Amanda Parsons (Colorado; Google Scholar) presents Tax Law for Informational Capitalism at Duke today as part of its Tax Policy Seminar hosted by Larry Zelenak:
Informational capitalism warrants a fundamental rethinking of tax law. This Article evaluates the tax policy implications of the emergence of social data (or data about people) as a new and essential factor of production within informational capitalism. It concludes that social data value creation necessitates elevating the role of wealth and capital income taxes to allow tax law to achieve its underlying policy goals in our modern economic environment.
The Article presents a thorough account of social data value creation, explaining how companies transform social data into money for themselves and wealth for their shareholders. It then exposes how the existing tax system, which is built upon outdated assumptions about how companies create value, is not effectively recognizing and capturing this new mode of value creation. It argues that greater taxation of wealth and capital income are critical components of the broader toolkit of reforms necessary to correct this failing and ensure that companies and their shareholders do not escape taxes on the economic gains they accrue from social data.
In an age of technological and economic upheaval and rising inequality, it is essential that we adapt tax law so that it can achieve its fundamental goals, including redistributing economic resources in our society. Otherwise, we will allow the continued concentration of economic and political power in the hands of companies that exploit novel and unfamiliar forms of value creation and their owners. This Article illustrates why and how we must do so.
Michael Graetz (Columbia; Google Scholar) presents The Power to Destroy – How the Antitax Movement Hijacked America (Princeton University Press 2024) at UCLA today as part of its Business Law Breakfast:
The postwar United States enjoyed large, widely distributed economic rewards—and most Americans accepted that taxes were a reasonable price to pay for living in a society of shared prosperity. Then in 1978 California enacted Proposition 13, a property tax cap that Ronald Reagan hailed as a “second American Revolution,” setting off an antitax, antigovernment wave that has transformed American politics and economic policy. In The Power to Destroy, Michael Graetz tells the story of the antitax movement and how it holds America hostage—undermining the nation’s ability to meet basic needs and fix critical problems.
In 1819, Chief Justice John Marshall declared that the power to tax entails “the power to destroy.” But The Power to Destroy argues that tax opponents now wield this destructive power. Attacking the IRS, protecting tax loopholes, and pushing tax cuts from Reagan to Donald Trump, the antitax movement is threatening the nation’s social safety net, increasing inequality, ballooning the national debt, and sapping America’s financial strength. The book chronicles how the movement originated as a fringe enterprise promoted by zealous outsiders using false economic claims and thinly veiled racist rhetoric, and how—abetted by conservative media and Grover Norquist’s “taxpayer protection pledge”—it evolved into a mainstream political force.
The important story of how the antitax movement came to dominate and distort politics, and how it impedes rational budgeting, equality, and opportunities, The Power to Destroy is essential reading for understanding American life today.
Ari Glogower (Northwestern; Google Scholar) & Andrew Granato (J.D.-Ph.D. Candidate, Yale; Google Scholar) present Reforming The Taxation Of Life Insurance, 44 Va. Tax Rev. __ (2025), at Connecticut today as part of its Insurance Law Workshop:
The purpose of life insurance was once to provide financial protection to “widows and orphans” upon an untimely death. Now, wealthy investors also use it to avoid paying taxes. Thanks to federal tax benefits for life insurance, insurers now market policies designed explicitly as vehicles for tax avoidance, with insurance protection as an afterthought.
Well-advised taxpayers accomplish this disappearing tax trick through a “cash value” policy. These policies contain an internal savings balance, which over time can transform the policy from an insurance product into an investment account that can still qualify for insurance tax exemptions. No other investment form—even explicitly tax-preferred savings vehicles like IRAs—offers the same combination of tax benefits with minimal restrictions. In the new market for life insurance, the current rules increasingly operate as a subsidy to the rich, invite abusive planning, and can obstruct broader capital income tax reforms.
“Private placement life insurance” (PPLI) policies, a variation of cash value life insurance, now allow rich investors to avoid taxation on an even wider range of boutique investments, such as hedge funds and private equity. These market innovations have brought new attention to the taxation of life insurance, and motivated current legislative reforms targeting PPLI strategies.
This Article provides a comprehensive study of the taxation of life insurance. It presents new empirical analysis of trends in life insurance ownership, finding that policies issued today are larger and more concentrated among the richest taxpayers. It then presents a framework for evaluating reforms that can be implemented by Congress, the IRS, and the judiciary, and considers the tradeoffs of different reform directions. The Article ultimately proposes a relatively simple yet powerful reform: capping the size of tax-preferred policies. This approach could address the new market for life insurance and realign its tax benefits with their original policy justifications.
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