Tax Law Commons^™

First Impressions Of The International Tax Provisions Of Bbb: A Reasonable Compromise., Reuven S. Avi-Yonah

Articles

U.S. critics of Pillar 2 of the Organisation for Economic Co-operation and Development (OECD)/Inclusive Framework (IF) Base Erosion and Profit Shifting (BEPS) 2.0 project have focused on the impact of the Undertaxed Profits Rule (UTPR) on tax credits such as the ones included in the Inflation Reduction Act (IRA) and the Creating Helpful Incentives to Produce Semiconductors and Science (CHIPS) Act. In fact, those credits are unlikely to be affected because they are refundable. But this raises a broader question of why the line between qualifying and non-qualifying credits should be drawn at refundability. This article addresses this question and …

Minimum Taxation In The United States In The Context Of Globe, Reuven S. Avi-Yonah, Mohanad Salaimi

Articles

The introduction of the minimum tax in Pillar II of the OECD/G20/IF framework was generally seen as a response to the U.S. Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA included both a minimum tax on outbound income (the Global Intangible Low-Taxed Income, or “GILTI”) and a minimum tax on inbound income (the Base Erosion Anti-Avoidance Tax, or “BEAT”). These were seen as the precursors to the IIR and the UTPR. Thus, unlike Pillar I which was perceived as a device to impose more tax on the U.S. digital giants, Pillar II was seen as more consistent with …

The Intergenerational Equity Case For A Wealth Tax, Daniel Schaffa

Law Faculty Publications

Intergenerational equity is commonly set aside in favor of other policy objectives, perhaps because of the extreme challenges inherent in adopting and applying an intergenerational equity normative framework. Even when there is a near consensus that the choices of today will have substantial costs in the future, these costs are often downplayed or disregarded. This Article asks whether there are measures that might offer redress to a generation for the costs imposed on it by its predecessors and finds that a one-time wealth tax is a promising option. Although its analysis applies more generally, this Article focuses on the widely …

Taxing Creativity, Jeffrey A. Maine

Faculty Publications

The recent sell offs of song catalogs by Bob Dylan, Stevie Nicks, Neil Young, and Mick Fleetwood for extraordinarily large sums of money raise questions about the law on creativity. While patent and copyright laws encourage a wide array of creative endeavors, tax laws governing monetization of creative works do not. The Songwriters Capital Gains Equity Act, in particular, solidifies creativity exceptionalism, exacerbates tax inequities among creators, and perpetuates racial disparities in the tax Code. This Article asserts that the law must encourage creativity from all creators. It is time to eliminate tax exceptionalism for musical compositions or expand its …

May I Pay More? Lessons From Jarrett For Blockchain Tax Policy, Amanda Parsons

Publications

In this article, Parsons examines Jarrett, t in which the taxpayers argue that blockchain reward tokens should be included in income only upon sale or exchange (a position that would raise their tax bills), and she explores why they sought this treatment and what implications it holds for policymakers trying to develop a tax regime for blockchain activities.

Tax's Digital Labor Dilemma, Amanda Parsons

Publications

Digitalization has reshaped the relationship between companies and their customers and users. Customers and users increasingly serve a dual role. They are not only consumers but also producers, creating data and content. They are a value-creating workforce, functioning as “digital laborers.”

Digital laborers’ value creation highlights that there are two parts to the question of whether multinational companies are paying their “fair share” of taxes—one of amount and one of location. First, are companies’ total tax bills paid across all countries in line with their global income? Second, is taxing authority over multinational companies’ income being divided amongst countries in …

Negotiating Bilateral Tax Treaties: Should Tax Treaties Involving Low-Income Countries Contain A Sunset Clause?, Okanga Ogbu Okanga

Reports & Public Policy Documents

This policy brief reflects on an underexplored proposition: that bilateral tax treaties – particularly treaties involving (middle- and) low-income countries – should contain an expiration or sunset clause. The brief examines some reasons why it may be sensible for a low-income country to make its bilateral tax treaty expirable, from its onset. It also highlights a few reasons why such a policy may not be advisable – or tenable. The brief concludes by exploring the design of a model sunset clause for inclusion in the UN Model Tax Convention.

Table Of Contents

Seattle University Law Review

Table of Contents

Madison 2.0—Applying The Constitution’S Taxing And Spending Clause To Revitalize American Federalism, Mohamed Akram Faizer

Seattle University Law Review

This article introduces the proposal entitled Madison 2.0 which calls for an enlightened federal government to enact legislation—using its broad ability to tax and spend for the general welfare—to revitalize, as opposed to undermine, American federalism. Part I discusses American Federalism today and the need for an updated approach. Part II explores the government's dysfunctional response to the Covid-19 pandemic. Part III proposes how to revitalize American federalism through the Spending Clause. Part IV discusses how to claw back funds in situations of state recalcitrance and replacing funds with a basic income. Lastly, this article concludes by explaining why the …

Incentivizing Innovation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

This Article advocates for a new approach to incentivizing innovation through the design of ex post tax incentives for research and development (R&D) investment. In contrast to many nations, the United States relies largely on ex ante tax incentives, namely a tax deduction and tax credit for qualified R&D spending. Fundamental design flaws exist with these ex ante incentives; moreover, innovation occurs continuously and yields results at the back end of the innovation cycle. An appropriate framework should take into consideration the key players in the innovation landscape. These players are often treated differently under the tax laws such that …

Empirical Evidence On Robot Taxation: Literature Review And Technical Analysis, Bret N. Bogenschneider

