A Taxing Blog

Saturday, May 10, 2003
Ending Double Taxation (on Attorney Fees)  
In a recent law review article, Gregg discusses the problem where, on account of limitations on miscellaneous itemized deductions (including the AMT), certain plaintiffs get taxed on damages which are paid over to the plaintiff’s attorney for legal services. According to this Washington Post article, the Senate Finance Committee's tax proposal includes a provision that fixes this problem (thanks to Brad for the site). Hmmm…Gregg writes a law review piece recommending that Congress fix the problem and, within a short period of time, Congress begins the process to fix it. I only wish my pieces had the same effect.

Friday, May 09, 2003
Economic Substance Doctrine  
According to the JCT summary of Chairman Grassley's proposals to the Jobs and Growth Tax Act of 2003:

The proposal clarifies and enhances the application of the economic substance doctrine. The proposal provides that a transaction has economic substance (and thus satisfies the economic substance doctrine) only if the taxpayer establishes that (1) the transaction changes in a meaningful way (apart from Federal income tax consequences) the taxpayer's economic position, and (2) the taxpayer has a substantial non-tax purpose for entering into such transaction and the transaction is a reasonable means of accomplishing such purpose....The proposal clarifies that the economic substance doctrine involves a conjunctive analysis -- there must be an objective inquiry regarding the effects of the transaction on the taxpayer's economic position, as well as a subjective inquiry regarding the taxpayer's motives for engaging in the transaction.

More information on this and the other proposals can be found in the full JCT report.

Putting the Esquire in Victor Fleischer, Esq.  
Nearly 2000 hits this week --- the spike in traffic comes from readers apparently interested in the constitutionality of the EITC reforms, helped by links from Eugene Volokh and, more unusually, mensnewsdaily.com, which bills itself as "News and More for the World's 200 Million English-Speaking Men." Not the audience I expected, exactly, but maybe I should consider moonlighting a tax column for Esquire or GQ.

Not clear to me how the readers of Esquire would feel about my argument that gender, like race, is primarily a social construction rather than biological.

WSJ Editorial  
There is a WSJ editorial today on Stanley Works. The editorial also mentions the proposal to cut taxes on repatriated corporate earnings to 5.25% for one year. While the proposal may have some merit, I don't see why it should be limited to one year. Also, a Washington Post article shows that some Senate Republicans are trying to lower the "cost" of the tax bill by raising taxes in other areas (the main one being the exemption for workers overseas).

I have been swamped with exam period work (drafting exams, answering student questions, grading, etc..) but I am starting to see the light at the end of the tunnel. Thus, I hope to get some serious work on my research projects for the summer. First, I am co-authoring a piece on tax shelters (what else?) where we compare the current tax shelter epidemic with the S&L crisis. As the project moves forward, I will post more to solicit comments and suggestions. Second, I am co-authoring a corporate tax textbook. I have finished chapter one but it all may get thrown out after the new tax bill gets passed.

I don't know much about the AMT but I have always wondered if it could actually be used for some serious tax reform. Making unpopular changes to the AMT is easier politically and then just repeal the "regular" income tax and have the AMT apply to everyone.

Codifying Economic Substance  
Anyone know the status of the proposal to codify the economic substance doctrine?

I'd assumed the proposal was dead, but now I'm wondering if the administration might put it back on the table as a revenue offset.

Unlike most practitioners, I'm in favor of the proposal, despite its flaws --- one overlooked effect of the legislation would be to effectively shift some power over tax shelters from judges to the Treasury/IRS. I'll write more on this if the proposal is, in fact, alive.

(For those of you who aren't familiar with the topic, I'm referring to a proposal to codify one of the many common law rules that judges sometimes apply as an attempt to shut down the most blatant tax shelters.)

Krugman on Sunsets  
Paul Krugman has an op-ed column criticizing the use of sunset clauses (phase-outs) as a budget gimmick. (Reader Dick Riley wrote in about this a few days ago.) Now that it's becoming a pattern, sunsets may be even harder to fix than, say, campaign finance, because, like campaign finance, the sunset gimmick benefits representatives on both sides of the aisle, and (even worse than campaign finance) the group that's hurt the most (future taxpayers) doesn't have much of an organized lobby. At least there is no free speech issue.

