Now that the brutal winter weather has finally passed, I made the mistake the other week of – well, the fates must have considered it crowing on my part – that, in twelve years, the NYU Tax Policy Colloquium has never once lost a session due to speaker unavailability. The obvious threat being that winter storms would prevent someone from coming in. (We meet from January through April.) We have had some close calls, and quite a few storms would have canceled us if they had come on the wrong day of the week (or if we’d had an out of town speaker in a given week), but never once a cancellation.
Sure enough, no sooner did I laud this fact then something happened. Our scheduled speaker this week was Kirk Stark of UCLA Law School, with a very interesting paper (if still in preliminary form) on fiscal equalization, or national programs transferring resources from rich states to poor states. He says that nearly all federations in the world other than the U.S. have such a program, and the U.S. at least formally doesn’t. (Which is not to deny that we might have the effective equivalent via differently labeled programs.) To see the paper, check out the March 29 date here.
Anyway, on Tuesday night Kirk contacted me to say that he unfortunately couldn’t come because he has the flu. One can certainly sympathize. I am just getting over a horrendous cold, which I would assume was rather like what he had only minus the fever, and even in my state I wouldn’t have wanted to board a transcontinental flight. With a fever it would have been unthinkable.
My first thought was that we would have to cancel today’s session. But then it occurred to me (with the help of my co-convenor, Alan Auerbach) that we could go on anyway. The NYU colloquium has an unusual format, in which the author doesn’t actually present the paper. Instead, we do and the author responds to our critiques of various issues. So one could say (it was the obvious joke that several people independently thought of) that this is simply the perfection or logical culmination of our method – no author whatsoever.
Not true, of course, and we would rather have had Kirk here. But with the help of several special commentators I enlisted to ensure multiple perspectives (Rosanne Altshuler, Jack Mintz, and Brian Galle), we actually had a pretty good session. Hence (counting Alan and me) the five commentators not in search of an author, from my title for this posting.
Bottom line conclusion of the session, without Kirk there to defend his view: to start with a bit of background, the paper proposes fiscal equalization based on tax capacity (i.e., potential revenue at a given level of “effort”) to respond to a fiscal federalism problem of inducing migration from poor to rich jurisdictions if public goods are like lump sum grants in their incidence but are financed by means-based taxes. This is merely a subset of the general fiscal federalism case for keeping redistribution to the highest level of government and having lower levels stick to providing competitive tax-benefit packages, with user fee style financing, a la the Tiebout model (named for Charles Tiebout’s famous 1956 paper).
We were unpersuaded that the paper’s proposed cure, payments to poor states (effectively financed by rich states) that seek to equalize taxing capacity fit logically with the diagnosis. Migration depends on fiscal effort, not fiscal capacity. (People move to Greenwich, CT, if the paper’s analysis is right, to get nice parks that richer people pay for, based on what Greenwich does, not what it could do.) And we thought the case is much stronger for equalizing, say, education outlays (where there is a positive externality plus an agency cost problem if parents don’t fully represent the interests of their children) than for government-provided consumer goods generally.
The paper offers an intriguing if preliminary political analysis, suggesting we don’t have fiscal equalization in the U.S. because (a) Blue States don’t want it since it transfers $$ to Red States, and (b) Red States don’t want it because their elites are anti-government and don’t want $$ given to their poorer citizens. But it’s hard to see why unrestricted cash grants to their governments wouldn’t appeal to Red State elites. Why not take free money? Better explanations, we thought, involved (a) path dependence – the U.S. started from a more decentralized status & so the thing would have had to be affirmatively introduced, plus (b) those who might have wanted it had more direct and appealing routes to getting the same thing (e.g., farm subsidies instead of $$ that depend on a complicated fiscal formula that could go the other way next year). Even the claim that we don’t currently have it, while other federations do, might conceivably be truer in form than in substance.
Anyway, not to tempt the fates yet again, but we still haven't lost a session due to speaker unavailability.
Thursday, March 29, 2007
Monday, March 26, 2007
Ironic waiver?
One of the interesting threads in the attorney scandal is that White House officials did lots of their communicating via Republican National Committee e-mails rather than White House e-mails. E.g., there is a report that Rove does 95% of his e-mailing via the RNC address.
Trivial though this may sound, there is also reason to believe that a lot of this has been done deliberately to evade legal requirements pertaining to recording and retention of official communications.
How does this play into the executive privilege claims? The natural analogy is attorney-client privilege, which is easily blown by the parties who want to claim it in various circumstances where they failed to treat a communication as confidential and as within the attorney-client relationship. Plus, there is no privilege where the attorney is providing not legal advice but something else (e.g., investment or tax accounting advice). It's a truism among knowledgeable practitioners that far less is actually covered by the privilege than lawyers tend to think while they are going about their daily business.
Obviously, there is next to no legal precedent on the boundaries of executive privilege, compared to the centuries of cases et al regarding the attorney-client privilege. But the privileges are similarly motivated cousins, and analogies from the latter are by no means irrelevant to thinking about the former. And if you think there's a special public purpose to letting the president get confidential advice, there's also a special public purpose to preventing him from evading oversight.
The easy and obvious point is that anything Rove sent out in an e-mail from his RNC address is not privileged. Call it a foot fault, if you like, but that's just tough, and doesn't call for sympathy given his likely unclean hands in using the RNC address.
A further interesting question is the extent to which using RNC e-mails to communicate stuff about meetings with Bush et al should be viewed as a further waiver of other executive privilege claims, at the limit on everything pertaining to the meetings and topics discussed in the RNC e-mails. On this point I would have to defer to those more knowledgeable than I am about how the attorney-client privilege is interpreted and applied.
But it strikes me as possible that we have an argument for a total waiver situation, even leaving aside the point that the attorney-client privilege does not cover criminal activity (relevant here given the strong inference of obstruction of justice as the cornerstone of the entire caper).
I certainly hope these arguments will be fully raised and vetted both in public debate and in any litigation on Bush's privilege claims.
Trivial though this may sound, there is also reason to believe that a lot of this has been done deliberately to evade legal requirements pertaining to recording and retention of official communications.
How does this play into the executive privilege claims? The natural analogy is attorney-client privilege, which is easily blown by the parties who want to claim it in various circumstances where they failed to treat a communication as confidential and as within the attorney-client relationship. Plus, there is no privilege where the attorney is providing not legal advice but something else (e.g., investment or tax accounting advice). It's a truism among knowledgeable practitioners that far less is actually covered by the privilege than lawyers tend to think while they are going about their daily business.
Obviously, there is next to no legal precedent on the boundaries of executive privilege, compared to the centuries of cases et al regarding the attorney-client privilege. But the privileges are similarly motivated cousins, and analogies from the latter are by no means irrelevant to thinking about the former. And if you think there's a special public purpose to letting the president get confidential advice, there's also a special public purpose to preventing him from evading oversight.
The easy and obvious point is that anything Rove sent out in an e-mail from his RNC address is not privileged. Call it a foot fault, if you like, but that's just tough, and doesn't call for sympathy given his likely unclean hands in using the RNC address.
