Tax Law Commons^™

Let The Sunshine In: Crafting Constitutional Transparency Regulations For Content Moderation, Caitlin Ring Carlson

Seattle University Law Review

In response to public concern about the impact of social media, legislators in some U.S. states have developed laws to regulate the process of content moderation. Many include mandatory transparency and disclosure requirements, some of which courts have already deemed an unconstitutional infringement on social media platforms’ right to free expression. This article explores the parameters for crafting constitutional social media transparency regulations using existing U.S. media policy and insights from recent legal challenges. The resulting analysis identifies content neutral transparency requirements that mandate the disclosure of purely factual, non-controversial information as those most likely to withstand judicial scrutiny. Specifically, …

This Is Not A Game: The Addictive Allure Of Digital Companions, Nizan Geslevich Packin, Karni Chagal-Feferkorn

Seattle University Law Review

Artificial Intelligence (AI) agents have become an inescapable part of modern childhood, reshaping education, leisure activities, entertainment, and social interaction. From AI-powered tutors that adapt to individual learning styles to emotionally responsive chatbots that simulate human companionship, these systems promise unprecedented personalization, cognitive stimulation, and social support. However, these benefits mask significant risks that remain unregulated and inadequately addressed.

Although adults are also susceptible to forming deep emotional bonds with AI companions—often trusting them as if they possessed genuine understanding and empathy—children are particularly vulnerable. Their misplaced trust can more severely distort social development, weaken critical thinking, and foster unhealthy …

Was The Niit A Treaty Override?, Reuven S. Avi-Yonah

Law & Economics Working Papers

Three court decisions have recently addressed the interaction of the Net Investment Income Tax (NIIT) and US tax treaties. The issue was whether the treaty provided an independent basis for crediting a foreign tax against the NIIT, because no such credit is available under the Code. First, in Toulouse, the Tax Court held that there was no treaty based credit. Second, in Christensen, the Court of Federal Claims held that a treaty-based credit was available, distinguishing Toulouse. Third, in Bruyea, the Court of Federal Claims issued a broader opinion that allowed the credit. Importantly, Bruyea addressed an issue that was …

Beyond Blinders And Boomerangs: Assessing State Business Taxation, David Gamage

Faculty Publications

Karl A. Frieden’s article, “Wearing Blinders in the Debate Over Business’s ‘Fair Share’ of State Taxes” and his subsequent article, “The Boomerang Effect of the Business ‘Fair Share’ Tax Debate,” jointly contend that progressive calls to strengthen state corporate income taxes (CITs) are misguided because businesses allegedly overpay certain other state and local taxes. This essay argues that, while Frieden does raise some valid points about the efficiency of specific tax design choices, his core argument fundamentally misconstrues the central issues: the ultimate incidence of business taxes, the pursuit of equity and efficiency, and the importance of combating harmful tax …

Is The Utpr Extraterritorial Or Discriminatory?, Reuven S. Avi-Yonah

Articles

On January 20 President Trump issued two executive orders on international tax. The first order rejected the OECD’s two-pillar project, stating: The OECD Global Tax Deal supported under the prior administration not only allows extraterritorial jurisdiction over American income but also limits our Nation’s ability to enact tax policies that serve the interests of American businesses and workers. Because of the Global Tax Deal and other discriminatory foreign tax practices, American companies may face retaliatory international tax regimes if the United States does not comply with foreign tax policy objectives. This memorandum recaptures our Nation’s sovereignty and economic competitiveness by …

The Samuel & Ronnie Heyman Center On Corporate Governance Invites You To: Taxes Vs Tariffs, Heyman Center On Corporate Governance, Cardozo Business Law Society, Luís Calderón Gómez, Harlan Grant Cohen, Scott Maberry, Maria Celis, Gregory Spak

2025 Event Invitations

Market participants are preparing for the tax and trade policies pursued by the second Trump administration. Regarding taxes, proposals include making expiring Tax Cuts and Jobs Act provisions permanent, ending green energy subsidies from the Inflation Reduction Act, and exempting certain income from taxation. Proposed tariffs range from retaliatory measures-in-kind to targeting Chinese market participation to a universal 20% import tariff. On the campaign trail, the President often presented these proposals as part of a shift of financial burdens from domestic taxpayers to foreign companies. In a panel discussion with tax and trade experts, we will seek to determine the …

Esg Irony: Why Corporate Tax Avoidance Must Be Considered, Reuven S. Avi-Yonah

Articles

Environmental, social, and governance (ESG) investing has been the focus of major attention in corporate law. Many writers praised ESG as the future of corporate governance. The push for ESG comes from the belief that the government is incapable of fulfilling its responsibility of achieving social and environmental goals, and that corporations are frequently in the best position to help. ESG investing has been significantly bolstered by large asset management institutions like BlackRock Group, State Street Global Advisors, and Vanguard Group. The “Big Three” own large stakes in most public corporations, which they have been pushing to address ESG issues.