Thursday, May 08, 2003
A Bit of Sanity: Senator Snowe  
The Washington Post reports that Sen. Olympia Snowe of Maine (R) was behind the Senate plan, announced yesterday, to offer dividend relief through a $500 across-the-board exclusion rather than a phased-in percentage plan. Hope it sticks.

Senate Bill  
It's been reported that the Senate will vote on a compromise tax bill which would (i) exclude the first $500 of dividends from gross income, (ii) exclude 10% of dividends in excess of $500 until 2008, and (iii) exclude 20% of dividends in excess of $500 from 2008-2013 (in 2013, everything reverts back to current law). What's interesting about this compromise is that the original justifications for Bush's 100% dividend exclusion proposal were to: eliminate current law's incentive to use debt versus equity financing, eliminate current law's incentive for corporations to retain their earnings rather than distribute it, and to eliminate current law's bias against C corporations. However, the Senate bill (and the House bill for that matter) will do little if anything to elimate these incentives. The Senate bill essentially reduces the effective rate on dividends to 31.5% until 2008 and to 28% from 2008-2013. This is still significantly higher than the capital gains rate of 20%. So, corporations will still have a tax incentive to retain their earnings, increase their stock price, and have their shareholders bail out earnings through sales or redemptions. And, since corporate earnings will still be taxed twice (albeit at a slightly lower rate for dividend distributions than under current law), there's still a bias against C corporations. Finally, the incentive to debt finance remains, since "earnings" paid out as interest would be taxed once (and not at all for some debtholders) while earnings paid out as dividends or redemptions would be taxed twice. The Senate bill also does nothing to eliminate (or reduce) the incentive to engage in sheltering activity. I suppose the Republicans' justification for the Senate bill is that it's a step in the right direction (and, more importantly, it doesn't make Bush's dividend exclusion proposal a complete failure). My view is that the cost of this half-hearted effort could be better used elsewhere.

Lastly, economists had a tough enough time figuring out the effect of a 100% dividend exclusion on stock prices- I can't imagine how they'd possibly figure out the effect of this bill (but maybe it is easy to figure because the answer is zero effect).

Capital Gains Cut vs, Dividends  
NYT article reports how many conservatives prefer the House Plan, which would cut capital gains from 20% to 15% (as well as cutting div rate from 38% to 15%), over the White House Plan:
Many conservatives had long preferred their tax cut to the one advocated by the president, but until the last few days, party loyalty prevented them from saying so. Now that the president's tax plan is faltering, however, his high standing in the polls has not prevented many Republicans from openly dismissing his proposal.
"A great number of conservatives in the Republican conference are more enthusiastic about the new House bill than the president's proposal," said Representative Mike Pence, a conservative Republican from Indiana. "Frankly, I never really understood how the White House plan to eliminate the taxation on dividends would get the economy moving. But millions of Americans understand the power of cutting the tax on capital gains."

As a matter of economic stimulus, I expect the House plan is better -- lowering the capital gains rate is more likely to lower the cost of capital than lowering the rate on dividends.

I should note that the House plan is even less progressive than the White House plan. Under the White House plan, rich folks with a lot of dividend income benefited the most, by far, but seniors with a small amount of dividend income also benefited. Under the House plan, those seniors get little or no help -- the reduction in the rate from 38% to 15% doesn't help them very much, since they are likely to be in a low tax bracket anyway. But I do think the House plan at least will stimulate a bit more investment in the markets (at least at the margin, which is what matters).

Another interesting point I haven't seen discussed -- unlike the White House plan, which would only benefit equity holders of dividend paying stocks, the House plan would benefit all property holders, including bondholders. (Wouldn't help individual real estate holders much, since so few pay capital gains tax anyway. But it would help commercial real estate.)

