Monday, July 31, 2017

Video of a recent talk

A month ago (on June 30), I gave a talk at the Oxford Summer Conference entitled "A U.S. View of the EU State Aid Cases."  I briefly blogged about it here, and posted a link to my slides, which are available here.

The Oxford folks have now posted videos of all the sessions at the Sumer Conference, and a video of my talk is available here.

Friday, July 28, 2017

The latest on "tax reform"

Six Republicans in leadership positions with respect to tax policy - Ryan, McConnell, Mnuchin, Cohn, Hatch, and Brady - have now issued a public statement regarding their plans for significant tax legislation, which they call "tax reform." It appears to promise a more open, conventional, and committee-based process than that which the Republicans used with respect to healthcare. Other than that, here is the key paragraph, broken down sentence-by-sentence with my annotations after each:

"We have always been in agreement that tax relief for American families should be at the heart of our plan."  Comment: This is standard boilerplate. "Tax relief for American families," in the sense that this term is meant to have (e.g., middle-income two-parent households with children), will get only a small percentage of the benefits, if indeed they get any.

"We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones." Comment: This appears to mean that the self-employed, even if they are extremely high-income, will pay lower tax rates than employees. I've commented previously on what a poor design feature this is. But there is admittedly an underlying dilemma here. All else equal, it might make sense to align the tax rates of small business and large business. And it might make sense to lower the tax rates for internationally mobile capital income insofar as it is only lowering the "normal" rate of return. But it makes no sense to tax employees at higher tax rates than the self-employed, and it's also likely to be extremely regressive. There are indeed ways out of the box, but they generally would require more significant structural changes than these folks appear to be contemplating at this point.

"The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas." Comment: They're not committing to how much they'll cut tax rates, but this (unsurprisingly) means as a practical matter that the proposal will lose revenue, requiring it to be phased out after 10 years unless they come up with some trick to avoid that result. "Unprecedented capital expensing" is a consumption tax-like result that would make more sense if accompanied by interest deduction limits, on which they are at this point silent. "Permanence" seems to mean they want to avoid the phaseout if possible, by one means or another, but I think it will be impossible unless they play games with the budget rules. "Bring back jobs" doesn't have a definite meaning unless it refers to lowering the corporate rate. Shifting to a territorial system (which I'd presume they'd want to do) is hard to square with these words rhetorically. The reference to profits taxed overseas presumably means that they anticipate no longer taxing U.S. companies' dividends from foreign subsidiaries - suggesting the enactment of territoriality - perhaps with a deemed repatriation at the transition. I've for years advocated taxing deemed repatriations, to address the foreign profits issue, but I suspect they'd have a very low repatriation tax rate, because otherwise the taxpayers subject to it (who have friends) might be unhappy.

"And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base. While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform." Comment: That one speaks for itself. Buh-bye to the destination-based cash flow tax, at least for now. Ryan and Brady would have been politically unwise to fight further on this front.

Thursday, July 13, 2017

It all depends on how you look at it

The New York Mets must be the best team in baseball.  They have an All-Star outfielder whom their manager doesn't even plan to play.

Somehow it doesn't sound as good if you say that they have a manager who doesn't even plan to play their All-Star outfielder.

Speaker schedule for 2018 NYU Tax Policy Colloquium

We now have a tentative speaker schedule for the 2018 NYU Tax Policy Colloquium, which I will be co-teaching with Lily Batchelder. We'll be meeting on Tuesdays, from 4:10 to 6 pm, in Vanderbilt 208 (our usual room).  It goes like this:

1.  Tuesday, January 16 – Greg Leiserson.Washington Center for Equitable Growth.
2.  Tuesday, January 23 – Peter Dietsch, University of Montreal Philosophy Department.
3.  Tuesday, January 30 – Andrew Hayashi, University of Virginia Law School.
4.  Tuesday, February 6 – Gerald Auten, U.S. Treasury Department.

5.  Tuesday, February 13 – Vanessa Williamson, Brookings Institution.
6.  Tuesday, February 27 – Jacob Goldin, Stanford Law School.
7.  Tuesday, March 6 – Lisa Phillips, Osgoode Hall Law School.
8.  Tuesday, March 20 – Michelle Hanlon, MIT Sloan School of Management.
9.  Tuesday, March 27 – Damon Jones, University of Chicago Harris School of Public Policy.

10.  Tuesday, April 3 – Ajay Mehrotra, American Bar Foundation and Northwestern University School of Law.
11.  Tuesday, April 10 – Jason Furman, Harvard Kennedy School.
12.  Tuesday, April 17 – Emily Satterthwaite, University of Toronto Law School.
13.  Tuesday, April 24 – Wolfgang Schon, Max Planck Institute.
14.  Tuesday, May 1 – Joshua Blank, NYU Law School.

Leaving aside the horror of its being winter again at the time when the colloquium starts - and that will have happened anyway by then, colloquium or no colloquium - I'm looking forward to 14 interesting and diverse papers and discussions, and to another great semester.

Sunday, July 02, 2017

Travel reading

The amount I read for pleasure on my travels was reduced by my also needing to read papers that were being presented, while also polishing my presentations and working on my literature book. But, during the Mexico City and Oxford trips, I did get to read most of (1) Chimamanda Adichie's Americanah, and (2) Henry Blake Fuller's With the Procession.

In Americanah, it's a bit depressing from the perspective of 2017 to read about the characters' response to Obama's election and inauguration. But it's a really excellent work of both narrative fiction and sociology. A friend suggested that I consider it for my literature book, in which I'm not absolutely set on all of my current-era choices. But while it deals with class, and while I ought to deal with U.S. race-class interactions at some point, I don't see it as sufficiently directed at my particular interests in the book (as distinct from, as an American living in our society today).

With the Procession was published by Fuller in 1894 and is set in Gilded Age Chicago. I had decided, after initial inquiry well short of a full read, not to include it among my 3 U.S. Gilded Age chapters (which will deal in turn with Twain & Warner's The Gilded Age, Dreiser's The Financier and The Titan, and Wharton's House of Mirth). But it's sharply satiric and quite good, and certainly makes the list of the next 3 that I would have done from this era if I were spending more chapters on it (the others being William Dean Howells' The Rise of Silas Lapham, which I like but don't love, and Booth Tarkington's quite interesting The Magnificent Ambersons).

For those who might be interested, With the Procession is available as a free Kindle download from Amazon, although for some reason it can be hard to find in this format on their website.

Comments on the EC state aid cases at the Oxford Summer Conference

On Friday I spoke at the Oxford University Centre for Business Taxation's Summer Conference. This is a public event with a large audience, discussing matters of general tax policy interest, as distinct from the academic conference earlier in the week, which focuses on attendees' works in progress.

I discussed the EC state aid cases, with particular reference to the Apple-Ireland case, on a panel that was more generally focused on issues of tax uncertainty. My slides are available here. They're different and I think better than the slides I posted a few weeks ago when I discussed the same topic at a conference in Luxembourg. They generally aim to be balanced, fair, and above-the-fray.