Things I should have known

I was pro-EU for many years, reflecting my dislike of parochial nationalisms, and my analogizing from my belief that, in the U.S., the optimal balance as between the national government and the state governments should be tilted much more towards the national side of the scale than it would be we if we were like Europe.

But U.S. federal government policy is run by a nationally elected president plus a national legislature where all states are represented, not to mention that we're all in the same boat economically even when we don't realize it.  E.g., I was reading the other day about how the S&L crisis was essentially a rich coastal states' bailout of Texas, only no one even thought of it that way, as it just happened automatically.

When you lack both democratically elected (and adequately empowered) federal-level political institutions and a federal-level economic union that operates automatically, one thing you can end up with (as anyone versed in American history can tell you) is the Articles of Confederation. But a very different thing that you can end up with - the EU today - is in its own way just as bad.

Herewith Ben Bernanke, not generally known as a fire-breathing lefty:

"In late 2009 and early 2010 unemployment rates in Europe and the United States were roughly equal, at about 10 percent of the labor force. Today the unemployment rate in the United States is 5.3 percent, while the unemployment rate in the euro zone is more than 11 percent. Not incidentally, a very large share of euro area unemployment consists of younger workers; the inability of these workers to gain skills and work experience will adversely affect Europe's longer-term growth potential....
"Currently, the unemployment rate in the euro zone ex Germany exceeds 13 percent, compared to less than 5 percent in Germany. Other economic data show similar discrepancies within the euro zone between the "north" (including Germany) and the "south." ....
"Germany has effectively chosen to rely on foreign rather than domestic demand to ensure full employment at home, as shown in its extraordinarily large and persistent trade surplus, currently almost 7.5 percent of the country's GDP. Within a fixed-exchange-rate system like the euro currency area, such persistent imbalances are unhealthy, reducing demand and growth in trading partners and generating potentially destabilizing financial flows....
"Germany could help restore balance within the euro zone and raise the currency area's overall pace of growth by increasing spending at home, through measures like increasing investment in infrastructure, pushing for wage increases for German workers (to raise domestic consumption), and engaging in structural reforms to encourage more domestic demand."

But of course they won't.  It's easier just to let everyone else suffer, while also feeling very noble and put-upon.

Bernanke doesn't address the political institutional side, but you can bet that things would be different if an EU-level prime minister and legislature were setting policy, and if the EU was automatically funding social welfare programs in Greece and southern Italy, like the US national government does in Mississippi and South Carolina.

Many U.S. tax people (not just me) have tended to be pro-EU, in part from the U.S. analogy in which we think that limiting internal tax competition to the relatively small state and local tax systems, which themselves face federal judicial review under the dormant commerce clause, gets it more or less right, all things considered. But we have often not been huge fans of the jurisprudence emanating from the European Court of Justice, which at times creates the worst of both worlds by handcuffing national governments' reasonable responses to aggressive tax planning, while lacking the power to impose federal-level uniformity. I don't blame this on the people at the ECJ - it's structural and inherent to the institutional set-up, rather than being particularly their fault.

What I hadn't understood until recently is the similarity between the structural flaws that tax people have seen all too clearly for years in the ECJ model and what we've seen at the macro level between Germany and the European "south" (not just Greece). Without federal-level democratic institutions, legitimacy, or true economic and political integration, you combine the evils of centralized decison-making that ignores reasonable local needs, with the evils of not being centralized enough to advance the common good in an integrated way.  One would have thought you could only one get set of evils at a time, but the EU has advanced our intellectual understanding of federalism by showing that, with a sufficiently perverse institutional design and ruling ideology, you can simultaneously get both.

Obviously, the ECJ looks great compared to these other jokers.

A broader lesson is that, even if greater EU centralization would potentially be good, it does not follow that decentralizing wouldn't also be good, relative to where they are now.  In my view, greatly decentralizing (e.g., dismantling the Euro and reducing ECJ oversight) would be a sizable improvement over the current state of play, even if it would be better still to centralize more, and in the end truly to become a single nation (subject, of course, to people actually wanting to do that).

Jury duty

For the last three days, I've spent most of my time at a New York State criminal courthouse, where I was called for jury duty. Lots of sitting around, but, while sent to a courtroom where they were picking jurors, I never got selected even for voir dire, much less actual jury service.

I was actually selected once for a civil jury - despite my law prof background and my having (long, long ago) taught Evidence and written a couple of articles about statistical probability issues.  But that civil trial settled before the opening statements. Just as well, as I was merely an alternate, so I probably wouldn't have gotten to participate in the jury deliberations.

It's actually quite interesting to see the process from the quasi-inside.  One clear point that I've noticed on more than one occasion is how earnest, or at least apparently earnest (it's hard to know) people are about expressing their views and feelings accurately during the voir dire.  But at the same time a part of the process is designed to overawe them into doing as they are told, in terms of following the law and the judge's instructions.

