Taxation-State and Local Commons^™

New York Adopts A Vat, Richard Thompson Ainsworth

Faculty Scholarship

On August 13, 2010 the New York State Department of Taxation and Finance, Office of Tax Policy Analysis, Taxpayer Guidance Division released Amendments Affecting the Application of Sales Tax to Rent Received for Hotel Occupancy by Room Remarketers. The legislative revision it considers (Chapter 57 of the Laws of 2010) was effective September 1, 2010. The changes brought in by this Chapter effectively converted New York’s Hotel Room Occupancy Tax from a single-stage retail sales tax to multi-stage European-style VAT. This paper considers the New York VAT in hotel accommodations in three sections. The first defines a European-style credit-invoice VAT …

Pennsylvania's Sales And Use Tax: Has Nearly $1 Billion Been 'Zapped' Away In Fraud?, Richard Thompson Ainsworth

Faculty Scholarship

The Sales and Use Tax is an essential part of Pennsylvania’s revenue profile. Not only is it the State’s second largest revenue source, it has historically played a critical role in reducing the volatility of Pennsylvania’s overall tax collections. The sales tax is also critical to the city of Philadelphia, and Allegheny County. During the current economic downturn both the revenue and structural attributes of this levy should be pushing it to the front of the tax policy line.

The two topics that should rest atop Pennsylvania’s tax policy agenda should be: (1) joining the Streamlined Sales Tax initiative and …

E-Vat: An Electronically Collected Progressive Consumption Tax, Daniel S. Goldberg

Faculty Scholarship

This report proposes replacing the income tax with an electronic, progressive consumption tax that couples a credit-method VAT (modified for wages) with a progressive wage tax. I have called this proposal e-VAT (a convenient contraction for an electronic value added tax), because it is based on a business-level-credit VAT and can be collected automatically and electronically at the point of sale.

The essential advantage of e-VAT over the Hall-Rabushka flat tax is that e-VAT’s use of a credit VAT as its foundation facilitates automatic and electronic collection of the tax. A credit VAT lends itself to electronic monitoring and auditing …

Proposition 13 And The California Fiscal Shell Game, Colin H. Mccubbins, Mathew D. Mccubbins

Faculty Scholarship

We study the effects of California’s tax and expenditure limitations, especially Proposition 13. We find that Proposition 13 was indeed effective at reducing both ad valorem property taxes per capita and total state and local taxes per capita, at least in the short run. We further argue that there have been unintended second- ary effects that have resulted in an increased tax burden, undermining the aims of Proposition 13. To circumvent the limits imposed by Proposition 13, the state has drastically increased nonguaranteed debt, has privatized the public fisc, and has devolved the authority to lay and collect taxes and …

Misguided Relief: Unsimplifying The Standard Deduction, Alan L. Feld

Faculty Scholarship

The push to use federal money for benevolent purposes occasionally produces more cost than benefit, particularly when the outlay comes in the form of taxes forgiven. The Housing Assistance Tax Act of 2008 added a supplement to the basic standard deduction. A nonitemizing taxpayer may claim a deduction for real property taxes paid, up to $500, $1,000 in the case of a joint return. Initially, the change applied only to 2008, but subsequent legislation extended its life through 2009, and pending legislation would make it a permanent part of the Code. Although well intentioned, the real property tax provision makes …

Massachusetts Zappers - Collecting The Sales Tax That Has Already Been Paid, Richard Thompson Ainsworth

Faculty Scholarship

No other New England state is as vulnerable to Zappers as is the State of Massachusetts. Zappers and related software programming, Phantom-ware, facilitate an old tax fraud – skimming cash receipts. In this instance skimming is performed with modern electronic cash registers (ECRs).

Zappers are a global revenue problem, but to the best of this author’s knowledge they have not been uncovered in Massachusetts. A global perspective says: it is highly unlikely that Zappers are not in the Commonwealth – we just need to find them. In fact, using a Quebec template, tax losses from Zappers and related frauds in …

California Biometrics: A Second Proposal For California's Commission On The 21st Century Economy, Richard Thompson Ainsworth

Faculty Scholarship

This proposal takes a long view to revenue reform. It seeks to fundamentally align the sales tax with the digital foundation of the 21st Century economy.

The core policy question is whether California is willing to change the way it defines sales tax exemptions; is it willing to move from product-centric to person-centric exemptions. Certified tax determination systems can be relied upon. A key element in this proposal is the encryption of exemption certificates in IDs (smart cards with biometric identifiers that will allow the poor or handicapped to make certain purchases tax free).

This proposal suggests that (for example) …

California Zappers: A Proposal For The Commission For The 21st Century Economy, Richard Thompson Ainsworth

Faculty Scholarship

California has not uncovered a single instance of technology-assisted cash skimming - there are no zappers, and no phantomware in California. Is this because Californians are not skimming cash sales with technology, or is this because the California technology works so well that the fraud cannot be detected?

The record in foreign jurisdictions is reasonable clear. Automated sales suppression technology is widely used to skim cash sales, denying the state revenues from consumption taxes that have been paid by the consumer, reducing taxable business profits, and funding a cash hoard out of which unreported employee wages are paid. Government studies …

Questions About Tax Increment Financing In North Carolina, Joseph Blocher, Jonathan Q. Morgan

Faculty Scholarship

No abstract provided.

Consumption Taxes And The Theory Of General And Individual Taxation, Robin Feldman

Faculty Scholarship

No abstract provided.

Anatomy Of Valuing Stock In Closely Held Corporations: Pursuing The Phantom Of Objectivity Into The New Millennium, Stephen J. Leacock

Faculty Scholarship

No abstract provided.

Tax Policy At The Beginning Of The Clinton Administration, Michael J. Graetz

Faculty Scholarship

Ten years ago, in 1983, the Yale Journal on Regulation was started by students at the Yale Law School to foster scholarship and debate on issues of regulatory policy. Today the Journal staff consists of students from Yale University graduate and professional programs in law, management, forestry, and public health. One of the Journal's primary missions was to track the regulatory/deregulatory developments under the Reagan Administration and later the Bush Administration. Since our tenth anniversary coincided with the installment of a Democratic Administration under President Clinton, we have asked two professors at the Yale Law School to submit an essay …

Double Jeopardy Of Corporate Profits, The , Constantine N. Katsoris

Faculty Scholarship

The more one reads about our economy, the more one is baffled and alarmed. Permanent solutions to economic problems are elusive. Treating one financial malaise often aggravates another sector of the economy, necessitating a delicate balancing of conflicting interests. Furthermore, the problems are complicated by the constant influence of foreign forces. Nevertheless, most economists agree that any solution will require enormous funding. Unfortunately, the public has little, if any, confidence in our tax system. Indeed, some tax laws and proposals have been referred to as "obscene" and a "disgrace to the human race." Few quarrel with the aptness of such …

Federal Tax Status Of California Professional Men Who Incorporate, Stephen A. Lind

Faculty Scholarship

No abstract provided.