A further interesting question is the extent to which using RNC e-mails to communicate stuff about meetings with Bush et al should be viewed as a further waiver of other executive privilege claims, at the limit on everything pertaining to the meetings and topics discussed in the RNC e-mails. On this point I would have to defer to those more knowledgeable than I am about how the attorney-client privilege is interpreted and applied.
But it strikes me as possible that we have an argument for a total waiver situation, even leaving aside the point that the attorney-client privilege does not cover criminal activity (relevant here given the strong inference of obstruction of justice as the cornerstone of the entire caper).
I certainly hope these arguments will be fully raised and vetted both in public debate and in any litigation on Bush's privilege claims.
Sunday, March 25, 2007
Interesting literary series
One Sunday when I was uncharacteristically free to wander around a Barnes & Noble (actual not virtual), I spotted a very interesting fiction series, "Femmes Fatales," published by the Feminist Press at the City University of New York. The series consists of selected pulp or genre novels written by female authors in the 1930s through the 1950s. So far I've read two, both of which were made into famous (but much less interesting) movies: Dorothy Hughes' "In a Lonely Place" and Vera Caspary's "Laura." Both are among the best detective/mystery/murder genre fiction that I've ever read; usually I find the genre tolerable but boring.
Give the Feminist Press credit, even if their forewords and afterwords are a bit predictable in exactly the academic vein would expect. The female writer's perspective in these two novels genuinely makes them much more interesting than they would otherwise be. (Plus, these appear to be particularly inspired outings by generally capable writers.) "In a Lonely Place" is far darker than the Humphrey Bogart movie - narrated by a male serial killer of women but not the misogynistic genre exercise one would expect from that. Also one of the best uses I can remember of the unreliable narrator device. "Laura" is less extreme, but also much fuller than the admittedly atmospherically effective Preminger film. Good use of multiple narrators, interesting twists even if one knows them from the movie. Laura is a single woman pursuing a career, not getting married as soon as she is supposed to, and surrounded by manipulative, immature men. The murder plot is a device (although a very good one) rather than the subject of real interest, notwithstanding the twists and suspense.
I like to vary my reading, so at the moment I'm embarked on the Rory Stewart book about walking through Afghanistan, but I will probably return to this series soon.
Give the Feminist Press credit, even if their forewords and afterwords are a bit predictable in exactly the academic vein would expect. The female writer's perspective in these two novels genuinely makes them much more interesting than they would otherwise be. (Plus, these appear to be particularly inspired outings by generally capable writers.) "In a Lonely Place" is far darker than the Humphrey Bogart movie - narrated by a male serial killer of women but not the misogynistic genre exercise one would expect from that. Also one of the best uses I can remember of the unreliable narrator device. "Laura" is less extreme, but also much fuller than the admittedly atmospherically effective Preminger film. Good use of multiple narrators, interesting twists even if one knows them from the movie. Laura is a single woman pursuing a career, not getting married as soon as she is supposed to, and surrounded by manipulative, immature men. The murder plot is a device (although a very good one) rather than the subject of real interest, notwithstanding the twists and suspense.
I like to vary my reading, so at the moment I'm embarked on the Rory Stewart book about walking through Afghanistan, but I will probably return to this series soon.
Tuesday, March 20, 2007
Cover-up
It's the old Watergate playbook. Bush's response leaves little doubt in my mind that he was personally involved in obstructing justice, both negatively by shutting down the Lam investigation and positively by seeking unfounded indictments of Democrats on sham charges.
Why not just send them all to Gitmo as enemy combatants?
Why not just send them all to Gitmo as enemy combatants?
Sunday, March 18, 2007
More feline excitement
Yesterday Buddy ambled into the dining room with a gray object in his mouth that, upon inspection, proved to be a live mouse rather than an inanimate cat toy. With a little encouragement, he agreed to carry it back into a small, unoccupied bedroom for further proceedings.
Buddy and Shadow then caucused with the poor creature for a couple of hours. It spent a lot of time in their mouths, but they would drop it every now and then, only to swat at it and pick it up again as soon as it showed signs of life. Pretty much like tag team wrestling, only it didn't have a teammate. Poor thing must have thought it was at Guantanamo or something, and I felt quite sorry for it though agreeing that its life should be forfeit under the circumstances.
They eventually lost interest when it stopped moving for good. At this point I deposited it in the trash outside. Unclear whether an autopsy would have identified shock, internal bleeding, or heart attack as the cause of death. But the grand jury would have had a clear basis to indict for first degree murder.
Buddy and Shadow then headed to their food bowls for refreshment (they had no interest in eating the mouse), and remained too stirred up to nap for a couple of hours.
Two movies I always think about when I observe this type of activity are (1) The Incredible Shrinking Man (Grade B 1950s sci fi in which a man, hiding in his daughter's dollhouse, is attacked by his cat once he has shrunk to being a few inches tall), and (2) the Nightmare on Elm Street [CORRECTION - thanks to a reader!] movies. Freddy Krueger is rather cat-like, from a mouse's perspective, what with his playfulness and retractable razor blades on his fingers.
Later on, Buddy was purring, kneading with his paws, and rolling over as I thanked him for the trouble-free vermin removal. As they say in the NBA, you can't teach size.
Buddy and Shadow then caucused with the poor creature for a couple of hours. It spent a lot of time in their mouths, but they would drop it every now and then, only to swat at it and pick it up again as soon as it showed signs of life. Pretty much like tag team wrestling, only it didn't have a teammate. Poor thing must have thought it was at Guantanamo or something, and I felt quite sorry for it though agreeing that its life should be forfeit under the circumstances.
They eventually lost interest when it stopped moving for good. At this point I deposited it in the trash outside. Unclear whether an autopsy would have identified shock, internal bleeding, or heart attack as the cause of death. But the grand jury would have had a clear basis to indict for first degree murder.
Buddy and Shadow then headed to their food bowls for refreshment (they had no interest in eating the mouse), and remained too stirred up to nap for a couple of hours.
Two movies I always think about when I observe this type of activity are (1) The Incredible Shrinking Man (Grade B 1950s sci fi in which a man, hiding in his daughter's dollhouse, is attacked by his cat once he has shrunk to being a few inches tall), and (2) the Nightmare on Elm Street [CORRECTION - thanks to a reader!] movies. Freddy Krueger is rather cat-like, from a mouse's perspective, what with his playfulness and retractable razor blades on his fingers.
Later on, Buddy was purring, kneading with his paws, and rolling over as I thanked him for the trouble-free vermin removal. As they say in the NBA, you can't teach size.
Thursday, March 15, 2007
More on law school academic culture
Today I was in Philadelphia, at Penn Law School, presenting my paper "Beyond the Pro-Consumption Tax Consensus." One anthropological question I got, from an economist in attendance, is why law profs' papers often over-claim, e.g., by generalizing a particular economic model with restrictive assumptions to serve as a source of very broadly stated real world conclusions. (I should note that this is what I was critiquing in my paper, not exemplifying; the question in a sense was why my paper needed to be written.)
