Paul L. Caron
Dean
Pepperdine Caruso
School of Law
My MoneyLaw colleague Tom Bell (Chapman) has an interesting post, Law Prof Diversity, Hiring, and Tenure, which cites AALS data showing that women and minorities have enjoyed significant advantages in the law faculty hiring process over the past 14 years. Tom has some nifty charts highlighting the data, which average out over the period to these rates of success in landing a law teaching job:
The Tax Policy Center yesterday released a major new report, Options to Fix the AMT, by Leonard E. Burman (Senior Fellow, Urban Institute; Co-director, Tax Policy Center), William G. Gale (Arjay and Frances Fearing Miller Chair, Brookings Institution; Co-director, Tax Policy Center), Gregory Leiserson (Research Assistant, Urban Institute & Tax Policy Center) & Jeffrey Rohaly (Senior Research Methodologist, Urban Institute; Director of Tax Modeling, Tax Policy Center) Here is the Introduction:
The individual alternative minimum tax (AMT) was originally designed to limit the amount of tax sheltering that taxpayers could pursue and to assure that high-income filers paid at least some tax. The current AMT, however, has strayed far from those original goals. Under current law, the tax will affect over 23 million taxpayers in 2007—many of them solidly middle-class—and mainly for reasons that have little or nothing to do with what most people would consider tax sheltering.
One policy response would be to extend the temporary AMT provisions that expired at the end of 2006. This would keep the number of AMT taxpayers at about 4 million for another year, but it would cost more than $40 billion in 2007 alone and would grow more expensive in subsequent years. For these and other reasons, many policy makers, including House Ways and Means Committee Chairman Charles Rangel, Senate Finance Committee Chairman Max Baucus, and Finance Committee Ranking Member Charles Grassley have proposed permanent reform or repeal of the AMT.
This brief examines a variety of implications of AMT repeal or reform and an array of options for offsetting the revenues lost under such options. It begins with a description of the taxpayers affected by the AMT and an explanation of the dramatic growth projected for the tax as the context for evaluating reform options.
Press coverage:
Linda Sugin (Fordham) has published Encouraging Corporate Charity, 26 Va. Tax Rev. 125 (2006). Here is the abstract:
The tax law governing corporate philanthropy is stuck in an archaic notion of corporate charity that does not necessarily benefit either charities or corporate stakeholders. Four developments in the last few years provoked this reexamination of the Code’s awkward dichotomy between business expenses and charitable contributions, and offer new reasons for replacing the charitable contribution deduction for corporations with a business expense deduction: (1) a statutory reduction in the rate of tax on dividends received by individual shareholders, (2) death of the preeminent model of corporate philanthropy – Berkshire-Hathaway’s shareholder designation program (3) empirical evidence showing very low effective tax rates paid by corporations, and (4) adoption of final capitalization regulations that significantly weaken the capitalization requirement and no longer pose much of an obstacle to immediate deduction of corporate payments to charities. This seemingly small legal change offers many benefits in today’s climate: it would increase the coherence of a corporation’s tax treatment, help to minimize the agency costs in corporate philanthropy, and change the way that corporations define their charitable endeavors, encouraging greater overall corporate commitment to charitable and community needs, both within and outside their business operations.
The ABA Tax Section Mid-Year Meeting concludes today in Hollywood, Florida. Tax Profs presenting today include:
Sales, Echanges, and Basis
VAT and Other Consumption Taxes
Fiduciary Income Tax
Teaching Taxation
Foreign Activities of US Taxpayers and Foreign Lawyers Forum
Standards of Tax Practice
British singer-songwriter James Blunt — best known for his hit single You’re Beautiful — has decided to establish residence in Switzerland to avoid British taxes. From press reports:
Blunt, who earned £5 million ($9.8 million) from his debut album Back To Bedlam, is the latest in a long line of high-earners to quit their homeland for Switzerland – Phil Collins resides there and French rock legend Johnny Hallyday set up residence in Gstaad only last month.
