More on my Leuven trip

As previously noted, last Friday (May 28) I spent the day at the 12th (?) Annual Congress of the European Association of Tax Law Professors (EATLP). I suppose one might compare this organization to the AALS Tax Section in the U.S., except (a) it's not part of a broader umbrella organization such as the AALS, and (b) it plays a different role given distinctions between the U.S. and European academic environments.

Tax and other legal scholarship in Europe are headed in the same direction, I'd say, as U.S. legal scholarship. (Insert sarcastic comment here if you must, but I believe this is generally a good direction.) In other words, the movement is towards being more academic, inter-disciplinary, etcetera. But the U.S. has perhaps gone further to date along the same road, e.g., with regard to having incorporated economics and other related disciplines into legal thinking. Though, that said, when called upon by my panel's title to address what "law and economics" is, I mentioned the line from Moliere about the guy who is startled to learn that all his life he has been speaking in prose. The underlying idea in law and economics is to assess laws in terms of their real world empirical effects (whether studied directly or analyzed through theoretical models that are believed to relate to the real world). And in all the panels prior to mine, people had been doing exactly this, at least in many instances (i.e., arguing for or against a proposition based on what they believed about real world effects).

The U.S. is a huge country, filled with law schools, and I would think has lots more tax law professors than all of Europe put together. Plus, we have lots of different institutions in place where we tax law profs meet each other, discuss ideas, etc. This is one reason why the AALS Tax Section isn't pretty much obligatory for anyone who wants to stay in touch with everyone else in the field, and indeed tends to be attended disproportionately by people who may not be as connected with some of the institutions (such as the host of tax policy colloquia) that enable us to meet and discuss each other's work. In Europe, having a smaller tax prof population and fewer developed institutions for the group to stay in touch, I gather that EATLP plays a large role in creating the needed larger sense of community.

The attendance at EATLP 2010 was probably in about the 150 to 200 range. Nearly all Europeans but there were also a few people from Japan, plus 4 Americans, including the 2 invited speakers (Charlotte Crane and me). The main activity for last Friday was 4 sessions on "Retroactivity in Tax Law." Each session had a single proposition to be debated, with two main speakers, one in favor and one opposed. People presumably tended to believe in the arguments they were making, but they were expressly charged with acting as advocates, rather than fully expressing all the nuances of their own personal views.

The speakers would get their say and then respond to each other, then the audience would chip in, and at the end the speakers would get another turn. There also were before-and-after audience votes in favor of vs. against the proposition that was being debated. In the "before" vote, you could check off "Don't yet have an opinion," but at the end you had to go Yes or No. At the end the votes were graphically shown on-screen, permitting audience discernment of winners and losers regarding both (a) the propositions themselves and (b) the speakers' ability to change things in their own favor.

The first proposition held that European Court of Justice decisions should "more often" lack retroactive application. This, of course, is contrary to how judicial decisions usually work (since, ostensibly, they "find" rather than "create" law). The argument for it was that the ECJ's tax decisions are so arbitrary, ungrounded, and unpredictable that retroactive application made no sense (e.g., no one could try to anticipate the decisions). Surely a bit overstated, and the implication might be to get rid of, otherwise greatly limit, or otherwise greatly improve, the ECJ, rather than simply denying retroactive effect to its decisions, so the proposition lost.

The second proposition held that it's OK for legislation to apply from the date of announcement (such as a government press release), even if it's not enacted for some months afterwards. To an American, this proposition is entirely uncontroversial. E.g., if the Obama Administration announced in January a proposed new law greatly slowing down tax depreciation, one would be unsurprised if it applied (assuming enactment within a few months) to all property placed in service after the announcement date. Otherwise, you get the rush to market to beat the enactment date (or delay in acquiring new depreciable property if the proposed change speeds up depreciation). And even those who are more anti-retroactivity than I am would say there's no reliance problem with applying the new law before it is formally enacted given the announcement. To European tax law professors, however, the proposition appeared to be more considerably controversial than it is to most of us in the U.S., reflecting, I think, a more formalist legal approach that is expressed in disparaging references to "legislating by press release." If I recall correctly, the proposition prevailed, but in the U.S. it wouldn't even have been thought debatable.

The third proposition concerned the use of retroactive tax legislation to confirm a particular interpretation of existing law (or else to support administrative practice). E.g., a country's parliament might pass a new law on June 1, 2010 to the effect that a given law (passed in 1950) has always meant X rather than Y, and this indeed would ostensibly nail down that, even back in 1950, it did indeed mean X not Y. My American perspective was to find this a bit surprising (since one legislature can't necessarily be deemed to have the same intent as an earlier one), but I felt that I was missing the context - there was obviously some set of cases that people had in mind.

Finally, the fourth panel, entitled "Retroactivity in Law and Economics" featured me in defense of the proposition (with Charlotte Crane opposed) that "When disadvantageous changes in tax rules are introduced, taxpayers should not receive transition relief." I interpreted this as being about tax preferences, and as holding that there shouldn't be an asymmetric approach holding that taxpayers win wen tax preferences are expanded but aren't permitted to lose when they're made smaller. And I interpreted my role as making an amalgam of the so-called new view, interpreted as Graetz then Kaplow then me (among others), and reviewing its motivations, main points, etc.

Here are the PPT slides for my talk. For reasons of time, I didn't get to cover the issues of income to consumption tax change, repealing worldwide taxation of domestic companies, etc.

As I expected given the more traditional legal framework accepted by most attendees, my side of the debate lost big-time in both the before and after votes. But I picked up at least half of the undecideds. I therefore decided that I would view myself as having won, but that Charlotte could also, equally reasonably, claim that she also won. No rule against two winners, after all, and the outcome was otherwise ambiguous (though not about the proposition itself, which as expected lost).