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A Tax Policy Blog -- for tax profs, policy wonks, and other shameless tax nerds.
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Saturday, April 12, 2003
In the democratic radio address, Richard Neal attacked corporate expatriates (see the NYT article here). The article states:
"Neal, who is also a senior member of the House Budget Committee, said House Republicans slipped a provision in the energy bill to protect all of the corporate expatriates who have already left."
I haven't seen anything about this particular provision but I will keep looking.
Friday, April 11, 2003
More on repatriated earnings
Washington Post article on the repatriated earnings legislation.
New blogger -- Brad Joondeph
Also now blogging with us, at least occasionally, is Brad Joondeph, one of Jeff's colleagues at Santa Clara. Brad teaches Con Law as well as Fed Tax and State and Local Tax, and he's written articles in both the con law and tax areas as well.
Thursday, April 10, 2003
I was suppose to fly to Detroit tonight to attend the Critical Tax Conference at the University of Michigan Law School but my flight (and thus my trip) was canceled. I cannot find a link describing the conference, but participants include Dan Schneider, Beverly Moran, Norm Stein, Reuven Avi-Yonah and Joel Slemrod (among other things, Joel is the director of the Office of Tax Policy Research). I hope they have better luck getting there than I did.
Budget deal and the Dividend Exclusion
New York Times article reports that the House and Senate agreed to disagree over the size of the tax cut, with the Senate authorizing $350B and the House authorizing $550B. Both are less than the $725B that the Bush administration requested. As I understand it, this means that, under this budget resolution, tax cuts up to $350B are okay with bare majorities in each house, and no threat of filibuster, but $350B-550B, the result is unclear.
The Times also noted, again, that many folks think that this means that the dividend exclusion is dead. I wonder how dynamic scoring works its way into this debate. No doubt some will argue that the dividend cut pays for itself. (I'm skeptical of this claim for a number of reasons, but more on that later.)
Regressive impact of fees vs. taxes
Bill Brown (Duquesne) pointed me to this article in the Washington Post discussing how local governments, now strapped for cash, are raising fees for public transport and the like. I've thought about this here in New York recently, with subway and bus fares going up as legislators struggle to pass a commuter tax.
Maybe you think local taxes are too progressive, maybe not. But one key problem with state and local governments relying more on fees instead of taxes is that it makes it more difficult to measure the progressive/regressive impact of an increase in fees.
IMF Weighs In
Kenneth Rogoff, Economic Counsellor and Director of Research of the IMF, states the following at the IMF World Economic Outlook press conference (a transcript of the entire press conference can be found here):
"First of all, I am sympathetic to the idea that it's important to eliminate the double debt taxation of dividends, and that over the long term that might enhance growth. However, the timing of the tax package is awkward, given the open ended nature of potential costs stemming from the war in Iraq and that country's eventual reconstruction.....If the tax cuts were accompanied, say, by expenditure cuts or planned expenditure cuts, or perhaps some type of pension reform, such as phasing in higher retirement ages, if these could be slotted in simultaneously, then I think our concern about the medium-term sustainability would be a lot less."
Although the IMF does not have the best track record, I personally agree with the point that the government should pass both tax and spending reductions (although I am not an economist). I believe that this is basically Alan Greenspan's position as well. Lawrence Lindsey (former economic advisor to President Bush) wrote an interesting article in the WSJ on this topic. I am still digesting the full IMF World Economic Outlook report.
Wednesday, April 09, 2003
Oxymoron? Dave Barry has published his annual tax piece.
Executive Tax Evasion
Here's a Washington Post story on executive pay on Enron. The issue is whether the income deferral on some deferred comp was justified, given that Enron in fact decided to accelerate the comp when it became clear that the company was going bankrupt. I haven't looked at the plans myself, so I don't know who is right, but it sure sounds fishy. The principle behind deferred comp (rabbi trust plans and the like) is that the money will be available to creditors, not executives, if things fall apart. Even more disturbing is the testimony that Enron was not an outlier here -- that what they did was industry standard.
NY Times suggested in a story today that the dividend exclusion would not survive if Congress cuts the Bush plan in half.
"But the prevailing view in the Capitol today was that the proposal to eliminate income taxes on most stock dividends probably could not survive under a $350 billion limit."
Whatever the outcome of the dividend plan, I expect this battle will be fought again in a year or two.
More Tax Compliance
Speaking of tax compliance, Clarissa Potter (Georgetown) is presenting a paper tomorrow at Dan Shaviro's NYU tax colloquium that analyzes an IRS's office, the Taxpayer Advocate Service, which is intended to reduce the aggregate costs of tax administration.
The full colloquium schedule is here.
Tuesday, April 08, 2003
According to Newsday, IRS salary increases and unexpected expenses means fewer funds for tax enforcement. Recently, Kansas Law Review held a symposium on tax compliance and the 1998 IRS Reform Act. The symposium issue has not been published yet.
Jeff Kahn, Assistant Professor of Law at Santa Clara, has kindly agreed to help me out with this blog. Jeff's most recent article, Gifts, Gafts, and Gefts, addresses the justification for excluding gifts from income. Jeff has also been working on corporate tax and international tax articles and casebooks. You can find a link to his homepage on the left.
Just received a desk copy of a new book on taxation and distributive justice, called Tax Justice. It's a collection of essays from nine scholars, edited by Joseph Thorndike and Dennis Ventry. I had read a couple of the chapters already in manuscript form -- Sharviro's essay on Endowment and Inequality was especially new and insightful, at least for me. Dennis Ventry's chapter puts the equity/efficiency debate in historical context, which I haven't seen before.