Altera certiorari

I've blogged occasionally (such as here and here) about the Altera case, in which the Ninth Circuit (reversing the Tax Court) upheld a tax regulation that limited a U.S. multinational's ability to engage in transfer pricing shenanigans with a wholly owned tax haven affiliate under the cost-sharing rules. I also joined in an amicus brief to the 9th Circuit, urging that they reverse the Tax Court's uncharacteristically misguided ruling in the case.

The taxpayer in Altera is seeking certiorari, and the Supreme Court will consider the petition later this month. As Susan Morse and Steve Shay note here, the government brief has far the better of the debate, and cert ought to be denied.

Morse and Shay further note that there is relatively little of broader legal interest at stake in the case, at this point in the U.S. international tax regime's evolution, because it's mainly a backward-looking issue about a narrow question: whether "the government changed its tune. But to the contrary, the government has been singing the same tune for two decades or more."

What worries me is that the Supreme Court's dominant five may be looking opportunistically for a chance to flog the IRS and regulatory discretion (other than when they like it) more generally, and may be too ignorant and indifferent to the actual legal context here to be much put off by Altera's unsuitability for such a purpose. If they both properly understand the issues here and are acting like judges, rather than legislators, then a grant of certiorari ought to be most unlikely. But these days one never knows.

Updated minimum tax paper

While noteworthy things keep happening around the United States and indeed the world, I have been continuing my shelter-in-place and doing some work. I have just now posted on SSRN a revised version of my paper, What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?

This version takes advantage of excellent comments that I received from several readers, and also has a new, very short intro. It also has a much shorter and more to-the-point abstract, which goes like this:

"Minimum taxes (including global minimum taxes) have serious drawbacks, and generally make sense, if at all, only if otherwise superior options must be ruled out for reasons of optics or political economy. Yet, given the “compared to what?” question that haunts all real-world tax policymaking, one cannot reasonably say that they should never be used. Still, any such use should generally be contingent, reluctant, and based on understanding their structural deficiencies."

You can find the paper here.

Upcoming virtual conferences

I had planned to attend this year's Law and Society Association annual meeting, which was scheduled to start today in Denver. One small peeve I had was that, due to the LSA's rigid rules for defining their "Author Meets Readers" sessions, they were not going to let me do such a session with my newly published book, Literature and Inequality, even though we had a number of interested commenters lined up. Under their mysteriously rigid rules, the book would have had to be published earlier than its actual April 1, 2020 pub date in order to be eligible for the session this year. So I will do the "Author Meets Readers" session next year, at least if there is a normal LSA conference.

I had planned on attending the LSA annual meeting after all, and joining one of the tax panels to discuss either it or my newly posted article on minimum taxes. But I decided against participating via Zoom - which I certainly would have done for "Author Meets Readers."

This summer I will, however, be participating in the virtual version of Oxford Centre for Business Taxation's Annual Academic Symposium, on June 29 and 30. I'll discuss the minimum tax paper. Truly a shame that actual physical conferences are on hiatus. I always enjoy going there, and seeing all the folks in Oxford (including other guests). And I had planned to combine the Oxford travel with a day in Liverpool plus perhaps a walking tour in the Lake District. But so it goes; maybe next year.

I'm also planning to discuss the minimum tax paper at this year's National Tax Association Annual Meeting, which had been scheduled for November 19-21 in Denver. I believe that the plan to hold an actual physical conference has not as yet been canceled in favor of the virtual version, but obviously few will be surprised if that happens.

NTA has extended the paper submission deadline for a month, presumably reflecting all the attendant uncertainties, and those who are interested can submit here. I always enjoy this conference, as much for the social aspects as the intellectual content, but am not especially hopeful that in-person will be feasible this year. Still, I'll participate virtually if that's all there is.

New York State has to do a better job with voting by mail

New York State is not among the states with leadership that aims to suppress voter turnout and make it harder for people to vote. Its leaders are not like the 5 Supreme Court Justices who evidently are fine (or perhaps better than fine) with forcing voters who they very well know are primarily Democrats to risk death from the pandemic as the price of exercising the constitutional right to vote.

Yet New York State needs to get its act together, better than it has so far, if it wants to make sure that voting by mail is a sufficiently available option this November. I base this on my own experience with the State's well-intentioned effort to expand the availability of voting by mail for the June 23 Democratic Party. They're trying to do it right, but there are a couple of glitches that need to be ironed out.

Yesterday I got an application form for voting by mail in the primary. Here it is, with the lines that list my mailing address, etc., blotted out.

Here are the main problems:

1) My basis for requesting an absentee ballot comes from the second line in Box 1 on the top. I have checked the line that says "temporary illness or physical disability (including affected/potential COVID 19)." The bolded text offers my basis for checking the box. Yet on its face it's ambiguous. Am I entitled to check it, absent any actual temporary illness or physical disability of which I am aware? The cover letter on the flip side of this page makes it clear that mere fear of contracting COVID 19 supports requesting an absentee ballot. And they've added the bolded language to the preexisting form itself to help make that clear. But it doesn't really quite fit. Potential COVID 19, or even reasonable fear of contracting it, isn't really quite (or at least unambiguously) a subclass of "temporary illness or physical disability." I'd consider the interpretation allowing me to check this box in good faith to be uncertain at best, if not for the "legislative history" confirming that this is within the intended scope.

2) In Box 6, which I've partly obscured due to the personal info printed a few lines above it, I have 2 options. One is to have my ballot picked up by me or my designee at the Board of Elections, an option that doesn't make enormous sense here. So I've checked instead the box that says: "Mail ballot to me at (check box and complete ONLY if address is different than mailing address."

My first reading of this phrase led me to think that I couldn't use this option unless I was submitting a mailing address for the ballot that differed from my regular mailing address. This would have made the entire exercise pointless. Upon further reflection, I concluded that the words could only reasonably mean: "if you check box, complete the line below ONLY to supply an alternate mailing address if needed."

Yes, it's trivial, but a confusing and ill-drafted form like this is NOT going to get the job done in November, when the whole thing may matter a lot more.

Yesterday's Zoom conference on income-shifting by multinational companies

Here's the live stream of yesterday's TPC-UNC Tax Center Zoom conference on income-shifting by multinational companies. My 7 minutes start at 1:42:40.

Conference on income-shifting & the OECD - Thursday morning, 5/21/20

I've been remiss in not flogging this earlier - focusing on my current writing project - but tomorrow morning I'll be participating in a very interesting international tax policy conference with a number of outstanding participants. It's on Zoom, and is free, so anyone anywhere can watch whatever parts of it they like, subject only to having a computer or smartphone.

