Guest columnists Igor De Lazari, Antonio Sepulveda, and Judge Sergio Dias describe how Brazil recently addressed an issue currently before the US Supreme Court-an issue of when (and whether) a state may collect taxes on goods that originate out of state. De Lazari, Sepulveda, and Dias suggest that perhaps the issue is better resolved, as it was in Brazil, through the legislative process rather than by court decision, so as to ease what is likely to be an abrupt transition.
George Washington law professor and economist Neil H. Buchanan argues that Republicans could have achieved a middle-class tax cut a fraction of the cost of the Republicans' tax bill. Buchanan points out that while the middle class may see a few thousand dollars in the short-term, Republican donors and wealthy corporations will benefit from significantly reduced taxes year after year, indefinitely, causing yet another surge in economic inequality.
Cornell University law professor Michael C. Dorf considers whether the new tax law, which disproportionally affects “blue” states as compared to “red” states due to changes to the deductions for state and local taxes (SALT), is unconstitutional. Dorf explains some of the possible arguments against the law but ultimately concludes that due to difficulties of proof, courts probably won’t end up ruling that the SALT deductibility cap violates the First Amendment or a core principle of federalism.
George Washington law professor and economist Neil H. Buchanan provides political context for the latest Republican-backed tax reform package. He highlights how the authors of an “open letter” to “Senators and Representatives” that recently made the rounds, and which attempted to solicit signatures of other Republican economists, deliberately misused numbers and employed sleight-of-hand wording to declare that corporate tax cuts would stimulate economic growth, lead to more jobs, and increase American wages. Buchanan counters each of the letter’s assertions in turn, illustrates how its stated economics is ultimately faulty, and fixes a critical eye on the economists who so willingly set aside intellectual integrity to appease the well-financed Republican powerbrokers who support these tax cuts.
George Washington law professor and economist Neil H. Buchanan discusses politicians' current fixation on the budget deficit and argues that Democrats who take an anti-deficit stance to attack the Republican tax bill are playing right into Republicans’ hands. Buchanan explains why blanket declarations about decreasing the budget deficit as a tax reform fix-all are problematic and cautions Democrats (along with journalists who report on tax reform issues) to be mindful of the arguments they choose when countering Republicans.
University of Washington law professor Anita Ramasastry comments on the recent release of records known as the Paradise Papers, which reveal the identities of thousands of individuals and corporations using offshore jurisdictions as a tax avoidance strategy. Ramasastry argues that while such actions may in many cases be legal, they are also unethical. She points out that if we focus on the harm of tax avoidance to society, rather than how it is legally defined, then we can see that it contributes to growing inequality and increases tax burdens on resident taxpayers who cannot change their citizenship or move their money.
George Washington law professor and economist Neil H. Buchanan continues his discussion of tax reform, suggesting that a starting place for meaningful reform would be to tax wealth more effectively, tax unrealized gains, and eliminate the preferential tax rates for investment income. Buchanan points out that even modest changes in these areas would significantly address the problem of growing economic inequality in our country.
In this first of a series of columns on tax reform, George Washington law professor and economist Neil H. Buchanan describes a few items that should not be seriously considered in attempting to improve the status quo. Buchanan argues that the notion of a complete overhaul of the tax code, and the proposal that the tax code should be “simpler,” ignore important considerations and distract from real issues.
Neil H. Buchanan, a George Washington law professor and economist, argues that the tax code status quo (imperfect as it is) is better than the changes Republicans are proposing to make. Buchanan explains the difference between the marginal tax rate and the effective tax rate and how Republicans focus only on marginal tax rates in order to mislead the public.
George Washington law professor and economist Neil H. Buchanan once again explains why supply-side economics does not work to stimulate the economy. Buchanan points out the logical mistake of inferring causation from correlation and points to the consensus among economists across the political spectrum that supply-side economics has no basis in fact or theory.
Chapman University Fowler School of Law professor Ronald D. Rotunda argues that lowering the marginal tax rates improves the economy. Rotunda looks at several historical examples where lowering the marginal tax rate coincided with an increase in the gross domestic product (GDP).
George Washington law professor and economist Neil H. Buchanan explains in plain English what Mick Mulvaney meant when he attempted to justify President Trump’s budget proposal that would cut programs that help America’s most vulnerable, such as Meals on Wheels and subsidized school lunches for poor children. As Buchanan explains, Mulvaney’s explanation is based on a false notion that better-off people gain as much utility from each dollar as worse-off people receive from the same amount.
Chapman University law professor Ronald Rotunda argues that the best way to increase revenue is to lower taxes. Rotunda explains that the current taxation structure incentivizes the wealthy to find loopholes and avoid paying taxes altogether, whereas those same corporations and individuals would be more likely to pay under lower tax rates. Rotunda also discusses the trend of corporations moving their headquarters and business centers from states with higher taxes, such as California, to states with lower taxes, and the negative impact of such moves on the origin state.