I'm not endorsing the House plan, mind you -- I think there are better (more targeted) ways to stimulate the economy than an across the board capital gains cut. But it is probably better than the White House plan.

Wednesday, May 07, 2003
Angry Bear suggests that we are "overly narrow" in describing our target audience -- that really anyone interested in economic and fiscal policy should be interested in the blog. So he suggests "Economic News and Analysis for Everybody, written by shameless tax nerds." Well, at least we are in agreement that we are shameless tax nerds.

Actually, Angry Bear is right -- I do seem to receive emails from a broader audience than I expected, which is great.

Other suggestions for catchphrases for the blog are most welcome.

Congressional Deception (Part II)  
Victor's earlier post regarding the phasing out of tax cuts to make the cuts look cheaper brought to mind what I like call the "AMT undisclosed liability problem." The AMT, which was intended to make sure that the very rich pay some taxes, taxes a broader base of income at 26-28%. An exemption of $45,000 is provided, so that the first $45K of amt taxable income is not taxed. The problem is that neither the bracket amounts nor the exemption amount is adjusted for inflation. As a result, more and more taxpayers creep into the AMT's domain. Furthermore, because the 2001 cut lowered rates significantly, and because the tax bills on the table accelerate this reduction, more and more unsuspecting people will get blindsided by the AMT. Thus, although only 1.3 million taxpayers had AMT liability in 2001, some estimates have 46 million taxpayers subject to the AMT in 2013 if the 2001 tax cuts are made permanent. (Rep. Rangel previously pointed out that the brunt of the burden will fall on those living in high tax states and said something to the effect of: "Isn't it interesting that the burden will be borne by those living in all the states that Gore won, except Florida (which has no income tax)?") In addition, some have predicted that, by 2008, it would be more expensive to repeal the AMT than to repeal the regular income tax.

Congress has enacted temporary fixes (what else would you expect) to the problem (like raising the exemption temporarily), but this is like plugging a leaky boat with your fingers.

Politically, Congress could never afford to let so many unsuspecting ordinary taxpayers get hit with the AMT trap. At some point, they must make a real fix, which will be enormously expensive. Thus, the undisclosed liability. To quote Professor Bob Peroni (who was talking about the Section 68 hidden rate increase, another repulsive display of Congressional deception): "Such a gimmick should be beneath the national legislative body of the world's most powerful democratic country."

Tuesday, May 06, 2003
SSRN article on blogging  
SSRN has uploaded our article on blogging, The Uneasy Case for Blogging Taxation.

Are the proposed Earned Income Tax Credit reforms unconstitutional?  
I blogged a while back about the IRS's proposal to require additional documentation for single dads applying for the Earned Income Tax Credit. Single moms and taxpayers filing jointly do not face the additional requirement.

My opinion is that the reform makes sense, since it is carefully targeted (only 20% of EITC claimants face the additional burden), and single dads cheat about 10 times as much. By cracking down on fraud, political support for the program might even increase.

A reader emailed me to ask if the reforms are constitutional. Of course they are, I wrote back. Oops.

It's a much closer question than I realized.

As you con law scholars out there know, because the EITC proposal relies on a gender classification, it is subject to "intermediate scrutiny." According to the recent Supreme Court VMI case, intermediate scrutiny is nearly as demanding as the strict scrutiny applied to race cases, and far more demanding than legislation without a race or gender classification, for which any non-laughable rational basis will do. The official test: A gender-based classification withstands equal protection scrutiny if it serves important governmental objectives and the discriminatory means employed are substantially related to the achievement of those objectives. The test, in reality, is applied more strictly than it sounds.

The IRS will have some arguments in its favor. Here, the IRS is using gender, coupled with marital status, as a proxy for proclivity to commit fraud. Single dads have to fill out the extra paperwork, while single moms and most married couples do not. The IRS can argue that gender is a good proxy because it has evidence that single dads in fact cheat far more often than single moms. But is gender an acceptable proxy here? After all, there are more single dads that don't cheat than those that do, and shouldn't we worry about them?

