obesity rates in the countries and municipalities that have enacted them. This Note argues that …

Reclaiming Place-Based Development Incentive, Ezra Rosser

Scholarly Articles in Law Reviews & Journals

Professor Michelle Layser's forthcoming article is an attack on the current form of place-based tax incentive programs. Layser argues that while rhetorically such programs are said to help the poor, by design they support gentrification in ways that harm the poor. The article ends with a call to reform place-based incentive programs so that the poor in selected areas actually benefit.

Tax Incentives For Attracting Foreign Direct Investment In Sub-Saharan Africa: A Comparative Study Of Ghana And Kenya, Patrick Ofori

LLM Theses

Developing countries have increasingly resorted to the use of tax incentives to attract FDI, despite existing evidence of the shortcomings of tax incentives. In sub-Saharan Africa, tax incentives are a prominent feature of many investment codes. Sub-Saharan African countries find tax incentives as a means of attracting FDI because there are no viable alternatives per se, and they believe that tax incentives can be structured to ensure that FDI advances socio-economic and technological development. But the reliance on tax incentives at the expense of maximizing domestic tax revenue poses a challenge to sustainable development. This study examines Ghana and Kenya …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.

Toward A 21st-Century International Tax Regime, Reuven S. Avi-Yonah

Law & Economics Working Papers

The OECD has been struggling to respond to countries that wish to tax large US technology companies on the basis of where their consumers live. The current OECD work program on digitalization is unlikely to produce a stable consensus or prevent countries from following the lead of France, India, Italy and the United Kingdom toward digital services taxes. The United States response should not be to target French, Indian, Italian or British companies for retaliation. Instead, the United States should consider adopting a sales-based formulary apportionment (SFA) solution that would apply to all large enterprises. Such a move is more …

Stabilizing “Pillar One”: Corporate Profit Reallocation In An Uncertain Environment, Itai Grinberg

Georgetown Law Faculty Publications and Other Works

This paper is about how the world reestablishes international tax order.

The paper focuses on the OECD’s work on profit reallocation and asks whether this multilateral effort can be successful in stabilizing the international tax system. The analysis centers on the current leading concepts for reallocating profit among jurisdictions under what is known as “Pillar One” of the OECD work programme. To analyze whether any Pillar One concept can be turned into a stable multilateral regime, it is necessary to specify certain elements of what a proposal to reallocate profits might entail. Accordingly, this paper sets out two strawman proposals. …

If Not Now, When? Us Tax Treaties With Latin America After Tcja, Reuven S. Avi-Yonah

Law & Economics Working Papers

Since the 1990s, the US tax treaty network has expanded to include most large developing countries. However, there remains a glaring exception: The US only has two tax treaties in Latin America (Mexico and Venezuela), and one pending tax treaty (Chile). The traditional explanation for why the US has no treaty with, for example, Argentina or Brazil is the US refusal since 1957 to grant tax sparing credits to developing countries. Before the Tax Cuts and Jobs Act of 2017 (TCJA), this explanation was wrong, because the combination of deferral and cross-crediting meant that tax holidays in a source country …

Does Customary International Tax Law Exist?, Reuven S. Avi-Yonah

Law & Economics Working Papers

Customary international law is law that “results from a general and consistent practice of states followed by them from a sense of legal obligation.” “International agreements create law for states parties thereto and may lead to the creation of customary international law when such agreements are intended for adherence by states generally and are in fact widely accepted.” Does customary international law (CIL) exist in tax? There are over 3,000 bilateral tax treaties, and they are about 80% identical to each other, but do they create CIL that binds in the absence of a binding treaty, like for example the …

The Fire Rises: Refining The Pennsylvania Fireworks Law So That Fewer People Get Burned, Sean P. Kraus

Dickinson Law Review (2017-Present)

On October 30, 2017, the General Assembly of Pennsylvania passed an act that repealed the state’s fireworks law, which had prohibited the sale of most fireworks to Pennsylvanian consumers for nearly 80 years. The law’s replacement generally permits Pennsylvanians over 18 years old to purchase, possess, and use “Consumer Fireworks.” Bottle rockets, firecrackers, Roman candles, and aerial shells are now available to amateur celebrants for holidays like Independence Day and New Year’s Eve. The law also regulates a category of larger “Display Fireworks,” sets standards for fireworks vendors, and introduces a 12-percent excise tax on fireworks sales that serves to …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.