It would definitely be interesting to serve on a jury sometime, but I was glad not to be chosen this time, for personal reasons relating to set-in-stone vacation plans.

Another article draft that I may post soon

I've recently completed another article draft, one more of the things that I've committed to do before getting back to work on my literature book.  This one was commissioned for an edited volume that is being put together by a friend at another leading law school, on issues related to timing and legislation. My book from 15 years ago, When Rules Change, is well within the topic range of the new volume, but as it happened I didn't want to return to the issues I discussed there.

While the editors have a book contract, I'm not 100% sure this is public information yet, so I will hold off on giving more details.

The piece I've written is a short one by legal standards - under 10,000 words, as indeed was specified by the invite.

Article title: "The More It Changes, The More It Stays the Same? Automatic Indexing and Current Policy."

Opening sentence: "The ancient Greek philosopher Heraclitus famously remarked that you cannot step into the same river twice, to which a disciple supposedly replied that you cannot do so even once."

My topic is automatic adjustment rules in the income tax and Social Security.  E.g., apart from inflation indexing in both, I discuss such automatic indexing possibilities (or actualities) as:

--In the income tax, indexing the rate brackets to prevent real bracket creep, or to respond to vertical distributional changes via the "Rising Tide Tax System," or to provide automatic tax smoothing when a measure of the fiscal imbalance changes.

--In Social Security, disputes over how to measure inflation for indexing purposes, wage indexing in actual Social Security, and proposals to index the normal retirement age for life expectancy changes.

The aim here is conceptual, rather than to endorse specific proposals.  E.g., I discuss indexing's general appropriateness (I consider it just fine if one happens to agree with the policy it advances), the difficulty of defining current policy if that is what one is trying to maintain, and the links between particular proposals that might be debated on seemingly technical grounds and separately conceived policy preferences that might lead one either to support or oppose them.

Aging rock nerds debate "want versus need"

Recently, at an informal academic seminar, a colleague quoted the famous Rolling Stones line to the effect that, while "you can't always get what you want, if you try sometimes you just might find you get what you need."

I couldn't resist responding after the session with Dylan's take on the Want Versus Need issue: "Your debutante knows what you need, but I know what you want."

He struck back with earlier Dylan: "Go 'way from my window, go at your own chosen speed, I'm not the one you want, babe, I'm not the one you need."  He called this classic regulatory command and control - apart from its leaving open the speed choice - since Dylan purports to know both what the other person wants and what she needs.

I responded that negative externalities and asymmetric information provide the classic rationales for regulation.  Here, not only does Dylan evidently find her presence at his window irksome, but he also claims to know more about himself than she does (hence "I'm not the one you want / need"). Both claims are plausible.

Nonetheless, my colleague replied that this is just the usual public interest rhetoric disguising private rent-seeking.  Perhaps he has a point, given that, while the Dylan of mid-60s love-hate songs is frequently compelling, he does not, thank goodness, come off as public-spirited like the earlier folksinger.  ("Ah, but I was so much older then, I'm younger than that now.")

Speaking metaphorically, of course

Here's my EU debt plan: reverse Germany's 1953 debt forgiveness on the ground that they violated the implicit terms by not "paying it forward," call it an equity interest that's deemed to have grown since 1953 at the rate of the German stock market, and then propose a summit meeting covering both the German and the Greek debt.

Revised article posted

I have posted on SSRN a revised version of my article "The Crossroads Versus the Seesaw: Getting a 'Fix' on Recent International Tax Policy Developments."  It's available here.

The changes reflect helpful comments that I received late last month at the 9th annual symposium of the Oxford University Centre for Business Taxation.  In particular, the introduction may now be clearer, In addition, I briefly discuss recent U.S. "patent box" proposals (see pages 5-6, 40-42, and 50), and I have added some needed nuance to my "tagging" discussion of paying low foreign taxes (see page 21).  Otherwise, it's mostly the same.

The Greek referendum

While I have far more sympathy for the Greeks than the Germans in their current standoff, this Vox post helps make the point that it's quite hard to say which referendum outcome would lead to better state of affairs down the road.

If the EU's future will be just like its present, and if the Greeks would be able to manage an independent budget and currency, then exiting the Euro (which a No vote would make more likely) strikes me as the significantly better choice, even though the next few years would be gruesome.

But on the other hand, if the EU were to evolve into a true fiscal state in which Germany would help out Greece the next time around, in the same way that boom areas in the U.S. help out bust areas via automatic fiscal policy instruments, and if a fully autonomous Greek state would have serious governance problems, the merits could lie in the other direction.

I am skeptical that EU internal governance will evolve the right way to make staying with the Euro a good choice for Greece, instead of just a recipe for endless austerity and disregard of their interests relative to those of more powerful countries.  But who really knows on either front.