I think it's partly from the nature of law review publication, where you need to make big claims in order for student editors to figure they should publish it. A second cause is the enthusiasm of the convert, where law profs are coming into another discipline in order to make use of it. A third is that simply using a given economic model, even if one over-claims from it, can represent an advance if people in law were unaware of it.
In conversation at dinner following the dinner, I emphasized the law review element, but with an internal feeling that I was indeed over-claiming for this explanation. As I was rightly asked, aren't people calculating past publication to their peer readers. (And I noted in an earlier post the strategy I've heard about whereby you over-claim so the law review will accept your piece and then take out the offending language once you're in the door.)
Upon reflection, there's also something distinct in law school academic culture (possibly derived in part from the law review editing experience, which so many law profs had) that applies to judgments by one's peers, as opposed to student editors. This is the paradigm of shifting the paradigm, often in Yale Law School type form to trumpet a cute little syllogism as a universal precept in lieu of more serious and careful analysis.
I remember in my days on the University of Chicago Law School faculty, when lateral hiring prospects were up for consideration, when the question would be asked of someone who evidently had done good work: "Yes, but has he/she shifted the paradigm for anything?"
At which point I would always think: "Fine, but what if the previous paradigms were just as good or better?"
I think it's partly from the nature of law review publication, where you need to make big claims in order for student editors to figure they should publish it. A second cause is the enthusiasm of the convert, where law profs are coming into another discipline in order to make use of it. A third is that simply using a given economic model, even if one over-claims from it, can represent an advance if people in law were unaware of it.
In conversation at dinner following the dinner, I emphasized the law review element, but with an internal feeling that I was indeed over-claiming for this explanation. As I was rightly asked, aren't people calculating past publication to their peer readers. (And I noted in an earlier post the strategy I've heard about whereby you over-claim so the law review will accept your piece and then take out the offending language once you're in the door.)
Upon reflection, there's also something distinct in law school academic culture (possibly derived in part from the law review editing experience, which so many law profs had) that applies to judgments by one's peers, as opposed to student editors. This is the paradigm of shifting the paradigm, often in Yale Law School type form to trumpet a cute little syllogism as a universal precept in lieu of more serious and careful analysis.
I remember in my days on the University of Chicago Law School faculty, when lateral hiring prospects were up for consideration, when the question would be asked of someone who evidently had done good work: "Yes, but has he/she shifted the paradigm for anything?"
At which point I would always think: "Fine, but what if the previous paradigms were just as good or better?"
Wednesday, March 07, 2007
Lock him up and throw away the key?
I'm bemused by all the sympathy for Lewis Libby now that he has been convicted. One actually should feel some measure of sympathy for him, and indeed for all convicted criminals, even murderers, if the consequences of the verdict will cause them to suffer, even deservedly. (As Libby no doubt will, at least psychically, if he goes to prison, even if it's relatively soft time.) Sympathy for human pain should be universal, whether or not one always acts on it.
The sympathy for Libby appears to be comparative, however, as if he, compared to other convicted felons, especially deserves a break. This view I cannot share.
The perjury and obstruction here were part of a conspiracy by a cabal to take the United States to war on false pretenses, and meanwhile to bully and besmirch all whistle-blowers and critics. It was part and parcel of the most gratuitous foreign policy disaster in U.S. history. (Vietnam, by contrast, was more or less bound to happen given the broader public mindset at the time, although it's true that the Gulf of Tonkin episode has elements in common with all this.) The harm these people have done is incalculable. And the conspirators, while hyping phony evidence about WMD, were prepared to undermine actual U.S. intelligence about WMD around the world by outing an important CIA specialist on this topic.
The sympathy for Libby appears to be comparative, however, as if he, compared to other convicted felons, especially deserves a break. This view I cannot share.
The perjury and obstruction here were part of a conspiracy by a cabal to take the United States to war on false pretenses, and meanwhile to bully and besmirch all whistle-blowers and critics. It was part and parcel of the most gratuitous foreign policy disaster in U.S. history. (Vietnam, by contrast, was more or less bound to happen given the broader public mindset at the time, although it's true that the Gulf of Tonkin episode has elements in common with all this.) The harm these people have done is incalculable. And the conspirators, while hyping phony evidence about WMD, were prepared to undermine actual U.S. intelligence about WMD around the world by outing an important CIA specialist on this topic.
My article, Beyond the Pro-Consumption Tax Consensus
Readers may recall that I posted this article here. I have since rewritten it to make it, I hope, a lot more accessible and reader-friendly, as well as to make some of the conclusions a bit crisper and more general.
The piece has now been accepted by the Stanford Law Review. Joe Bankman will be writing a brief reply, reflecting that my article is in part a critique or response to his article in Stanford (co-authored by David Weisbach), entitled "The Superiority of an Ideal Consumption Tax Over an Ideal Income Tax."
My personal feeling is that the Bankman-Weisbach article significantly advanced the legal tax policy literature and that mine does as well.
The piece has now been accepted by the Stanford Law Review. Joe Bankman will be writing a brief reply, reflecting that my article is in part a critique or response to his article in Stanford (co-authored by David Weisbach), entitled "The Superiority of an Ideal Consumption Tax Over an Ideal Income Tax."
My personal feeling is that the Bankman-Weisbach article significantly advanced the legal tax policy literature and that mine does as well.
Another musical note
Raves keep appearing everywhere I turn for the new Arcade Fire album, which made both the NY Times Magazine and the front page of its Sunday Arts & Leisure section.
But I keep seeing the word "bombastic" here and there in references to the album, along with half-apologetic, half-aggressive comments that, well, if you're too set on irony and too unsympathetic to Springsteen-style sentiment-blasting it might not be for you.
I certainly don't think my own palette or palate is limited to irony, although it's a coloring or flavor that I like. The Wrens' Meadowlands, my favorite album of the last few years, certainly emphasizes feeling rather than irony. But I found the first Arcade Fire album simply too bombastic and a bit over-wrought; hence, I think I will sit this one out.
But I keep seeing the word "bombastic" here and there in references to the album, along with half-apologetic, half-aggressive comments that, well, if you're too set on irony and too unsympathetic to Springsteen-style sentiment-blasting it might not be for you.
I certainly don't think my own palette or palate is limited to irony, although it's a coloring or flavor that I like. The Wrens' Meadowlands, my favorite album of the last few years, certainly emphasizes feeling rather than irony. But I found the first Arcade Fire album simply too bombastic and a bit over-wrought; hence, I think I will sit this one out.
Tuesday, March 06, 2007
Smart Cat; or, The Mystery of the Mangled Meat
The other day, I came down to make breakfast and found 2 chewed-up pieces of steak lying on the ground. These were leftovers from my kids' dinner the night before, and I was quite sure I had left them in the garbage can with the lid closed, but life is busy and you just go on.
I also knew the most likely culprit - Shadow, aka the Big Fella (an honorific title; he's only 10 pounds). Normally the best-behaved of beasts, he is a bit gaga when it comes to cooked meats. I figured that perhaps the lid of the garbage can hadn't been shut.
