Revised fall 2019 NYU Tax Policy Colloquium schedule

There have been a couple of changes since I posted, so here is the current state of the play:

1. Tuesday, September 3 – Lily Batchelder, NYU Law School.

2. Tuesday, September 10 – Eric Zwick, University of Chicago Booth School of Business.

3. Tuesday, September 17 – Diane Schanzenbach, Northwestern University School of Education and Social Policy.

4. Tuesday, September 24 – Li Liu, International Monetary Fund.

5. Tuesday, October 1 – Daniel Shaviro, NYU Law School. 

6. Tuesday, October 8 – Katherine Pratt, Loyola Law School Los Angeles

7. Tuesday, October 15 – Zachary Liscow, Yale Law School.

8. Tuesday, October 22 – Diane Ring, Boston College Law School.

9. Tuesday, October 29 – John Friedman, Brown University Economics Department 

10. Tuesday, November 5 – Marc Fleurbaey, Princeton University, Woodrow Wilson School.

11. Tuesday, November 12 – Stacie LaPlante, University of Wisconsin School of Business.

12. Tuesday, November 19 – Joseph Bankman, Stanford Law School.

13. Tuesday, November 26 – Deborah Paul, Wachtell, Lipton, Rosen, and Katz.

14. Tuesday, December 3 – Joshua Blank, University of California at Irvine Law School.

Again, all of these sessions are 4-6 pm on Tuesdays, in Vanderbilt Hall, second floor.

Death of Mortimer Caplin

I'm sorry to hear of Mort Caplin's death, although it's great that he made it to age 103 (and was mentally sharp even when extremely old).

I worked at Caplin & Drysdale in the early 1980s, and I agree with Scott Michel (who started the same year I did but stayed a lot longer, and is quoted in the above article) that Mort set a crucial positive tone regarding the office atmosphere, as well as one about serving clients assertively if needed but ethically. He was also affable and charming, including to junior associates.

Only on one occasion did I work with Mort directly on a project, but it left a good taste. He was interested in a live issue at the time, concerning the IRS's ability in audits to access tax accrual workpapers that a given taxpayer's accountants had used to evaluate tax risks for financial accounting purposes.

Mort was thinking about pursuing in litigation a legal position to the effect that the IRS should generally be denied access to such workpapers, on the view that allowing it would undermine financial accounting by inducing accountants (or taxpayers in discussions with them) to pull punches regarding soft spots, the taxpayer's possible settlement strategy, etc.

This concern is clearly a meaningful one, even if on balance one nonetheless favors granting access. But my task (obviously) wasn't to figure out what I thought about the merits, but rather to look at precedents, etc., for a sense of how strong the case would be. I concluded from my research that, based on the case authorities etc. to date, the IRS was extremely likely to win on this issue. (As indeed was soon confirmed - see U.S. v. Arthur Young, decided by a 9-0 Supreme Court in 1984.)

After working all day on a Saturday or Sunday to finish the memo, I per instructions took a taxi up to Mort's rather nice home (in NW Washington, I think? - but I could be mistaken) to hand him the memo and briefly discuss it. Given the circumstances, I was grungily dressed and unshaven, and I recall having a harder time getting a cab to stop for me than would usually have been the case when I was wearing my regular weekday suit and tie.

When I got there, Mort, though gracious, was clearly not pleased with my conclusion, as it was not what he wanted to hear. But I got the sense that he accepted both its legitimacy (although obviously he didn't read it in detail until I had left), and that I had properly done my job.

Fall 2019 NYU Tax Policy Colloquium schedule

We have now completed our schedule for the fall 2019 NYU Tax Policy Colloquium. (By "we" I mean myself and my co-convenor, Lily Batchelder, with the gracious cooperation of our invitees.) This will be the first, but hopefully not the last, time that we offer the colloquium in the fall.  All sessions will meet on Tuesdays, from 4 to 5:50 pm, in a room on the second floor of Vanderbilt Hall. Anyway, here goes:

1.      Tuesday, September 3 – Lily Batchelder, NYU Law School.

2.      Tuesday, September 10 – Eric Zwick, University of Chicago Booth School of Business.

3.      Tuesday, September 17 – Zachary Liscow, Yale Law School.

4.      Tuesday, September 24 – Li Liu, International Monetary Fund.

5.      Tuesday, October 1 – Daniel Shaviro, NYU Law School.

6.      Tuesday, October 8 – Katherine Pratt, Loyola Law School Los Angeles

7.      Tuesday, October 15 – Gabriel Zucman, University of California at Berkeley, Economics Department.

8.      Tuesday, October 22 – Diane Ring, Boston College Law School.

9.      Tuesday, October 29 – John Friedman, Brown University Economics Department

10.  Tuesday, November 5 – Marc Fleurbaey, Princeton University, Woodrow Wilson School.

11.  Tuesday, November 12 – Stacie LaPlante, University of Wisconsin School of Business.

12.  Tuesday, November 19 – Joseph Bankman, Stanford Law School.

13.  Tuesday, November 26 – Deborah Paul, Wachtell, Lipton, Rosen, and Katz.

14.  Tuesday, December 3 – Joshua Blank, University of California at Irvine Law School.

The French digital services tax

As I am currently writing an article that will extensively discuss digital services taxes (DSTs) - albeit, in a broader context of thinking about multinational entities' (MNEs') economic rents and stateless income - I am certainly interested by France's enactment of a DST, and by the prospect of a punitive U.S. response.

I'm still trying to learn more about the tax (my French might not be good enough for reading an untranslated text to do me much good). But it is summarized, for example, here,

The NYT discusses the possible U.S. response - tariffs, of course, as no matter the question they are often the current Administration's preferred answer - here.

Perhaps unusually among tax experts (and Americans!), I am inclined to be sympathetic to properly designed DSTs, for reasons that I discussed here and here in response to Wei Cui's very interesting paper on the topic (presented this past April 30 at the winter-spring 2019 NYU Tax Policy Colloquium). And I also think that an aggressive American response would be unwise, among other reasons because our friends - as I hope they still are - across the pond are addressing reasonable concerns about tax avoidance and locally generated rents.

The French DST appears to be aimed primarily at the likes of Facebook and Google  Per the EY summary (and translation of some provisions) that I linked above, it would apply to:

1. “The supply, by electronic means, of a digital interface that allows users to contact and interact with other users, including for the delivery of goods or services directly between those users.”

2. “Services provided to advertisers or their agents enabling them to purchase advertising space located on a digital interface accessible by electronic means in order to display targeted advertisements to users located in France, based on data provided by such users. These services include, among others, the buying, stocking and diffusion of advertising messages and the management and communication of users’ data.”

But it would exclude, inter alia, digital interfaces that provide users with digital content, communications services, and payment services (e.g., Youtube, Netflix, and the financial intermediation industry). As I'll discuss in my article, if one otherwise views the tax favorably, such exclusions may not be well rationalized - leaving aside the financial sector, which might call for separate and more comprehensive treatment.

Obviously this is what they call a developing story, and I'll try to comment here when appropriate although at the moment I'm more focused on getting my arms around the issues from a broader and more conceptual standpoint.