Tax Chats

Send us a textScott and Jeff ask Andy Grewal to describe administrative law, and why it is so important for taxes. We discuss how significant portions of tax laws are left to interpretation by the IRS or Treasury, and how these interpretations can have a material effect on the experience of taxpayers.

Send us a textScott and Jeff discuss income shifting by multinational corporations with Jennifer Blouin. We talk about Jennifer's research that suggests some estimates of the amount of tax revenue the U.S. loses to income shifting are as much as ten times too large. These estimates are important because they drive policy discussions, including debates in the U.S. about tax reform, and abroad, through the OECD and other organizations. The conversation builds on some of Jennifer's recent work related to income shifting, including a paper entitled "Double Counting Accounting: How Much Profit of Multinational Enterprises Is Really in Tax Havens?" available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3491451.

Arthur Laffer, a renowned economist and creator of the Laffer Curve, dives into the relationship between tax rates and revenue. He shares the iconic story of sketching the curve on a napkin, illustrating its profound impact on tax policy. The discussion covers the unintended consequences of high tax rates on work incentives and argues for lower taxes to boost economic activity. Laffer also tackles the complexities of unrealized income taxation and its implications for wealth disparity, advocating for a simplified tax system to promote fairness and growth.

Send us a textScott and Jeff are joined by Rita de la Feria @delaFeriaR to discuss her new paper (co-authored with Maria Amparo Grau Ruiz) called "Taxing Robots".  The abstract of her paper reads in part: "In recent years, the idea of taxing robots has been progressively gaining momentum. The potential impact of automation on employment, and consequently on income tax revenues, has led many to defend the introduction of a tax on robots, or on the use of robots, to either compensate for the potential revenue loss, or to slow down the process of automation. This paper argues that whilst automation presents significant challenges to tax systems, the introduction of a new tax on robots –or on their use– is not an effective mechanism through which to address these challenges." We discuss the idea of taxing robots, whether the tax is different from a tax on other types of capital investment, the behavioral motivations for a desire to tax robots, and other issues.

Send us a textScott and Jeff discuss whether the Tax Cuts and Jobs Act (TCJA) was effective. Often referred to as the Trump tax cuts, or the Trump Tax Reform, recent commentators have argued that it was highly effective. For example, Tyler Goodspeed and Kevin Hassett argued in the Wall Street Journal the TCJA "delivered as promised" by increasing investment, wages, and government revenues. Academic research, however, paints a more nuanced picture. Jeff keeps a list of academic studies that evaluate different aspects of the TCJA on the UNC Tax Center website called The TCJA Effects Tracker. We discuss why articles in the popular press that claim victory or defeat are almost always oversimplified.

Send us a textScott, Jeff, and Paul Kiel discuss the series of articles published by ProPublica based on a massive leak of private tax return data on the wealthiest individuals in the United States. The series of articles can be found here: https://www.propublica.org/series/the-secret-irs-files.We ask about privacy, transparency, tone, influence, leaked data, and more.

Send us a textJeff explains why quarters have ridges, and what it has to do with taxes and inflation.

Send us a textScott and Jeff discuss the idea of carryover basis with Kathleen Thomas. Currently, when someone dies with appreciated capital gains, they get a step-up in basis, meaning their estate pays no taxes on their accumulated gains. The downside is they have to die. An alternative would be to carryover the basis the the person who died had, which would make many tax planning strategies more difficult.

Send us a textScott and Jeff discuss Biden's proposed Mega Millionaire Minimum Tax with David Gamage, one of the thought-leaders behind the proposal and its variations. We discuss the basics of what the minimum tax might look like. We discuss the strengths and weaknesses of this type of tax. The tax is intended to force very wealthy individuals like Jeff Bezos or Mark Zuckerberg to pay more tax, even if they do not have much income as currently the tax code currently defines income. We also discuss the idea of "notional equity" as a way for the government to strengthen its taxing authority. 

Send us a textScott and Jeff discuss progressive taxation. While most agree progressive taxation is desirable, there is less agreement about how much progressivity is desirable, what it even is, and if our current tax system is progressive.  Scott and Jeff tackle these issues by asking each other questions about taxes on income, property taxes, taxes on cigarettes, and other scenarios. They conclude that progressivity is a slippery subject, and, claims about progressivity should be carefully considered.