Patrick Messeiller, director of tourism for Verbier, confirmed a report in the Swiss daily Le Matin that Blunt, who is a frequent visitor to the mountain village, had registered with the tax office there.
Each Swiss canton (state) sets its own tax rates, and can cut special deals with wealthy foreigners that allow them to pay only a fraction of what they would have to pay elsewhere.
The Tax Justice Network for Africa has been launched to fight tax-driven capital flight from Africa and the resulting detrimental effect on anti-poverty efforts across the world’s poorest continent. The network hopes to prompt governments to act against companies and individuals that shift assets to low-tax jurisdictions or tax havens to avoid or evade tax. For the network’s detailed mission statement, see here.
I previously blogged the tax consequences of another giveaway on the October 30 Oprah Winfrey Show:
Every member of Oprah’s audience is going home with a $1,000 Bank of America debit card and a Sony DVD Handycam…but there’s a catch. Oprah is challenging more than 300 audience members to donate their money to a charitable cause… The audience members can’t spend their money on family members, and they’ll be videotaping their stories for a future show. They only have one week to come up with a plan for their money!
I noted that "[t]he tax consequences seem straighforward — income to each recipient ($1,000, plus fmv of the Handycam), along with a $1,000 charitable deduction to the extent the $1,000 is given to a qualifying charitable organization." This month’s "Shop Talk" column in the Journal of Taxation by Sheldon I. Banoff (Katten, Muchin Zavis Rosenman, Chicago) & Richard L. Lipton (Baker & McKenzie, Chicago) takes a much more detailed look at the tax consequences of the arrangement, including:
Reuven S. Avi-Yonah (Michigan) has posted Tax Competition, Tax Arbitrage, and the International Tax Regime on SSRN. Here is the abstract:
This paper argues that a coherent international tax regime exists, embodied in both the tax treaty network and in domestic laws, and that it forms a significant part of international law (both treaty-based and customary). The practical implication is that countries are not free to adopt any international tax rules they please, but rather operate in the context of the regime, which changes in the same ways international law changes over time. Thus, unilateral action is possible, but is also restricted, and countries are generally reluctant to take unilateral actions that violate the basic norms that underlie the regime. Those norms are the single tax principle (i.e., that income should be taxed once- not more and not less) and the benefits principle (i.e., that active business income should be taxed primarily at source, and passive investment income primarily at residence).
Seventeen Democratic senators yesterday filed legislation to stop the IRS’s private debt collection program. From Sen. Byron Dorgan’s (D-ND) press release:
Legislation introduced by U.S. Senators Byron Dorgan (D-ND) and Patty Murray (D-WA) and more than a dozen Senate colleagues Thursday would stop the Internal Revenue Service (IRS) from using private debt collectors to collect unpaid taxes. The legislation would make law a recommendation from the IRS’s own National Taxpayer Advocate, Nina Olson, who just last week strongly recommended that the practice be halted. …
Joining Dorgan and Murray in sponsoring the bill are: Senators Barbara Mikulski (D-MD), Daniel Akaka (D-HI), Patrick Leahy (D-VT), Carl Levin (D-MI), Edward Kennedy (D-MA), Maria Cantwell (D-WA), Jay Rockefeller (D-WV), John Kerry (D-MA), Daniel Inouye (D-HI), Ben Cardin (D-MD) , Barbara Boxer (D-CA) Diane Feinstein (D-CA), Robert Menendez (D-NJ), Frank Lautenberg (D-NJ), and Joe Lieberman (ID-CT).
According to press reports, more than 450,000 active and retired federal employees owe $2.8 billion in federal income taxes. WTOP Radio created this Excel Spreadsheet from data obtained through FOIA requests.
In absolute terms, the departments and administrative agencies with the most tax scofflaws among active employees are:
In percentage terms, the departments and administrative agencies with the most tax scofflaws among active employees are:
In percentage terms, the departments and agencies with the least tax scofflaws among active employees are:
Other notable departments and agencies have these percentages of employees who are tax scofflaws:
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