Tax presentations at the two-day Northeastern Junior Scholars Conference (program):
Assaf Harpaz (Georgia; Google Scholar), Artificial Intelligence and the Taxpayer Entity:
Artificial intelligence (AI) is changing the world and presents numerous challenges to legal and regulatory frameworks. The evolving, complex yet still ambiguous concept demands reconsidering longstanding doctrines that are at risk of obsoleteness. These tensions are highlighted in federal income taxation, which generally compartmentalizes taxpayers into individuals and business entities. Technological developments such as generative AI upend these conceptions given their capacity to create value and operate autonomously, interacting with the economy in ways that combine both human and non-human attributes.
Under current U.S. law, even the most advanced AI models are not directly subject to the income tax regime, as they are neither individuals nor separate business entities. AI is poised to dramatically reshape the tax base by altering both the sources of income (from humans to robots) and the type of that income (from labor to capital) that is subject to tax.
This article examines the intersections and frictions between AI models and federal income tax policy. It focuses on questions of taxpayer entity and personhood that arise from the widespread use of AI. The article argues that the unique and non-binary characteristics of AI require a rethinking of the traditional taxpayer entity classifications. It proposes adopting a non-exhaustive definition of AI for income tax purposes, which could lead to the creation of a business entity. Such a framing of ownership will enable the broader capital taxation of the immense value created by automation.
Zhaoyi Li (Albany; Google Scholar), Digital Service Tax in the Data-Driven Era:
As the digital economy expands, driven by activities like online shopping and advertising, tax jurisdictions face challenges as taxable activities frequently extend beyond national borders. This shift has led to the emergence of the Digital Services Tax (“DST”) in the EU. Two areas, optimal collection methods and the equitable distribution of taxing rights among countries, are at the forefront of the DST discussion. These issues, central to adapting tax systems to a globalized economy, require careful exploration and international cooperation. In recent years, the debate over whether the U.S. governments should tax digital transactions or digital products has intensified. This paper delves into this issue by examining the tax law framework underlying DST and its implications from a data privacy perspective
This article explores how DST impacts the collection, use, and security of consumer data within the digital economy. By integrating legal analysis with insights from data privacy studies, it aims to illuminate the broader consequences of DST for privacy rights and regulatory compliance. The article suggests that while DST may offer fiscal benefits, it also raises significant privacy concerns that must be addressed to protect consumer interests in an increasingly digital marketplace. This comprehensive analysis emphasizes the urgency of developing a harmonized approach to DST that balances the economic goals of taxation with the protection of individual privacy, ensuring a fair and equitable digital marketplace for all stakeholders.
Noah Hertz Marks (Duke), The Frequency and Importance of Lingering Proposed Tax Regulations:
This article presents a novel dataset of all ~3,450 proposed tax regulations and critically examines ones that Treasury has never (or only very belatedly) finalized. Taxpayers rely on such lingering proposed regulations (at least initially), which are increasingly common and are likely to gain more prominence given the impact of Loper Bright Enterprises v. Raimondo, 603 U.S. __ (2024) and Corner Post v. Board of Governors of the Federal Reserve System, 603 U.S. __ (2024) on the stability and authority of final regulations. Specifically, this article investigates the frequency and the consequences of Treasury’s failure to finalize or withdraw proposed regulations. For example, scholars suggest that there are a significant number of lingering proposed regulations interpreting the partnership tax provisions in the Code (Subchapter K). This dataset empirically demonstrates such trends. In addition, this dataset reveals the extent to which (if at all) the shifting relationship between OIRA and Treasury (as well as the Supreme Court decisions such as Mayo Foundation v. United States, 562 U.S. 44 (2011)) correlates with the frequency of lingering proposed regulations. Then, turning to a few case studies, this article examines the treatment of proposed regulations over time. Logically, in the immediate aftermath of comment submissions, the proposed regulation should be at its most influential and important. But over time, as the proposed regulations stay in limbo, such influence should wane as consensus shifts to the proposal being obsolete and unlikely to be finalized. To investigate this intuition and identify any shift from imminent to influential to obsolete, the article draws on and analyzes references to the case study proposed regulations in other Treasury documents and guidance, practitioner materials, student-oriented materials, and academic scholarship. Finally, this article considers the normative implications of lingering proposed regulations. It contends that lingering proposed regulations tilt and obfuscate tax law in favor of sophisticated parties because taxpayers can often follow taxpayer-favorable proposals while ignoring fisc-favorable proposals and proposed regulations are not comprehensively cataloged, so often only sophisticated taxpayers are aware of them. Accordingly, it proposes and explores possible remedies for these problems, including public compilations of proposed regulations and presumptively applicable sunsets that withdraw proposed tax regulations.
Blaine G. Saito (Ohio State; Google Scholar), Democratic Tax Policy:
Democracy is in trouble around the world, and that creates other problems. After all, democracy and equality have a strong interlinked relation, feeding off each other in a positive feedback loop. Additionally, through deliberation and aggregation, democracy is an epistemically superior form of governance. Taxation, because of its reach and ability to handle power and redistribution, is one part of this puzzle.
Recent scholars have started to focus more on the concept of democracy and taxation, advocating for new criteria, substantive changes to the law, and procedural changes to how policies get made. This article develops a working conception of democratic equality. In doing so, it draws on democratic theorists to put forward two key notions. First, that procedures in policy making should, to the greatest extent possible, treat people as equals in relation with each other. Second, outcomes in tax and other governmental policies should foster the capabilities of people to act in all aspects of civil society to the greatest extent possible without badges of honor or dishonor.
The piece then examines how on the margins, how changing substantive tax provisions and the development of procedures can advance and hinder these notions of democratic equality. The analysis also is bounded by the existence of current institutions, but it shows how rethinking some of these changes can actually help push the tax system and society in a better direction.
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