Tonight I was removing meat from its packaging, in the course of making something for dinner, and Shadow walked up to the garbage can, pushed the lid up, and shoved his head inside. Case closed, so far as the other night is concerned. Of course, before we laud his intellect too much for figuring out how to get into the trash, we should keep in mind that there was no meat in there yet, and that I was right next to him watching. So he can forget about future opportunities to extract meat from the garbage overnight.
Still, impressive in its own way.
Oh, yes. Shadow is toothless by this stage in his career (he is going on 16 years old). I'm not sure what good any of this did him anyway.
I also knew the most likely culprit - Shadow, aka the Big Fella (an honorific title; he's only 10 pounds). Normally the best-behaved of beasts, he is a bit gaga when it comes to cooked meats. I figured that perhaps the lid of the garbage can hadn't been shut.
Tonight I was removing meat from its packaging, in the course of making something for dinner, and Shadow walked up to the garbage can, pushed the lid up, and shoved his head inside. Case closed, so far as the other night is concerned. Of course, before we laud his intellect too much for figuring out how to get into the trash, we should keep in mind that there was no meat in there yet, and that I was right next to him watching. So he can forget about future opportunities to extract meat from the garbage overnight.
Still, impressive in its own way.
Oh, yes. Shadow is toothless by this stage in his career (he is going on 16 years old). I'm not sure what good any of this did him anyway.
Saturday, March 03, 2007
More music appreciation
I've been greatly enjoying selected tracks from Andy Partridge's Fuzzy Warbles, volumes 7-8, available on ITunes so one can select judiciously. Partridge, the main figure in the apparently now-defunct XTC, has issued eight volumes of outtakes and home recordings (9 if you buy the entire package & get a bonus CD), many of which are either casual maunderings or demos of songs that sound better in the XTC released catalog. But if you use the 30-second sample feature on ITunes plus the customer reviews on ITunes and Amazon, you can figure out which ones are worth having.
One way of describing the good songs (and I gleaned 90-100 very good minutes out of the 8 Fuzzy Warbles volumes) is that it sounds like what Paul McCartney might have been doing over the last decade if he had kept his talent and not become so self-conscious and pompously silly.
One way of describing the good songs (and I gleaned 90-100 very good minutes out of the 8 Fuzzy Warbles volumes) is that it sounds like what Paul McCartney might have been doing over the last decade if he had kept his talent and not become so self-conscious and pompously silly.
Thursday, March 01, 2007
New article posted
I have posted another article on SSRN, entitled Why Worldwide Welfare as a Normative Standard in U.S. Tax Policy? I actually wrote this article last August, and it will be appearing soon in the Tax Law Review, but I didn't realize until a friend pointed this out the other day that I hadn't posted it.
Monday, February 12, 2007
Fool me twice
It has been truly sickening and horrifying to watch the rollout of the Bush Administration's apparently planned war against Iran. You literally couldn't do more than these guys have to undermine their credibility by making such a reckless and false case for war in Iraq, followed by such stunning incompetence in the execution of the war. And you couldn't have more clearly demonstrated to the press that they should not simply be court stenographers, repeating what they're told as if it had any claim on being believed. Yet it is all happening again, with vague, undocumented, and less than credible assertions getting front page play all over the place.
Isn't it a little strange that, with the U.S. troops predominantly fighting Sunnis, the Bush Administration is blaming the Iranians? I'm not convinced Bush knows that the Iranians actually support the Shiites in Iraq, who control the government there and actually are fighting against the Sunnis, but you'd think others, including the press, would keep this point more clearly in mind.
I suspect that, if the Administration wanted to make a case for war against Saudi Arabia, it could come up with something fifty times stronger than what they are throwing at the Iranians, given the Saudis' position in the Iraqi civil war and where we stand in the middle of it. How many times have American troops been attacked with Saudi-supplied weapons, which of course need not have come directly from the Saudi government?
The nightmare that happens twice can be powerful artistically - think Hitchcock's Vertigo - but it is nauseating to live through.
UPDATE: As detailed here, Michael Gordon, the New York Times "reporter" who wrote Saturday's breathless, unsourced, and undocumented front-page story, both (a) was Judy Miller's co-author on some of the most egregiously false stories from the Iraq war run-up, and (b) is an avowed public supporter of the "surge."
Isn't it a little strange that, with the U.S. troops predominantly fighting Sunnis, the Bush Administration is blaming the Iranians? I'm not convinced Bush knows that the Iranians actually support the Shiites in Iraq, who control the government there and actually are fighting against the Sunnis, but you'd think others, including the press, would keep this point more clearly in mind.
I suspect that, if the Administration wanted to make a case for war against Saudi Arabia, it could come up with something fifty times stronger than what they are throwing at the Iranians, given the Saudis' position in the Iraqi civil war and where we stand in the middle of it. How many times have American troops been attacked with Saudi-supplied weapons, which of course need not have come directly from the Saudi government?
The nightmare that happens twice can be powerful artistically - think Hitchcock's Vertigo - but it is nauseating to live through.
UPDATE: As detailed here, Michael Gordon, the New York Times "reporter" who wrote Saturday's breathless, unsourced, and undocumented front-page story, both (a) was Judy Miller's co-author on some of the most egregiously false stories from the Iraq war run-up, and (b) is an avowed public supporter of the "surge."
Sunday, February 11, 2007
New and old music
It's nice, and even downright encouraging, to see a pleasant little indie band like the Shins in the Billboard Top Ten - # 8 this week, after being # 2 last week. I like the album and have played it a number of times, although it seems to shut the door on the thought that the Shins might actually make it to the top ranks artistically. Hard to see why it took them so long (about the same time between this album & the previous one as between Sergeant Pepper and With the Beatles). But still, albums I'd actually listen to don't often land so high on the charts. Leaving aside Dylan's latest, which though tame is a tribute not just to his 1960s career but to the fact that Love & Theft (released in 2001) was so good.
Other recent listens show my vintage a bit more, I guess. I had never gotten a CD of the Clash's first album, although I had a tape for years & recall walking around the Bronx with my brother back in the day so he could find an import copy (this being before the US release). Still great. Stevie Wonder's Innervisions, another 1970s album I'd never gotten as a CD, is also pretty good if a bit more dated. The Velvet Underground Live 1993 is disappointingly tame. It's certainly odd to hear these guys strike up, say, Venus in Furs & hear the crowd cheering as if it had been some Top Ten hit of their youth instead of selling 2,000 copies or whatever. I decided to try the 1993 live album because the Velvets' three live double albums from 1969-70 (Quine, Max's, 1969) are all so great, but in those days they actually owned the songs rather than being a covers/revival band.
