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TaxProf Blog

Paul L. Caron
Dean
Pepperdine Caruso
School of Law

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  • Paul Caron

    NTA Symposium: Tax Policy in Transition

    Tuesday, May 4, 2004

    The National Tax Association will hold its 34th Spring Symposium on Tax Policy in Transition on Thursday, May 20 – Friday, May 21 at the Holiday Inn Capitol in Washington, D.C. Here are the panel programs and speakers:

    Thursday, May 20

    8:45am
    Welcome
    John McClelland (Office of Tax Analysis, Department of the Treasury), Program Chair

    9:00-10:30am
    Revenue and Rules: Effects on the Federal Budget
    Moderator: Eric Engen (American Enterprise Institute)
    Presenters:
    • Where Did Revenues Go? (David Weiner, Congressional Budget Office)
    • The Persistence of Individual and Corporate Capital Gains and Losses (Nicholas Bull, James Cilke & Christopher Giosa, Joint Committee on Taxation)
    • Budget Rules for 2005 and Beyond (Rudolph Penner & C. Eugene Steuerle, The Urban Institute)

    10:45am-12:15pm
    Exploring Selected State and Local Issues
    Moderator: Dennis Zimmerman (Congressional Budget Office)
    Presenters:
    • State Structural Deficits (Bruce Baker, Bureau of Economic Analysis, U.S. Commerce Department; Daniel Besendorfer, University of Freiburg; & Laurence J. Kotlikoff, Boston University)
    • History and Evaluation of the Unfunded Mandates Law (Theresa Gullo, Congressional Budget Office)
    •Is “No Child Left Behind” an Un (or under) funded Federal Mandate? Evidence from Texas
    (Jennifer Imazeki, San Diego State; & Andrew Reschovsky, Wisconsin)

    12:30-2:00pm Luncheon
    Presiding: Thomas S. Neubig (President, National Tax Association)
    Speaker: Harvey S. Rosen (Member, Council of Economic Advisers)

    2:00-3:30pm
    The Role of a Public Policy Economist: Lessons from Bruce Davie’s Career
    Moderator: Allen H. Lerman (Office of Tax Analysis, U.S. Treasury Department)
    Presenters:
    • Jousting with Rent Seekers: Bruce Davie and Tax-Exempt Bonds (Dennis Zimmerman, Congressional Budget Office)
    • The Costs of State-Sponsored Terrorism: The Case of the Barbary Pirates (J. Thomas Woodward, Congressional Budget Office)
    • A Tax Expenditure Budget for Excise Taxes (Lindsay Oldenski, Office of Tax Analysis, U.S. Treasury Department)

    3:45-5:15pm
    Effects of a Changing Pension Landscape on Saving
    Moderator: Karen M. Pence (Federal Reserve Board of Governors)
    Presenters:
    • How Will the Changing Pension Landscape Affect Retiree Benefits? (Amy Rehder Harris, Kevin Perese & John Sabelhaus, Congressional Budget Office)
    • Distributional Effects of Tax-Preferred Saving Options (Leonard E. Burman, The Urban Institute; & William Gale & Peter Orszag, The Brookings Institution)
    • Pension Reform and Saving (Barry Bosworth & Gary Burtless, The Brookings Institution)

    Friday May 21

    9:00-10:30am
    Corporate Tax Reporting and Compliance
    Moderator: George Plesko (MIT)
    Presenters:
    • Corporate Tax Avoidance and the Properties of Corporate Earnings (George Plesko, MIT)
    • Lost in Translation: Detecting Tax Shelter Activity in Financial Statements (Gary McGill , Florida; & Edmund Outslay, Michigan State)
    • The Evolving Schedule M-3: A New Era of Corporate Show and Tell? (Charles Boynton, Office of Tax Analysis, U.S. Treasury Department; & Lillian Mills, Arizona)

