An old paper of mine on endowment taxation has been reposted at SSRN here, because it belatedly occurred to me that there was an error in how the tables appeared in it.
This is one of my old papers that I relatively like, although the literature it seems to have spawned sometimes seems to me to have a bit too much of an angels-on-a-head-of-a-pin quality. Here I try to stick to what I think is conceptually important.
Wednesday, September 30, 2009
Tuesday, September 22, 2009
The new cat
Our new cat Seymour still hides out a lot and tends to run away during the day. But in the middle of the night at some point he’ll jump on the bed, start purring and nuzzling, rolling on his back to be petted, etcetera. Then by morning he is gone (although he shows up again to be fed).
Probably just the adjustment period, but while it persists I’m reminded of a story that Alfred Hitchcock once told when he was a guest on a late night talk show (presumably Carson), some time in the mid-1970s.
The story concerns a young man who is lost in the desert, and convinced he is about to die of thirst and exposure, when he sees a lovely villa in the middle of nowhere. He is graciously welcomed there and given a place to stay while he recovers. His host is an older man who lives quite comfortably with no one else in sight except for an attractive daughter (and perhaps servants?). The daughter is very chilly towards our hero, and will scarcely talk to him. But every night there is a knock on his door. From the voice it appears to be the daughter. She comes in and spends most of the night with him, but insists that he not turn on the light. Then the next morning, when he goes to breakfast, she is as remote as ever, until the next night when it happens again.
When the young man has recovered and is ready to leave, he asks his host why they are living in such a remote place, with no one around. “It must be so lonely for you and your daughter,” he says.
“Daughter?” the old man replies. “I actually have two daughters here. They are twins. You haven’t seen the other one because she has leprosy.”
And on that note Hitchcock took his leave.
I’m pretty sure Seymour doesn’t have a leprous twin in our house, with the same long body, absurdly long tail, carpet-like gray fur, and white boots. But for now there’s a similar disconnect between his daytime and nighttime avatars.
UPDATE: Seymour is starting to relax and get friendlier during the daytime. But it's a good thing he isn't a Seymouria (early Permian reptile), or he would look like the one on the left
rather than the right. 
FURTHER SEYMOUR UPDATE: Seymour appears to have established a modus vivendi with Ursula, the sweet-tempered and moderately shy female. Buddy, our crazed male incumbent, has been having loud yowling contests with Seymour in which they swat at each other but haven't gotten into actual fighting. They're evenly matched and appear to be a couple of big sissies (and thank goodness for that) behind the macho posturing, each desperate not to appear vulnerable. A couple of peaceable nose sniffs recently indicate we may be headed in the right direction.
Probably just the adjustment period, but while it persists I’m reminded of a story that Alfred Hitchcock once told when he was a guest on a late night talk show (presumably Carson), some time in the mid-1970s.
The story concerns a young man who is lost in the desert, and convinced he is about to die of thirst and exposure, when he sees a lovely villa in the middle of nowhere. He is graciously welcomed there and given a place to stay while he recovers. His host is an older man who lives quite comfortably with no one else in sight except for an attractive daughter (and perhaps servants?). The daughter is very chilly towards our hero, and will scarcely talk to him. But every night there is a knock on his door. From the voice it appears to be the daughter. She comes in and spends most of the night with him, but insists that he not turn on the light. Then the next morning, when he goes to breakfast, she is as remote as ever, until the next night when it happens again.
When the young man has recovered and is ready to leave, he asks his host why they are living in such a remote place, with no one around. “It must be so lonely for you and your daughter,” he says.
“Daughter?” the old man replies. “I actually have two daughters here. They are twins. You haven’t seen the other one because she has leprosy.”
And on that note Hitchcock took his leave.
I’m pretty sure Seymour doesn’t have a leprous twin in our house, with the same long body, absurdly long tail, carpet-like gray fur, and white boots. But for now there’s a similar disconnect between his daytime and nighttime avatars.
UPDATE: Seymour is starting to relax and get friendlier during the daytime. But it's a good thing he isn't a Seymouria (early Permian reptile), or he would look like the one on the left
rather than the right. 
FURTHER SEYMOUR UPDATE: Seymour appears to have established a modus vivendi with Ursula, the sweet-tempered and moderately shy female. Buddy, our crazed male incumbent, has been having loud yowling contests with Seymour in which they swat at each other but haven't gotten into actual fighting. They're evenly matched and appear to be a couple of big sissies (and thank goodness for that) behind the macho posturing, each desperate not to appear vulnerable. A couple of peaceable nose sniffs recently indicate we may be headed in the right direction.
New career as a film star?
If you view the trailer that's available here all way to the end, you'll see the first time I've ever been listed in a film's credits as one of its "stars." But unlike several of my co-stars, I didn't make the cut for the trailer.