Other recent listens show my vintage a bit more, I guess. I had never gotten a CD of the Clash's first album, although I had a tape for years & recall walking around the Bronx with my brother back in the day so he could find an import copy (this being before the US release). Still great. Stevie Wonder's Innervisions, another 1970s album I'd never gotten as a CD, is also pretty good if a bit more dated. The Velvet Underground Live 1993 is disappointingly tame. It's certainly odd to hear these guys strike up, say, Venus in Furs & hear the crowd cheering as if it had been some Top Ten hit of their youth instead of selling 2,000 copies or whatever. I decided to try the 1993 live album because the Velvets' three live double albums from 1969-70 (Quine, Max's, 1969) are all so great, but in those days they actually owned the songs rather than being a covers/revival band.
Law reviews vs. economics journals
One thing economists are always amazed about, when they talk to law professors, is the way that law review publication is handled. Leaving aside the special-topic faculty-edited journals (e.g., Tax Law Review at NYU, Journal of Legal Studies at the U of Chicago), the law reviews are of course student-edited. More specifically, by second-years who have newly been selected to editorial positions. Important decisions, in terms of junior law profs' careers, what gets read, who has the buzz, etc., then end up being made by these individuals, who, with no criticism intended, are not very far along yet in terms of the background needed to recognize serious, good, or important work.
Lucky for me, I've almost completely stayed out of the law reviews' way for almost a decade, what with books and invited pieces. But at the end of this month, when the new boards have been installed, I'm planning to submit "Beyond the Pro-Consumption Tax Consensus," significantly revised for greater clarity and readability since I posted it on SSRN (and linked it here) about a month ago. I actually do feel that this is an important article in the tax policy lit, and also a good one. We will see if this view ends up being shared by the people who get to decide.
Knowing that you have law review readers making publication decisions can have bad effects. It can simply be boring to have to go through the ABC's of ideas that your main target audience will already know about. But okay, it's actually a good discipline, up to a point, to force yourself to communicate more broadly. The problem is that it creates over-long detours. Sometimes it means you can't make an interesting & significant side-point since it would take 5 pages to set the stage for it. Worse is the incentive to have to sell articles' conclusions as extra-significant, and to tart them up in stupid ways so people who don't know the field that well will think they should publish it. "This is the first article to show that 1 + 1 = 2, a point that will transform the law and economics of arithmetic." One strategy I've heard about is putting these claims in the version you send out, then taking it out before publication so that your peers won't laugh at you.
Another bad incentive, the man bites dog scenario, isn't limited to law reviews. Perhaps it's even more true for professionally edited economics journals. If you can devise a study showing that 1 + 1 actually equals 3, you're in clover. The moment you get that finding from your regressions, but only if you get that result, you know you have a publishable paper. (Econ journals won't publish a paper confirming that 1 + 1 = 2.) Luckily, most reputable empirical economists are honorable, plus they do have to worry about reviewers asking for back up data runs.
Rare instance of thinking that the law reviews sometimes aren't as bad came from last Thursday's Tax Policy Colloquium at NYU, where Dhammika Dharmapala presented a paper (co-authored with Mihir Desai) finding that well-managed firms get more of a boost in stock price from tax savings than do poorly-managed firms, suggesting the possibility that the market expects the managers in poorly managed firms to loot or dissipate more of the tax savings. In some ways, the theoretical story wasn't that strong (since the effect would depend, not on total looting or waste, but on extra marginal looting or waste when extra tax savings emerge). Also, one could criticize the methodologies used for two key empirical components of the analysis. First, they tried to identify tax planning via gaps between tax and book income. But deliberate and systematic gaps between the two can reflect either tax planning or earnings management. It was unclear that their methodology for identifying the latter could do the job well enough. (Which is not to say that the authors overlooked a better way of doing it - the point is simply that they're very hard to distinguish). Second, the paper's proxy for well-managed firms, which was higher-than-average ownership by institutional investors, was theoretically questionable since it's unclear how much these investors actually improve governance. This device also causes big endogeneity problems (i.e., we might be picking up some aspect of how the institutional investors pick firms or directly influence stock prices).
In the paper as it stands, Dharmapala & Desai mention a robustness check for their governance finding, which is that the results are the same if one uses a governance measure relating to institutional mechanisms for managerial entrenchment. This, in general, is the really good thing about their paper - questionable though the results seem since they are so distantly and indirectly related to the underlying things of interest, the results are not only statistically significant but apparently quite robust to alternative specifications. So something has to lie behind their findings, and although we spent much of Thursday at the colloquium spinning alternative stories that would explain the data, in the end they really seem to have something.
But back to the law reviews versus econ journals. The authors may actually agree with us about the better way to test for well-managed firms, via the entrenchment measures that don't give rise to comparably serious endogeneity problems. But the reviewers at the journal that will likely be publishing the paper made them switch.
Not a problem one ordinarily has with student law review editors, with whom it's often more a matter of negotiating over whether you need a footnote for the claim made in passing that 1 + 1 = 2. So score one for the law review process.
Lucky for me, I've almost completely stayed out of the law reviews' way for almost a decade, what with books and invited pieces. But at the end of this month, when the new boards have been installed, I'm planning to submit "Beyond the Pro-Consumption Tax Consensus," significantly revised for greater clarity and readability since I posted it on SSRN (and linked it here) about a month ago. I actually do feel that this is an important article in the tax policy lit, and also a good one. We will see if this view ends up being shared by the people who get to decide.
Knowing that you have law review readers making publication decisions can have bad effects. It can simply be boring to have to go through the ABC's of ideas that your main target audience will already know about. But okay, it's actually a good discipline, up to a point, to force yourself to communicate more broadly. The problem is that it creates over-long detours. Sometimes it means you can't make an interesting & significant side-point since it would take 5 pages to set the stage for it. Worse is the incentive to have to sell articles' conclusions as extra-significant, and to tart them up in stupid ways so people who don't know the field that well will think they should publish it. "This is the first article to show that 1 + 1 = 2, a point that will transform the law and economics of arithmetic." One strategy I've heard about is putting these claims in the version you send out, then taking it out before publication so that your peers won't laugh at you.
Another bad incentive, the man bites dog scenario, isn't limited to law reviews. Perhaps it's even more true for professionally edited economics journals. If you can devise a study showing that 1 + 1 actually equals 3, you're in clover. The moment you get that finding from your regressions, but only if you get that result, you know you have a publishable paper. (Econ journals won't publish a paper confirming that 1 + 1 = 2.) Luckily, most reputable empirical economists are honorable, plus they do have to worry about reviewers asking for back up data runs.
Rare instance of thinking that the law reviews sometimes aren't as bad came from last Thursday's Tax Policy Colloquium at NYU, where Dhammika Dharmapala presented a paper (co-authored with Mihir Desai) finding that well-managed firms get more of a boost in stock price from tax savings than do poorly-managed firms, suggesting the possibility that the market expects the managers in poorly managed firms to loot or dissipate more of the tax savings. In some ways, the theoretical story wasn't that strong (since the effect would depend, not on total looting or waste, but on extra marginal looting or waste when extra tax savings emerge). Also, one could criticize the methodologies used for two key empirical components of the analysis. First, they tried to identify tax planning via gaps between tax and book income. But deliberate and systematic gaps between the two can reflect either tax planning or earnings management. It was unclear that their methodology for identifying the latter could do the job well enough. (Which is not to say that the authors overlooked a better way of doing it - the point is simply that they're very hard to distinguish). Second, the paper's proxy for well-managed firms, which was higher-than-average ownership by institutional investors, was theoretically questionable since it's unclear how much these investors actually improve governance. This device also causes big endogeneity problems (i.e., we might be picking up some aspect of how the institutional investors pick firms or directly influence stock prices).