Sponsored by the Urban-Brookings Tax Policy Center and the UNC Tax Center, it's called Responding to Income-Shifting by Multinational Corporations, and the link for it is here. You can register for it here.

Here is the agenda (all times are EST):

9:30 a.m. Welcome and Introduction: Mark Mazur, Urban-Brookings Tax Policy Center

9:35 a.m. Keynote Address • Pascal Saint-Amans, OECD

9:50 a.m. Audience Q&A

10:00 a.m. Panel I. How Big a Problem is Income Shifting?:

Kimberly Clausing, Reed College
Scott Dyreng, Duke University
Leslie Robinson, Dartmouth College
Gabriel Zucman, University of California, Berkeley
Edward Maydew, University of North Carolina (moderator)

10:45 a.m. Audience Q&A

11:00 a.m. Panel II. The OECD’s Response to Income Shifting
Manal Corwin, KPMG
Lisa De Simone, Stanford University
Victoria Perry, International Monetary Fund
Daniel Shaviro, NYU Law School
Thornton Matheson, Urban-Brookings Tax Policy Center (moderator)

11:45 a.m. Audience Q&A

12:00 p.m. Event Concludes

I'm actually the second speaker on Panel II (although we're listed above alphabetically), so I will be speaking from roughly 11:08 to 11:15. I'm planning to discuss the OECD's Pillar 1 and Pillar 2 initiatives, although what exactly I'll say remains somewhat flexible pending  the keynote address, which may offer updates (at least to me) that are of interest.

Small musical note

Two old albums that I have been quite enjoying recently are the Zombies' Odessey and Oracle (1968) and XTC's Apple Venus, Vol. 1 (1999). Both are melodic and wistful in a way that brings to mind Paul McCartney and Brian Wilson in their good years. Their elegiac tone seems to fit my mood these days.

New items I've tried via Spotify include this year's releases by Fiona Apple (Fetch the Bolt Cutters) and Car Seat Headrest (Making a Door Less Open). But neither has yet broken through for me. I like the percussion and self-willedness of Fiona's latest, but admittedly after only a couple of listens it doesn't yet pack for me the emotional punch of her prior 3 albums, which I consider among the very best anyone has done this century. My impression is that she's in a better place emotionally, for which I'm glad, but that the raw anger and distress expressed on prior albums (albeit, mixed with other moods) were good for her art.

Haven't made it through the Car Seat Headrest yet; it's harder to find the time without health club visits and the car trips of normal times. Plus, if I only have a few minutes, why not just play Drunk Drivers / Killer Whales again.

My paper on minimum taxes

I've finally posted on SSRN my paper on minimum taxes of various kinds. Its specific title is: What Are Minimum Taxes, and Why Might One Favor or Disfavor Them? It's available here.

The draft has a March 4, 2020 date, to reflect that I haven't yet changed it to reflect some very useful comments that I've gotten from several readers since that time. But I not only appreciated those comments, but plan to make use of them in revising / improving the paper. Only, the time for doing that hasn't quite come yet, so in the interim I thought I would solicit more feedback regarding the original version.

I kind of like the paper, if I do say so myself, but it's definitely pitched in the conceptual albeit applied space, and is aimed at people who know a fair amount about current income tax issues, in the US and internationally, rather than being for generalists. But it may be of interest to tax law professors, tax practitioners, tax policymakers in Washington and abroad, economists who are interested and steeped in applied income tax issues (especially but not just international ones), and other people who are following, say, the OECD GloBE process.

The paper's abstract goes something like this:

The alternative minimum tax (AMT), a key and at the time widely lauded feature of the Tax Reform Act of 1986, soon fell into disrepute and was subsequently scaled back, to general approbation and relief. Yet in recent years minimum taxes have come back into vogue. For example, two key international tax provisions in the 2017 tax act (GILTI and the BEAT) had minimum tax structures, and the OECD has recently issued proposed guidelines for the design of a global minimum tax, meant for multilateral adoption.

In light of minimum taxes’ surprising return to center stage, this paper explores such issues as the following:

1) the purposive, technical, and semantic contours of instruments we call “minimum taxes,”

2) why a minimum tax structure matters – pertaining, for example, to the creation of clientele effects and discontinuous marginal incentives,

3) the lessons to be learned from the rise and fall of the AMT,

4) minimum taxes’ similarity to foreign tax credit limitations and loss nonrefundability,

5) the design question of whether, if highly profitable companies’ financial accounting income were made tax-relevant, this should be done through a minimum tax,

6) how one might rationalize (or not) the BEAT’s minimum tax structure, and

7) the main issues posed by global minimum taxes, including GILTI and the OECD’s Pillar Two GloBE proposal.

Branko Milanovic review of Literature and Inequality

Branko Milanovic, who is one of the world's leading scholars on the global history of economic inequality, has posted a review here of my new book, Literature and Inequality.

The review lauds my "very skillful analysis" of the societies discussed in the books that feature in my study, and adds that "Shaviro's book could set the tone for a new type of social studies that would combine the usual empirical work with archival research and valuable fiction."

The two main dialogue points he raises in the review pertain to: (1) marriages as potentially unsettling the social order when they are made, not just dynastically, but based on all of the diverse personal elements that can shape it in daily life, and (2) the picture of how great fortunes are made in classic fiction, versus the world of Econ 101 textbooks. As he notes, the books I discuss feature plenty of "swindles, cheats, cronyism, plunder, and bribery," as distinct from acts of productive entrepreneurship. It of course figures that those methods tend to be more fun to write and read about than the meticulous work of building up a successful business. Also, as I note in the book, artistically ambitious fiction writers tend not, as a group, to be enormously fond of business or the business classes. Nonetheless, he concludes that the fictional narratives, given real world parallels, should "give us pause when entertaining a more benevolent view of large fortunes in capitalist societies."

I very much look forward to our further discussing these and other issues during the Zoom session regarding my book that is scheduled for this October.

My follow-up book-in-progress to Literature and Inequality

In my prior post, I promised a follow-up to how my plans for a sequel to Literature and Inequality have developed.

Literature and Inequality looks at 9 books, 3 from each of 3 eras. It goes:

(1) England and France during the Age of Revolution: Austen's Pride and Prejudice, Stendhal's Le Rouge et le Noir, Balzac's Le Pere Goriot & La Maison Nucingen.

(2) Victorian and Edwardian England: Dickens' A Christmas Carol, Trollope's The Way We Live Now, Forster's Howards End.

(3) Gilded Age America: Twain & Warner's The Gilded Age, Wharton's The House of Mirth, Dreiser's The Financier & The Titan.