Monday, September 21, 2009
2010 NYU Tax Policy Colloquium
We're far enough into the fall semester that thinking about the spring semester (which perhaps ought to be called the winter semester) no longer seems so fanciful. So I thought I'd post the recently completed schedule for the Tax Policy Colloquium at NYU, which I will be co-leading with Mihir Desai. All sessions will meet on Thursdays from 4-5:50 pm in Vanderbilt 208, NYU Law School, and the schedule is as follows:
1. January 14 – Fred Goldberg, Skadden Arps.
2. January 21 – Kim Brooks, McGill Law School.
3. January 28 – Lily Batchelder, NYU Law School.
4. February 4 – Michael Devereux, Said Business School, Oxford University.
5. February 11 – David Walker, Boston University Law School/NYU Law School.
6. February 18 – Jeffrey Brown, University of Illinois Business School.
7. February 25 – Matthew Adler, Penn Law School.
8. March 4 – Rebecca Kysar, Brooklyn Law School.
9. March 11 – David Weisbach, University of Chicago Law School.
10. March 25 – Robert Peroni, University of Texas School of Law.
11. April 1 – Douglas Shackelford, Kenan-Flagler Business School, University of North Carolina.
12. April 8 – Joel Slemrod, University of Michigan Economics Department and Business School.
13. April 15 – Michael Schler, Cravath, Swayne, and Moore.
14. April 22 – James R. Hines, University of Michigan Business School and Law School, and Edward McCaffery, USC Law School.
1. January 14 – Fred Goldberg, Skadden Arps.
2. January 21 – Kim Brooks, McGill Law School.
3. January 28 – Lily Batchelder, NYU Law School.
4. February 4 – Michael Devereux, Said Business School, Oxford University.
5. February 11 – David Walker, Boston University Law School/NYU Law School.
6. February 18 – Jeffrey Brown, University of Illinois Business School.
7. February 25 – Matthew Adler, Penn Law School.
8. March 4 – Rebecca Kysar, Brooklyn Law School.
9. March 11 – David Weisbach, University of Chicago Law School.
10. March 25 – Robert Peroni, University of Texas School of Law.
11. April 1 – Douglas Shackelford, Kenan-Flagler Business School, University of North Carolina.
12. April 8 – Joel Slemrod, University of Michigan Economics Department and Business School.
13. April 15 – Michael Schler, Cravath, Swayne, and Moore.
14. April 22 – James R. Hines, University of Michigan Business School and Law School, and Edward McCaffery, USC Law School.
Friday, September 18, 2009
Glories of the past
OK, the Beatles box set is on back order, but at least I have my Pavement tickets, more than a year in advance of their 9/21/2010 reunion concert in NYC's Central Park. (UPDATE: Pitchfork reports that those tickets sold out in the first two minutes, so you can tell I was on the case.) Still skeptical about the Big Star box set (as I have their 3 classic 70s albums), but I've been finding some interesting Elliott Smith nuggets in out-of-the-way places.
Nothing to report right now from the 1980s or the 2000s, though I have to say Grizzly Bear didn't do much for me.
Nothing to report right now from the 1980s or the 2000s, though I have to say Grizzly Bear didn't do much for me.
Wednesday, September 16, 2009
How NOT to be an "objectively" top-ranked tax law professor
Evidently, one way to lower your ranking is to write books, which in recent years I have found myself doing most of the time. Books can't get downloaded on SSRN. Thus, if you spend your time writing them, you do yourself no favors on the frequently published personal or institutional SSRN download rankings, such as this one that appeared today.
Not whining, just noting it.
I could easily write an article on how the incentive to get downloaded has bad effects on topic choice and the approach taken in scholarly articles. But would it get downloaded enough to be worth the effort?
Not whining, just noting it.
I could easily write an article on how the incentive to get downloaded has bad effects on topic choice and the approach taken in scholarly articles. But would it get downloaded enough to be worth the effort?
Matt Yglesias on why the U.S. will probably default on its debt (implicitly if not formally)
In re. why the Chinese are getting nervous about their holdings of U.S. debt, he notes:
"It strikes me that any rational person looking at how the health care debate has unfolded is going to grow substantially more skeptical about the ability of the United States to pass major legislation in general. What’s more, if you contrast the health care situation with the relative ease with which it was possible to enact debt-financed tax cuts (in 2001 and 2003) and a debt-financed increase in Medicare spending (in 2003) you’re not going to get super-optimistic about the prospects of deficit reducing legislation passing in the future."
This overlaps with but is also partly distinct from (and a complement rather than an alternative to) Bruce Bartlett's explanation, noted by me here, of why the U.S. is likely to default.