In the paper as it stands, Dharmapala & Desai mention a robustness check for their governance finding, which is that the results are the same if one uses a governance measure relating to institutional mechanisms for managerial entrenchment. This, in general, is the really good thing about their paper - questionable though the results seem since they are so distantly and indirectly related to the underlying things of interest, the results are not only statistically significant but apparently quite robust to alternative specifications. So something has to lie behind their findings, and although we spent much of Thursday at the colloquium spinning alternative stories that would explain the data, in the end they really seem to have something.
But back to the law reviews versus econ journals. The authors may actually agree with us about the better way to test for well-managed firms, via the entrenchment measures that don't give rise to comparably serious endogeneity problems. But the reviewers at the journal that will likely be publishing the paper made them switch.
Not a problem one ordinarily has with student law review editors, with whom it's often more a matter of negotiating over whether you need a footnote for the claim made in passing that 1 + 1 = 2. So score one for the law review process.
Tuesday, January 23, 2007
The Urban Institute on Bush's healthcare plan
I would pretty much endorse the entire statement here, from the Brookings-Urban Tax Policy Center (easily available via google search). Much closer to my views than, say, Krugman's denunciation of the plan.
Anyway, herewith their summary statement about it (from the abstract for a longer discussion):
In his State of the Union address, President Bush will propose to replace most current tax exclusions and deductions for health insurance premiums and out-of-pocket costs with a new $15,000 standard deduction ($7,500 for single people) in the federal income tax-as well as an exemption from payroll taxes-for all taxpayers who obtain qualifying health insurance. The plan would eliminate the current bias in favor of health insurance obtained through employers, provide tax incentives for the purchase of health insurance in the private market, and reduce current tax incentives to over-spend on healthcare services. As designed, the proposal would be revenue neutral over ten years, after which it would generate a growing stream of revenue.
The innovative plan is a major step toward improving the efficiency of the market for health insurance. By severing the link between work and insurance, it would offer everyone the same tax incentives to obtain insurance coverage and limit spending on health care. Whether it would succeed in meeting its objectives in a fair way is less clear.
The new tax incentives will help some individuals to gain coverage. But they could also lead employers, particularly those in small firms, to discontinue health plans for their workers, some of whom would end up without insurance. Furthermore, by relying on tax deductions, the plan would continue to provide the largest benefits to high-income taxpayers and offer little or no financial incentive for low-income people who most need help paying for insurance. The plan would encourage states to shift existing funds to subsidize insurance for people with low incomes and chronic health conditions, but those funds could well be too small to be effective.
Changes to the President's proposal could improve its chances of success:
* Replacing the deduction with a refundable credit or voucher would provide more assistance to low-income families, increasing coverage and improving progressivity.
* Requiring that qualifying insurance plans offer community-rated premiums would help to assure the availability of affordable coverage for people regardless of their health status.
* Providing additional funds for complementary programs like Medicaid and SCHIP would help to provide coverage for low-income families and children.
* Explicitly mandating individuals to purchase health insurance, in combination with adequate subsidies for those with low incomes, would increase coverage and reduce adverse selection.
* Eliminating tax subsidies for health savings accounts would remove a bias in favor of those accounts that would otherwise exist.
* Indexing the deduction to the health CPI or even the rate of change in overall health spending would maintain its value over time, albeit at the cost of lost revenue.
Despite its limitations, the President's plan marks an encouraging step in the right direction. With appropriate modifications, it could expand health insurance coverage and improve market efficiency.
[BACK TO ME]: All this being said, it's just pure silliness for anyone to pay much attention to Bush's proposals on any domestic matters - as if he actually cared about any of this stuff, or had the clout to do anything even if he did care. You can't play the sorts of shenanigans he has over the past 6 years and then say "guess what, I'm turning over a new leaf and you guys should start voluntarily doing what I say." BUT, his healthcare proposal may matter in the future as a not-insane Republican guidepost that could actually play a role in a genuine policymaking process. Bad proposals certainly, but one would hope not entirely bad ones as well, never actually die any more than Michael Myers does in the Halloween movies.
Anyway, herewith their summary statement about it (from the abstract for a longer discussion):
In his State of the Union address, President Bush will propose to replace most current tax exclusions and deductions for health insurance premiums and out-of-pocket costs with a new $15,000 standard deduction ($7,500 for single people) in the federal income tax-as well as an exemption from payroll taxes-for all taxpayers who obtain qualifying health insurance. The plan would eliminate the current bias in favor of health insurance obtained through employers, provide tax incentives for the purchase of health insurance in the private market, and reduce current tax incentives to over-spend on healthcare services. As designed, the proposal would be revenue neutral over ten years, after which it would generate a growing stream of revenue.
The innovative plan is a major step toward improving the efficiency of the market for health insurance. By severing the link between work and insurance, it would offer everyone the same tax incentives to obtain insurance coverage and limit spending on health care. Whether it would succeed in meeting its objectives in a fair way is less clear.
The new tax incentives will help some individuals to gain coverage. But they could also lead employers, particularly those in small firms, to discontinue health plans for their workers, some of whom would end up without insurance. Furthermore, by relying on tax deductions, the plan would continue to provide the largest benefits to high-income taxpayers and offer little or no financial incentive for low-income people who most need help paying for insurance. The plan would encourage states to shift existing funds to subsidize insurance for people with low incomes and chronic health conditions, but those funds could well be too small to be effective.
Changes to the President's proposal could improve its chances of success:
* Replacing the deduction with a refundable credit or voucher would provide more assistance to low-income families, increasing coverage and improving progressivity.
* Requiring that qualifying insurance plans offer community-rated premiums would help to assure the availability of affordable coverage for people regardless of their health status.
* Providing additional funds for complementary programs like Medicaid and SCHIP would help to provide coverage for low-income families and children.
* Explicitly mandating individuals to purchase health insurance, in combination with adequate subsidies for those with low incomes, would increase coverage and reduce adverse selection.
* Eliminating tax subsidies for health savings accounts would remove a bias in favor of those accounts that would otherwise exist.
* Indexing the deduction to the health CPI or even the rate of change in overall health spending would maintain its value over time, albeit at the cost of lost revenue.
Despite its limitations, the President's plan marks an encouraging step in the right direction. With appropriate modifications, it could expand health insurance coverage and improve market efficiency.
