Law and Economics Commons^™

Bringing International Tax Policy Into The 21st Century, Michael J. Graetz

Faculty Scholarship

Michael J. Graetz delivered the following remarks at the Tax Policy Center's "A Corporate Tax for the 21st Century" conference on July 14 in Washington. These remarks are substantially taken from his April 2015 Ross Parsons Lecture at the University of Sydney Law School.

Follow The Money: Essays On International Taxation – Introduction, Michael J. Graetz

Faculty Scholarship

Publicity about tax avoidance techniques of multinational corporations and wealthy individuals has moved discussion of international income taxation from the backrooms of law and accounting firms to the front pages of news organizations around the world. In the words of a top Australian tax official, international tax law has now become a topic of barbeque conversations. Public anger has, in turn, brought previously arcane issues of international taxation onto the agenda of heads of government around the world.

Despite all the attention, however, issues of international income taxation are often not well understood. This Introduction outlines a collection of essays, …

Impact Investing As A Form Of Lobbying And Its Corporate-Governance Effects, Andrzej Rapaczynski

Faculty Scholarship

Impact investment is attractive to many because it seems to combine support for progressive causes with an apparent commitment to the principles of a market economy. In fact, however, a rational impact investor is not simply creating demand for certain types of corporate actions; he/she is attempting to use corporate governance mechanisms to influence fiduciary decisions of the management. The cost of this tactic for the health of the capitalist economy is potentially very considerable. The American capitalist system relies heavily on a relatively fragile corporate governance arrangement in which the agency problems of a modern corporation are minimized by …

Appraising The "Merger Price" Appraisal Rule, Albert H. Choi, Eric L. Talley

Faculty Scholarship

This paper develops an auction design framework to study how best to measure “fair value” in post-merger appraisal proceedings. Our inquiry spotlights an approach recently embraced by some courts benchmarking fair value against the merger price itself. We show that merger price deference effectively nullifies the role that appraisal can potentially play in establishing a de facto reserve price for company auctions, thereby depressing both acquisition prices and target shareholders’ expected welfare relative to both the optimal appraisal policy and a variety of other valuation measures. We also examine conditions under which deference to the merger price can be optimal. …

Online Sovereignty: The Law And Economics Of Tribal Electronic Commerce, Gavin Clarkson, Katherine A. Spilde, Carma M. Claw

Vanderbilt Journal of Entertainment & Technology Law

In 1886, the US Supreme Court wrote that, for Indian tribes,"the people of the states where they are found are often their deadliest enemies." Recently, state agencies and regulators have continued that tradition of hostility by improperly attempting to regulate electronic commerce businesses operated by tribal governments that are more properly subject to regulations established by tribal law and subject to federal oversight. Despite the fact that these online businesses operate exclusively under tribal law and make their tribal affiliation clear to customers, certain state regulators have demanded absolute compliance with state law, even when such laws are from states …

Corporate Control And Idiosyncratic Vision, Zohar Goshen, Assaf Hamdani

Faculty Scholarship

This Article offers a novel theory of corporate control. It does so by shedding new light on corporate-ownership structures and challenging the prevailing model of controlling shareholders as essentially opportunistic actors who seek to reap private benefits at the expense of minority shareholders. Our core claim is that entrepreneurs value corporate control because it allows them to pursue their vision (i.e., any business strategy that the entrepreneur genuinely believes will produce an above-market rate of return) in the manner they see fit. We call the subjective value an entrepreneur attaches to her vision the entrepreneur’s idiosyncratic vision. Our framework identifies …

Economic Crisis And The Integration Of Law And Finance: The Impact Of Volatility Spikes, Edward G. Fox, Merritt B. Fox, Ronald J. Gilson

Faculty Scholarship

The 2008 financial crisis raised puzzles important for understanding how the capital market prices common stocks and in turn, for the intersection between law and finance. During the crisis, there was a dramatic fivefold spike, across all industries, in "idiosyncratic risk" – the volatility of individual-firm share prices after adjustment for movements in the market as a whole.

This phenomenon is not limited to the most recent financial crisis.This Article uses an empirical review to show that a dramatic spike in idiosyncratic risk has occurred with every major downturn from the 1920s through the recent financial crisis. It canvasses three …

The Corporation’S Place In Society, Gabriel Rauterberg

Michigan Law Review

The vast majority of economic activity is now organized through corporations. The public corporation is usurping the state’s role as the most important institution of wealthy capitalist societies. Across the developed world, there is increasing convergence on the shareholder-owned corporation as the primary vehicle for creating wealth. Yet nothing like this degree of convergence has occurred in answering the fundamental questions of corporate capitalism: What role do corporations serve? What is the goal of corporate law? What should corporate managers do? Discussion of these questions is as old as the institutions involved.

