Tax Law Commons^™

The Original Meaning Of The Sixteenth Amendment, David Gamage, John R. Brooks

Faculty Publications

The Sixteenth Amendment to the United States Constitution enshrines Congress’s “power to lay and collect taxes on incomes, from whatever source derived.” Challenges to the exercise of that power have typically turned on whether the thing being taxed is “income” or not. In the most recent example, the 2024 Supreme Court case of Moore v. United States, taxpayers argued that the Sixteenth Amendment only authorizes taxation of realized income—that is, that gain from appreciated property can only be taxed as “income” when there has been a sale or conversion of that property.

In this Article we argue—based on the original …

Current Developments In Tax Malpractice: Basics And Beyond, Jacob L. Todres

Faculty Publications

It was always assumed that “tax malpractice” referred to a situation in which an error occurred with respect to some tax provision or in a tax-related administrative or legal proceeding. However, several recent cases have expanded this thinking, introducing the possibility that tax malpractice may also occur where damages include an increase in taxes—irrespective of whether there was an error that directly involved tax law. Beginning with a discussion of the evolving definition of that term as seen in the New York cases of Serino v. Lipper and Bloostein v. Morrison Cohen LLP and whether these cases may have returned …

Students For Fair Admissions: Affirming Affirmative Action And Shapeshifting Towards Cognitive Diversity?, Steven A. Ramirez

Seattle University Law Review

The Roberts Court holds a well-earned reputation for overturning Supreme Court precedent regardless of the long-standing nature of the case. The Roberts Court knows how to overrule precedent. In Students for Fair Admissions v. Harvard (SFFA), the Court’s majority opinion never intimates that it overrules Grutter v. Bollinger, the Court’s leading opinion permitting race-based affirmative action in college admissions. Instead, the Roberts Court applied Grutter as authoritative to hold certain affirmative action programs entailing racial preferences violative of the Constitution. These programs did not provide an end point, nor did they require assessment, review, periodic expiration, or revision for greater …

Moore V. United States: The Constitutionality Of The Taxation Of Unrealized Gains, Loren Naldoza

Lewis & Clark Law Review

Rarely in modern tax jurisprudence does the common adage “nothing is certain except death and taxes” receive a challenge in the highest court in the land. This year, the Supreme Court is considering the most existential question concerning the federal income tax in over a century: what is “income”? The definition of “income” has gone through several developments and adjustments since the enactment of the Sixteenth Amendment. Two taxpayers have reached the Supreme Court to challenge one such aspect of the definition of “income”— whether realization is a constitutional requirement as required by the Sixteenth Amendment. When an accession to …

Capital Gains Realizations, Daniel Schaffa

Law Faculty Publications

If there are important nondeductible costs to long-term investing, then higher capital gains tax rates may encourage or discourage investors from realizing accumulated gains. This ambiguity suggests that the sizeable observed effects of capital gains taxes on realizations may partly reflect factors other than the time value of money, such as investor anticipations of future tax rate changes.

Taxing Dirty Luxuries, Victoria J. Haneman

Scholarly Works

Dirty luxuries are items that are pleasant or nice to have, not necessities, that absolutely bludgeon the environment. From the merely affluent to the ultra-rich, consumers enjoying dirty luxuries, such as luxury clothing, private jets, superyachts, SUVs, and vacation cruises, drive one of the most polluting types of consumption on the planet. This Article explores the climate costs of dirty luxuries, considers the current and proposed international efforts to address the climate impact of these luxuries, and proposes structures by which these luxuries may be taxed to either reduce consumption or compensate for negative externalities.

Fiscal Equity: The Non-Profit Model Of Corporate Ownership, Eric A. San Juan

American University Business Law Review

In an era of excessive executive compensation, the non-profit corporation serves as an exemplary alternative. Voluntarily, some brand-name manufacturers operate under existing law that permits non-profit ownership. Virtually all corporations could become non-profits under a legislative reform potentially more effective than past redistributive measures. Twentieth-century progressive taxation has waned, while initiatives to endow impoverished children with personal accounts have not expanded beyond pilot programs. Instead, economic inequality widens with global industrialization. Traditionally, deprivation led to the call for the abolition of private ownership of the means of production, yet this proved impracticable under revolutionary regimes. A review of the evolution …

State Taxing Power Over Tribal Leasing Activity: Balancing Bracker With The Call To Modernize, Caitlyn Lindstrom

American University Business Law Review

Federal law operates on the premise that state jurisdiction does not interfere with American Indian jurisdiction, and it is generally accepted that states may not tax Indian entities or members. However, the Supreme Court held that there are circumstances in which states may extend taxation onto non-Indians residing on tribal lands. In cases where Indians believe that states are violating legislation or regulations prohibiting state taxation, the Court follows the Bracker balancing test, an interest balancing test that weighs state, federal, and tribal interests. As with most balancing tests, this test lacks strict guidance on how to properly weigh certain …

The Chinese Tax System: Where It Stands And How We Should Study It, Wei Cui

All Faculty Publications

This book chapter offers an overview of where China’s tax system stands, critically assesses recent scholarship on Chinese taxation, and urges researchers to attend more to normative questions of tax design (e.g., economic efficiency and redistribution). After surveying major tax instruments deployed in China today, the chapter reviews recent studies of taxation’s impact on the Chinese economy, arguing that such scholarship often falls short of providing systematic support for policy analyses, and that ignoring normative questions in tax design leads to poor conceptual framing in positive analyses. The chapter then considers some themes at the intersection between Chinese political institutions …

Administrative Procedures As Tax Enforcement Tools, Wei Cui, Jeff Hicks, Michael Wiebe

All Faculty Publications

We study how common administrative procedures affect firm tax evasion. We begin with the counter-intuitive observation that many firms bunch above, rather than below, large notches in China’s corporate income tax. Cross-sectional patterns suggest that administrative procedures in the prepayment and refund system served as de facto enforcement tools that prevented some firms from accessing the reduced tax rates below the notches. Following a regulatory reform that eliminated these procedures, bunching below the notches increased dramatically. The results imply a tradeoff between reducing administrative barriers and allowing much taxpayer non-compliance in low-compliance environments.