Part 2, as originally envisioned, was going to repeat the structure of having 3 eras with 3 works each, in this case the 1920s through World War II, then the 1950s through perhaps the 1970s (i.e., the peak of the "Great Easing"), then the 1980s to the present. I also anticipated looking not just at novels, but also possibly at plays, such as Death of a Salesman, and films, such as It's a Wonderful Life and The Wolf of Wall Street.

But I have decided instead to write something shorter and more focused. Here's the current state of the play, which I have been pursuing actively while sheltering in place at home. Current working title, which may change and might require a more informative subtitle: Bonfires of the American Dream.

Here my main premise is that two deeply embedded U.S. ideological sets of values, which I dub egalitarianism and market meritocracy, are both each contested internally and in tension with each other, in ways that make extreme high-end inequality very fraught here, and which texts of various kinds can help us to understand. I propose to illustrate how texts can be used to illuminate these tensions through examples drawn from each of three formats: lectures or speeches, literary fiction, and film - rather than to draw sweeping general conclusions from a limited data set.

Part 1, of which I have completed a first draft, discusses and contrasts (1) Russell Conwell's Acres of Diamonds lecture (very famous and prominent cultural artifact from the 1870s to 1920s) and (2) the John Galt speech in Ayn Rand's Atlas Shrugged.

Part 2, on which I am making (knock on wood) good progress at present, discusses The Great Gatsby. I take an interest here not just in the text itself, but also in how its reception has varied sharply as between eras.

Part 3, on which I've done some preliminary research, will aim to discuss and contrast It's a Wonderful Life and The Wolf of Wall Street.

The whole thing will be, I hope, no more than say 45,000 words. And if the project keeps going well, I should certainly be able to finish writing a complete first draft this summer.

Branko Milanovic on literature and inequality

This new blog post by Branko Milanovic discusses issues of common interest, including his book, The Haves and the Have-Nots, which helped to inspire my Literature and Inequality. (BTW, he calls my book "new and exciting," and promises to review it in his next post.)

The Haves and the Have-Nots contains brief vignettes on Pride and Prejudice (which I also discuss, at greater length), as well as Anna Karenina (which I am currently re-reading, as it happens, but just for fun and I don't anticipate writing about it).

His discussion of Pride and Prejudice was most helpful to me, e.g., because he uses the income numbers that Austen provides in the book, along with his own research in economic history, to reveal that the "middle-class" Bennets were actually, if just barely, in the top 1% if one were to rank the era's English households by per capita income. But he offers vignettes that emphasize the numbers (and their relevance), whereas I essay deep dives that look at broader cultural issues. So they are complementary efforts.

He suggests that I ought to have discussed a Fitzgerald novel, such as Tender is the Night or The Great Gatsby, in connection with the Gilded Age. But despite the similarities between the 1920s and the Gilded Age itself, I had planned to save this for Literature and Inequality's then-intended Part 2 or sequel, as part of a post-World War I sequence that might also have included Waugh and Wodehouse.

As it happens, my thinking about a follow-up book has changed since then. I decided to do something shorter and more focused - but including The Great Gatsby. More on that in my next post.

Upcoming TPC-UNC event on income-shifting by multinational corporations

On Thursday, May 21, from 9:30 am to 12 pm, the Urban-Brookings Tax Policy Center and the University of North Carolina Tax Center will be cosponsoring a Zoom event on income-shifting by multinational corporations. I am among the speakers. More information about the event is available here, and the registration page is here.

After a keynote address by the OECD's Pascal Saint-Amans, there will be two panels. The first will discuss the empirical issues, and the second, on which I am among the speakers, will focus on evaluating the OECD's response to multinationals' income-shifting efforts.

Book event now scheduled for the fall

It's still a ways off, but it looks like we'll be having a Zoom book event at NYU Law School on Literature and Inequality, on Thursday, October 15, from 4:30 to 6 pm EST. Kenji Yoshino and Branko Milanovic will be offering comments.

Short piece discussing Literature and Inequality

Westview, the neighborhood paper in my NYC neighborhood, has just published a short piece that I wrote discussing my new book.

The link is here, or for this week's entire issue here.

Given its brevity, I've pasted in the full text of my piece below:

Jewish immigrant families from a century ago, such as my grandparents on both sides, often had a distinct set of intellectual and artistic values. Suppose that, of two siblings born to a similar family, one had turned out to be Bill Gates, and the other had become the third violinist at the Philharmonic. Everyone in the family would probably have said, “It’s a shame Bill didn’t turn out as well as his sibling.”

With such a background, it was predictable that if I didn’t find a career in the arts (though I’ve written a novel, the royalties wouldn’t pay for a Fresh Direct shipment) I would at least become an academic. In that capacity, I’ve been teaching and writing for more than thirty years, mainly about tax policy, but also in related areas such as social justice, inequality, budget deficits, Social Security, and Medicare. But for fun I read works outside my fields, focusing especially on literature, high quality genre fiction, and history.

When Thomas Piketty published Capital in the Twenty-First Century, I realized that I could now combine my professional and side interests. Piketty had the great idea of using works of literature as a tool for increasing our understanding of inequality in different eras. Unfortunately, however, his discussion of such classic works as Jane Austen’s Pride and Prejudice and Honoré de Balzac’s Le Père Goriot is neither very deep nor entirely accurate. For example, he views Goriot as showing that early nineteenth century France was a pure rentier society, in which only inherited capital mattered—not what one achieved personally. This ignores the fact that Goriot is in large part the story of Eugène de Rastignac, to this day the preeminent arriviste or social climber in all of French literature.

I decided that I could do better than Piketty in using literature to help us understand inequality in different eras (although I respect his great work with economic data). In Literature and Inequality: Nine Perspectives from the Napoleonic Era Through the First Gilded Age, just published by the Anthem Press, I take a deep dive into a set of classic works that range from Pride and Prejudice and Goriot to Charles Dickens’ A Christmas Carol, Mark Twain’s (with Charles Dudley Warner) The Gilded Age, and Edith Wharton’s The House of Mirth.

My aim has been to enrich and deepen, qualitatively albeit anecdotally, what bare economic accounts can tell us about the feel of inequality, and how it was both rationalized and condemned, in different countries and different eras. I explore, for example, the cultural differences between American and English inequality, and the relationship between America’s two Gilded Ages: that which occurred during the late nineteenth century and that which exists today.

The book was fun to write, and I hope is fun to read. It does not require familiarity with the works that I discuss. Literature and Inequality is available from Amazon and other online booksellers, including in a Kindle edition, and I would be delighted to discuss it with any readers who wish to pursue a dialogue about it.