[BACK TO ME]: All this being said, it's just pure silliness for anyone to pay much attention to Bush's proposals on any domestic matters - as if he actually cared about any of this stuff, or had the clout to do anything even if he did care. You can't play the sorts of shenanigans he has over the past 6 years and then say "guess what, I'm turning over a new leaf and you guys should start voluntarily doing what I say." BUT, his healthcare proposal may matter in the future as a not-insane Republican guidepost that could actually play a role in a genuine policymaking process. Bad proposals certainly, but one would hope not entirely bad ones as well, never actually die any more than Michael Myers does in the Halloween movies.
Wednesday, January 17, 2007
Cost of the Iraq war
The New York Times has an article today based on the cost of the Iraq war, which to this point stands at $1.2 trillion. The article notes that people have a hard time really grasping big numbers, so it's difficult to evaluate what this actually means. But one can think of it in terms of alternative uses for the same funds.
For example, it would cost less than half as much to engage for ten years in: "an unprecedented public health campaign — a doubling of cancer research funding, treatment for every American whose diabetes or heart disease is now going unmanaged and a global immunization campaign to save millions of children’s lives."
Good point, but here's another way to make the dollar cost easy to grasp. It's a lot crasser, but perhaps all the more salient for that. Since the U.S. population is about 300 million and we are going to pay for it eventually (I call this the no-free-lunch principle), Bush's going to war is fiscally equivalent to his having charged each U.S. citizen an average of $4,000.
That's $16,000 for a four-person household such as mine, ignoring that we'll probably pay more than our per capita share due to being above the mean in affluence.
Glad to know that I have personally, in effect, paid more than $16,000 for all this.
For example, it would cost less than half as much to engage for ten years in: "an unprecedented public health campaign — a doubling of cancer research funding, treatment for every American whose diabetes or heart disease is now going unmanaged and a global immunization campaign to save millions of children’s lives."
Good point, but here's another way to make the dollar cost easy to grasp. It's a lot crasser, but perhaps all the more salient for that. Since the U.S. population is about 300 million and we are going to pay for it eventually (I call this the no-free-lunch principle), Bush's going to war is fiscally equivalent to his having charged each U.S. citizen an average of $4,000.
That's $16,000 for a four-person household such as mine, ignoring that we'll probably pay more than our per capita share due to being above the mean in affluence.
Glad to know that I have personally, in effect, paid more than $16,000 for all this.
Tuesday, January 16, 2007
A review of my (unpublished) novel
Hope I am not violating any confidences here, or being unduly self-serving. (The barest bit self-serving I see no need to apologize for.) Someone I know who read my unpublished novel "Getting It" sent me these thoughts, which I believe the writer does not plan to use and that I can pass on so long as he/she is not identified. Anyway, here goes:
Who’s not sick and tired of short stories, novels, sitcoms, and movies with or about lawyers? And then, here comes Daniel Shaviro with a fresh, amazing, and so literary novel entitled “Getting It.” I must say, reading it during the long MLK weekend – when we probably are not supposed to be so happy about the world - it really made my weekend!
First of all, the writing is flawless, and I suspect, in my total ignorance of his previous literary sins, that Shaviro made his way to such a skill through many other works that I don’t know anything about. [Not so, actually, unless you count books and articles on my law and policy interests. – DS]
OK, a novel that takes place in the environment of a leading law firm, with a lot of “legal lingo." However, Daniel makes it very easy for the lay person to understand even the most “professional” implications. Cleverly enough, he places his action in 1984, before Shepard’s was online—which gives him the opportunity to explain the reader what “Shepardizing a case” is. He does this in a very natural way, without creating too many asides from the plot, here and with other legal or legal research matters, explaining terminology and approaches as needed. Therefore the novel appeals to a variety of readers. As far as I was concerned, I couldn’t let it go, once I started to be captivated by the plot. Three associates (Doberman, Stellworth, and Porter) are running for the only open spot to make partner, and have to prove that they deserve it to one of the senior partners (Crossley). All this would be done through ways and means determined by their own qualities and shortcomings, by their distinctive personalities. Shaviro plays a kind of mathematical/geometrical game here. He describes his characters in a parallel way (e.g., the way each is perceived by the law firm secretaries; their arts interests and family values, etc), but then he cuts it short with an amazing couple of sentences: “Crossley hated everyone there, including himself. Doberman and Stellworth each hated everyone except himself. Porter hated himself.”
Well, this happens on page 11, and then there are more than 200 pages to prove it. And, yes, it’s true! Intrigues, hide-and-seek, manipulation, some remarkable women figures (Lyla, Gidget, Janet) -- everything develops at a very balanced pace, in a novel that goes beyond the inner circle of the players, attempting to say something more general about society, rotten characters, ambitions, but also about humble people (who may be full of potential, but not aggressive and ruthless, such as Porter) . The tone is sympathetically-cynical, in an original manner, reminding sometimes the best of Philip Roth or Thomas Wolfe. The sense of humor is dry, rather British, and involves references that range from the classics to popular culture. In the end, the most complex character proves to be Doberman, a unique texture of intelligence, ambition, ruthlessness, lack of feelings, and selfishness. He is the true hero of our times! Don’t forget, though, all this happened more than 20 years ago.
But, then, what is 20 years in History?
This novel that does not show the typical hesitations or uncertainties of a first-timer. The emotional tension is nerve-racking, the psychological insight deep and convincing. Shaviro masters both the colloquial dialogue and the parallel storytelling, which in the end is unified by the verdict. “As the ancient Greeks had the Mysteries of Eleusis, so Asby & Cinders had its annual partnership meeting.” [Plot details omitted - DS.]
No moral, whatsoever, but maybe a hint that manipulation, bad faith, selfishness, and egomania do not always pay in the end.
Who’s not sick and tired of short stories, novels, sitcoms, and movies with or about lawyers? And then, here comes Daniel Shaviro with a fresh, amazing, and so literary novel entitled “Getting It.” I must say, reading it during the long MLK weekend – when we probably are not supposed to be so happy about the world - it really made my weekend!
First of all, the writing is flawless, and I suspect, in my total ignorance of his previous literary sins, that Shaviro made his way to such a skill through many other works that I don’t know anything about. [Not so, actually, unless you count books and articles on my law and policy interests. – DS]
OK, a novel that takes place in the environment of a leading law firm, with a lot of “legal lingo." However, Daniel makes it very easy for the lay person to understand even the most “professional” implications. Cleverly enough, he places his action in 1984, before Shepard’s was online—which gives him the opportunity to explain the reader what “Shepardizing a case” is. He does this in a very natural way, without creating too many asides from the plot, here and with other legal or legal research matters, explaining terminology and approaches as needed. Therefore the novel appeals to a variety of readers. As far as I was concerned, I couldn’t let it go, once I started to be captivated by the plot. Three associates (Doberman, Stellworth, and Porter) are running for the only open spot to make partner, and have to prove that they deserve it to one of the senior partners (Crossley). All this would be done through ways and means determined by their own qualities and shortcomings, by their distinctive personalities. Shaviro plays a kind of mathematical/geometrical game here. He describes his characters in a parallel way (e.g., the way each is perceived by the law firm secretaries; their arts interests and family values, etc), but then he cuts it short with an amazing couple of sentences: “Crossley hated everyone there, including himself. Doberman and Stellworth each hated everyone except himself. Porter hated himself.”