Tax Experience Isn’T Everything: A Tale Of Two Justices., Reuven S. Avi-Yonah

Articles

Any student of federal income taxation is familiar with a series of important Supreme Court tax decisions written by Justice Harry Blackmun (associate justice, 1970-1994). They would also know of three important decisions written by his contemporary, Justice Thurgood Marshall (associate justice, 1967-1991). It is interesting to compare the two, because Blackmun was the only recent justice with extensive tax practice experience, whereas Marshall had none. Yet, most of Blackmun’s tax opinions were wrong while Marshall’s opinions were right.

Reassessing Corporate Philanthropy From A Tax Perspective, David I. Walker

Faculty Scholarship

U.S. corporations make and deduct charitable contributions in excess of $20 billion annually. This Article reassesses corporate philanthropy from a tax perspective, asking first whether the federal tax subsidy for corporate philanthropy is greater than the subsidy for the alternative stakeholder philanthropy, as some commentators have previously found. The answer: it depends. The relative degree of subsidy depends on corporate and individual tax rates, obviously, but also on the incidence of corporate philanthropy, i.e., who bears the cost, which is generally unclear, as well as other details, such as whether individual stakeholders itemize deductions. At current tax rates, however, any …

Taxes And Certainty: Challenges In Judicial Review Of U.S. Tax Legislation, Reuven S. Avi-Yonah, Moshe Jaffe

Law & Economics Working Papers

The application of judicial review to tax legislation presents unique challenges and inconsistencies. Unlike other forms of legislation, tax laws in the United States are seldom invalidated by the Supreme Court, and when this does occur, it is done using various and inconsistent tests, suggesting a need for a more balanced and effective approach. This paper explores the U.S. court's approach to judicial review in tax cases, empirically analyzing the methods and tests used in key decisions. The findings will reveal a complex and inconsistent picture, highlighting the need for a more coherent approach. Additionally, the research will analyze several …

Understanding The Effect Of Carried Interest Provisions On Fairness And Equality In The Taxation Of Hedge Fund Profits, Nathan D. Madden

Widener Commonwealth Law Review

Private equity and hedge fund managers (General Partners) typically receive a percentage share of the profits from the funds that they manage as part of their compensation for managing the investments made by investors. This compensation is commonly referred to as “Carried Interest.” General Partners are then entitled to a more favorable tax treatment of their compensation—as compared to most other taxpayers—by deferring the tax on Carried Interest and having it taxed at a lower, preferential rate. Many view these Carried Interest tax provisions as providing an unfair and unjustified tax advantage. This paper will explore alternatives that would arguably …

Is The Us Exit Tax Constitutional?, Reuven S. Avi-Yonah

Law & Economics Working Papers

The recent US Supreme Court decision in Moore vs. United States raised the possibility that the Court would declare that realization is required for a tax provision to be constitutional. The US exit tax on expatriations is the most likely vehicle for a post-Moore constitutional challenge to taxation without realization because (a) it involves individual taxpayers; (b) it does not involve attribution, because the tax is imposed directly on the expatriating taxpayer, and (c) it involves precisely the kind of tax that was the direct target of the Moore litigation, namely a mark to market tax on rich taxpayers (the …

Should Country-By-Country Reporting Be Public?, Reuven S. Avi-Yonah

Articles

Under action 13 of the base erosion and profit shifting project, large multinational enterprises are obligated to file country-by-country reports with tax authorities. As of April 2024, over 80 countries have adopted a multilateral agreement on exchanging CbC reports. The United States has not adopted the multilateral agreement, but regulations require U.S.-based MNEs to file these reports with the IRS, which can then exchange them with other countries under tax treaties.