Mel Thomas

I am also saddened by the recent death of long-time Joint Committee on Taxation staffer Mel Thomas. Behind a paywall in Tax Notes, Martin Sullivan has published a tribute that begins as follows:

It was 2 a.m. when Senate Minority Leader Bob Dole wanted details on what boats would be subject to the proposed luxury excise tax. Negotiations were touch-and-go on a $500 billion bill. Only leadership and one staff member were allowed in a small conference room in the U.S. Capitol. Fortunately, that staffer was Mel Thomas, an expert on tax law and on boating.

Whether with a powerful member or a wet-behind-the-ears junior staffer, Mel Thomas always had time to share the encyclopedic knowledge he had gathered through years of study and experience. Mel was a teacher. His classroom was Congress. If he had been a professor, he would have been one of the rare breed who combined a world-class intellect with five-star teaching reviews. His imposing fullback physique did not fool anybody for a second. This old-school gentleman had a heart of gold.

Smart as Solomon. Underpaid. Behind the scenes. Nonpartisan. Dedicated. Hardworking. Never forgot it was a privilege to be on the staff. When the real work began, you wanted Mel in the room.

I got to know Mel when I was on the JCT staff between 1984 and 1987. We didn't work on the same matters, but it was a small staff and he had a large footprint. He was beloved by staffers - but at times less so by lobbyists! - either despite or because of his demanding rigor and excellence. A favorite quote: "You're wrong, but go ahead."

Ranjana Madhusudhan

I''m very sad to learn of the death of Ranjana Madhusudhan, former president of the National Tax Association, as well as Chief Economist for the New Jersey government, whom I always enjoyed seeing at the annual NTA meetings.

Zoom session last Thursday concerning my minimum tax paper

Courtesy of Leandra Lederman, here from youtube is the video of my Zoom presentation last Thursday regarding my new paper on minimum taxes. It includes a run-through of my slides for the talk.

Recent virtual travels.

Yesterday I greatly enjoyed virtually presenting, via Zoom, my new paper (soon to be posted on SSRN), What Are Minimum Taxes, and Why Might One Favor or Disfavor Them? The session was hosted by Leandra Lederman at Maurer Law School, and but for the pandemic I would have presented it there physically. Today, I was equally glad to present the paper virtually at the Critical Tax Conference, hosted by Neil Buchanan at U Florida Law School.

Although I like meeting in person with my colleagues at other schools when it is safe to do so, better Zoom than nothing. An hour from now, I will be attending my first-ever Zoom cocktail party, marking the end of the Critical Tax Conference's first day. I'm pretty sure it's BYO cocktail, as physical delivery by Zoom of actual drinks is still just on the drawing board.

Here is an abstract for the minimum tax paper:

The alternative minimum tax (AMT), a key and at the time widely lauded feature of the Tax Reform Act of 1986, soon fell into disrepute and was subsequently scaled back, to general approbation and relief. Yet in recent years minimum taxes have come back into vogue. For example, two key international tax provisions in the 2017 tax act (GILTI and the BEAT) had minimum tax structures, and the OECD has recently issued proposed guidelines for the design of a global minimum tax, meant for multilateral adoption.

In light of minimum taxes’ surprising return to center stage, this paper explores such issues as the following:

1) the purposive, technical, and semantic contours of instruments we call “minimum taxes,”

2) why a minimum tax structure matters – pertaining, for example, to the creation of clientele effects and discontinuous marginal incentives,

3) the lessons to be learned from the rise and fall of the AMT,

4) minimum taxes’ similarity to foreign tax credit limitations and loss nonrefundability,

5) the design question of whether, if highly profitable companies’ financial accounting income were made tax-relevant, this should be done through a minimum tax,

6) how one might rationalize (or not) the BEAT’s minimum tax structure, and

7) the main issues posed by global minimum taxes, including GILTI and the OECD’s Pillar Two GloBE proposal.

And finally, courtesy of Leandra Lederman, here is a virtual snapshot of the Maurer session yesterday:

Literature and Inequality update

I'd still prefer a lower price (authors are that way), but the Amazon Kindle price for Literature and Inequality has been lowered by 25 percent.

BTW, here is the back cover blurb from Daniel Markovits of Yale Law School, author of The Meritocracy Trap:

"Literature and Inequality is an eye-opening and powerfully affecting book. By rereading literary classics through the lens of high-end inequality, and by emphasizing their fascination with the contest between patrimonial complacency and meritocratic ambition, Shaviro opens a new window into familiar texts. And by confronting us with the lessons of his readings, Shaviro compels a new reckoning with the rising high-end inequality and regenerated caste system that increasingly plague our own age."

A coupla pictures

Just to lighten the mood, here are a coupla pictures. The first is me doing some writing yesterday. I have a new project that's going well at the moment. No mask because it's secluded private space.

And this, taken from the files (it just happened to be on my laptop) is the roundabout that gets mentioned in Penny Lane. I took this photo some years ago, during a side trip in Liverpool while I was attending a tax conference in Oxford. This year's in-person conference, which I had planned to attend, has of course been canceled.

Why are they so wrong?

I have been struck by the tendency of conservative intellectuals, including some I know (and am too fond of personally to rake over the coals in public) to get the pandemic so wrong. Non-Trumpists are included in this group; it's a more general ideologically driven myopia. They of course are going to want to forget it (and avoid learning from it) later on, but the lessons are worth considering even without any finger-pointing or shaming component.

Hostility to scientific (and all other) expertise, within the adjoining ideological swamp in which they swim, is one factor here, although some of these folks are genuine intellectuals. A second, of course, is reflexive anti-government sentiment, so that any sort of coordinated national response, especially at the expense of economic output of the sort that GDP measures, is immediately suspect. (Quick test: If, pre-Great Recession, you didn't believe in Keynesian policy responses to severe downturns, did you learn from that? Some did, e.g., Richard Posner, but others didn't.)

But another important contributing intellectual fallacy is over-estimating the extent to which relatively benign and sustainable equilibria will rapidly and spontaneously emerge in all "markets," including, say, the interaction between viruses (or other micro-predators - the particular substrate doesn't matter to over-generalizers) and their hosts.

Suppose, for example, that one has in mind the model of economic equilibrium in the market for consumer goods - Econ 101-style - along with the usual raft of assumptions suggesting that it will always spontaneously and instantaneously emerge in the absence of centralized interference, which of course is assumed, for its part, to be certain of miscarrying. (BTW, trained economists who actually understand economic theory in greater-than-Econ-101 depth realize that these models do NOT predict when or how fast equilibrium will emerge in multiply constrained real world conditions.)