More importantly, perhaps, should we allow the law to reinforce existing stereotypes (i.e. that children are more likely to live with mom than dad)? This is a tough one, because the IRS presumption -- that children are more likely to live with mom than dad -- is in fact true, and not just based on sexism. But the fact that it is true doesn't mean, necessarily, that the law should sanction the presumption.

If this were a racial classification, it would be an easy case. Race is essentially a social construction, and we don't generally allow the law to sanction racial profiling. But gender is sometimes a social construction and sometimes not, and that's what makes it so tricky.

In a recent immigration case, Nguyen v. INS (2001), the Supreme Court upheld additional documentation steps required of children born out of wedlock to US citizen fathers than to US citizen mothers. Nguyen was a 5-4 decision, with O'Connor joining the liberals and Stevens joining the conservatives.

The problem for the IRS is that in Nguyen, the distinction was primarily biological, whereas here it is primarily sociological. It is, as a matter of biological fact, easier to know one's mother, as there are often witnesses to the birth and contemporaneous hospital and public records. In the EITC context, we are dealing not with the biological fact of parentage but with residency. And while there may be some biological urges that make it somewhat more likely for children to live with their mothers than their fathers (and I'm not even sure about that), it is clear to me that the presumption that children live with their mothers is primarily a social construction, not a predetermined biological fact.

And the Supreme Court, at least in recent years, has been very reluctant to allow laws to perpetuate any gender classifications that are based primarily on social construction rather than biology. Cf. Craig v. Boren (1976) (striking down state statute with different drinking age for men and women notwithstanding fact that men tend to drive drunk more often than women).

Ultimately, were this case ever to reach the Court, I think the reforms would be struck down, with O'Connor, Ginsburg, Breyer, Souter and Stevens relying on Craig v. Boren, and maybe even picking up some conservatives, since conservatives both hate discrimination against men and also usually hate the IRS.

I have a lot of sympathy for the Service. They have done their homework here and come up with reforms that are carefully designed to impose the minimum burden on legitimate EITC claimants. What do they get in return? First, they get unfairly bashed in the New York Times. Second, Dems in Congress are holding up the appointment of the new IRS commissioner until he promises that any new rules will not be overbroad. Now, on top of that, they could face a lawsuit challenging the new rules because they are not overbroad ENOUGH -- i.e., if the rules required extra documentation of everyone, there would be no gender classification and thus no constitutional issue. The end result is that the rules will probably have to be rewritten in a gender-neutral way, thus imposing the documentation burden on many more people than necessary, exposing the IRS to new charges of bashing-the-poor.

Stepping back for a moment, this result presumably reflects a view that the societal harm of a classification based on gender -- here, the presumption that single dads cheat more -- is greater than the societal harm of living without the presumption, which means either 1) allowing more EITC fraud or 2) unnecessarily imposing the burden on single moms, too.

This reflects the philosophical approach of Justice Ginsburg, and reflects her impact on the law. Before she was a judge (and sometimes with the help of her husband, taxguru Marty Ginsburg) she challenged tax and social security statutes that supported "widows and orphans." Of course, Justice Ginsburg had nothing against widows and orphans --- rather, she felt that widowers should be treated the same as widows, even if that costs the government more money. (She also knew -- and she's said this publicly -- that in the 1970s the only way to win a gender discrimination case in front of a conservative judge is to make the plaintiff a man. It's hard to argue with her strategy.) Her view, to summarize, is that we should be willing to pay a bit more tax, or fill out a few extra forms, in exchange for a more equitable society free from unnecessary gender classifications.

I'm not sure I agree with that view in this case, and in general I'm awfully skeptical of reverse discrimination claims. But having read the cases, I think that's probably the law.

Tax Cuts and Budget Scoring  
Reader Dick Riley emailed in to grumble (his words, not mine) about the "the
enactment of tax cuts on a "temporary" basis (i.e., typically with some
sunset a few years down the road) for the sole purpose of artificially
lowering the calculated revenue cost over the 5-year or 10-year scoring
window, with the sponsors knowing (or at least planning) that the provisions
will be continually re-enacted."