Vacation reading

While traveling in the UK last week, the books that I got to read included Knausgaard Book 1, and a biography of Lewis Carroll / social history of the Alice books by Robert Douglas Fairhurst.

I liked, and more than that respected, the Knausgaard, but it wasn't a super-easy go when one wants to relax, and I'm not in an immediate rush for Book 2.

I am one of those people whose love of the Alice books (and The Hunting of the Snark) goes extremely deep. They are foundational for me, as they are for many others whom I have known. We used to be an enormous tribe. Indeed, for a sense of the books' cultural valence 50 years ago, consider that John Lennon and Grace Slick both wrote canonical 1960s rock songs that were rooted in them. But for some reason our numbers seem to have shrunk comparatively in recent decades. And for once it isn't the movies' fault - the 2010 version, although its wrong-headedness appalled me, can no more diminish it than did the Disney version 60 years ago.  (Cf. the Colin Firth Darcy, which really has knocked Pride and Prejudice out of its prior cultural orbit.)

Where the Alice books "came from" has always been a hard question. They are in a sense so radical, and the level of imagination, daring, creativity, and wit that they display is so extraordinary, that their fit with a pious, shy, stodgy, and in many ways reactionary Oxford don, with a distinctly creepy (whether or not one deems it actually pedophilic) interest in young children, seems inexplicable, even if also inevitable in the sense that no other sort of person could possibly have written them.

Just one small point, they feature a realistically portrayed 7 and then 7-1/2 year old girl - very sweet, but quite conventional, not to mention naive, sheltered, and snobbish - who also functions simultaneously (and, on the author's part, seemingly effortlessly) as (a) one of the great quest heroes in literature, (b) the books' sole spokesman and undiscouragable champion for the values of sanity, proportion, and common sense, and (c) the badly needed "straight man" (so to speak) for one outrageous high-wire performer after another.

Fairhurst's book is a thorough and fair-minded exploration of what's known or can still be learned about the man (Dodgson / Carroll), the work, and for that matter the subsequent life of the historical Alice. One of the interesting things it depicts is how the "Carroll" side lost ground to the "Dodgson" side as he got older. A second pertains to the interest in children that today would be universally (whether rightly or wrongly) viewed as aberrant and criminal. The book shows how more widely shared tropes of that era help to explain where Dodgson was coming from, allowing him to rationalize and perhaps experience it as nonsexual, in a way that would be impossible today. Even during Dodgson's lifetime, however, views of childhood were changing rapidly in a modern direction. By the time of his death in 1898, in just his mid-sixties, the world had wholly passed him by. Darwin he took in stride, but Freud would have been too much for him. Not so for the Alice books, however, which if anything gained force over time.

As has the The Hunting of the Snark, which I regard as not just great fun, but startlingly prophetic in an oddly gnomic way.  E.g., the map that is "a perfect and absolute blank" - "what I tell you three times is true" - "They threatened its life with a railway share, they charmed it with smiles and soap."

New paper posted on SSRN

I have just posted on SSRN my draft paper, Taxing Potential Community Members' Foreign Source Income, which I wrote for a conference on citizenship and taxation that will be held at the University of Michigan Law School on October 9 of this year.  The paper is available for download here.

The abstract goes as follows:

Recent years have witnessed rising debate, on both sides of the Atlantic, regarding how to define the category of individuals whom a given country classifies as domestic taxpayers, and who thus may be taxable on their foreign source income (FSI) even if they live abroad.  While the United States rules focus distinctively on citizenship, the broader issue is better viewed as pertaining to the taxation of “potential community members” (PCMs) – that is, all those who plausibly might be viewed as members of the home community.

This paper makes two main points regarding the taxation of PCMs on their FSI.  First, the issues turn in large part on drawing a distinction between “us” and “them” – that is, between people whom we classify as members of the home community, and thus whose welfare we care about, and those whom we classify as normatively irrelevant (or less relevant) outsiders.  While such a distinction is inevitable in a world with separate national governments, conventional tax policy and public economics tools shed little direct light on how one might operationalize it.

Second, for PCMs whom a given country classifies as domestic taxpayers, past debate has over-focused on issues of mitigating “double taxation” through exemption or foreign tax credits.  It should instead focus distinctly on the questions of (a) how heavily or lightly one should tax domestic taxpayers’ FSI in particular cases, and (b) how foreign taxes paid should affect domestic liability.  Refocusing the analysis not only helps to inform one’s understanding of the choice between the two standard tools, but also may suggest considering blended approaches that might avoid the worst features of each.

Back from Oxford

I've just returned from the UK, where last week I attended the 9th annual symposium at the Oxford University Centre for Business Taxation.  I gave a talk on my recently SSRN-posted paper, "The Crossroads Versus the Seesaw: Getting a 'Fix' on Recent International Tax Policy Developments."

