Tax
Restricted Charitable Gifts to the Government
This Essay examines the overlooked long-term costs generated by restricted charitable gifts to the government. It reveals that gift compliance disputes are surprisingly frequent and costly to litigate. The authors propose that governments adopt gift acceptance policies that subject donor-imposed restrictions to rigorous review, public comment, and formal approval.
Whose Child Is This? Improving Child-Claiming Rules in Safety-Net Programs
Benefit programs for families rely on rules to determine which individuals can claim which children. These rules shape who qualifies for a program and who does not. This Article critically assesses the design of child-claiming rules, using as case studies the Child Tax Credit and the Earned Income Tax Credit.
Biden’s Gambit: Advancing Racial Equity While Relying on a Race-Neutral Tax Code
This Essay analyzes ARPA’s major provisions to determine their potential impact on racial equity. It argues that the Biden Administration should do more to tackle racial wealth inequality and the structural issues in the tax code that allow the rich to benefit disproportionately from tax subsidies.
Getting Beyond Ad Hoc Fiscal Federalism: A Proposal for a Default Federal Liquidity Facility for the States
Our current approach to state debt overcorrects for the problem that states might borrow too much. We can do better and aspects of the federal response to the pandemic illustrate how. The federal government should make forgiveable low-cost loans available to the states, but within limits to prevent moral hazard.
Revolutionizing Redistribution: Tax Credits and the American Rescue Plan
The American Rescue Plan Act temporarily altered refundable tax credits in 2021 to include previously excluded families and workers. These changes protect millions of households from being pushed into poverty by taxes. This Essay argues that Congress should build on these reforms to make refundable tax credits more protective.
The American Rescue Plan and the Future of the Safety Net
This Essay considers the lessons of the American Rescue Plan for design of the safety net, using unemployment insurance as a case study. It shows why UI failed and how to fix it, including how to provide benefits to part-time workers.
Wayfair Undermines Nicastro: The Constitutional Connection Between State Tax Authority and Personal Jurisdiction
This Essay exposes connections between two controversial cases that unsettled two ostensibly distinct areas of constitutional law—Wayfair v. South Dakota and J. McIntyre Machinery, Ltd. v. Nicastro—arguing that Wayfair’s underlying logic warrants narrowing or overruling Nicastro.
Critiquing (and Repairing) the New International Tax Regime
The 2017 Tax Act significantly changed the U.S. international tax regime. The legislation, however, failed to solve existing problems and opened the door to new ones. This Essay addresses these shortcomings, and outlines recommendations for a better approach.
Foreword—The 2017 Tax Cuts: How Polarized Politics Produced Precarious Policy
This Essay argues that the 2017 Tax Act provides neither an effective nor stable solution to the nation’s economic and fiscal challenges.
International Cooperation and the 2017 Tax Act
Some have criticized the 2017 Tax Act for lowering the corporate tax rate. This Essay argues instead that Congress deserves credit for bringing the U.S. rate in line with other OECD countries, potentially saving the corporate tax by establishing a minimum global rate.
Not So Fast: 163(j), 245A, and Leverage in the Post-TCJA World
The Tax Cuts & Jobs Act moves the United States from a worldwide system of taxation to a quasi-territorial regime. This Essay reviews these changes and reflects on their likely effect on cross-border financing structures.
The Social Meaning of the Tax Cuts and Jobs Act
The 2017 Tax Act reflects values that were not openly debated in the legislative process. This Essay unearths these values and argues that justice in taxation is impossible without a full and honest evaluation of the law’s underlying principles.
A Brief Sur-Reply to Professors Graetz and Warren
Professors Ruth Mason and Michael Knoll defend their interpretation of the tax-discrimination jurisprudence of the Court of Justice of the European Union, arguing that the nature of their project has been misunderstood by Professors Michael Graetz and Alvin Warren. In Mason and Knoll’s view, competitive neutrality remains the principle most plausibly guiding Court of Justice rulings on tax discrimination, and thereby illuminates the clearest way out of the doctrinal confusion in this field of law.
Sales Tax Not Included: Designing Commodity Taxes for Inattentive Consumers
122 Yale L.J. 258 (2012). A spate of new research suggests that the salience of a tax dramatically shapes taxpayer behavior: the more salient a tax—i.e., the more prominent a good’s after-tax price—the more taxpayers respond. Policymakers make decisions about tax salience, whether they intend to or not, every time they impose a new tax, yet the normative implications of those decisions remain poorly understood. This Note derives new guidelines for how policymakers can manipulate tax salience to promote efficiency. In particular, I show how levying a combination of high- and low-salience taxes can raise consumer welfare and further other social goals.