Dick points out that this is awfully cynical and a blatant gaming of the system, and of course he's right.

Who gets hurt: the public, of course. Those inside-the-beltway don't really get hurt. The scoring conventions are like accounting conventions -- if everyone understands the game, and everyone plays by the same rules (i.e. Dems and Republicans alike), then insiders with a deep understanding are not fooled by artificial numbers.

But it does hurt the public. The object of scoring tax cuts should be to give voters an understanding of the true costs of competing proposals. Making an insincere promise to repeal a tax cut is deceptive to voters, who just might think that a $350 billion tax cut is really that, and not a $1 trillion cut in disguise.

Politicians like temporary tax cuts because they know it is easier to extend existing tax relief than to initiate a new tax cut. And so they know that the sunset repeal of a tax, in real politics terms, is unlikely to ever come.

The public is hurt by more than just the deception factor. The public also loses because temporary measures add to the complexity of the tax code and confuse legitimate tax planning.

But since these negative externalities (i.e. indirect bad effects caused by the legislation) are spread across the public, no one has a very strong incentive to lobby against the temporary aspect of the legislation.

The solution, I think, is to change the budget scoring rules. Changes which are likely to be permanent should be treated as such for scoring purposes. Of course, I'd need to do more research on the tax legislative process before coming up with appropriate language. I suspect that, like accounting conventions, scoring conventions need to move away from bright-line rules (which are easy to game) and towards principles (which are vaguer and harder to apply but also harder to cheat).

Monday, May 05, 2003
Angry Bear  
Angry Bear has a great post on what McKinsey (the consulting group) says about the dividend tax cut. I'll write more about this when I get a chance. Meanwhile, here's one key passage from McKinsey's newsletter:

The proposed tax cut, when viewed with an understanding of the shareholder makeup and share price movements of US companies, seems unlikely to have a significant or lasting effect on US share prices. Moreover, history and practice suggest that if the proposal becomes law, most US companies will not—and should not —change their dividend policies significantly.

More to come.

Sunday, May 04, 2003
A Rookie's View of the Tax Canon  
Grouped by topic; explanations follow below.

The Meaning of Personal Income

1. William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev. 309 (1972).
2. Daniel Shaviro, The Man Who Lost Too Much: Zarin v. Commissioner and the Measurement of Taxable Consumption, 45 Tax L. Rev. 215 (1990).

Consumption Tax vs. Income Tax

3. William D. Andrews, A Consumption-Type or Cash Flow Personal Income Tax, 87 Harv. L. Rev. 1113 (1974).
4. Joseph Bankman & Thomas Griffith, Is the Debate Between an Income Tax and a Consumption Tax a Debate About Risk? Does It Matter?, 47 Tax. L. Rev. 377 (1992).

Transitions and Retroactivity

5. Michael J. Graetz, Legal Transitions: The Case of Retroactivity in Income Tax Revision, 126 U. Pa. L. Rev. 47 (1977).

Progressivity and Distributive Justice

6. Joseph Bankman & Thomas Griffith, Social Welfare and the Rate Structure: A New Look at Progressive Taxation, 75 Cal. L. Rev. 1905 (1987).

Modern Financial Contracts

7. Daniel I. Halperin, Interest in Disguise: Taxing the “Time Value of Money,” 95 Yale L. J. 506 (1986).
8. Alvin C. Warren, Jr., Financial Innovation and Income Tax Policy, 107 Harv. L. Rev. 460 (1993).

Critical Tax Scholarship

9. Mary Louise Fellows, Rocking the Tax Code: A Case Study of Employment-Related Child-Care Expenditures, 10 Yale J. L. & Feminism 307 (1998).