I won't link to the paper, since I am planning to revise it, and would just as soon have prospective downloaders wait until I have posted the revision.  But the slides for my talk are available here.

After the conference was over, I enjoyed going to the Cotswolds for 3 days of hiking through the countryside.  The paths lead through woods, fields both with and without livestock, and scenic small towns.  Then I was in the charming city of Bath for a couple of days.

One highlight in Bath was getting to meet this individual, who was not actually trying to carry me away to a distant aerie for eating at his pleasure - rather, he is willing, under controlled circumstances, to accept bits of chicken from strangers.

Alex Rodriguez

When I go to the health club, which I do at least 5 times a week when my schedule permits, I like to listen to music while watching sports without sound on my TV screen. But I switch the channel if they're showing a Yankees win - although I am usually willing to see highlights of a Mets loss.

Today, I was vexed to find that all sports networks had basically gone to full-time, wall-to-wall A-Rod coverage in honor of his 3,000th hit, making all of them unwatchable for me because it was associated with a Yankees win. The Mets network was part of this as well - they appear to cover the Yankees almost coequally with the Mets (and they used to run lots of Jeter ads), whereas I have the impression that the Yankees network not only covers nothing but the Yankees, but verges on covering only Yankees wins - if they lost yesterday or it's the offseason, they show past Yankees wins.

Why am I really not particularly anti-A-Rod?  Well, it's true that he's an admitted cheater, but consider lots of other baseball and football superstars. He also appears not to be an enormously nice person, but again think about other superstars in all the major sports.  Being a jerk may both help one to become a great player, and then is encouraged by the treatment one gets from everyone.

Perhaps I like the fact that A-Rod is so NOT a "true Yankee."  First, in 2000, he wanted to come to the Mets.  But they were too stupid to want a 25 year old superstar, who had a realistic chance at that point to be the greatest player in baseball history, and who perfectly fit their needs. They preferred, not only to refuse even to negotiate with him, but also to insult him gratuitously.

Then he wanted to play for the Red Sox, but the players union wouldn't let him.  The deal would have required a modest salary giveback, which he was willing to accept, but the union, fearing the "precedent," preferred to make sure that only the Yankees would be interested.

Finally he went to the Yankees, where Jeter selfishly made him to switch to third base even though, at that time, A-Rod was a vastly superior defensive shortstop.  But Jeter didn't care about the team's welfare, as his own ego was evidently more important.  He of course has always gotten a free pass for this.  Glad though I was to see the Yankees weakening their defense (relative to what they could have done) for no good reason, I felt a bit bad for A-Rod about this, as he might otherwise have ranked either just with Honus Wagner, or else all alone, as clearly the greatest shortstop of all time.

Anyway, here's hoping that the Yankees lose the next game at which he reaches a milestone, if I am going to the health club the next day.

On the road again

I'm flying to the UK tomorrow for the 9th annual symposium of the Oxford University Centre for Business Taxation.  Next Tuesday, I'll be presenting this paper on international business taxation.  I'll post my slides when I get back to NYC the following week, or sooner if I can link to them via the symposium's website.

Should the cats get teaching credits?

The NYU Law homepage has an article about first-year reading groups, which we did at the law school for the first time last year. Two of my stealth teaching assistants are mentioned at the front of the article. Seymour would like everyone to know that only Buddy is interested in people's food. Gary and Sylvester were too shy of strangers to participate.

As the article mentions, last year my first-year reading group slogged through Piketty. This coming year, I am considering opting for a rather different approach, in which we would watch episodes of The Paper Chase (the TV series, not the movie).

I had never seen the TV show, although the movie was standard fare on college and law school campuses back in the day. But after watching the pilot episode, I can report that, while (mercifully) it's extremely dated, this potentially adds interest, and it could certainly feed discussion concerning teacher-student interactions, law as an intellectual topic, law as a profession, class, and gender. (Race, too?  I believe the pilot was all-white.)

New frontiers in fiscal language

I've long pointed out - to say I've long "argued" would suggest that there's some possible doubt, when in fact, as a matter of pure logic, there isn't - that the terms "taxes" and "spending" are not actually meaningful, at least in the ways that people often think.

The classic example was David Bradford's pretend "Weapons Supplier Tax Credit."  He explained it something like this.  Suppose Congress wants to raise income tax revenues by $10 billion, but doesn't want to "raise taxes."  This could reflect the Grover Norquist tax pledge, or anything else.

So they do the following 3-step: raise income tax revenues by $10 billion, zero out a $10 billion weapons contract with a military supplier, and enact a $10 billion "weapons supplier tax credit" (WSTC) that said company can use in return for its supplying the very same weapons, effectively for the very same price.