American University Business Law Review

The literature on robot taxation has continued to expand since 2018 with numerous articles now referring to empirical evidence. The evidence presented in prior studies comprises abstract modeling and statistical pattern reviews with no statistically significant findings reported to date. Notably, one article is an advocacy piece by a tech lobbyist who at one point purchased priority Google results for the search "robot taxation." In some cases, technical errors are sufficient to reverse the stated results. Examples of error in empirical analyses include (i) motivated reasoning, such as the failure to model simpler or best explanations; (ii) lack of causal …

Carving A Path For Legal Scholarship During An Existential Crisis, Adam H. Rosenzweig

Scholarship@WashULaw

The G-7 and G-20 recently announced a “breakthrough” agreement by over 130 countries to adopt and implement a “global minimum tax” proposal. The agreement is reportedly expected to raise over $150 billion in new revenue by closing some of the most notorious tax loopholes in the world; ultimately the deal could reshape global commerce and shore-up beleaguered national finances following the global pandemic. Officials involved in the deal have been quoted as making sweeping statements that the deal was historic, and that it would reshape the global economy, make worldwide taxation fairer, eliminate incentives for corporations to avoid tax, and …

Can Blockchain Revolutionize Tax Administration?, Orly Sulami Mazur

Faculty Journal Articles and Book Chapters

Experts predict that the use of smart contracts and other applications of blockchain technology could revolutionize the manner in which we do business. Blockchain technology promises the elimination of middlemen, increased trust and transparency, and improved access to shared information and records. Thus, it is no surprise that companies and entrepreneurs are developing blockchain solutions for an array of markets, ranging from real estate to health care. But can this new technology revolutionize tax administration?

This Article is the first to consider blockchain technology’s role in addressing the shortcomings of our current administration system— namely, a large tax gap, high …

Taxing Sports, John T. Holden, Kathryn Kisska-Schulze

American University Law Review

Sports are no longer mere games. In today’s money-driven culture, they have cultivated into a lucrative business enterprise where everyone—whether professional or amateur; owner or player; coach or spectator—stands to make significant money. Modern sports have also morphed into a landscape encompassing both the traditional athletic events and the more novel esports and daily fantasy sports (DFS) arenas. Across all these physical, digital, and biological spheres, sports revenues are being measured in terms of billions. It thus stands to reason why taxes have become a progressively critical discussion point within U.S. professional and collegiate sports, the video gaming world, and …

Tax Opinion Policies And Procedures, Linda Galler

Hofstra Law Faculty Scholarship

This Article summarizes and comments on a 2021 survey by the American College of Tax Counsel (ACTC) on the policies and procedures followed by law and accounting firms in drafting tax opinions. The Article provides background on the contexts in which tax opinions are issued and considerations that are relevant to the composition of such opinions; defines and distinguishes among the levels of assurance at which tax opinions are typically provided; and presents an overview of ethical rules and related considerations, including Circular 230 and the Code's preparer penalty provisions, implicated in the process of drafting and issuing tax opinions. …

Taxing Choices, Tessa R. Davis

FIU Law Review

Tax has a choice problem. At all stages of the making of tax, choice plays a role. Lawmakers consider how tax will impact the range and appeal of choices available to an individual. Scholars critique how tax may drive an individual toward or away from a given choice. Courts craft stories of how an individual had either free or deeply constrained choice, using their perception of the facts to guide their interpretation of tax law. And yet for all the seeming relevance of choice to tax, we have no clear definition of what we mean when we talk about choice …

Filing While Black: The Casual Racism Of The Tax Law, Steven Dean

Faculty Scholarship

The tax law's race-blind approach produces bad tax policy.' This Essay uses three very different examples to show how failing to openly and honestly address race generates bias, and how devastating the results can be.² Ignoring race does not solve problems; it creates them. ProPublica has shown, for example, that because of the perils of filing income taxes while Black, the five most heavily audited counties in the United States are Black and poor.

The racial bias long tolerated-and sometimes exploited-by tax scholars and policymakers affects all aspects of the tax law. In 1986, Sam Gilliam was denied tax …

The Inequity Of Informal Guidance, Joshua D. Blank, Leigh Z. Osofsky

Faculty Publications

The coexistence of formal and informal law is a hallmark feature of the U.S. tax system. Congress and the Treasury enact formal law, such as statutes and regulations, while the Internal Revenue Service offers the public informal explanations and summaries, such as taxpayer publications, website frequently asked questions, virtual assistants, and other types of taxpayer guidance. Throughout the COVID-19 pandemic, the IRS increased its use of informal law to help taxpayers understand complex emergency relief rules implemented through the tax system.

In contrast to many other legal scholars who have examined important administrative law issues regarding informal tax guidance, in …

How To Design An Antiracist State And Local Tax System, Francine J. Lipman

Scholarly Works

Since the first ship of enslaved African people landed in Virginia in 1619, racist policies in institutions, systems, structures, practices, and laws have ensured inequity for people of color. These racist policies include every imaginable variant of injustice from slavery to lynching, to segregation, and to economic injustices, including those delivered through tax systems today. Although facially color-blind, tax systems have long empowered the explosion of white wealth and undermined wealth accumulation for Black families and communities of color. State and local tax systems, especially in the South, have deeply-rooted racist fiscal policies, including Jim Crow laws that continue to …

Tax Now Or Tax Never: Political Optionality And The Case For Current-Assessment Tax Reform, David Gamage, John R. Brooks

Articles by Maurer Faculty

The U.S. income tax system is broken. Due to the realization doctrine and taxpayers’ consequent ability to defer taxation of gains, taxpayers can easily minimize or avoid the taxation of investment income, a failure that is magnified many times over when considering the ultra-wealthy. As a result, this small group of taxpayers commands an enormous share of national wealth yet pays paltry taxes relative to the economic income their wealth produces—a predicament that this Article condemns as being economically, politically, and socially harmful.

The conventional view among tax law experts has assumed that the problems created by the realization doctrine …