Taxes & Business Strategy

10. David M. Schizer, Frictions as a Constraint on Tax Planning, 101 Colum. L. Rev. 1312 (2001).


A few weeks ago, I had a chat with Adam Chodorow, a LLM student at NYU who is contemplating teaching. Adam wanted to hear about my experiences on the job market. Among other things, I mentioned that I have spent a good bit of time the last two years reading law review articles so as to gain a foundation for my own scholarship and, of course, to be able to “talk the talk” on the job market. Adam noted that there must be a “tax canon” — essential reading for those interested in developing a cultural literacy about tax policy. While I agreed that this must be true, I wasn’t sure what would be on the list. I e-mailed an inquiry to Taxprof, the email listserv for tax professors run by Paul Caron (Cincinnati), and received a number of helpful responses; I also discovered that Pat Cain (Iowa) had done a survey of experienced taxprofs just a few years ago.

The “established” tax canon, which I draw from both Pat’s research and my own informal queries, is probably comprised of the following articles:

1. William D. Andrews, A Consumption-Type or Cash Flow Personal Income Tax, 87 Harv. L. Rev. 1113 (1974).
2. Stanley S. Surrey, Tax Incentives as a Device for Implementing Government Policy: A Comparison with Direct Government Expenditures, 83 Harv. L. Rev. 705 (1970).
3. Boris I. Bittker, A “Comprehensive Tax Base” as a Goal of Income Tax Reform, 80 Harv. L. Rev. 925 (1967).
4. Boris I. Bittker, Federal Income Taxation and the Family, 27 Stan. L. Rev. 1389 (1975).
5. William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev 309 (1972).
6. Daniel I. Halperin, “Interest in Disguise: Taxing the Time Value of Money,” 95 Yale L. J. 506 (1986).
7. Walter J. Blum & Harry Kalven Jr., The Uneasy Case for Progressive Taxation, 19 U. Chi. L. Rev. 417 (1952).

These articles are impressive, of course, and each deserves the attention and recognition it receives. As a descriptive matter, those articles would land on almost anyone’s top 10 list of highly influential articles, and each has the citations to prove it. As a foundation for future study of the tax system, however, a reader who stuck to the established canon would miss out on newer trends in tax scholarship, especially the influence of interdisciplinary work (law & economics, critical legal studies, and modern theories of moral philosophy and distributive justice). My list is an attempt to fill out and update the list without expanding it beyond a useful size.

The list is primarily targeted at law students interested in tax policy, so given a close choice between articles, I opt in favor of accessibility – both in the sense of being easy-to-find (i.e. on Westlaw) and easy-to-read (the fewer equations, the better).

The Meaning of Personal Income

1. William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev. 309 (1972).
2. Daniel Shaviro, The Man Who Lost Too Much: Zarin v. Commissioner and the Measurement of Taxable Consumption, 45 Tax L. Rev. 215 (1990).

The Andrews article serves as both a wonderful introduction to basic tax concepts (the Haig-Simons definition of income, vertical and horizontal equity, tax expenditure analysis, personal consumption), and a critical analysis and application of those concepts. The Shaviro article is a master case study on the nature of income and consumption.

Consumption Tax vs. Income Tax

3. William D. Andrews, A Consumption-Type or Cash Flow Personal Income Tax, 87 Harv. L. Rev. 1113 (1974).
4. Joseph Bankman & Thomas Griffith, Is the Debate Between an Income Tax and a Consumption Tax a Debate About Risk? Does It Matter?, 47 Tax. L. Rev. 377 (1992).

The Andrews article defines the consumption tax vs. income tax debate. The Bankman & Griffith article sharpens the analysis by adding a careful study of the impact income and consumption taxes have on risk and the shifting behavioral incentives that follow.

Transitions and Retroactivity

5. Michael J. Graetz, Legal Transitions: The Case of Retroactivity in Income Tax Revision, 126 U. Pa. L. Rev. 47 (1977).

The study of transition policy continues to grow in importance, and the Graetz article remains, I think, the best place to start. The other obvious choices would be Louis Kaplow, An Economic Analysis of Legal Transitions, 99 Harv. L. Rev. 509 (1986) and Dan Shaviro’s When Rules Change (2000).