    10:45am-12:15pm
    International Tax Roundtable
    Moderator: Peter Orszag (The Brookings Institution)
    Presenters:
    • Jane Gravelle (Congressional Research Service)
    • Gary Hufbauer (Institute of International Economics)
    • Jonathan Talisman (Capitol Tax Partners)

  • Paul Caron

    Apinunmahakul & Devlin on Charitable Gaming

    Tuesday, May 4, 2004

    Amornrat Apinunmahakul (Lakehead-Dep’t of Economics) & Rose Anne Devlin (Ottawa-Dep’t of Economics) have posted Charitable Giving and Charitable Gambling: An Empirical Investigation. Here is the abstract:

    Recent decades have witnessed a rapid increase in charitable gaming. Some have suggested that this means that conventional donations to charity will fall. In this paper, we use a rich Canadian data set to examine the relationship between direct contributions to charities and those made indirectly via charitable games. We find that individuals consider these two ways of giving as complementary to each other. Rather than leading to a reduction in conventional donations, direct donations may increase with the increase in charitable lotteries.

  • Paul Caron

    SOI Releases Projections of 2004-2010 Tax Returns

    Tuesday, May 4, 2004

    The just-released Statistics of Income Bulletin (Winter 2003-04) includes Projections of Returns That Will Be Filed in Calendar Years 2004-2010 by Terry Manzi. Here is the abstract:

    The Internal Revenue Service estimates that the total number of tax returns to be filed in 2004 will reach 226.8 million. With an estimated annual growth rate of 1.6 percent under current tax law and other planning assumptions, the total number expected by 2010 should reach 249.7 million. These totals are comprised of “primary” returns (mostly individual income tax and employment tax returns) and “supplemental” returns (mostly amended returns and documents filed by individuals and corporations requesting extensions of time to file returns). Primary returns account for 92.2 percent of the grand total.

    The most recent projection of electronically-filed (“e-file”) individual income tax returns calls for 59.8 million to be filed in 2004 (out of 131.6 million total of all individual income tax returns); these returns would otherwise be filed on “paper” forms, mostly “short forms” 1040A or 1040EZ. Of the 59.8 million electronically-filed total, about 55.8 million are expected to be “standard” e-file returns, transmitted through an authorized third party, such as a tax practitioner. The remaining 3.9 million should be “TeleFile” returns, filed by touch-tone telephone. Standard e-file returns are expected to increase at an annual rate of 8.9 percent through 2010.

    TeleFile volumes, unlike standard e-file, are expected to drop an average 0.8 percent by 2010 due to migration to other e-file options. As electronically-filed returns increase, the total number of paper individual income tax returns should drop to about 49.4 million by 2010, with the corresponding number of electronically-filed returns increasing to 92.4 million.

    For a related Excel table of data, see here. For more return projections, see here.

    Over the coming week, TaxProf Blog will summarize the remaining Featured Articles and Data Releases in the latest SOI and provide links to the full reports and accompanying tables and statistics.

  • Paul Caron

    Death of Georgia Tax Prof Larry Blount

    Tuesday, May 4, 2004

    Georgia tax professor Larry Blount died Sunday. He was only 53 years old.

    Photo of Professor BlountProfessor Blount earned his B.A. from Michigan (1972), his J.D. from Cincinnati (1975), and his LL.M. from Columbia (1980). He joined the Georgia law faculty in 1976 and taught federal income tax, partnership tax, corporate tax, tax policy, and law and religion. He wrote several tax books and articles, including Tax Deductions (Warren, Gorham & Lamont, 1982).

    TaxProf Blog sends its condolences to Professor Blount’s family, friends, colleagues, and students. We invite others to share their remembrances of Professor Blount here.

    For the University of Georgia’s announcement of Professor Blount’s death, see here.

    ,
  • Paul Caron

    What Tax Profs Are Reading . . . Caron on Legal Essays on the New York Yankees

    Tuesday, May 4, 2004

    This is the second installment of What Tax Profs Are Reading. The goal is to share with the broader tax community reviews of both tax-related and nontax-related books recently read by tax professors. We invite tax professors to submit book reviews for publication on TaxProf Blog.