Whether and when a relatively benign and sustainable equilibrium might emerge is really a matter of how the numbers play out in very complex and multifaceted settings where we don't know any of the inputs. But benign, sustainable equilibria don't always emerge, even in the very long term if too much gets destroyed along the way.

Consider the Black Death, American chestnut blight, Dutch elm disease, and the global overkill by hominins of large landed species that didn't coevolve with them. In each case, one who was sufficiently committed, intellectually and emotionally, to believing in the rapid, inevitable triumph of spontaneous order and the invisible hand would presumably "predict" that the runaway phenomenon will stop itself. And it is indeed true that some of the relevant forces will always be pushing in that direction. But those forces don't necessarily prevail in any particular setting or time frame.

Global warming is of course another example. Many of the same people who are embarrassing themselves with respect to the pandemic have likewise been doing so on climate change, apparently because their ideology demands that they predict that the benign (from our standpoint) feedback effects will overtake the adverse ones - although in fact it is purely a question of how particularized phenomena happen to play out mathematically.

Unfortunately, if the rapid emergence of (at least relatively) benign spontaneous order in all "markets" (defined as broadly as possible) is your religion,  then you are going to be very wrong sometimes.

Preview of Literature and Inequality

Most of the book's first 49 pages can be viewed for free here.

The Amazon Kindle version and preview aren't up yet, but I hope soon. The B&N Nook version appears to be live.

Fall 2020 NYU Tax Policy Colloquium

At this point, we obviously do not know what the fall 2020 semester will look like, be it at NYU Law School or anywhere else. But the possibilities surely include its taking place more or less as normal, or else perhaps via Zoom.

In any event, the schedule was 99% set when the coronavirus stoppage got rolling, so I figured, why not take the last couple of steps to complete it.

I should note that I don't yet know for sure who will be my co-convenor. That, actually, was up in the air even before the transformation.

Anyway, with full hopes (whether or not confidence) that this will actually happen, here is what we hope to have on tap:

SCHEDULE FOR FALL 2020 NYU TAX POLICY COLLOQUIUM

(All sessions meet from 4:00-5:50 pm in Vanderbilt 208, NYU Law School)

1.     Tuesday, August 25 – Steven Dean, NYU Law School

2.     Tuesday, September 1 – Daniel Shaviro, NYU Law School

3.     Tuesday, September 8  – Natasha Sarin, University of Pennsylvania Law School

4.     Tuesday, September 15 – Adam Kern, Princeton Politics Department and NYU Law School

5.     Tuesday, September 22 – Henrik Kleven, Princeton Economics Department

6.     Tuesday, September 29 – Leandra Lederman, Indiana University Maurer School of Law

7.     Tuesday, October 6 – Michelle Hanlon, MIT Sloan School of Management

8.     Tuesday, October 13 – Steve Rosenthal, Urban-Brookings Tax Policy Center

9.     Tuesday, October 20 –Michelle Layser, University of Illinois College of Law

10.  Tuesday, October 27 – Clinton Wallace, University of South Carolina School of Law

11.  Tuesday, November 10 – Owen Zidar, Princeton Economics Department

12.  Tuesday, November 17 – Abdoulaye Ndiaye, NYU Stern Business School

13.  Tuesday, November 24 – Lilian Faulhaber, Georgetown Law School

14.  Tuesday, December 1 – Erin Scharff, Arizona State Sandra Day O’Connor College of Law

My book Literature and Inequality is now live

I realize that such things seem trivial right now, but my new book Literature and Inequality has now gone live, as per the Anthem Press link here and the Amazon link here.

UPDATE: Barnes and Noble has a better price for Literature and Inequality.

Remarks from 2019 Fordham international tax conference

Sometime back in October 2019, Fordham Law School hosted a symposium entitled "The Future of the New International Tax Regime." Remarks (including mine) from the session, which featured a number of well-known international tax scholars, have now been printed in physical form by the Fordham Journal of Corporate and Financial Law, and are also available online.

You can find the full proceedings here. My remarks are at pages 250-258 if you go by the numbered physical pages, aka pages 33-41 within the posted file.

Literature and Inequality book launch, cover art

With events being canceled all over the place, I realized that it was time to make things official, and scrap the once-firm plans for the following book event:

New York University School of Law

invites you to a discussion of

Literature and Inequality: Nine Perspectives from the Napoleonic Era Through the First Gilded Age (Anthem Press)

with author

Daniel N. Shaviro, Wayne Perry Professor of Taxation

Branko Milanovic, Stone Center Senior Scholar, Visiting Presidential Professor

The Graduate Center, CUNY

And

Kenji Yoshino, Chief Justice Earl Warren Professor of Constitutional Law

Monday, April 13, 4:30 p.m.

All things permitting, including in particular the state of life here more generally, I anticipate this event's being rescheduled for the fall.

Meanwhile, here is an advance look at the book's cover art:

New article (coming soon) on minimum taxes

I've just completed a new article draft, entitled "What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?" It addresses, among other topics:

(1) the purposive, technical, and semantic contours of what the term "minimum tax" is generally used to mean, along with the reasons why these matter - relating, for example, to the creation of clientele effects and discontinuous marginal incentives,

(2 the lessons to be learned from the rise and fall of the alternative minimum tax (AMT),

(3) the Biden versus Warren design question of whether, if one gave tax consequences to highly profitable companies' financial statement accounting income, this should involve the use of a minimum tax structure or a standalone structure,

(4) the relationship between avowed minimum taxes and provisions, such as loss nonrefundability and applying foreign tax credit limitations, that set a zero percent floor on a particular tax rate,

(5) the issues posed by global minimum taxes, including GILTI in U.S. law and the OECD's recent GloBE minimum tax proposal.

In general I am quite skeptical about minimum taxes, although there may at times be optical or political economy reasons for preferring them to a given, limited set of realistically available alternatives.

I'll post it on SSRN soon, but probably not until I get some feedback from presenting it. The problem with posting too soon is that some of one's readership looks at it too early, before it's been improved. Barring travel restrictions from the coronavirus, I'll be presenting it at the Critical Tax Conference in Gainesville, FL, on April 3 or 4, and then at the Maurer Law School's 2020 Tax Policy Colloquium (in Bloomington, IN) on April 9. Also possibly in Oxford this summer, if international travel is feasible.

Discussion of the 2017 U.S. tax act at the Columbia Business School

Last night, I was a panelist at the Columbia Business School's Richman Center for a discussion of the 2017 U.S. tax act. The moderator was Jesse Green, and the other panelists were Stephan Eilers and Joseph Stiglitz.