Progressivity and Distributive Justice

6. Joseph Bankman & Thomas Griffith, Social Welfare and the Rate Structure: A New Look at Progressive Taxation, 75 Cal. L. Rev. 1905 (1987).

While Blum & Kalven’s Uneasy Case would be the classic choice, Bankman & Griffith’s article on the problem of progressivity and distributive justice is more useful to the modern reader.

Timing and Economic Equivalence

7. Daniel I. Halperin, Interest in Disguise: Taxing the “Time Value of Money,” 95 Yale L. J. 506 (1986).
8. Alvin C. Warren, Jr., Financial Innovation and Income Tax Policy, 107 Harv. L. Rev. 460 (1993).

The Halperin article is a wonderful exploration of the problem of timing. The Warren article concisely introduces one of the key problems in the modern practice of tax law: using derivatives to replicate the economics of simple financial contracts but reach a different tax result. Another (longer) excellent article is Reed Shuldiner, A General Approach to the Taxation of Financial Instruments, 71 Tex. L. Rev. 243 (1992).

Critical Tax Theory

9. Mary Louise Fellows, Rocking the Tax Code: A Case Study of Employment-Related Child-Care Expenditures, 10 Yale J. L. & Feminism 307 (1998).

It was especially hard for me to choose an article in this area, as I’m not as familiar with critical tax scholarship I should be. The Fellows article is less widely known than others, but it has the benefit of introducing the reader, in one article, to the critical approach from the gender, class and race perspectives, as well as using historical study as an effective analytic tool, thus touching on all of the key elements of critical tax scholarship. Other important articles include Grace Blumberg, Sexism in the Code: A Comprehensive Study of Income Taxation of Working Wives and Mothers, 21 Buff. L. Rev. 49 (1972); Anne L. Alstott, Tax Policy and Feminism: Competing Goals and Institutional Choices, 96 Colum. L. Rev. 2001 (1996); Edward J. McCaffery, Taxing Women (1997); Beverly I. Moran & William Whitford, A Black Critique of the Internal Revenue Code, 1996 Wisc. L. Rev. 751; Patricia Cain, Same Sex Couples and the Federal Tax Laws, 1 J. L. & Sexuality 97 (1991); Lawrence Zelenak, Taking Critical Tax Scholarship Seriously, 76 N.C. L. Rev. 1521 (1998).

Taxes & Business Planning

10. David M. Schizer, Frictions as a Constraint on Tax Planning, 101 Colum. L. Rev. 1312 (2001).

No list would be complete without some introduction to the concepts set forth in Scholes & Wolfson’s Taxes and Business Strategy: A Planning Approach. The Scholes & Wolfson book itself, however, is better suited for MBAs than for JDs. Schizer’s article presents a more accessible guide to understanding and addressing modern tax planning.

For those who like books:

Joel Slemrod & Jon Bakija, Taxing Ourselves (1996).
Bruce Ackerman & Anne Alstott, The Stakeholder Society (1999).

I’ve shied away from listing books, instead opting for Westlaw-friendly articles. Taxing Ourselves, however, deserves mention for its wonderfully balanced overview of tax policy debates. And I include Stakeholder Society because, at least when it is sunny and I am feeling optimistic, I think it is a book that will only grow in importance over time.


Because I’ve kept the list short, I’ve overemphasized topics in which I have a particular interest (business planning and modern financial instruments) and underemphasized others (corporate and partnership tax, international tax, the budget process, the estate tax, and the taxation of the family). But one thing tax scholarship teaches you is that there are always trade-offs, so I’ll stick with the list above – at least until I read a bit more. Suggestions and comments are most welcome.

The Bush Tax Cut and National Saving  
It's been out for a few months, but I just came across Berkeley Econprof Alan Auerbach's paper on the economic effects of the 2001 tax cuts, "The Bush Tax Cut and National Saving. Auerbach runs the evidence through two models and concludes that "dynamic scoring has a significant impact on estimated revenue losses, but that the tax cut's impact on national saving is still negative in the long run."

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