"It strikes me that any rational person looking at how the health care debate has unfolded is going to grow substantially more skeptical about the ability of the United States to pass major legislation in general. What’s more, if you contrast the health care situation with the relative ease with which it was possible to enact debt-financed tax cuts (in 2001 and 2003) and a debt-financed increase in Medicare spending (in 2003) you’re not going to get super-optimistic about the prospects of deficit reducing legislation passing in the future."
This overlaps with but is also partly distinct from (and a complement rather than an alternative to) Bruce Bartlett's explanation, noted by me here, of why the U.S. is likely to default.
Monday, September 14, 2009
Addressing uncontrolled federal debt growth
Per Andrew Sullivan, there's a recent AEI piece by John Steele Gordon addressing the uncontrolled growth of federal debt. Sullivan notes that it's (of course) too easy on the G.W. Bush Administration, to which I'd add that it also misconceives the core problem and offers dubious solutions. but at least it's a generally good faith effort, albeit from a perspective that conservative readers (actual ones, not Teabaggers who mind debt only during Democratic administrations) will find more compatible than liberal ones.
While I welcome Gordon's input here, I view it as having basic conceptual problems that have nothing to do with liberal vs. conservative.
First, he offers as his Proposal # 1 resurrection of a constitutionally permissible form of the line item veto. This is naive, and further analysis would be needed to ascertain whether it would raise or lower spending growth (as I explain here). People tend to think about the line item veto statically: Congress spends $X, then the president can only reduce spending by knocking some stuff out. But legislation is a dynamic process. The line item veto shifts power towards the president, and will be used to further his interests or policy agenda relative to that of the Congress. So the question is: How will this likely affect total spending? In general, Congress tends to like penny ante stuff more than the president does (goodies for particular districts or interest groups). But presidents like really big initiatives more. Thus, e.g., if the line item veto existed today it would offer Obama additional leverage to lobby members of Congress to support his health care legislation ("give me your vote or I'll knock out the appropriations for your district").
Gordon's second idea is to have an independent accounting board scoring new programs (a la the Fed, except that here it's just scoring, not substantive policy actions). Fine with me, but don't expect much, I would say. No reason for Congress or the president to care much what these folks say. Plus, to what degree would the nominal independence actually work out in practice? The incentive the parties have to preserve Fed independence (fear that, if they exercise direct control, they'll screw up AND take the blame for everything) really doesn't apply here. What sorts of people do you think George W. Bush would have appointed to this commission, not to single him out as the only sinner, if he thought it would matter substantively to policymaking in the slightest?
Gordon's third idea is to limit total spending by Congress so it could only grow with the population. Even assuming the underlying normative predicate, which is of course controversial in right versus left terms about the optimal and politically likely scale of government, it's a fatally naive implementation of the idea that government growth should be slowed. As I explain in my recent book on fiscal language and approaching fiscal default (link, once again, is here), the term "spending" is formalistic and not meaningful, e.g., consider tax expenditures or regulatory mandates. Dollars formally counted has "spent" has very little relationship to the true size of government, i.e., its effect on allocation and distribution relative to some agreed-upon (if problematic) "minimal government" baseline.
While I welcome Gordon's input here, I view it as having basic conceptual problems that have nothing to do with liberal vs. conservative.
First, he offers as his Proposal # 1 resurrection of a constitutionally permissible form of the line item veto. This is naive, and further analysis would be needed to ascertain whether it would raise or lower spending growth (as I explain here). People tend to think about the line item veto statically: Congress spends $X, then the president can only reduce spending by knocking some stuff out. But legislation is a dynamic process. The line item veto shifts power towards the president, and will be used to further his interests or policy agenda relative to that of the Congress. So the question is: How will this likely affect total spending? In general, Congress tends to like penny ante stuff more than the president does (goodies for particular districts or interest groups). But presidents like really big initiatives more. Thus, e.g., if the line item veto existed today it would offer Obama additional leverage to lobby members of Congress to support his health care legislation ("give me your vote or I'll knock out the appropriations for your district").
Gordon's second idea is to have an independent accounting board scoring new programs (a la the Fed, except that here it's just scoring, not substantive policy actions). Fine with me, but don't expect much, I would say. No reason for Congress or the president to care much what these folks say. Plus, to what degree would the nominal independence actually work out in practice? The incentive the parties have to preserve Fed independence (fear that, if they exercise direct control, they'll screw up AND take the blame for everything) really doesn't apply here. What sorts of people do you think George W. Bush would have appointed to this commission, not to single him out as the only sinner, if he thought it would matter substantively to policymaking in the slightest?