The combination of zeroing out the weapons contract and enacting the WSTC makes a difference of exactly zero.  The US government gets the same weapons at the same net budgetary cost, the company is in exactly the same position as it would have been otherwise, etc.  No one gains or loses a penny from doing it the new way, rather than the old way (leaving aside administrative, etc. issues). But, as a matter of formal budgetary accounting, it converts a $10 billion "tax increase" into a $10 billion "spending cut."

Louisiana Governor Bobby Jindal, with the permission of Pope Norquist, who apparently issued a ruling under his authority to interpret the no-new-taxes pledge, has done exactly this, except for a minor twist.  The WSTC equivalent is being used to convert "taxes" into "fees," rather than into "spending cuts."

Here's what apparently happened, according to the New York Times and a Louisiana paper, the News Star: Louisiana is raising taxes, in the conventional sense of the term, by $700 million, most of it from temporary (3-year) repeal of various business tax credits and exemptions, and the rest of it from permanently raising the cigarette tax from 36 cents to 86 cents a pack.

Of this amount (if one chooses to think about it this way, although money is fungible), about $350 million is going to LSU and other public educational institutions - relative to what would have happened otherwise, that is.  The funding avoids cuts, rather than increasing overall education financing.

Apparently, using "tax increases" to pay for education spending is Norquist-verboten under the no new taxes pledge.  As a result, to get Norquist's approval, Jindal needed a WSTC-style device to "cut taxes," notionally speaking, by just $350 million, rather than the full $700 million.  (There may be something missing here from the press accounts.)

Anyway, here's what these bright fellas came up with: a $350 million phantom tuition increase that would be offset, penny for penny, by WSTC-style tax credits.  Per the NYT, the legislation includes "an 'assessment' of around $1,600, called SAVE - 'Student Assessment for a Valuable Education' - on the state's public college students.  Nobody would actually pay this assessment because a student would also be granted a tax credit [presumably refundable when needed?] against that assessment.  The student's tax credit, in turn, would be transferred to the state Board of Regents, the body that runs higher education.  The board would then use the credit to draw money from the Department of Revenue.

"Under the plan [i.e., just the SAVE part of it?], no one's current tax burden would go up or down a cent.  [This can't be quite right if describing the bill as a whole - there are cigarette and corporate taxpayers versus the phantom tax credit for students.  I suspect the actual point is that no student's combined tax plus tuition bill changes by a cent.]  But the Jindal administration said the arrangement would constitute an offset to [$350 billion of?] the new tax revenue that was raised this term, and would thus keep his administration on the right side of its tax pledge.

"Lawmakers have called the provision everything from 'money laundering' to 'stupid,' and that was just the Republicans. A Democratic state senator proposed an amendment to change the name of the credit from SAVE to DUMB, for 'Don't Understand Meaning of Bill.'  (He later withdrew the amendment.)"

If this invariably "works" to turn net tax increases into fee increases, then literally all bets could be off. Perhaps Congress could pass a $1 trillion tax increase on billionaires, and offset it with a $1 trillion [something-or-other: national defense? clean air? use of the roads?) fee for billionaires that was offset by a $1 trillion Federal Fee Tax Credit.  (OK, there might be an issue with just charging the billionaires for whatever.)

But, as Oliver Wendell Holmes  once said: "Not ... while this court sits."  The court here is Grover Norquist, and just because Jindal gets a special ruling doesn't mean anyone else will unless Grover likes the applicant and/or the facts.

Joe Stiglitz, "New Theoretical Perspectives on the Distribution of Income and Wealth"

Tax Prof Blog offers a link to new work by Joe Stiglitz that is potentially significant, and that tax law profs who are interested in high-end inequality should certainly give a look.  For now I've just seen the abstracts, but I will be reading the four (I suspect short) papers when I get the chance.

It overlaps with things that I've heard Stiglitz say, e.g., at NTA last year, relating to his rejection of Piketty's theoretical explanation for rising inequality.  Piketty, of course, attributes it to r > g, whereas I am more inclined (as a U.S. observer) to think in terms of rising wage inequality, and also to say that you have to decompose r, as well as to distinguish between life cycle saving and inheritance (see here).  Stiglitz says some related things, and also has been pushing the importance of land values vs. productive capital, and of rents, both of which he thinks Piketty gives too little weight.

A few of Stiglitz's main points / claims / arguments here:

1) One needs to distinguish "wealth" from "capital."  The former I presume he defines as things with value to the holders, the latter as limited to inputs to economic production.  Stiglitz sees the run-up in land values, especially housing stock, as wealth but not capital, and hence in recent practice as increasing inequality without creating capital gluts that would be expected, from normal supply and demand, to drive down r.

2) Rents, not ordinary r, are at the heart of rising inequality in recent decades.  Land rents, intellectual property, etc., are the key elements here.

3) In his model, taxing capital, i.e., ordinary r, may get shifted entirely back to labor, and hence do nothing to address inequality (leaving aside the question of how the tax revenues are spent, which could make a difference at the low end of the wealth and income distribution).