The Richman Center will shortly be posting the session on video, and I have posted an approximate version of my remarks here.

Embracing (or not) new technologies

I made the transition to Kindle long ago, a format that many whom I know have resisted. I still read physical books too, but I find the Kindle format (on an iPad) reasonably manageable. Plus:

(1) books that interest me go on sale periodically on Kindle (reflecting the zero marginal cost to the seller), so if you're patient then pounce it can work well,

(2) I don't have to further crowd the shelves of my home library (I have an old school aversion to throwing books out),

(3) I can stand reading it on my iPhone in the subway, and

(4) it's nice to be able to go on vacation and have dozens of choices at hand without cramming one's suitcase.

But I hadn't tried audiobooks, until the last few days, when I've started using Audible. The draws were:

(1) it's free for a month, and I can ditch it after that if it isn't working for me,

(2) you get two free books when you start, then I think one a month. So I can get things that I've had on my patient-then-pounce list for months or years, and

(3) when I'm at the health club, it can be hard finding music that I want to listen to right at that moment. (I'm an album person, reflecting the technology of my youth, so I don't go much for letting Spotify choose.)

But I don't know yet if Audible will work for me. I've started on Jon Clinch's quite delightful novel, Marley. But I miss small things in the narrative, and seem reluctant to go back 30 seconds, as it lets you do. I've always known what's generally happening, but the details of his often flashy (in a good way) writing sometimes speed by me unapprehended.

Being at a noisy health club with headphones, and peddling away on a mechanical device while giant TV screens loom in front of one's eyes, admittedly isn't the ideal way to focus on a book. It might work better to listen while driving long distances, but as a New Yorker I don't do that. Perhaps while walking? (This being something that New Yorkers, myself included, do a lot.) But it's under 10 minutes to work (not to complain), and the last couple of days have simply been too cold anyway.

One rather obvious thing about reading is that, if you like, you can actually read every single word. Indeed, if you want to and the book is well-written, you can even pause every now and then to savor things. Audible is not well-suited for that. But then again, it can potentially expand my reading horizons by a few hours a week, as well perhaps as making health club visits feel shorter.

Will I stay or will I go; don't know yet.

Cover art for "Literature and Inequality"

The cover art for my forthcoming (April 1) Anthem Press book, Literature and Inequality, is now set. It's a public domain image of a caricature of Charles T. Yerkes (aka Frank Cowperwood in Dreiser's The Financier and The Titan) that was drawn in 1905 by Max Beerbohm. You can see it here.

I had been intrigued by the idea of using, for the cover, the image you can see at the far right here, but couldn't determine where the rights to it might reside.

Upcoming tax event at Columbia Business School

Next Monday (February 24) at the Columbia Business School, I'll be participating in a panel discussion that is entitled "The Global Consequences of the US Tax Cuts and Jobs Act of 2017. Event and registration info are available here. My co-panelists will be Joseph Stiglitz and Stephan Eilers.

Although I will aim to be measured and fair, I will not, on balance, be adhering to the old maxim that states: "If you don't have something nice to say, don't say anything at all." 

Revised paper on digital services taxes and the source of income

I have posted on SSRN a revised, and pretty close to final, version of my paper, Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location Specific Rents. Available here. I'll be submitting it shortly to the Singapore Journal of Legal Studies for expected publication there, in keeping with the lecture on the topic that I gave at NUS Law on January 14.

The main change this time around was simply to fill in the footnotes (with the help of my research assistant).

Literature and Inequality: first links for pre-ordering

My forthcoming book, Literature and Inequality, is now listed here on Amazon, and available for pre-ordering.

There will also be an e-version of the book, as noted by Anthem Press at its website here.

ABA slides on the BEIT, raising income tax rates, and broadening the estate and gift tax

As discussed in prior posts, last Friday I participated in a panel at the ABA Tax Section Annual Meeting in Boca Raton, FL, along with co-panelists Roger Royse, Linda Beale, and Richard Prisinzano. The panel discussed the rising U.S. wealth gap between the very rich and everyone else, and sought to lay out, in a reasonably neutral and balanced way, various options for responding, such as via enactment of a wealth tax.

As we divided up the issues among the panelists, my comments (and share of the slides) focused on Ed Kleinbard's dual BEIT proposal, and on recent talk of raising income tax and/or estate and gift tax rates at the top.

Not a whole lot of brand-new or startling content here, but in particular because I offered a well-deserved shout-out for, and brief summary of, the dual BEIT, I am attaching my portion of the session slides here.

Slides for my ABA Tax Section panel on taxation & inequality

The ABA Tax Section has now posted (the slides for the panel on rising wealth inequality on which I'll be a panelist this coming Friday. Available here. Slides #31-36 are mine.

Another milepost towards the publication of my literature book

I have just completed reviewing the page proofs of my literature book, aka Literature and Inequality: Nine Perspectives from the Napoleonic Era Through the First Gilded Age. This is my last input in the process, which should now move smoothly (or even inexorably) towards fulfillment of the projected April 1 publication date.

The book is now also referenced here on the Anthem Press website, although the page hasn't fully been fleshed out yet, pending further progress in the publication process.

The page proofs indicate that the book is 226 pages, including the bibliography and index (210 pages without them), so not at all a behemoth - rather, I am hoping, a smooth and enjoyable read that doesn't require advance familiarity with all of the books that I discuss.

On April 13, we'll be having a discussion of the book at an NYU Law School event. Branko Milanovic and Kenji Yoshino have graciously volunteered their services as commentators. Branko is a leading economic historian of inequality who also has written about the use of literature in developing sociological insights regarding the topic, and Kenji is a leading law and literature scholar (among other bows in his quiver). So I am very much looking forward to their comments.

Upcoming panel discussion

This coming Friday (January 31), I will be appearing on a panel at the ABA Tax Section's Annual Meeting, in Boca Raton, FL. The session will take place from 8:30 to 10 am, and its title is "How Should the US Tax System Respond to the Growing Wealth Gap: The Continuing Debate over Wealth Taxes and Other Tax Proposals to Narrow the Gap Between Rich and Poor." My fellow panelists are Roger Royse, Linda Beale, and Richard Prisinzano.

Among other things, we'll be discussing recent data concerning wealth inequality, and such proposals to address it as wealth taxation (a la the proposal by Senator Warren), expanded mark-to-market taxation (a la the proposal by Senator Wyden), Ed Kleinbard's business enterprise income tax (BEIT) proposal, and raising income &/or estate & gift tax rates.