Gordon's third idea is to limit total spending by Congress so it could only grow with the population. Even assuming the underlying normative predicate, which is of course controversial in right versus left terms about the optimal and politically likely scale of government, it's a fatally naive implementation of the idea that government growth should be slowed. As I explain in my recent book on fiscal language and approaching fiscal default (link, once again, is here), the term "spending" is formalistic and not meaningful, e.g., consider tax expenditures or regulatory mandates. Dollars formally counted has "spent" has very little relationship to the true size of government, i.e., its effect on allocation and distribution relative to some agreed-upon (if problematic) "minimal government" baseline.
Friday, September 11, 2009
Bruce Bartlett on the risk of a U.S. government debt default
In his column today, he says - and I completely agree:
"[M]arkets have always assumed that the federal government would raise taxes as much as necessary to prevent a debt default. That's the primary reason why U.S. Treasury securities are assumed to have zero default risk.
"This was a reasonable assumption in the past, but I'm not sure if it is going forward because the Republican Party is now totally dominated by anti-tax fanatics utterly opposed to raising taxes for any reason. Although most Democrats would probably raise taxes if they could, they are terrified of being attacked by Republicans if they do. Barack Obama is so fearful of such attacks, he insists that taxes will never rise on any group except the rich, even if this means extending most of the Bush tax cuts.
"I don't think financial markets have yet priced into interest rates the possibility that Republicans would rather default on the debt than raise taxes. Although they may not control Congress or the White House any time soon, it is clear from the health care debate that they and their allies at Fox News and talk radio effectively dominate the policy agenda even on issues like health that are generally favorable to the Democrats.
"If Republicans gain seats next year, which is very likely at this point, they will have veto power over any tax increase. Should Democrats attempt to raise taxes, we will see a replay in Washington of the budget debacle that recently transpired in California, where the state was reduced to paying people with IOUs.
"In short, the fiscal situation going forward is even more precarious than it appears at first glance--and that's extremely bad. If I am right about Republican opposition to tax increases, default on the debt has to be considered as a real possibility."
Time to get a massive short position in U.S. government bonds. Or, since that's prohibitively costly, do what? Buy inflation-indexed bonds on the view that they'll eventually be paid? (Don't bet on it.) Buy gold?
"[M]arkets have always assumed that the federal government would raise taxes as much as necessary to prevent a debt default. That's the primary reason why U.S. Treasury securities are assumed to have zero default risk.
"This was a reasonable assumption in the past, but I'm not sure if it is going forward because the Republican Party is now totally dominated by anti-tax fanatics utterly opposed to raising taxes for any reason. Although most Democrats would probably raise taxes if they could, they are terrified of being attacked by Republicans if they do. Barack Obama is so fearful of such attacks, he insists that taxes will never rise on any group except the rich, even if this means extending most of the Bush tax cuts.
"I don't think financial markets have yet priced into interest rates the possibility that Republicans would rather default on the debt than raise taxes. Although they may not control Congress or the White House any time soon, it is clear from the health care debate that they and their allies at Fox News and talk radio effectively dominate the policy agenda even on issues like health that are generally favorable to the Democrats.
"If Republicans gain seats next year, which is very likely at this point, they will have veto power over any tax increase. Should Democrats attempt to raise taxes, we will see a replay in Washington of the budget debacle that recently transpired in California, where the state was reduced to paying people with IOUs.
"In short, the fiscal situation going forward is even more precarious than it appears at first glance--and that's extremely bad. If I am right about Republican opposition to tax increases, default on the debt has to be considered as a real possibility."
Time to get a massive short position in U.S. government bonds. Or, since that's prohibitively costly, do what? Buy inflation-indexed bonds on the view that they'll eventually be paid? (Don't bet on it.) Buy gold?
Tuesday, September 08, 2009
A sucker, or just another hapless (if tail-end) boomer?
OK, I've ordered the Beatles box set (stereo - I'm not enough of an audiophile fanatic for the mono). I did so even though the albums are so far past over-familiar to me by now that I generally will only listen to bootlegs and outtakes. Worse still, I'm annoyed that they can't be like Pavement, say, and have greatly expanded reissues exploiting the vast wealth of unissued material out there. (E.g., the White Album could easily be doubled via Esher and other demos and outtakes; Get Back/Let It Be should be a 3 to 4-CD boxed set.)
But if the sound really is way better, as Pitchfork and others say ...
But if the sound really is way better, as Pitchfork and others say ...
Tax reform recommendations (mine and others)
Tax Analysts has just posted "Towards Tax Reform: Recommendations for President Obama's Task Force," consisting of short essays by 32 invited kibitzers of all stripes (law profs, practitioners, economists, journalists, etc.). You can access the entire 130-page document here or my contribution here. My comments focus on corporate and international tax policy.