Tax Law Commons^™

The Great And Mighty Tax Law: How The Roberts Court Has Reduced Constitutional Scrutiny Of Taxes And Tax Expenditures, Linda Sugin

Faculty Scholarship

This article compares National Federation of Independent Business v. Sebelius – the Supreme Court’s decision upholding the individual mandate in Obamacare as a tax, with Arizona Christian Schools v. Winn – the Supreme Court’s decision denying standing to taxpayers with an Establishment Clause challenge to a state tax credit. It argues that these cases aggravate a growing tension between the economic and legal analyses of taxation by reducing the legal significance of economic analysis in constitutional cases. It suggests that Arizona Christian Schools was a truly radical decision because it conceptualized tax expenditures as private action immune from constitutional attack, …

Taxing The Platypygous, James J. White

Articles

This Article maintains that obesity in the United States is an enormous public health issue that causes the health care costs of the obese Americans greatly to exceed those of citizens of normal weight. Recognizing that that much of that cost will be born by publicly financed programs and that the taxes supporting those programs will constitute an externality that the fat impose on the thin, the Article proposes a tax on high calorie food-but only when that food is purchased by the obese. The Article addresses many of the administrative, moral and other objections to a tax aimed at …

Taxation, Risk, And Portfolio Choice: The Treatment Of Returns To Risk Under A Normative Income Tax, John R. Brooks

Georgetown Law Faculty Publications and Other Works

Many articles in the legal and economic literature claim that a pure Haig-Simons income tax cannot effectively tax investment income. This is because an investor can use leverage to gross up her investments in risky assets such that the increased gain (or loss) exactly offsets any income tax (or deduction) on the returns to risk-taking. This article argues, however, that while it is possible for an investor to make such portfolio shifts, she almost certainly will not because of the increased risk of doing so.

Central to any discussion of the effects of taxation on investment risk-taking is the meaning …

Nfib V. Sebelius And The Transformation Of The Taxing Power, Barry Cushman

Journal Articles

In National Federation of Independent Business v. Sebelius, Chief Justice Roberts wrote for a majority of five Justices in holding that the “shared responsibility payment” required by the Patient Protection and Affordable Care Act (“ACA”) constituted an imposition of a “tax” rather than a “penalty.” Thus, even though the Chief Justice and four other Justices had concluded that the provision was not a legitimate exercise of the commerce power, the Court held that it was a valid exercise of the taxing power.

The origin of the distinction between taxes and penalties in taxing power jurisprudence is found in the 1922 …

Tax Incentives For Innovation In A Modern Ip Ecosystem, Joshua Chao

Vanderbilt Journal of Entertainment & Technology Law

Technological innovation is a long-recognized catalyst for economic growth in the United States, and its promotion is an important feature of national economic policy, as evidenced by the presence of various tax incentives for innovation in the US Internal Revenue Code. Tax incentives are an important means by which governments can deliver subsidies to promote such innovation. To be effective, however, any system of tax incentives must be tailored for current economic conditions and competitive landscapes. In the current ecosystem of innovation in the United States, this means that, at the very least, the incentives for innovation in the US …

Embracing The Queen Of Hearts: Deference To Retroactive Tax Rules, James Puckett

Faculty Articles

The Supreme Court's decision in Mayo Foundation for Medical Education and Research v. United States underscored the importance of a uniform approach to judicial review of administrative action; accordingly, the Court clarified that tax administration is generally subject to the same review as other kinds of administrative action by other federal agencies. Tax guidance from the IRS and Treasury Department serves an important role in clarifying the tax law so that taxpayers may report their tax liability accurately and plan their affairs. Meanwhile, aggressive attempts by a relatively small number of taxpayers to avoid tax liability by exploiting arguable ambiguities …

Costly Mistakes: Undertaxed Business Owners And Overtaxed Workers, Lily Kahng, Mary Louise Fellows

Faculty Articles

This Article advocates fundamental changes in the federal income tax base by systematically challenging conventional understandings of consumption and investment. As signaled by its title, "Costly Mistakes," this Article's thesis has to do with the disparate treatment of expenditures incurred by business owners and workers. Where the current tax law treats a business owner's expenditure as investment, the Article sometimes finds consumption and questions why the law should allow the expenditure to be deducted. Where the tax law treats a worker's expenditure as consumption, the Article sometimes finds investment and questions why the law does not allow at least a …

China's Golden Tax Project: A Technological Strategy For Reducing Vat Fraud, Jane K. Winn, Angela Zhang

Articles

Unlike the United States, where sales tax is a common form of indirect tax, almost all countries around the world-both developed and developing alike-now impose a value added tax (VAT). In the early 1990s, as part of its comprehensive economic reform program initiated over 30 years ago, the People's Republic of China implemented a VAT. Monitoring compliance with VAT is a serious challenge in developing countries, and China is no exception in that regard.

To address this challenge, China launched a major fiscal reform project called the "Golden Tax Project" (GTP) which mandates the use of specific sophisticated information technologies …

Tax Advice For The Second Obama Administration, Michael J. Graetz

Faculty Scholarship

Delivered January 18, 2013 as the keynote address at a conference cosponsored by Pepperdine Law School and Tax Analysts.

Updating The Competitive Tax Plan: A New Epilogue For 100 Million Unnecessary Returns, Michael J. Graetz

Faculty Scholarship

This is the first step of a new epilogue for my book 100 Million Unnecessary Returns: A Simple, Fair, and Competitive Tax Plan for the United States. In January 2012, the Tax Policy Center (TPC), pursuant to a grant from Pew Charitable Trust, published an article analyzing and estimating the parameters of the tax plan set forth in this book. TPC has now updated its estimates to take into account the January 2013 “fiscal cliff” legislation and other economic changes. Certain details of the plan have also been revised somewhat.