4) Focusing on r versus g also misses the point that r is endogenous - it's part of what needs to be explained, not a cause of what happens.

5) A Henry George land tax would have the desired distributional effects - not getting passed on because the supply is close enough to fixed, and under the empirics can make a large practical difference in high-end inequality, without adversely affecting incentives.

6) Given life cycle saving, we shouldn't distinguish between labor and capital (David Bradford would definitely agree with this part), but rather between capitalists and workers.  He uses the term "capitalist" to mean people who make bequests, whereas workers just do life cycle saving.  So it's actually bequesters vs. life cycle savers that we need to think about.  (Though without the benefit of his model, Joe Bankman and I said something similar here.)

7) Stiglitz also draws a big distinction between what he calls debt and equity.  In a simple version of his model, workers just hold debt, capitalists hold equity.  (When I see the actual paper, I'll be looking to see if buying a diversified stock portfolio through your mutual fund is really what he means by "equity," or if it's special opportunities, start-ups, etc., as opposed to what they sell on the market once the extraordinary profit has been realized and only normal returns remain.)  Anyway, this has the result in his model that lowering interest rates enriches the capitalists at the expense of the workers, raising them goes the other way.  Thus, if we think of r as the Federal bond rate and all the other bank, etc., rates that travel with it, then raising r, not lowering it, reduces inequality.

Anyway, however all this plays out in intellectual debate among economists, it's important and I would urge tax law profs to take notice, and in particular to start thinking about how they might assess it and what its implications might be.  I may take that tack myself, but there's plenty of room in the water, and anyway my dance card is a bit full at present.

A step back (or else forward) in the orderly retreat

The aging process, I am now old enough to be qualified to say, is an exercise in orderly retreat, dragged on for as long as possible (at least until things get really bad) and fighting every inch of the way.  You can't help its happening, but you want to retreat as slowly as possible, and never to face a rout until it's forced on you.  Diet and exercise are of course key components in keeping the retreat as slow and as orderly as possible.

Every now and then, however, one must execute swift tactical withdrawals from exposed positions that it has become too costly to defend.  I seem to have reached one of those moments recently.

I played sports growing up, both because I enjoyed it and because, in my neighborhood's social structure or at least for the boys' subgroup, sports activities were coin of the realm so far as one's standing was concerned, especially if one was guilty of the faux pas of doing too well in school.  When I reached law school age, I transitioned from team sports, such as baseball, touch football, and basketball, to individual racquet sports.  First was squash, then I eventually got moderately serious about tennis.

Although always aerobically fit, first due to youth and then by reason of working at it, I was also always injury-prone.  The key problem, apart perhaps from coordination issues (although I always had decent eye-hand), was that I apparently was too loose-limbed.  So I kept spraining my left ankle, although not generally from playing racquet sports.  I also suffered a significant recurring shoulder injury when I was only 20.  It seems to have come from pitching a stickball game against a good friend.  I figured out later that I must have thrown 150 to 200 pitches, generally as hard as I could and without having trained for this at all.  Initially misdiagnosed (sports medicine was not as good back then as it has become more recently), the injury, which turned out to be rotator cuff instability and impingement, periodically plagued me until medical advances permitted me to fix it, albeit not quite to the 100% level, through arthroscopic surgery about 15 years ago.

Meanwhile, as I got older, loose-limbedness gave way to various body parts losing flexibility and becoming all too willing to strain or tear.  So I got back spasms, pulled hamstrings, and then tennis elbow when I tried to play without my legs under me properly due to the hamstring problem.  My solution to all this was periodic layoffs plus physical therapy - intensive during the recovery period, but then continuing afterwards for maintenance.  So the price of my continuing to play racquet sports - requiring "explosive" muscle and joint use, although it doesn't seem that way when you are younger - was a long list of home exercises, all of which I had to do a few times a week.  This grew increasingly boring over time, but if I wanted to keep playing I had no choice.

Eventually I quit squash because it was just too explosive - various body parts got angry from the sudden changes in direction that you need if your partner wrong-foots you.  But tennis seemed to be going OK, for the most part and subject to my keeping up the exercise regimen, until 2 years ago when I tore the ACL in one of my knees.

At that point I was icily determined not to let it stop me.  I was strongly leaning towards the elective surgery for ACL replacement, even though it is a truly horrible process.  The problem is that the newly inserted replacement ligament (taken from one's own patella or else from a cadaver) has to integrate fully with the body parts in place.  Tommy John surgery for baseball players is similar, but your leg is more foundational than your arm, since without it you can't even get out of bed.

I had to wait before deciding on the surgery, since I didn't want to ruin my summer and then I couldn't do it while teaching.  But by the time I could have had the surgery, I was already back on the tennis court, wearing a bulky knee brace.  After a bit, I was actually moving about as well as I did before the injury (and mobility was always my #1 asset), although I could clearly tell in some other settings that the injured knee is far from 100%.  Carrying a heavy suitcase upstairs, for example, makes my knee get angry and start to threaten me.