Unveiling Injustice: An Analysis Of Irc Section 7430 And The Quest For Fairness In Taxpayer Administrative And Judicial Proceedings With The Irs, Kevin T. White, Tammy W. Cowart, Roger Lirely

Brooklyn Law Review

The American rule and doctrine of sovereign immunity are serious barriers affecting access to justice for individuals and small businesses. In this Article, we explore the legislative history of and evolution of the amendments to section 7430 of the Internal Revenue Code, which allows prevailing taxpayers in tax proceedings who meet certain substantive and procedural requirements to recover their attorneys’ fees and costs. We also examine in depth the requirements under section 7430 for recovering administrative and litigation costs, looking at select judicial decisions at how these requirements have been applied, including decisions applying the statutory limitations on attorneys’ fees …

Should The United States Abandon Citizenship-Based Taxation?, Reuven S. Avi-Yonah

Law & Economics Working Papers

President Trump proposed during the election campaign to end the "double taxation" of American citizens living overseas. To which the answer is, what double taxation? Americans living overseas already benefit from three significant provisions that in most cases prevent any double taxation, and because of these most of them do not have any U.S. tax liability. Those who do are typically wealthier, derive income from investments or from high wages, and are not subject to foreign tax because they live in tax havens or in countries that do not tax rich immigrants on foreign source income, and they do not …

Taking The Sting Out Of The Slap On The Wrist: Why The Tax Cuts And Jobs Act Deductibility Carve-Outs Under I.R.C. Section 162(F) Are Hurting The Average American Taxpayer, Rachel Pritzlaff

University of Miami Business Law Review

The Section 162(f) carve-outs created under the Tax Cuts and Jobs Act of 2017 should concern all taxpayers. Where there were no exceptions previously, now both civil and criminal wrongdoers have the potential to deduct the payments they make in restitution for their actions from their taxable income as a business loss. These carve-outs represent government spending for the benefit of individuals and corporations behaving badly and at the expense of the average American taxpayer. The government is leaving tax revenue on the table by allowing deductibility for fines and penalties, which negatively impacts the federal “power of the purse.” …

February 5, 2025 — Letter To The House Ways And Means Committee On Tax, American Dental Association

Advocacy in Action letters

No abstract provided.

Reforming The Medical Expense Income Tax Deduction To Better Reflect "Crip Time", Diane Kemker

University of Michigan Journal of Law Reform Caveat

Extraordinary medical expenses— whether due to a one-time occurrence or a chronic condition— happen on their own time. These expenses, their causes, and their consequences (medical, personal, financial, or all of these) can rarely be neatly cabined into a single calendar year. Treatment requiring an expensive prescription medication or complex surgery not covered by insurance may address a condition that arose over years. That condition may have interfered with a taxpayer’s ability to work in prior years, the current year, and perhaps for years to come, even for the rest of the taxpayer’s earning life. The medical condition of a …

Tax In Law Schools, Michael Hatfield

Articles

At the 2023 Association of American Law Schools Tax Section meeting, professors discussed their impressions of a decline in the number of JD students studying tax. Their impressions were consistent with declines that have been documented in similar fields. Between 2011 and 2021, U.S. accounting programs saw an 18% drop in students, while new CPA candidates declined 39% from 2010 to 2022. In the United Kingdom, the number of law schools that teach tax has diminished by 43% since 2002. This Article examines tax education in 40 U.S. law schools, focusing on course offerings and enrollment trends from 2012 to …

Sovereignty, Sins, And The Reassertion Of Primary Taxing Rights By The United States, Michael J. Graetz

Faculty Scholarship

In this report, Graetz argues that the United States must reassert its primary taxing rights over income long conceded to other countries, especially income from intellectual property created in the United States, and he explains some changes necessary to make that happen.

Law For The Rich, Alex Raskolnikov

Faculty Scholarship

With top incomes and wealth reaching historic highs, scholars and politicians have proposed new taxes and novel legal rules aimed at reversing the emergence of the new Gilded Age. Yet while new taxes target the rich directly by imposing greater burdens only on those with incomes or wealth above multi-million-dollar thresholds, none of the proposed legal reforms do anything of the sort. There appears to be no interest in changing property law, corporate law, antitrust law, or labor law, among others, to have special, more burdensome rules applicable only to the rich. This Article asks: Why not? Why shy away …

The Role Of Unrealized Gains And Borrowing In The Taxation Of The Rich, Edward Fox, Zachary Liscow