The competitive tax reform plan has five pieces: First, enact …

Preserving The Corporate Tax Base Through Tax Transparency, Henry Ordower

All Faculty Scholarship

International corporate tax competition continues to exert pressure on legislatures to reduce corporate tax rates as well as the rate imposed on shareholders. To combat this pressure, this commentary recommends eliminating the corporate income tax. Instead corporations should become tax transparent so that a full taxon corporate income is imposed on corporate owners but collected initially at corporate level through a required withholding tax at the maximum rate applicable to individuals. Contemporary data processing capacity enables corporations to track share ownership and report to shareholders amounts withheld on their behalf so that they may include their shares of corporate income …

The Corporate Income Tax: United States Of America Report, Henry Ordower

All Faculty Scholarship

In the context of a European project describing variations in the structure of the corporate income tax, this paper briefly describes the United States corporation income tax and contextualizes it within the broader category of business entity taxation. The paper identifies the various tax models that the United States uses for business entities and discusses the historical delinking of limited liability protection for owners and managers from traditional double taxation.

Tax Abuse According To Whom, Shannon Weeks Mccormack

Articles

In 1996, Congress banned the Treasury Department from enacting retroactive regulations but provided an important exception, allowing tax regulations to apply retroactively “to prevent abuse.” Congress did not, however, explicitly define abuse; nor did it designate to any specific actor the power to do so. This Article provides the first comprehensive look at the level of deference owed a Treasury regulation’s interpretation of the Internal Revenue Code’s abuse exception. Generally, a reviewing court owes some level of deference to an agency’s interpretation of the statute it is entrusted to administer. Some statutory interpretations are entitled to receive the strong standard …

Extending The Taxation-Of-Risk Model To Timing Options And Marked-To-Market Taxes, Eric D. Chason

Faculty Publications

No abstract provided.

The Trouble With Tax Increase Limitations, David Gamage, Darien Shanske

Articles by Maurer Faculty

In this symposium essay, we explore the theoretical implications of one particular type of fiscal limitation on state legislatures — namely, special Tax Increase Limitation rules (TILs). We argue that there is no meaningful content to the term “tax increase” as used in TILs. This incoherence allows legislative majorities who wish to do so to circumvent TILs. This fact about TILs, among others, explains the observed inefficacy of TILs in shrinking the size of state governments.

Furthermore, TILs are not just harmless political theater. When combined with other common features of state fiscal constitutions, particularly Balanced Budget Requirements (BBRs), they …

United States Of America: The Burden Of Proof In Tax Matters, Henry Ordower

All Faculty Scholarship

This United States report responds to a questionnaire that the general reporters prepared for the 2011 meeting of the European Association of Tax Law Professors in Uppsala, Sweden, June 3-5, 2011. The report describes and analyzes the U.S. law on burden of proof and burden of production in tax matters in the context of tax law procedure, including the settlement function of appeals and information reporting, uncertain tax positions (Form UTP) and foreign accounts of U.S. taxpayers. This report also addresses the interplay of burden of proof and the anti-abuse provisions, including the “economic substance” clarification in section 7701(o) and …

I Like To Pay Taxes: Taxpayer Support For Government Spending And The Efficiency Of The Tax System, Yair Listokin, David M. Schizer

Faculty Scholarship

Why do people pay taxes? The simplest answer is that they have a legal obligation to do so. But it has long been recognized that this legal obligation alone provides an inadequate explanation for taxpaying behavior, just as legal obligations generally offer an inadequate explanation for most law-abiding activity.Another answer, then, is that some people pay taxes because – like Oliver Wendell Holmes – they like to do so. In other words, they appreciate that the government provides a vast array of public goods, such as rule of law, roads, schools, and aid to the poor, and find satisfaction in …

Accepting The Limits Of Tax Law And Economics, Alex Raskolnikov

Faculty Scholarship

This Article explores the limits of tax law and economics, attributing them to the unique complexity of the tax optimization problem. Designers of the optimal tax system must account for the impossibility of deterring socially undesirable behavior, provide for redistribution, and minimize social costs on the basis of assumptions that are laden with deeply contested value judgments, pervasive empirical uncertainty, or both. Given these challenges, it is hardly surprising that economic theory has a much weaker connection to the content of our tax laws and their enforcement than it does to the content and enforcement of many other legal regimes. …

The China-United Kingdom Income Tax Treaty (2011), Wei Cui

All Faculty Publications

The author, in this article, considers some of the key features of the China-United Kingdom Income Tax Treaty (2011), with particular reference to the provisions on technical fees, permanent establishments, passive and other income, and anti-avoidance rules.

The Inefficiencies Of Legislative Centralization: Evidence From Provincial Tax Rate-Setting, Wei Cui, Zhiyuan Wang

All Faculty Publications

Legislative power in China is centralized to an unusual degree. This arrangement is both positively and normatively significant, but has received little attention in prior scholarship. We devise a novel method for analyzing the consequence of centralization by examining provincial rate setting for the vehicle and vessel tax (VVT). Because all provinces have assigned VVT revenue and VVT administration to sub-provincial governments, provincial rate-setting represents centralized, not decentralized, decision-making. Using spatio-econometric analyses, we find that provincial tax rate choices fail to reflect local economic and demographic conditions and display traces of tax mimicking. Both support the hypothesis that provincial officials …