Another newly posted item

Tax Jotwell has just, as of today, posted my annual short feature there. It's entitled "Writing Books Versus Journal Articles," but after brief ruminations on that general topic I turn to the real matter at hand, which is that of offering brief but extremely well-deserved praise to (1) Kimberly Clausing's Open: The Progressive Case for Free Trade, Immigration, and Global Capital, and (2) William Gale's Fiscal Therapy: Curing America's Debt Addiction and Investing in the Future.

You can find the text of my brief Jotwell write-up here.

Soon to be on the road again

This being a sabbatical semester, I will soon be on the road again, albeit not traveling as far or for as long as I did most recently. On Friday next week (January 31), I'll be speaking at the ABA Tax Section Annual Meeting in Boca Raton, FL. (You may notice a broader personal theme here - getting out of New York, in favor of warmer climes, during peak winter.)

More specifically, I'll be among the members of a Tax Policy and Simplification Committee Panel at the ABA Tax Section meeting that has the current working title: "How Should the US Tax System Respond to the Growing Wealth Gap?: The Continuing Debate Over Wealth Taxes and Other Tax Proposals to Narrow the Gap Between Rich and Poor."

Many thanks to Pamela Fuller for doing lots of hard work in getting this panel organized, although she won't be appearing on it. My co-panelists will be Roger Royse, Linda Beale, and Richard Prisinzano.

We're dividing up a set of related topics within the panel's broader themes. For example, while others will take the lead in discussing such topics as recent empirical evidence regarding wealth inequality, Senator Warren's wealth tax proposal, and Senator Wyden's mark-to-market proposal for taxing capital gains upon accrual) I will do so with respect to (1) Edward Kleinbard's dual BEIT proposal - an important income tax reform option that is often mysteriously under-appreciated, and (2) proposals to raise significantly the top rates in income and/or estate and gift taxes.

Back in the US of A

Earlier today, I returned to NYC from Asia, where I spent 3 days in Singapore, followed by 6 in Bali near Ubud.

While in Singapore, I gave the first (I believe to be annual, but by a rotating list of people) Sat Pal Khattar Visiting Professor of Tax Law Lecture. The slides for this talk are available here. You also can find the most recent draft of the paper here.

The side trip to Bali was purely for vacation and relaxation. Ubud is getting crazily over-built and over-grown (hence, risking some of the charm I remember from a trip there 30 years ago), but the resort that we stayed at, about a half hour's drive outside of the town proper, was exceptionally delightful.

Off to Singapore

Tomorrow I head east - from New York City to Singapore, or 9,521 miles as the crow flies (if it was a unusually fit and vigorous crow). Also a time zone change of 13 hours. While there, I will be giving a talk on my digital services tax paper, as well as lingering for a few days (some of it in Bali near Ubud). I'll post the slides, which are fuller than previously-posted versions, as I'll be speaking for longer, on my return.

The event will be the first Sat Pal Khattar Professorial Lecture at the National University of Singapore (NUS) Law School. This is a venue that I know fairly well, as on three occasions I taught  mini-courses there (in connection with the now-defunct NYU@NUS program).

The lecture is named for a generous leading Singaporean with a tax background, whom I look forward to meeting while there. I believe that Sat Pal Khattar Professorial Lectures on tax issues are meant to become a regular, perhaps even annual, event at the NUS Law School.

A poster for the event can be found here.

Year-end activities

Yay for the holiday season; it's about time. This has been a tough last couple of months in some ways, for me as for our country.

In terms of my professional activities, my forthcoming book, LITERATURE AND INEQUALITY: Nine Perspectives from the Napoleonic Era Through the First Gilded Age, remains on-track for April 2020 publication by the Anthem Press. Copy-editing has begun.

In mid-January, I'll be traveling to Singapore to give a lecture at the NUS Faculty of Law as Sat Pal Khattar Visiting Professor of Tax Law. It will concern my work in progress, Digital Services Taxes and the Broader Shift From Determining the Source of Income to Taxing Location-Specific Rents. A final version of the piece will then appear in the Singapore Journal of Legal Studies. The lecture time is long enough that I'm preparing, and will post here, significantly longer and fuller slides than I have posted upon giving briefer talks concerning the piece.

My new article in process is well underway, albeit perhaps ready for seasonal hiatus. Its current working title is What Are Minimum Taxes, and Why Might One Favor or Disfavor Them? It will discuss, inter alia, what one might call the "Mortimer Adler" problem with using minimum taxes, how minimum taxes might be defined (and why minimum tax-ness might matter), and it will discuss in this regard institutional manifestations that include at least the following:

(1) the AMT,

(2) standalone versus minimum tax structure for taxing public companies' reported financial statement income, with reference to the 1987-1989 AMT preference that was based on book income,

(3) the BEAT,

(4) GILTI (along with worldwide/foreign tax credit systems that are structurally similar, albeit typically not called minimum taxes if they tax foreign source income at the full domestic rate), and

(5) other global minimum taxes, such as the OECD's Pillar Two proposal.

Taxing corporate book income: minimum tax vs. add-on tax

Vice President Biden has just proposed a 15% corporate minimum tax based on companies' financial statement accounting income (aka, book income) above a large threshold. By contrast, Senator Warren is proposing a 7% add-on or additional tax on book income above the threshold. The difference is that the latter would be payable in all events, while the former would be payable only to the extent in excess of regular taxable income (albeit, with multi-year smoothing provisions).

Leaving aside perhaps the biggest issue here, which pertains to taxing book income or not, the contrast between them raises the classic old issue of minimum taxes versus separate add-on taxes. I have begin writing about this issue more generally (including in my analysis the US experience with the individual and corporate AMTS, as well as global minimum taxes such as GILTI and the OECD Pillar Two Globe proposal. But it also goes way back for me. The first article I published after entering academe in 1987 was entitled something like "Perception, Reality, and Strategy: The New Alternative Minimum Tax." I published it in Taxes Magazine so I could get it out fast, although in style and substance it was more like a Tax Law Review article.

I am not, however, writing the new article within a time frame that's aimed at participating in the current Democratic campaign debate. I'm more interested in getting a general analysis out there that I think is presently lacking, although lots of experts have a decent grasp on some of the main points.

Final NYU Tax Policy Colloquium session for fall 2019

Yesterday at the colloquium, after marking the completion of my 25th year co-running the thing, we discussed Josh Blank’s and Ari Glogower’s Progressive Tax Procedure. This is still an early draft of an ambitious project, hence plenty of opportunities to discuss the way forward. (Not presented when we discuss, as sometimes happens, recently published papers.)