Keeping The Perpetual In Florida's Conservation Easements, Nancy A. Mclaughlin

FIU Law Review

Hundreds of millions of dollars are being invested in the protection of the Florida Wildlife Corridor and other environmentally sensitive lands. One of the primary tools being used to accomplish this protection is the perpetual conservation easement, which is touted to landowners and the public as providing a permanent guarantee that the subject lands will never be developed. There is a very real danger, however, that perpetual conservation easements in Florida may not, in fact, be perpetual, and the protections put in place today will vanish over time—along with the public funds invested therein—as government and nonprofit holders “release” the …

Building The Gateway: Why The Two Pillars Need Each Other., Reuven S. Avi-Yonah, Ajitesh Kir

Articles

There is a reason the OECD proposed two pillars for its gateway to a better tax future. A gateway requires both pillars, and neither can stand without the other. Pillar 2 is a fait accompli, but it needs countries to implement Pillar 1 as well because in the absence of a clear sourcing rule there is no limit to countries implementing the Qualified Domestic Minimum Top-Up Tax (QDMTT), which would turn off the other parts of Pillar 2 and potentially result in double taxation. Pillar 1 is not going forward in the absence of a Multilateral Tax Convention (MLC), but …

The Original Meaning Of The Sixteenth Amendment, John R. Brooks, David Gamage

Faculty Scholarship

The Sixteenth Amendment to the United States Constitution enshrines Congress’s “power to lay and collect taxes on incomes, from whatever source derived.” Challenges to the exercise of that power have typically turned on whether the thing being taxed is “income” or not. In the most recent example, the 2023 Supreme Court case of Moore v. United States, taxpayers have argued that the Sixteenth Amendment only authorizes taxation of realized income—this is, that gain from appreciated property can only be taxed as “income” when there has been a sale or conversion of that property.

In this Article we argue—based on the …

The Global Tax Deal And The New International Economic Governance, Rebecca Kysar

Faculty Scholarship

The ethos of economic integration and trade liberation no longer reigns supreme. Instead of multilateral trade agreements, nations are turning towards protectionism and unilateralism. Yet in late 2021, nearly 140 countries agreed to a new global tax deal that is aimed at coordinating their tax systems to curtail tax competition and corporation profit shifting to tax havens, as well as constructing a new allocation of taxing rights among nations. Although multilateral trade agreements now seem out of reach, tax multilateralism is ascendant. This is surprising given the deep tradition of national control over tax policy. It also perplexing since international …

Cooperative Federalism And The Digital Tax Impasse, Orly Mazur, Adam Thimmesch

Faculty Journal Articles and Book Chapters

The digital economy is changing faster than the law can respond and has challenged legal systems worldwide. In the tax space, the digital economy has undermined traditional tax systems in ways that have created significant tax compliance and enforcement challenges, substantial tax revenue losses, and unwarranted distortions in the market between digital and traditional transactions. These problems are well recognized both in the legal literature and in the public sphere. Unfortunately, the legal reforms that are needed in this space have been slowed by a combination of technical, conceptual, and political impediments. This Article focuses on the digital tax landscape …

Is There A Presumption Against Wealth Taxation?, Linda Sugin

Faculty Scholarship

No abstract provided.

Lawmakers And Economic Othering, Edward W. De Barbieri

Oklahoma Law Review

No abstract provided.

The Nation’S Transfer Tax Regime And The Tax Gap, Jay A. Soled

Oklahoma Law Review

No abstract provided.

Consumption Governance: The Role Of Production And Consumption In International Economic Law, Timothy Meyer

Faculty Scholarship

Over the last decade, international economic conflict has increased dramatically. To name only a few examples, the European Union banned the import of products from deforested land and is poised to impose duties on carbon-intensive imports; the United States banned Chinese imports made with forced labor; and countries the world over threatened to impose digital services taxes on U.S. corporations, leading to a new multilateral agreement on apportioning income tax revenue among countries.

This Article argues that these conflicts represent a shift in norms governing the authority to tax and regulate international commerce. Different fields within international economic law describe …

The Realization Rule As A Legal Standard, Sloan G. Speck

Publications

The realization “rule” in tax law is better characterized as a legal standard. This characterization matters after the Supreme Court’s decision in Moore v. United States, which sets the stage for future courts to decide that the Constitution mandates realization— an identifiable event before accrued income is reportable by taxpayers. The stakes of a constitutional realization requirement are underappreciated. Because current statutory law embeds realization as a background principle, a constitutional realization requirement would operate as a taxpayer-initiated antiabuse doctrine—a sword that taxpayers could use selectively to invalidate parts of the Internal Revenue Code and Treasury Regulations. This novel constitutional …

Valuing Social Data, Amanda Parsons, Salome Viljoen

Publications

Social data production—accumulating, processing, and using large volumes of data about people—is a unique form of value creation that characterizes the digital economy. Social data production also presents critical challenges for the legal regimes that encounter it. This Article provides scholars and policymakers with the tools to comprehend this new form of value creation through two descriptive contributions. First, it presents a theoretical account of social data, a mode of production that is cultivated and exploited for two distinct (albeit related) forms of value: prediction value and exchange value. Second, it creates and defends a taxonomy of three “scripts” that …