Well, this happens on page 11, and then there are more than 200 pages to prove it. And, yes, it’s true! Intrigues, hide-and-seek, manipulation, some remarkable women figures (Lyla, Gidget, Janet) -- everything develops at a very balanced pace, in a novel that goes beyond the inner circle of the players, attempting to say something more general about society, rotten characters, ambitions, but also about humble people (who may be full of potential, but not aggressive and ruthless, such as Porter) . The tone is sympathetically-cynical, in an original manner, reminding sometimes the best of Philip Roth or Thomas Wolfe. The sense of humor is dry, rather British, and involves references that range from the classics to popular culture. In the end, the most complex character proves to be Doberman, a unique texture of intelligence, ambition, ruthlessness, lack of feelings, and selfishness. He is the true hero of our times! Don’t forget, though, all this happened more than 20 years ago.
But, then, what is 20 years in History?
This novel that does not show the typical hesitations or uncertainties of a first-timer. The emotional tension is nerve-racking, the psychological insight deep and convincing. Shaviro masters both the colloquial dialogue and the parallel storytelling, which in the end is unified by the verdict. “As the ancient Greeks had the Mysteries of Eleusis, so Asby & Cinders had its annual partnership meeting.” [Plot details omitted - DS.]
No moral, whatsoever, but maybe a hint that manipulation, bad faith, selfishness, and egomania do not always pay in the end.
Tuesday, January 09, 2007
My favorite quote from today's NY Times
From the article about the PR roll-out of Bush's surge, AKA escalation, AKA the New Way Forward:
“It’s not just one speech,” the official said. “This is so complicated you couldn’t do it all in one speech. So there will be an ongoing and sustained effort to educate the American people.”
Wow. I'm really going to have to work hard to understand everything the Prez is doing. Hope he stays patient with us all. Maybe I should stay in tomorrow night, because if I miss The Speech, I'll be behind an' everything.
UPDATE: My wife says no problem; we can just ask for Surge Help on Thursday morning if we need it.
“It’s not just one speech,” the official said. “This is so complicated you couldn’t do it all in one speech. So there will be an ongoing and sustained effort to educate the American people.”
Wow. I'm really going to have to work hard to understand everything the Prez is doing. Hope he stays patient with us all. Maybe I should stay in tomorrow night, because if I miss The Speech, I'll be behind an' everything.
UPDATE: My wife says no problem; we can just ask for Surge Help on Thursday morning if we need it.
Sunday, January 07, 2007
Two new articles posted at SSRN
I have posted two new articles at the SSRN download site. The first is a substantially revised version of a paper I posted some months back that, at the time, was mostly about income averaging. This time, I'm hunting somewhat bigger game. Title, link, and abstract are as follows:
Beyond the Pro-Consumption Tax Consensus.
In the last two decades, the dominant norm in fundamental tax reform has shifted from income taxation to consumption taxation, among academics no less than policymakers. Few have recognized, however, that the case for a consumption tax overlaps substantially with that for lifetime income averaging, an idea that has drawn considerably less support. Likewise, few have recognized that the grounds for unease about the case for income averaging (as an ideal system, leaving aside administrative concerns) apply equally to the case for consumption taxation.
Within a welfare economics framework, the case for both norms is close to irrefutable if one makes three key assumptions: that markets are complete, that individuals engage in consistent rational choice given their preferences, and that the only relevant information about taxpayer "ability" is that provided by an undifferentiated measure of lifetime earnings. Where these assumptions fail to hold, (1) allowing income averaging between periods may be undesirable, (2) the case for a consumption tax becomes less clearcut, and (3) as revealed by the "new dynamic public finance" literature in economics, there may actually be a strong rationale for taxing saving.
The second article is a piece I wrote for a conference at tax and corporate governance that I attended in Munich last month. Title, link, and abstract are as follows:
Disclosure and Civil Penalty Rules in the U.S. Legal Response to Corporate Tax Shelters.
This paper, written for a European conference on tax and corporate governance, evaluates two aspects of the U.S. legal response to corporate tax shelters: the civil penalty rules and the disclosure rules. It argues that, while the disclosure rules do not impose undue burdens, their usefulness to the IRS is limited by the difficulty of steering between the twin dangers of under-disclosure (permitting taxpayers to conceal close cousins of reportable transactions) and over-disclosure (creating information overload for the IRS). Thus, expanded reporting requirements with respect to book-tax differences in income accounting are likely to prove more useful to the IRS.
With respect to penalties, the paper argues that the rules' main flaw is excessive reliance on taxpayer good faith, which induces shopping around for "penalty shield" opinions from tax lawyers. To address this problem and create a better set of incentives in the "audit lottery," the paper argues for no-fault civil penalties, with penalty insurance serving to address any concerns about the proportionality of sanctions imposed on risk-averse taxpayers who may have been acting in good faith.
Beyond the Pro-Consumption Tax Consensus.
In the last two decades, the dominant norm in fundamental tax reform has shifted from income taxation to consumption taxation, among academics no less than policymakers. Few have recognized, however, that the case for a consumption tax overlaps substantially with that for lifetime income averaging, an idea that has drawn considerably less support. Likewise, few have recognized that the grounds for unease about the case for income averaging (as an ideal system, leaving aside administrative concerns) apply equally to the case for consumption taxation.
Within a welfare economics framework, the case for both norms is close to irrefutable if one makes three key assumptions: that markets are complete, that individuals engage in consistent rational choice given their preferences, and that the only relevant information about taxpayer "ability" is that provided by an undifferentiated measure of lifetime earnings. Where these assumptions fail to hold, (1) allowing income averaging between periods may be undesirable, (2) the case for a consumption tax becomes less clearcut, and (3) as revealed by the "new dynamic public finance" literature in economics, there may actually be a strong rationale for taxing saving.
The second article is a piece I wrote for a conference at tax and corporate governance that I attended in Munich last month. Title, link, and abstract are as follows:
Disclosure and Civil Penalty Rules in the U.S. Legal Response to Corporate Tax Shelters.
This paper, written for a European conference on tax and corporate governance, evaluates two aspects of the U.S. legal response to corporate tax shelters: the civil penalty rules and the disclosure rules. It argues that, while the disclosure rules do not impose undue burdens, their usefulness to the IRS is limited by the difficulty of steering between the twin dangers of under-disclosure (permitting taxpayers to conceal close cousins of reportable transactions) and over-disclosure (creating information overload for the IRS). Thus, expanded reporting requirements with respect to book-tax differences in income accounting are likely to prove more useful to the IRS.
With respect to penalties, the paper argues that the rules' main flaw is excessive reliance on taxpayer good faith, which induces shopping around for "penalty shield" opinions from tax lawyers. To address this problem and create a better set of incentives in the "audit lottery," the paper argues for no-fault civil penalties, with penalty insurance serving to address any concerns about the proportionality of sanctions imposed on risk-averse taxpayers who may have been acting in good faith.
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