Each of the three words in the title could be interrogated a bit. However, the basic idea is that procedural rules in the federal income tax – for example, concerning statutes of limitation, penalty rules, and standards of care in taking reporting positions – might vary with the income or wealth of the taxpayer. Audit rates are also in the ballpark, although to what extent within scope remains unclear. The clearest contrast, although here I seem to have begun interrogating the third word in the title, lies between procedural and “substantive “ rules – establishing, for example the tax rate and base.

“Progressive” raises numerous definitional issues, but the broader category might be called “means-based.” Suppose you want average or effective or statutory or marginal rates to rise with the taxpayer’s income. Then you favor income tax progressivity as defined or measured one way or another, but the broader point is that you favor a positive relationship between the rate of particular interest to you and the taxpayer’s overall income (which is a measure of the taxpayer’s means).

In that example, we also know how to define a regressive tax system. The rate of chosen interest goes south rather than north, with a perfectly flat tax standing in between them as the benchmark of a means-neutral system so far as these aspects are defined. (Of course, in a flat rate tax system, those with higher income still pay more overall tax, but the rate that one is focusing on, is distinct from overall liability, doesn’t vary with the measure of means.)

“Progressive tax procedure” therefore implies that item one is looking at grow less favorable in some way as the overall measure of the taxpayer’s means increases. Illustrative examples that the paper is at least willing to contemplate might involve, for example, having penalty rates go up as a percentage of the underpaid tax liability, statutes of limitation increase, or standards of taxpayer care to avoid penalties grow more demanding, as the taxpayer’s income (or, say, wealth, if a measure of that was available) increases. 

Having audit rates rise with income would be within the paper’s scope if that qualifies as “procedure,” which remains to be determined by the authors. This helps raise the point that once is talking about means-based tax procedure, without specifying as yet that it might be progressive, one might be motivated, not just by distributional preferences, but also the question of what information is relevant to tax administration. For example, supposed that the IRS’s information audits found that the amount of one’s income (at the start of the audit, or at the end) was informative regarding the likely revenue yield from a given audit. We know, of course, that the IRS must be looking at such things as whether, say, cash businesses or those in particular industries offer greater audit yields, or perhaps returns with large vs. small charitable contributions of a given type. If they find that something relating to the taxpayer’s overall means is also relevant to expected audit yield, one could ask (among other questions) whether using or ignoring this information would be, not only the better approach all things considered, but even the more “neutral” one, if one was attempting to define and apply such a benchmark. But while I suspect that a consistently applied audit yield metric would result in a significant upward shift, along the income scale, in who is audited, it wouldn’t necessarily be “progressive” all the time. E.g., suppose EITC claimants tend to yield greater audit yield than those earning above the phase-out. Or suppose there is more audit yield from the merely rich in the 99.0 to 99.5% percentile, than from those at the very top. Then one’s audit yield strategy wouldn’t be “progressive” at all margins, even when it was means-based.

This distinction can be an important one – looking at “means” because it has relevant informational content wholly apart from one’s distributional policy preferences, vs. because it is itself a topic of interest under one’s distributional preferences.

A further distinction to have in mind here lies between formal and substantive means-based variation in tax procedural rules. You know the old gag: “The law, in its majesty, forbids the rich and poor alike to sleep under bridges.” An opposite version of the same thing is FATCA, requiring information reporting about US taxpayers’ foreign bank accounts. As between full-time U.S. residents, this has progressive impact, at least to a degree, because you have to be at a certain level of wealth and/or income before one starts availing oneself of foreign bank accounts. (But perhaps it tapers down at some point towards the top? And of course for U.S. taxpayers who spend enough time abroad to need local banking outside the country, FATCA looms even if their resources are decidedly modest.) Likewise, if one applies particular penalties above a flat dollar amount of overall tax liability shortfall, or if one disfavors the use of tax advisor opinions as penalty shields, the rule even if formally neutral will have upwards-tilting effects.

In thinking about the various approaches that the paper puts in play, both the Kaplow-Shavell work on restricting distribution policy to the “tax system” and the Kaplow work on the social value of determining income (or whatever) accurately offer important orienting devices. Rules that might be described as implementing progressive tax procedure are contrary to the Kaplow-Shavell approach if they are used to increase the overall progressivity of the tax system – except insofar as by, say, reducing tax avoidance opportunities they affect optimal rates. But if they are using means-based information that is relevant to efficient implementation, the case is different. The point here isn’t to insist on Kaplow-Shavell conformity, as that’s a live issue under debate, but it’s useful for situating and understanding the claims.

And here’s where “accuracy” as discussed by Kaplow and others may enter the analysis. Suppose we used means-based, whether or not progressive, tax procedural rules to change the taxation of rich people in the following way. E.g., suppose that initially half were paying tax at a 40% effective rate and others at a 20% rate, due to tax avoidance opportunities available disproportionately to the latter. Then we used tax procedural rules, such as cutting back on the use of penalty shield tax opinions, or more broadly (whether or not within the term’s scope) by increasing audits of high-income taxpayers. One might think of the shift as being distributionally neutral, in an aggregate group sense, if now all the rich paid 30%, but for multiple reasons this might now be a better system (leaving aside the costs of getting there). Whereas, if we got all of them up to 40%, the system would now apparently be more accurate, but it would also be more progressive – which might be fine, but muddies the waters a bit regarding why we might favor (if we did) the tax procedural changes that brought about this new state of affairs. In Kaplow terms, a key question in the now-all-30% scenario would be measuring the benefit vs. the cost (if positive) of the greater accuracy – we obviously wouldn’t be willing to spend infinite resources in order to measure everyone’s income accurately and assure the uniformly “correct” application of statutory tax rates.

My point here is simply that this helps to demarcate the different issues raised by means-based tax procedure that the paper will be exploring as it develops. 

NYU Tax Policy Colloquium: 25 years in the bank!

Today was the final session of my 25th Tax Policy Colloquium at NYU. The occasion was honored by kind people with a poster, card, cake, and short speech (actually, that was impromptu & by me). This photo shows me reenacting the candle blow-out (2 + 5 = 7 in one blow, just like the Little Tailor from Grimm's Fairy Tales). Room was fairly full of people, but they backed off for the photo op.

Modestly revised paper draft

I have revised, although this time fairly modestly, the SSRN-posted version of my article on multinational rents or quasi-rents, the source and value creation concepts, and digital service taxes as an exemplar of where international tax policy may more generally be heading.

You can find the revised version here.

For now I've kept "Digital Services Taxes" as the first 3 words in the title, though this risks over-stating the extent to which the paper is actually about them as such. They remain a relevant piece of the paper's analysis, and (at least so far) I couldn't come up with a good title that didn't start by referencing them.