One thing that playing tennis without an ACL requires, however, is serious ongoing commitment to the exercise program.  I did what I had to, but it came at the expense of my being willing to put in the time for all my other injury maintenance exercises.  So a couple of months ago I suffered another nasty hamstring pull (in the leg that still has an intact ACL).

Getting over that, and back onto the tennis court, would have been a far easier matter than overcoming a torn ACL.  But this time around, I found that I had simply lost the will to do it.  Too many years of rehab and home exercise programs.  Too much time out of my day - and on the subway, on NYC's least reliable line, the F train - in order to play indoors in New York City on a Hartru court (concrete is far too wearing for multiple body parts).  Too much frustration when I'd play below the level I expected of myself, by reason of being too busy, and traveling too much, to play enough to maintain that level.  So I decided, at least for now: Forget it.

I must say, I've been greatly enjoying NOT doing my home exercise program, NOT riding on the F train, NOT losing 3 hours out of my day twice a week (the minimum to maintain a decent playing level), and NOT experiencing the frustration of playing badly.  So I have no current inclination to go back.  And while this conceivably could change someday, especially if I find myself in a warm-weather climate, I'd have to be super-careful about ramping up again first through a renewed set of strengthening exercises for multiple body parts that at present seem to be applauding my choice not to play, through their compliant and complaisant silence.

Summer research to date

I have just finished a first draft of an article entitled "Taxing Potential Community Members' Foreign Source Income," which I will be presenting at a Citizenship and Taxation Symposium, to be held at the University of Michigan Law School on October 9.  Not quite ready to post it on SSRN, however.

Oddly, it is the same length in pages (46) as my recently posted article on international business taxation, entitled "The Crossroads Versus the Seesaw: Getting a 'Fix' on Recent International Tax Policy Developments."  This one is posted on SSRN, and I will be presenting it in less than two weeks (on June 23) at the 9th Annual Symposium at the Oxford University Centre for Business Taxation.

Next up, I am going to be writing a short piece (supposed to be in the ballpark of 10,000 words) for a forthcoming book that colleagues elsewhere are organizing on the timing of legislation.  I've previously written at length about issues of legal transition, which would be a good fit here, but as those isuess don't currently grab me I'll be writing instead about conceptual problems associated with defining "constant policy" across time.  Most of us would agree that, say, inflation indexing of income tax rate brackets and Social Security benefits increases policy constancy between years, compared to keeping dollar amounts nominally fixed when price levels are changing.  But that's an easy case, and there are plenty of harder ones out there.

After that, I plan to return to my book-in-progress on high-end inequality as viewed through the lens of literature.

Jotwell post on work by Knoll, Mason, and Viard on discrimination against interstate commerce

Jotwell, or "the journal of things we like lots," is a website that seeks to "fill[] a telling gap in legal scholarship by creating a space where legal academics can go to identify, celebrate, and discuss the best new scholarship relevant to the law."  The gap, of course, exists primarily because so many of us are mainly engaged in doing our own work, and secondarily because there often is stronger motivation to attack, than gratuitously praise, other work.  (Just as chimps shriek and wave branches around when they see rival troupes, rather than inviting them to come in.)

I've agreed to write a Jotwell "jot" annually.  Two years ago, I wrote something about Benn Steil's book about Bretton Woods. Last year, I addressed Piketty.

This time around I have written a piece, just posted here, lauding recent scholarship by Michael Knoll, Ruth Mason, and Alan Viard that addresses the legal definition of discrimination against interstate commerce, and that appears to have completely persuaded the Supreme Court majority in the recent state income tax law case, Comptroller v. Wynne.  I'm glad to give these individuals (all admittedly friends) some well-deserved praise, and I also briefly address the direction of legal scholarship and offer an overview of the underlying issue and their arguments.

The discerning and well-informed reader may note that I share these authors' lack of enthusiasm for "double taxation" as a useful analytic frame, as you can see, for example, here. My work to this effect addresses issues in international, rather than state and local, taxation, but there is something in common (pertaining to an instinct for substance over formalism) as between the two sets of issues.

Law and Society Association conference in Seattle

We're now about halfway through the 3rd out of 4 days of the Law and Society Association annual meeting in Seattle.  As readers of the Tax Prof Blog will know, for some years Neil Buchanan has very successfully organized what is essentially a separate tax conference within the broader LSA conference.  The tax sub-conference has a total of 15 panels, generally with 3 or 4 papers each, and you can do the math to figure out about how many tax profs this means are in town.  (Not all stay for the whole thing, of course, but many are attending many sessions.)  At least 6 were at the Mariners-Indians game last night.