The Complicated Economics Of Prison Reform, John F. Pfaff

Michigan Law Review

Two recent books on prison growth directly address the relationship between penal change and economic conditions: Hadar Aviram’s Cheap on Crime and Marie Gottschalk’s Caught. Aviram’s is the more optimistic of the two accounts, arguing that there is at least some potential in an economic-based reform effort. Gottschalk, on the other hand, fears not only that economic-based efforts could fail to lead to significant reforms, but that they could actually make prison life worse for inmates if states cut funding and support without cutting populations. Both books make many provocative points, but both also suffer from some surprising omissions. …

Pluralizing The 'Sharing' Economy, Erez Aloni

All Faculty Publications

The so-called sharing economy presents one of the most important and controversial regulatory dilemmas of our time — yet, surprisingly, it remains undertheorized. This Article supplies needed analysis. Specifically, the Article offers a regulatory model that distinguishes between two separate kinds of transactions: conventional economic transactions and those that rely on temporary access to goods and services that would otherwise go underutilized (what I call “access-to-excess” transactions). The regulatory regime that this Article proposes would distinguish between true access-to-excess transactions and conventional transactions. The model is rooted in a version of pluralist theory that posits that the state is responsible …

The High Cost Of Transferring The Dream, Kim Brooks

Articles, Book Chapters, & Popular Press

This paper is part of a larger project where I use the facts in tax decisions to reveal something about who we are. It looks through a small window into the lives of the people who find themselves caught between our collective and their individual expenditure aspirations. More specifically, it explores the circumstances in which individuals find that their outstanding tax debts pose a threat to their ability to maintain ownership of their home.

In this paper I use the facts of tax cases for two ends. First, I am interested in disrupting legal knowledge hierarchies. We choose cases to …

En-Gendering Economic Inequality, Michele E. Gilman

All Faculty Scholarship

We live in an era of growing economic inequality. Luminaries ranging from the President to the Pope to economist Thomas Piketty in his bestselling book Capital in the Twenty- First Century have raised alarms about the disparity between the haves and the have-nots. Overlooked, however, in these important discussions is the reality that economic inequality is not a uniform experience; rather, its effects fall more harshly on women and minorities. With regard to gender, American women have higher rates of poverty and get paid less than comparable men, and their workplace participation rates are falling. Yet economic inequality is neither …

Africa's New Economic Partnerships And Dispute Settlement, Victoria Sahani

Faculty Scholarship

This panel was convened at 11:00 a.m., Thursday, March 31, 2016, by its moderator Uche Ewelukwa of the University of Arkansas School of Law, who introduced the panelists: Victoria Shannon Sahani of Washington and Lee University School of Law; David H. Shinn of George Washington University School of Law; and Thomas R. Snider of Greenberg Traurig LLP.

Competing For Refugees: A Market-Based Solution To A Humanitarian Crisis, Joseph Blocher, Mitu Gulati

Faculty Scholarship

The current refugee crisis demands novel legal solutions, and new ways of summoning the political will to implement them. As a matter of national incentives, the goal must be to design mechanisms that discourage countries of origin from creating refugees, and encourage host countries to welcome them. One way to achieve this would be to recognize that persecuted refugee groups have a financial claim against their countries of origin, and that this claim can be traded to host nations in exchange for acceptance. Modifications to the international apparatus would be necessary, but the basic legal elements of this proposal already …

Panel Ii: Fleeing Violence From The Middle East And North Africa, Alice Farmer, Zaid Hydari, Edwin Rekosh, Thomas Streinz

Cardozo Journal of Equal Rights & Social Justice

No abstract provided.

Intermediary Institutions And The Sharing Economy, John Infranca

Suffolk University Law School Faculty Works

In Regulating Sharing: The Sharing Economy as an Alternative Capitalist System, Professor Rashmi Dyal-Chand challenges the assumption – implicit in the fast-growing legal literature on the “sharing economy” – that companies in this sector operate in the manner of traditional firms. Framing the sharing economy as a “nascent form of a coordinated market economy”, Dyal-Chand calls for regulation rooted in a deeper understanding of the institutions – both the technological platforms most commonly associated with the sharing economy (Uber, Airbnb, TaskRabbit, and their ilk) and a burgeoning collection of more organic and democratic organizations — that shape this economy.