Income Tax Discrimination: Still Stuck in the Labyrinth of Impossibility
121 Yale L.J. 1118 (2012). In previous articles, we have argued that the European Court of Justice’s reliance on nondiscrimination as the basis for its decisions did not (and could not) satisfy commonly accepted tax policy norms, such as fairness, administrability, economic efficiency, production of desired levels of revenues, avoidance of double taxation, fiscal policy goals, inter-nation equity, and so on. In addition, we argued that the court cannot achieve consistent and coherent results by requiring nondiscrimination in both origin and destination countries for transactions involving the tax systems of more than one member state. We demonstrated that—in the absence of harmonized income tax bases and rates—the court had entered a “labyrinth of impossibility.” Ruth Mason and Michael Knoll claim to have discovered a single normative criterion that not only resolves this dilemma, but also explains the existing nondiscrimination tax jurisprudence of both the European Court of Justice and the United States Supreme Court. Although they endorse economic efficiency as the lodestar for judicial decisions regarding tax discrimination, Mason and Knoll fail to provide any evidence that their proposed norm would reduce tax-induced distortions more than competing efficiency norms, even in the limited situations to which their analysis applies. In fact, their crucial, but unrealistic, assumption that taxpayers can never change their residences from one state to another confines the actual scope of their analysis to a very small set of cases involving cross-border workers. That analysis is further limited by an unrealistic assumption of flat-rate taxation for individual income. Nor do they make a convincing case that they have found the key to understanding the confusing and inconsistent U.S. and EU judicial decisions, which are not confined to cross-border workers. Finally, implementation of their proposed norm by legislation or litigation is not practical, given the particular tax systems that they say would be required. In short, their proposed norm does not provide a way out of the “labyrinth of impossibility” created by a nondiscrimination approach to taxation of international transactions.
What Is Tax Discrimination?
121 Yale L.J. 1014 (2012). Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties, and other sources, but despite their ubiquity, little agreement exists as to how such provisions should be interpreted. Some commentators have concluded that tax discrimination is an incoherent concept. In this Article, we argue that in common markets, like the EU and the United States, the best interpretation of the nondiscrimination principle is that it requires what we call “competitive neutrality,” which prevents states from putting residents at a tax-induced competitive advantage or disadvantage relative to nonresidents in securing jobs. We show that, contrary to the prevailing view, maintaining a level playing field between resident and nonresident taxpayers requires neither tax rate harmonization nor equal taxation of residents and nonresidents. Our approach produces simple rules of thumb that provide states and courts with clear direction in writing tax laws and evaluating challenges to those laws.
“Early-Bird Special” Indeed!: Why the Tax Anti-Injunction Act Permits the Present Challenges to the Minimum Coverage Provision
In view of the billions of dollars and enormous effort that might otherwise be wasted, the public interest will be best served if the Supreme Court of the United States reaches the merits of the present challenges to the Patient Protection and Affordable Care Act (ACA) during its October 2011 Term. Potentially standing in the way, however, is the federal Tax Anti-Injunction Act (TAIA), which bars any “suit for the purpose of restraining the assessment or collection of any tax.” The dispute to date has mostly turned on the fraught and complex question of whether the ACA’s exaction for being uninsured qualifies as a “tax” for purposes of the TAIA. We argue that the Supreme Court need not resolve this issue because the TAIA does not apply for a distinct reason: the present challenges to the ACA do not have “the purpose” of restraining tax assessment or collection. In order for the TAIA not to bar refund suits, the TAIA must be read to bar suits with the immediate purpose of restraining tax assessment or collection. The present challenges do not have such an immediate purpose because the very authority to assess or collect will not exist until long after the litigation is concluded. Among other virtues, this resolution of the TAIA question does not predetermine whether the tax power justifies the minimum coverage provision.
Common Control and the Delineation of the Taxable Entity
121 Yale L.J. 624 (2011). This Note proposes a solution to what has been one of the most vexing problems in state corporate taxation and in multijurisdictional taxation generally: the delineation of the scope of the entity that an individual jurisdiction is entitled to tax. Starting from the observation that the federal government already aggregates the income of commonly controlled groups of corporations to prevent them from taking advantage of the lowest tax brackets multiple times, this Note proposes that states “piggyback” on these efforts and allow the federal government thereby to shoulder the burden of delineating the taxable entity.