The paper topics are quite heterogeneous and don't necessarily have a particularly "law and society" flavor, although some do.  Definitely a good experience, although tiring after a while if you go to just about everything.  I find these types of events stimulating; they both are fun and can expand my imagination and contacts.

There is some overlap with people who attend, say, the National Tax Association annual meetings, but also some people whom I had not recently, or otherwise, or as yet, met.  On balance, attendance is tilted a bit towards juniors, which makes sense strategically, but for someone like me that can actually add to the interest and value, since, while it's fun to see old friends (which has happened here), it's also good to get to know more people, and more about the people, as well as seeing what they're working on or consider interesting.

I have twice previously attended the LSA annual meeting, but this was back in the 1990s, before there was any significant tax sub-conference.  Next year, the LSA meeting, will be in New Orleans (which I like, but have been to quite a lot over the years).  In 2017, it will be in Mexico City, which would be a new location for me and certainly a draw.

Definitely recommended (along with the NTA) for tax law juniors (both U.S. and non-U.S.) who want to break into the academic conference circuit for both social and intellectual reasons.  Also possibly a good venue for tax people in fields outside law, but touching on either the "law" or the "society" angle (one is enough; it doesn't have to be both).  Note also that, unlike the NTA, you don't have to get through the paper acceptance gauntlet at LSA - although, when I co-ran the NTA annual meeting in 2013, we tried to be very inclusive, and I believe that is still the case.  (Plus, they are eager at NTA to attract more lawyers to the fall annual meetings.)

Time is money, of course, especially during the summer, but I tend to find this "money" well spent.

Empirical question: I get the sense that people who get out a lot on the conference circuit often do broader and more interesting work than those of comparable reputational rank who don't.  The hard question is, which way does the causal arrow run, or for that matter do distinct personal characteristics (not otherwise directly observed) lie behind both of these results?

Amy Rigby concert

Last night, at the Hifi Bar in the East Village, I got to see a great Amy Rigby concert, sitting about 10 feet from the stage.  The first photo shows her with husband Wreckless Eric on bass, the second with audience special guests Lenny Kaye and Syd Straw.

Other NYC rock scene fabulosos were also there in the crowd, e.g., Yo La Tengo's Ira Kaplan and Georgia Hubley, as well as rock critic Robert Christgau, plus quite a few more who seemed vaguely familiar, though perhaps it was just because they had that look.  (One of them, sitting next to me, was explaining to Ira Kaplan before the show why Keith Hernandez had mentioned him, i.e., the speaker not Ira, on a recent Mets broadcast.)  Though everyone was nice, it gave me a bit of that feeling that you have when you go to a party where all the people know each other, but you have never met any of them.  But this only mattered in terms of hanging around (or rather not) after the concert had ended.

This was certainly the oldest audience I've ever seen at a rock concert.  I would say that the average age exceeded mine, and that the average number of years since first rock concert attended was probably north of 35.

Rigby is a great songwriter.  While not stylistically path-breaking, her influences generally fit my taste.  They include Chuck Berry, the Beatles, Bob Dylan, other 1960s pop, country music, folk, and singer-songwriter ballads.  But her songs are far more than just tuneful & catchy - they're also literate, witty, observational, and very willing to go for the jugular (hers and others).

She's about my age, left Pittsburgh for New York in the late 1970s when she realized what was happening there musically (e.g., Patti Smith and then CBGB), married the DBs' drummer but then got divorced and was left with a small child to raise on her own and very grim economic prospects.  She spearheaded a couple of groups that became known in the local scene, but not commercially or to me (although I had followed the great NYC punk and new wave bands of the late 1970s).

Finally in 1996, she went solo with "Diary of a Mod Housewife," followed by "Middlescence" and then three more albums, all of consistently high quality, with a theme that remains somewhat unique in the youth-oriented world of pop music. She decided to write about being a thirty-something single working mom with bad prospects, meeting mostly bad men, and struggling with her own issues and limitations as well.  The songs vary from expressing humor to anger to resignation to irony to cynicism to sentiment.  And they're not just words strung together - each one tends to be like a short story, or to develop thematically some feeling or situation.

As tends to happen with this sort of artist, her critical acclaim has exceeded her sales, but she does have followers, fans, and friends, and she has been able to keep on recording music and playing shows. She's an artist / craftsperson of a sort that I could imagine myself having been in an alternative universe (e.g., if my upbringing and skill set were different than in the actual universe, but my taste and mentality remained the same).

Great high-energy show in a small venue, with just a guitar, bass, and drums reverberating through one's bones without being deafening.

She'll be back at the HiFi Bar in the East Village one more time (next Thursday, May 28), and I would have planned to attend again if not for the fact that I will be in Seattle at the Law and Society Association's annual meeting, presenting a paper on high-end inequality and the social science literature.

Just as a sample of her live work, try this solo performance on youtube.