This …

The Common Law Of Contract And The Default Rule Project, Alan Schwartz, Robert E. Scott

Faculty Scholarship

The common law developed over centuries a small set of default rules that courts have used to fill gaps in otherwise incomplete contracts between commercial parties. These rules can be applied almost independently of context: the market damages rule, for example, requires a court only to know the difference between market and contract prices. When parties in various sectors of the economy write sales contracts but leave terms blank, courts fill in the blanks with their own rules. As a consequence, a judicial rule that many parties accept must be "transcontextual": parties in varied commercial contexts accept the courts' rule …

Between Scylla And Charybdis: Taxing Corporations Or Shareholders (Or Both), David M. Schizer

Faculty Scholarship

The United States taxes both corporations and shareholders on corporate profits. In principle, the United States could rely on only one of these taxes, as many commentators have suggested. Although choosing to tax the corporation or its owners may seem like taking money from one pocket or the other, this Essay emphasizes a key difference: These taxes prompt different planning. Relying on one or the other mitigates some distortions and leaks, while exacerbating others. As a result, choosing which to impose is like navigating between Scylla and Charybdis.

In response, this Essay recommends using both taxes for three reasons. First, …

Pay It Forward? Law And The Problem Of Restricted-Spending Philanthropy, Brian Galle

Georgetown Law Faculty Publications and Other Works

American foundations and other philanthropic giving entities hold about $1 trillion in investment assets, and that figure continues to grow every year. Even as urgent contemporary needs go unmet, philanthropic organizations spend only a tiny fraction of their wealth each year, mostly due to restrictive terms in contracts between donors and firms limiting the rate at which donations can be distributed. Law has played a critical role in underwriting and encouraging this build-up of philanthropic wealth. For instance, contributors can typically take a full tax deduction for the value of their contribution today, no matter when the foundation spends their …

Meta-Mindfulness: A New Hope, Peter H. Huang

Publications

This Essay starts by tracing its humble origins to an earlier, related and unique law review article, namely, Tiger Cub Strikes Back: Memoirs of an Ex-Child Prodigy About Legal Education and Parenting. This Essay describes various professional responses to Tiger Cub Strikes Back, provides an update of some developments in research about parenting and legal education since Tiger Cub Strikes Back, and recounts a few personal stories about mindfulness and related to being an ex-child prodigy. This Essay then analyzes meta-mindfulness, defined as mindfulness about mindfulness. This Essay discusses how mindfulness about mindfulness can help facilitate the …

The Energy Prosumer, Sharon B. Jacobs

Publications

Decentralization is becoming a dominant trend in many industries, and the electricity industry is no exception. Increasing numbers of energy consumers generate their own electricity and/or provide essential grid services such as storage, efficiency, and demand response. This Article offers a positive account of the emergence of these new energy actors, which it calls "energy prosumers. " It then frames several doctrinal and procedural puzzles that prosumers create, including jurisdictional puzzles, distributional concerns, and democratic challenges. Ultimately, it concludes that prosumers can be a positive disruptive force in the electricity industry if courts and regulators can manage these challenges effectively. …

Closing Fireside Chat With The Assistant Attorney General For The U.S. Department Of Justice Antitrust Division, William Baer, Philip J. Weiser

Publications

This Closing Fireside Chat was the final session of the 16th annual Silicon Flatirons Center conference, The Digital Broadband Migration: The Evolving Industry Structure of the Digital Broadband Landscape, held on Feb. 1, 2016 in the Wittemyer Courtroom of the University of Colorado Law School.

"At the time this conference was held, William J. Baer was Assistant Attorney General for Antitrust in the United States Department of Justice. On April 17, 2016, President Obama asked Mr. Baer to become Acting Associate Attorney General of the United States. Video of this interview with Assistant Attorney General Baer is available at https://www.youtube.com/watch?v=C351xEX0h4g …

Overcoming The Great Forgetting: A Comment On Fishkin And Forbath, Jedediah S. Purdy

Faculty Scholarship

Fishkin and Forbath’s (F&F’s) manuscript is a project of recovery. It portrays the present as a time marked by a “Great Forgetting” of a tradition of constitutional political economy. F&F name what has been forgotten the “democracy of opportunity” tradition. Recovering it would mean again treating the following three principles as linked elements at the core of our Constitution: (1) an anti-oligarchy principle that works to prevent wealth from producing grossly unequal political power; (2) a commitment to a broad middle class with secure, respected work; and (3) a principle of inclusion that opens participation in both citizenship and the …