    Image of Book JacketIn researching the connection between baseball and law schools for our Moneyball review essay, What Law Schools Can Learn from Billy Beane and the Oakland Athletics, 82 Texas L. Rev. 1483 (2004), we came across Courting the Yankees: Legal Essays on the Bronx Bombers (Carolina Academic Press, 2003), a wonderful collection of 21 essays by law professors, edited by Ettie Ward (St. John’s), on a range of legal issues surrounding the Yankees and their players through the years. The book nicely accomplishes its mission:

    [The book] examines both baseball lore and baseball law. Baseball has been America’s national pastime for over 100 years; law and litigation now pervade every aspect of our society and have increasingly become an American pastime. By focusing on the famous New York Yankees, and incidents involving the team and the Yankee franchise, Courting the Yankees explores a wide range of legal issues as they relate to baseball.

    Part One is devoted to some of the biggest names in Yankee history (Yogi Berra, Joe DiMaggio, Mickey Mantle, and George Steinbrenner) and their run-ins with the law. Surprisingly, some of the biggest Yankee names are not profiled — where are Babe Ruth, Lou Gehrig, Reggie Jackson, etc?

    Part Two covers some notable incidents in Yankee history (injuries resulting from baseballs, Jim Bouton’s tell-all book (Ball Four), the Sports Illustrated woman reporter who sued to gain access to the locker room, the death of Thurman Munson, and George Brett’s pine tar incident).

    Part Three contains various episodes of “scandalous behavior” perpetrated by various Yankees. (As one might expect, this is the longest part of the book.) Topics include various crimes and midemeanors (“foul” language, gambling, drug use, sex scandals, murders) and the role of the “cop” — several baseball commissioners — in policing the Yankee miscreants.

    Part Four discusses various legal issues associated with Yankee Stadium, including its origins and building, as well as the impact of labor and antitrust laws.

    Part Five explores various self-described “bigger issues,” including breaking the color barrier, globalization, and, perhaps of most interest to readers of this blog, tax issues. Jack Williams (Georgia State) takes a tour through the tax problems of Yankees through the years. Some are mentioned only in passing, like Dwight Gooden and Darryl Strawberry. Others are discussed in much greater detail. The longest section explores the tax litigation surrounding Roger Maris’s Anheuser-Busch distributorship. Other tax cases drawing significant discussion are those involving Whitey Ford, George Steinbrenner, and Jeff Pries.

    As a life-long Boston Red Sox fan, I took perverse pleasure in reading about the various legal tangles involving my Yankee nemeses. Although nothing will take the sting away from last year’s Red Sox implosion (or 1986, 1975, . . .), it is comforting to read that the Yankees’ success on the diamond has not been matched in the courtroom. In watching Game 7 last year with my then-13 year old son, and seeing the tears stream down his face as he screamed at Grady Little “Take him out you idiot!,” I was reminded of a great column in the Boston Globe after Game 6 of the 1986 World Series, describing how a father summed up the pain of the Bill Buckner moment to his 10-year son: “They killed your grandfather, they’re killing me, and now the bastards are coming to get you.”

    To see the inaugural installment of What Tax Profs Are Reading, Joel Newman’s review of Perfectly Legal by New York Times tax reporter David Cay Johnston, see here.

  • Paul Caron

    Graetz Named Fellow of American Academy of Arts & Sciences

    Tuesday, May 4, 2004

    Michael Graetz (Yale) has been named one of 178 new fellows of the American Academy of Arts & Sciences. Here’s the opening paragraph of the announcement:

    [The 178 new fellows] are world-renowned leaders in scholarship, business, the arts, and public affairs. “I am honored to welcome these outstanding and influential individuals to the nation’s oldest and most illustrious learned society,” said Academy President Patricia Meyer Spacks. “These new members have made extraordinary contributions to their fields and disciplines through their commitment to the advancement of scholarly and creative work in every field and profession.”