The International Provisions Of The Tcja: Six Results After Six Months, Reuven S. Avi-Yonah

Law & Economics Working Papers

Over six months have passed since the enactment of the TCJA, so it is now possible to reach some preliminary conclusions on its impact. The main ones are:

1. The transition tax plus anticipated GILTI tax minus territoriality have resulted in higher GAAP effective tax rates for 2017. In some cases they approach 35% for large multinationals with a lot of offshore income. For the first six months of 2018, however, overall corporate tax revenues are sharply down because of the 21% rate plus expensing. This is the exact reverse of the situation before TCJA in which MNEs showed very …

Perpetual Motion Machines: Esops Don’T Pay For Themselves, Andrew Stumpff Morrison

Law & Economics Working Papers

In this article, Stumpff addresses policy issues regarding employee stock ownership plans and demonstrates how some claims in support of ESOPS aren’t supported by the math.

Designing A Robust Tax System For Nigeria: Lessons From An International Perspective, Olukemi Tawoju

LLM Theses

This thesis argues that Nigeria can adapt its tax system for better gain from investment and other taxation. It outlines the foundation for a good tax policy, and explores initiatives by the Organisation for Economic Co-operation and Development (OECD and the United Nations (UN) regarding harmful tax practices and tax incentives. Their recommendations and those of scholars, conclude that tax incentives are ineffective in attracting foreign direct investment, may result in taxpayer abuse, and erode the revenue base of capital importing countries like Nigeria. Utilizing internationally accepted features on effective tax incentive design, examining the operation of the Nigerian tax …

Tax Compliance In A Decentralizing Economy, Manoj Viswanathan

Georgia State University Law Review

Tax compliance in the United States has long relied on information from centralized intermediaries—the financial institutions,employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities,consumers and businesses are not. New technologies, such as sharing economy platforms (companies such as Airbnb, Uber, and Instacart)and the blockchain (the platform on which various cryptocurrencies are based) are providing new, decentralized options for exchanging goods and services.

Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance. Until now, legal …

Proposal For A Non-Subsidized, Non-Retirement-Plan, Employee-Owned Investment Vehicle To Replace The Esop, Sean M. Anderson, Andrew Stumpff Morrison

Law & Economics Working Papers

The authors have previously been critical of the existing American legal exemption and subsidy regime for employee stock ownership plans (“ESOPs”). By definition such plans create dangerously undiversified investment programs tying employees’ retirement security to the financial health of a single company – which, to compound the problem, is the employees’ employer, thereby correlating participants’ retirement security risk with the risk of losing their jobs. No demonstrated compensating policy benefit justifies this extraordinary large-scale departure from basic principles of financial prudence. One context, however, where a plausible case might be made for employee ownership is that which arises when a …

The Elephant Always Forgets: Us Tax Reform And The Wto, Reuven S. Avi-Yonah, Martin G. Vallespinos

Law & Economics Working Papers

The “Tax Cuts and Jobs Act” (TCJA) enacted on December 22, 2017 includes several provisions that raise WTO compliance issues. At least one such provision, the Foreign-Derived Intangible Income (FDII) rule, is almost certain to draw a challenge in the WTO and is likely to lead to another US loss and resulting sanctions. This outcome would be another addition to the repeated losses suffered by the US for export subsidies from the 1970s to 2004, which led to the imposition of sanctions and the ultimate repeal of the offending regime. The important question for 2018 and beyond is whether the …

Beat It: Tax Reform And Tax Treaties, Reuven S. Avi-Yonah

Law & Economics Working Papers

The Tax Cuts and Jobs Act (TCJA) includes several provisions that may be viewed as potential violations of US tax treaties. However, most of those potential violations, such as new IRC section 951A and to a large extent new IRC section 59A, are covered by the Savings Clause (US model article 1(4)). The only remaining question is whether IRC section 59A (the “Base Erosion Anti-Abuse Tax”, or BEAT) violates the non-discrimination provision (article 24), which is exempted from the Savings Clause. The answer is no, because foreign related parties are not comparable to US related parties receiving interest or royalties.