Law & Economics Working Papers

As deficits rise and concerns about tax avoidance by the rich increase, we study how unrealized gains and borrowing affect Americans’ income taxes. We have four main findings: First, measuring “economic income” as currently-taxed income plus new unrealized gains, the income tax base captures 60% of economic income of the top 1% of wealth-holders (and 71% adjusting for inflation) and the vast majority of income for lower wealth groups. Second, adjusting for unrealized gains substantially lessens the degree of progressivity in the income tax, although it remains largely progressive. Third, we quantify for the first time the amount of borrowing …

Three Implications Of Moore., Reuven S. Avi-Yonah

Articles

In his majority opinion in Moore, Justice Brett Kavanaugh listed several provisions of the code that could be subject to a constitutional challenge if realization were a constitutional requirement, as suggested by Justices Amy Coney Barrett, Samuel A. Alito Jr., Clarence Thomas, and Neil M. Gorsuch. Kavanaugh wrote: In short, the Moores cannot meaningfully distinguish the [mandatory repatriation tax] from similar taxes such as taxes on partnerships, on S corporations, and on subpart F income. The upshot is that the Moores’ argument, taken to its logical conclusion, could render vast swaths of the Internal Revenue Code unconstitutional. See, e.g., 26 …

January 15, 2025 — Welcome Letter To Members Of The 119th Congress, American Dental Association

Advocacy in Action letters

No abstract provided.

Poverty, Fresh Starts, And The Social Safety Net, Michelle Lyon Drumbl

Scholarly Articles

For decades low-income families have relied on the filing of individual income tax returns to claim critical social welfare benefits in the form of refundable tax credits, most notably the Earned Income Tax Credit and the Child Tax Credit. But what happens to those families when the social safety net is not enough to meet their financial obligations, and they must seek a fresh start by filing for bankruptcy?

This Article, at the intersection of tax law, bankruptcy law, and the social safety net, examines the ways in which state bankruptcy laws treat refundable tax credits when an individual debtor …

Through A Glass Darkly: How Securities Disclosures Give A Distorted View Of The Economy, Gerald F. Davis

Seattle University Law Review

Our understanding of the American economy often relies on stylized facts derived from mandatory disclosures by listed corporations. Data vendors like Standard & Poor’s vacuum up 10Ks and proxy statements into databases, and scholars distill these into tentative maps. This may have been adequate for a postwar economy centered on asset-heavy manufacturers, but it is increasingly out of step with an information-based economy. Companies listed on the stock market are fewer in number and less representative than they were, light in tangible assets and people, and heavy on IP. Basic facts such as what industry they are in are increasingly …

Martinique’S Octroi De Mer: Ancient Dock Dues Threaten The Integrity Of The European Union’S (Eu) Internal Market And Contribute To The Cost Of Living Crisis., Johanna Leffler

American University International Law Review

In 1670, France implemented a tax on all imports known as the octroi de mer in Martinique, a Caribbean island in the Lesser Antilles of the West Indies. The octroi de mer outlived France’s colonial rule over Martinique, and today, it is imposed on both imported and locally produced products. This Comment argues that the octroi de mer system undermines the integrity and coherence of the European Union’s (EU) legal order, violating Article 349 of the Treaty on the Functioning of the European Union (TFEU or Treaty) because its very nature is contrary to the fundamental principles of the EU …

Tax Base Diversification As An Enforcement Tool, David Gamage, Brian Galle, Yulia Kuchumova

Faculty Publications

We examine when it is optimal to employ sales or VAT-type taxes as complements to a labor income tax. We find a Ramsey-type result in which each tax instrument should be imposed in inverse proportion to the combined elasticity of real and avoidance responses to the respective tax. Contrary to some prior results, we find that sales-type taxes are optimally non-zero across a variety of settings, and in particular when the (weighted) elasticity of taxable income with respect to the wage tax is greater than the cross-elasticity of taxable income with respect to the sales tax. We argue this parameter …

Boden Lecture: Taxation Of Autonomous Artificial Intelligence, Reuven Avi-Yonah, Lucas Brasil Salama, Herbert Snitz, W. Robert Thomas

Marquette Law Review

This Article proposes that tax can be a useful supplement to other measures to regulate Autonomous Artificial Intelligence (AAI) and limit its potential harmful effects. This proposal differs from command-and-control regulation of AAI along the lines of European Union legislation that may unduly limit the development of AAI. It also differs from existing proposals to tax AAI to generate revenue to help workers displaced by AAI programs, or to tax the data used by AAI. The proposal is based on granting AAI programs like ChatGPT separate legal personhood, like corporate personhood, while incentivizing or requiring their corporate owner to place …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents