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TaxProf Blog

Paul L. Caron
Dean
Pepperdine Caruso
School of Law

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  • Paul Caron

    Chart on 1916-2011 Tax Rates

    Monday, May 17, 2004

    Citizens for Tax Justice has released a helpful one-page chart, Top Federal Income Tax Rates on Regular Income and Capital Gains since 1916. Here are the figures for 2004 and beyond:

    Year……..Top Regular Rate……..Begins at:..Top Capital Gains Rate
    2003-05…..35% (36.1%)………… 319,100… 15% (16.1%) (CG rate applies to dividends)
    2006-07…..35% (35.7%)………… 338,525….15% (15.7%) (CG rate applies to dividends)
    2008………..35% (35.4%)………… 351,250… 15% (15.4%) (CG rate applies to dividends)
    2009………..35% (35.4%)………… 360,050… 20% (20.4%) (Dividends taxed at regular rates)
    2010………. 35%………………………. 369,050… 20% (All Bush tax cuts expire after 2010)
    2011-……… 39.6% (40.8%)……….378,250… 20% (21.2%)

  • Paul Caron

    Kahng on New Innocent Spouse Rules

    Monday, May 17, 2004

    Lily Kahng (Seattle) has published Innocent Spouses: A Critique of the New Tax Laws Governing Joint and Several Tax Liability, 49 Vill. L. Rev. 263 (2004). Here is the conclusion:

    The principal tax rationale for joint and several liability–marital unity–is little more than a fiction adopted by lawmakers and scholars in order to rationalize a political compromise between community property and common law states. Furthermore, the other, secondary justifications for joint and several liability are unsatisfactory at best. Nonetheless, with the fiction of marital unity deeply embedded in our tax system, joint and several liability for married joint filers is likely to remain the law. While it can sometimes promote legitimate goals of fairness and efficiency, as an examination of joint and several liability in tort, agency and fraudulent conveyance law reveals, it can also produce unjust or irrational results. Where possible, therefore, the new innocent spouse laws should be interpreted and, in some cases, reformed to alleviate these injustices and irrationalities.

  • Paul Caron

    Will Catholic Church’s Criticism of Kerry Jeopardize Tax Exemption?

    Monday, May 17, 2004

    Donald Tobin (Ohio State) raises the interesting question of whether the Bishop of Colorado placed his diocese’s tax exemption in jeopardy by telling Catholics in a pastoral letter that that “any Catholics who vote for candidates who stand for abortion, illicit stem cell research or euthanasia suffer the same fateful consequences [as the candidates who support these issues]?” According to the Bishop, such people “place themselves outside full communion with the Church and so jeopardize their salvation.” Professor Tobin writes:

    [The Bishop] later goes on to say that “The Church never directs citizens to vote for any specific candidate,” but the letter certainly appears to be telling people to vote against Kerry.

    This letter appears to me to be very close to the line. In its recent notice, Charities May Not Engage in Political Campaign Activities, the IRS indicated that:

    “These organizations [501(c)(3)s] cannot endorse any candidates, make donations to their campaigns, engage in fund raising, distribute statements, or become involved in any other activities that may be beneficial or detrimental to any candidate. Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political campaign prohibition of section
    501(c)(3).”

    Isn’t [the Bishop’s] letter political activity detrimental to a candidate? It is not just saying good Catholics oppose these issues, but is instead saying that when a Catholic balances the pros and cons of a candidate, he risks salvation if he decides to vote for Kerry over Bush.

    The Bishop has also picked specific issues that divide Bush and Kerry and makes reference to the coming election often. It is my understanding that the Church also opposes the death penalty, but that was not listed. (I have no idea of Kerry’s position on the Death Penalty) Do I risk salvation by voting for either Kerry or Bush? It appears the Bishop picked specific issues that Kerry opposes (or Bush supports) and basically indicated that only people who vote for Kerry “jeopardize their salvation.” (I understand he never mentions Kerry by name but it is impossible to read the letter and not get his meaning).

    I am sure that the IRS will not take on the Catholic Church over this issue. But it seems to me to be another reason 1) not to exempt 501(c)s from campaign finance regulation and 2) not to rely on the IRS as an enforcement mechanism for campaign finance regulation.

  • Paul Caron

    Report on State Earned Income Tax Credits

    Monday, May 17, 2004

    The Center on Budget and Policy Priorities has released A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty. The effectiveness of the federal EITC in encouraging work among welfare recipients and in inducing more single mothers to work has been well-studied. State EITCs, however, often have been ignored in this scholarly debate. In all, 17 states (Colorado, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oklahoma, Oregon, Rhode Island, Vermont, Virginia, Wisconsin) and the District of Columbia have EITCs ranging from 4% to 43%. For a full summary of the report, see here.

  • Paul Caron

    Georgetown Guide to Tax Research

    Monday, May 17, 2004

    The Edward Bennett Williams Library at Georgetown University Law Center has an extraordinarily helpful on-line Federal Tax Research Guide, as well as a handy Federal Tax Reference Chart and State & Local Tax Research Guide. After a detailed Introduction, the Federal Tax Research Guide provides listings of tax sources in these major categories:

    • Statutes

    • Administrative

    • Judicial

    • Periodicals

    • Procedure

    • IRS Pubs

    • IRS Forms

    • Internet

    TaxProf Blog will add links to these wonderful sites to our list of resources in the left column. For links to research guides in other areas of law, see here. Thanks to Benefitsblog for the tip.

  • Paul Caron

    Paine on Tax Treatment of International Philanthropy

    Monday, May 17, 2004

    Robert Paine has published The Tax Treatment of International Philanthropy and Public Policy, 19 Akron Tax J. 1 (2004). Here is part of the introduction:

    Despite the changes in the landscape of international philanthropy and the revelations regarding its abuse, the U.S. tax system continues to impose an archaic and inconsistent web of policies and restrictions on taxpayers: a system of rules and limitations that differ according to the status of the taxpayer as an individual, a public charity, or a private foundation. The traditional policy that has guided the development of the charitable deduction and tax exemption is that charitable activities ease a burden that would otherwise have to be borne by the United States government. This policy creates inconsistent treatment, however, when it is applied to international charitable giving. Because of this inconsistent treatment and the ever-increasing globalization of the world’s communities, Congress should adopt a new policy to guide this field: a policy that grants a charitable deduction and tax exemption (1) if a contribution or grant furthers one of the traditional charitable purposes enumerated in § 501(c)(3) and (2) if the activity does not violate the public policy of the United States.

  • Paul Caron

    Penn State Tax Conference

    Monday, May 17, 2004

    The 58th Annual Penn State Tax Conference is being held today and tomorrow in State College, Pennsylvania. Tax Prof Kathy Mandelbaum (Temple) will be speaking on Estate & Gift Taxes. For a list of the other speakers and topics, see here.

  • Paul Caron

    Top 5 Tax Paper Downloads

    Sunday, May 16, 2004

    This week’s list of the Top 5 Tax Paper Downloads on SSRN is unchanged from last week:

    1. Corporations, Society and the State: A Defense of the Corporate Tax, by Reuven Avi-Yonah (Michigan)

    2. The Dividend Divide in Anglo-American Corporate Taxation, by Steven Bank (UCLA)

    3. Evidence of Differing Market Responses to Meeting or Beating Targets Through Tax Expense Management, by Cristi Gleason (Iowa – Dep’t of Accounting) & Lillian Mills (Arizona – College of Business & Public Administration)

    4. Masking Redistribution (or its Absence) by Jonathan Baron (Penn – Wharton) & Edward McCaffery (USC)

    5. The Progressive Consumption Tax Revisited, by Steven Bank (UCLA)

  • Paul Caron

    Senate Staff Summary of Pension Bill

    Sunday, May 16, 2004

    The Senate Finance Committee staff has prepared a very helpful 10-page summary of the National Employee Savings and Trust Equity Guarantee Act (NESTEG).

  • Paul Caron

    President Bush Seeks Reappointment of Tax Court Judge Colvin

    Sunday, May 16, 2004

    The White House sent to the Senate its request to reappoint Tax Court Judge John O. Colvin for another 15-year term. Originally appointed to the Tax Court by President Reagan in 1988, Judge Colvin has served as a senior judge since his first 15-year term expired August 31, 2003.

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