How Terrible Is The New Tax Law? Reflections On Tra17, Reuven S. Avi-Yonah

Law & Economics Working Papers

Overall, TRA17 is not much worse than TRA86 or TRA14. It increases the deficit, but not by an impossible amount; it is distributionally skewed, but less so than is usually assumed; and its details are not terrible (on the international side they are a big improvement over prior law). There is one big problem, the pass through provisions, and we can only hope that as its horrible implications unfold it will be a prime candidate for repeal.

Charitable Subsidies And Nonprofit Governance: Comparing The Charitable Deduction With The Exemption For Endowment Income, David M. Schizer

Faculty Scholarship

Charitable subsidies are supposed to encourage positive externalities from charity. In principle, the government can pursue this goal by evaluating specific charitable initiatives and deciding how much each should receive. Although the government sometimes makes this sort of fine-grained judgment, this Article focuses on two income tax rules that leave the government essentially no discretion about which charities to fund: the deduction for donations to charity ("the deduction") and the exemption of a charity's investment income ("the exemption"). With each subsidy, federal dollars flow automatically as long as charities satisfy very general criteria.

As a result, these subsidies are especially …

Foreword – The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy, Michael J. Graetz

Faculty Scholarship

By lowering the corporate tax rate from 35% to 21%, the 2017 tax legislation brought the U.S. statutory rate into closer alignment with the rates applicable in other Organisation for Economic Co-operation and Development (OECD) nations, thereby decreasing the incentive for businesses to locate their deductions in the United States and their income abroad. Its overhaul of the U.S. international income tax rules simultaneously reduced preexisting incentives for U.S. multinationals to reinvest their foreign earnings abroad and put a floor on the benefits of shifting profits to low-tax jurisdictions. The 2017 legislation also added an unprecedented, troublesome lower rate for …

Getting Local Governments Where They Need To Go Without Taking Taxpayers For A Ride: "Cabs," Why They Are Used, And What Can Be Done To Prevent Their Misuse, Heather G. White

St. Mary's Law Journal

Abstract forthcoming

The Elephant Always Forgets: Tax Reform And The Wto, Reuven S. Avi-Yonah

Law & Economics Working Papers

The “Tax Cuts and Jobs ACT” (TCJA) enacted on December 22, 2017, includes several provisions that raise WTO compliance issues. At least one such provision, the Foreign-Derived Intangible Income (FDII) rule, is almost certain to draw a challenge in the WTO and is likely to lead to another US loss and resulting sanctions. This outcome would be another addition to the repeated losses suffered by the US for export subsidies from the 1970s to 2004, which led to the imposition of sanctions and the ultimate repeal of the offending regime. The important question for 2018 and beyond is whether the …

The Economics Of American Higher Education In The New Gilded Age, Paul Campos

Publications

No abstract provided.

User Participation In Value Creation, Itai Grinberg

Georgetown Law Faculty Publications and Other Works

This article examines HM Treasury’s proposal to account for the active participation of users in value creation in certain digital platforms. The first key question is whether there is any reason to believe, as HM Treasury suggests, that users only meaningfully or actively contribute to value creation in the context of certain digital platforms. The article accordingly explores the factors HM Treasury sets out for the attribution of income to active user participation, including features such as network effects, multisided business models, and a lack of physical presence in the jurisdiction of the user. It concludes that if a user …

Tit For Tat: How Will Other Countries React To The Tax Cuts And Jobs Act?, Reuven S. Avi-Yonah, Gianluca Mazzoni

Law & Economics Working Papers

The Tax Cuts and Jobs Act of 2017 (TRA17) represents the most comprehensive reform of US international tax rules since 1962. An important question in evaluating TRA17 is how US trading partners will respond to its provisions. In general, US trading partners may take steps to negate the competitive advantage gained by the US from the lower rate of corporate tax, expensing and the “patent box”. They may also take advantage of the participation exemption and the cross-crediting feature of GILTI to increase taxes on US multinationals. Finally, they are likely to copy the BEAT and apply it to US …