    For a list of the other six law professors so honored this year, see here. For a complete list of the 178 new fellows, see here. Professor Graetz joins Boris Bittker (Yale) and Louis Kaplow (Harvard) as the only tax professors among the 124 law professor fellows.

  • Paul Caron

    Tax Protester Richard Simkanin Sentenced to 7 Years in Prison

    Tuesday, May 4, 2004

    TaxProf Blog typically does not comment on tax protester litigation, but “Tax Honesty” leader Richard Simkanin’s recent argument to a federal district judge, recounted on the Roth CPA Blog, recently caught my eye:

    Simkanin, 59, told U.S. District Judge John McBryde that after spending thousands of hours studying federal tax laws, the Constitution and the Declaration of Independence, he concluded that he did not agree with the tax laws.

    If that was not enough, his lawyer chimed in with this:

    He has a sincere, well-thought-out position that is at odds with the government position. Reasonable people disagree about the tax laws. My client is an American citizen who, like Thoreau, walked to the beat of a different drummer.

    Of course, Thoreau never took out a full page ad in USA Today denouncing the federal tax law. The Department of Justice and the jury (which found Simkanin guilty of 10 counts of wilful failure to collect, account for and pay over taxes due; 15 counts of making false claims against the United States; and 4 counts of failure to file individual income tax returns) were unpersuaded by these arguments, as was the district judge:

    But McBryde had heard enough. Going above federal sentencing guidelines, McBryde sentenced Simkanin to seven years in prison and ordered him to pay $302,000 in restitution to the government. Sentencing guidelines call for a sentence of 41 months to 51 months.

    For more on the Simkanin trial, see here, here, here, and here.

  • Paul Caron

    Aura on Optimal Income & Estate Taxes

    Tuesday, May 4, 2004

    Saku Aura (Missouri-Columbia Dep’t of Economics) has posted Estate and Capital Gains Taxation: Efficiency and Political Economy Considerations on SSRN. Here is the abstract:

    In this paper a simple dynastic overlapping-generations model with homogeneous agents is used to analyze the optimal use of capital income tax, labor income tax and estate tax. The results of this analysis add to the conventional wisdom about capital income taxation: while it is true that in the long run the estate tax rate should be set to zero, it is also true that other capital income taxation is a usable policy tool even in the steady state.

    The other contribution of the paper is the building of a simple dynamic political economy model where the structure of capital taxes is determined. In a median-voter framework with no policy commitment, estate taxation is used too heavily as a capital-tax-revenue-collecting tool relative to the second-best optimum for the social planner.

  • Paul Caron

    Johnson Takes Temperature of Tax System

    Monday, May 3, 2004

    Calvin Johnson (Texas) has posted A Thermometer for the Tax System: The Overall Health of the Tax System as Measured by Implicit Tax on SSRN. Here is the abstract:

    The implicit tax on tax-exempt municipal bonds is a thermometer that is now giving warning that the current tax system is not in good shape. The U.S. needs to stop using the tax system as a vehicle to delivering subsidies. In fact, the U.S. needs to give considerable attention to repairing the tax base through a tax overhaul at least as major as the Tax Reform Act of 1986. Tax exempt municipal bonds give an interest rate that is lower than that on comparable taxable bonds by the amount of what is called the implicit tax. In theory, high tax bracket investors should be willing to accept an implicit tax, just short of their statutory tax rate. The implicit tax is now very low, hovering not far above zero. The implicit tax is so low today because investors have too many easy alternative ways to avoid tax and are not willing to accept very low interest rates from tax exempt municipal bonds. The low implicit tax indicates that tax is an inefficient vehicle for delivering tax subsidies and that the tax system is not reaching its best sources.

  • Paul Caron

    IRS Attorney Directory by Code Section & Subject Matter

    Monday, May 3, 2004

    The monthly update of the 121-page directory of attorneys in the IRS Chief Counsel’s Office, arranged by Internal Revenue Code Section and Subject Matter, is available on the Tax Analysts’ web site.

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