Wednesday, May 26, 2004
For strikingly similar religious perspectives on so-called sin taxes (taxes on alcohol, cigarettes, gambling, etc.), compare this Christian blog with this Islamic blog.
Paul L. Caron
Dean
Pepperdine Caruso
School of Law
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Today’s ABA Tax Section Teleconference and Webcast Postponed
Wednesday, May 26, 2004
Today’s scheduled ABA Tax Section Teleconference and Webcast (1:00 – 2:30 pm EST) on the Application of Section 108 to Consolidated Groups has been postponed and will be rescheduled for another date.
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IRS Promotions
Wednesday, May 26, 2004
The IRS has announced two promotions:
• Steven Miller, Commissioner of the Tax Exempt and Government Entities (TE/GE) Division
• Rich Morgante, Deputy Commissioner of the Wage and Investment (W&I ) Division -
New Book: Eugene Steuerle, Contemporary U.S. Tax Policy
Tuesday, May 25, 2004
Eugene Steuerle has published Contemporary U.S. Tax Policy (Urban Institute Press, 2004). Here are some Tax Prof reviews:• Alan Auerback (UC-Berkeley): “This is an accessible and engrossing analysis of recent tax policy by an important participant in the process, full of useful facts and plenty of interesting anecdotes. The U.S. tax system’s current state may be difficult to justify, but it will be easier to understand after one reads Steuerle’s account of how and why things happened.”
• Evelyn Brody (Chicago-Kent): “The pre-eminent writer on public finance today brings us a succinct and thorough guide to the exigent yet contested social issue of tax policy. In his clear and compelling prose, Gene Steuerle masterfully reviews the history of endless ‘reform’ and offers prescriptions for the future. In unpacking the legislative and administrative process, he identifies the major players, their principles and ideologies, and the winners and losers. This practical volume is essential reading for policy makers as well as practitioners and students of economics, law, accounting, policy studies, and political science.”
• Daniel Halperin (Harvard): “I am a long-time fan of Gene Steuerle and his work, most importantly his ability to bring clarity and balance to a debate that is often dominated by partisanship and bias. Contemporary U.S. Tax Policy provides a compelling examination of how theoretical arguments have blended with powerful constituencies to shape and reshape tax policy over the past 50 years. Academics as well as tax lawyers should read this concise history.”
• Ronald Pearlman (Georgetown): “I think it fair to say that treasury I [the treasury proposal leading to the tax reform act of 1986] would not have moved forward had it not been for [Gene’s] early leadership.”
Newsweek’s Robert Samuelson notes that the book “addresses the insistent question: Why is the federal tax system such a mess? The answer, in a word, is democracy.”
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NY AG’s Complaint Against Former NYSE Head Richard Grasso
Tuesday, May 25, 2004
For a copy of the 106-page complaint filed by New York Attorney General Eliot Spitzer seeking to recover over $100 million of past compensation paid to former NYSE Chairman Richard Grasso, see here. For Mr. Grasso’s defense, see here. For some of the many press reports about the complaint, see here, here, here, here, and here. (Thanks to Ellen Aprill (Loyola-L.A.) for the tip).
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Lessons from Tax History
Tuesday, May 25, 2004
As most Tax Profs know, there are a number of active and vibrant scholars in this country who mine tax history for lessons to inform current tax policy debates. In Japan, the government is looking to tax historians to help shape modern-day tax reform:
A Japanese government advisory panel has turned to ancient history for inspiration in its struggle with the thorny issue of how to reform the country’s tax system. Members of the panel, which reports directly to the prime minister, recently heard from experts on population change in the Jomon period, from around 10,000 BC to 300 BC, and during the Tokugawa Shogunate, which ruled Japan from AD 1600 to 1868.
For the complete story, see here.
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Tax Policy Group Releases Scorecard of Senators and House Members on “Middle Class” Votes
Tuesday, May 25, 2004
The Drum Major Institute for Public Policy has released Middle Class 2003: How Congress Voted, a scorecard of votes on “legislation that significantly impacted America’s middle class in 2003.” Votes on several tax bills are included in the grades given to every Senator and Member of the House. See the accompanying press release and executive summary. (Sen. Kerry received an “A” grade for his 100% voting record.)
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Block on Congress and Accounting Scandals
Tuesday, May 25, 2004
Cheryl Block (George Washington) has published Congress and Accounting Scandals: Is the Pot Calling the Kettle Black?, 82 Neb. L. Rev. 365 (2003). Here is a flavor from the Introduction:
Congress itself has been guilty of using accounting devices remarkably similar to those used by Enron, WorldCom and others to “cook the books” and to mislead the public with regard to government finances….temptations for the government to engage in creative accounting may be even greater than those in the private sector.
Many budget commentators have complained about congressional gimmicks used to misstate or misrepresent the true state of the federal budget. To my knowledge, however, none of them has made an effort to compare the gimmicks used by Congress with those used by private-sector firms. One of the questions raised in this Article is the extent to which mere “gimmicks” in the hands of federal budget-makers might be considered accounting, tax, or securities fraud in the hands of the private sector. Further, if the gimmicks would be so considered, is the double standard justified? This question takes on added importance as Congress now seeks to hold the private sector to higher standards through recent corporate accountability legislation and as Congress considers proposals for budget reform.
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Tax Problems of U.S. Soldiers in Iraq
Monday, May 24, 2004
Congress has enacted various tax breaks for members of the U.S. Armed Forces, including section 112 which excludes from income military pay for soldiers serving in combat zones like Iraq. The IRS has a very helpful web site and publication (Publication 3: Armed Forces’ Tax Guide) explaining these tax benefits. Yet a recent GAO Report, Active Duty Military Compensation and Its Tax Treatment (GAO-04-721R), reports that the section 112 income exclusion has adverse tax consequences because of its interaction with other tax benefits, and that the adverse consequences get worse the longer a solder is stationed in a combat zone:
The complex interactions between the combat zone exclusion and certain tax credits (principally the Earned Income Tax Credit and the Additional Child Tax Credit) appear to be creating unintended consequences. Specifically, some low-income-earning service members who serve in a combat zone are worse off for tax purposes, while some higher-income-earning members are better off because they become eligible for a tax credit that is normally targeted to low-income workers.
Our analysis suggests that some of the roughly 430,000 members serving in a combat zone in 2003—between 5,000 and 10,000 members in one-earner households—suffered a net loss of tax benefits…. [T]he number of members losing tax benefits could be larger in 2004 depending on the how many service members are in a combat zone and how long they are there.
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“Unofficial” Tax Court Web Site
Monday, May 24, 2004
Jim Maule (Villanova) has updated his wonderful “unofficial” Tax Court web site. The site has a complete set of the court’s rules which, unlike the “official” site, are hyperlinked (and thus permit the user to jump from rule to rule). The unofficial site also has detailed biographical information about the judges and other information. A tip of the TaxProf Blog hat to Professor Maule for providing this valuable service to the tax community.
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