The Journal of Things We Like (Lots)
Select Page

Beyond the “Tax Loophole” Rhetoric

Heather Field, A Taxonomy of Tax Loopholes, 55 Houston L. Rev. (forthcoming 2018), available at SSRN.

One of the many obstacles in the way of productive governance these days is people talking past each other. In the tax context, for instance, everyone seems to agree that we need to “simplify” the tax system and eliminate “tax loopholes.” But, people with very different agendas mean very different things when they use these loaded terms. And using the loaded terms, without elaboration, interferes with our ability to engage in serious policy conversations.

In A Taxonomy for Tax Loopholes, Heather Field identifies this phenomenon and attempts to push us beyond the “tax loophole” rhetoric. She explores the different ways that the term “tax loophole” is used, provides a framework that is designed to promote more transparent substantive debate, and uses her framework to bring greater clarity to contemporary debates about specific tax issues. While, as Field acknowledges, the term “tax loophole” is not going away any time soon, her approach nonetheless brings refreshing incisiveness to a discourse that is too often clouded by meaningless labels.

Field’s most radical move is arguing that we should stop using the “tax loophole” label altogether. She explains that, unlike other difficult-to-define terms like “tax shelter” and “tax expenditure,” classifying something as a “tax loophole” has no actionable consequences. Rather, the term “tax loophole” simply reflects the labeler’s subjective dislike of a particular outcome, and thus it is fruitless to perseverate about what is, or is not, a “tax loophole.”

Having cleared away the distracting classification issue, Field argues that we should use a more robust framework for expressing the dissatisfaction that underlies the use of a “tax loophole” label. This framework should include: the normative policy objection (such as a concern regarding revenue, fairness, efficiency, complexity, or social policy) and a declaration of who is responsible (such as Congress, the President, Treasury, IRS, courts, or private parties). At bottom, Field’s framework is a call to replace the tax “‘loophole’ label’s appeals to emotion with appeals to logic and analysis.” (P. 29.) The hope is that identifying the problem, who is responsible, and what can be done about it, can lead to substantive, actionable debate.

Beyond offering a taxonomy, Field illustrates how it can be used to improve analysis regarding particular tax provisions and to better understand perceptions of the tax system. She explores how greater analytical precision regarding the commonly decried carried interest “tax loophole” offers a number of concrete reform options, as well as barriers to such reforms. And, most interestingly in my view, she explores the use of the “tax loophole” label by major news organizations leading up to the 2016 election. In so doing, she uses elements of her taxonomy to tease out the organizations’ real, underlying concerns for what they label to be “tax loopholes.” Her findings include, for example, that more liberal news sources focused much more on fairness concerns regarding “tax loopholes,” whereas more conservative news sources focused much more on economic concerns regarding “tax loopholes.” She suggests that this coverage mirrors Clinton voters’ focus on inequality and Trump voters’ focus on the economy. From these and other findings, Field hypothesizes that the liberal and conservative media’s divergent discussions regarding “tax loopholes” may both have reflected and perpetuated the increasing polarization exhibited in American culture and on the political stage.

While Field seems well aware that the Article is unlikely to result in the banishment of the term “tax loophole,” she ends with the hope that this effort nonetheless may help us move beyond the echo chamber that increasingly comprises our understanding of tax policy issues. I sincerely hope that she is right. And, in that vein, Field’s article will hopefully not only enrich tax policy discussions, but also underscore an important role for academics, which extends well beyond the tax field. By deploying their training in the manner that Field has done in this Article, academics can offer an alternative to a national dialogue that is increasingly, and worryingly, comprised of buzzwords that merely serve to confirm what people already think.

Cite as: Leigh Osofsky, Beyond the “Tax Loophole” Rhetoric, JOTWELL (October 18, 2017) (reviewing Heather Field, A Taxonomy of Tax Loopholes, 55 Houston L. Rev. (forthcoming 2018), available at SSRN), https://tax.jotwell.com/beyond-the-tax-loophole-rhetoric/.

When the Life of the Law is Logic

Sarah B. Lawsky, Formalizing the Code, 70 Tax L. Rev. 377 (2017), available at SSRN.

In Formalizing the Code, Professor Sarah Lawsky offers a glimpse of what might be gained if law were written in formal logic language. It might be written by machine-language specialists attached to Congressional tax-writing committees. It could reduce unintentional ambiguity and complexity. Computers could understand it.

Lawsky takes as her focus a problem she calls definitional scope, defined as “when the Code uses a term but the structure of the Code leaves unclear to what a term refers.” (P. 378.) Definitional scope is about cross-references, and cross-references are one element of the formal structure of the Code.

Two examples that illustrate definitional ambiguity run through the paper. One is the question of whether the definition of “acquisition indebtedness” limits IRC Section 163(h)’s mortgage interest deduction with respect to a primary mortgage to debt of $1 million. Another is an ambiguity about the application of the so-called 50% ownership test to “a series of” corporate stock redemptions for purposes of the substantially disproportionate redemption rule of IRC Section 302(b)(2).

Lawsky shows how the discipline of translating statutory code into formal logic would identify ambiguities like those in Sections 163(h) and 302(b)(2). In the case of the definition of acquisition indebtedness, she proposes a logical formula that defines debt eligible for the mortgage interest deduction in terms of three elements labeled “Purpose,” “Secured” and “Amount.”  Once definition is structured this way, “[t]he statute cannot be formalized without resolving” whether a $1 million limitation is part of the definition of acquisition indebtedness. (P. 401.)

Lawsky advances two reasons for formalizing the code: increased certainty and decreased complexity. The discipline of logic that she proposes can help reveal instances of obscurity and ambiguity in the Code. In both of the examples presented, it is reasonable to think that if only Congress realized that its words were confusing, it would correct the problem quickly and easily. The uncertainty and complexity are not intentional. They are mistakes, which can be discovered with tools of formal logic, so that Congress can do what it meant to do in the first place.

In the examples that Lawsky presents, I agree. Congress often intends to write an ex ante rule, but trips itself up inadvertently. I also agree with her that a prescription for formalizing the code should leave room for intentional ambiguity.  As she explains, ambiguities could be presented as “alternate formalizations” or drafters could choose not to formalize an ambiguous point of law. (P. 399.)

One interesting question is whether rule drafters reliably know whether a provision should or should not be ambiguous.  What about the definition of “primary residence” in Section 163(h)?  Does it mean an RV, a boat, a yurt, a permanently orbiting spaceship?  What sorts of partial interests in property does it include?  Does a correct decision about the ambiguity of “primary residence” require not only that the drafters know about home ownership, but also that they appreciate the extent and limit of their knowledge?

This paper, like other recent examples of Lawsky’s work (here and in A Logic for Statutes, 21 Fla. Tax Rev. (forthcoming 2017) considers the potential of computer logic and artificial intelligence to transform law. The idea of formalizing the code is powerful and provocative. It shows how machine logic could identify and prevent human error. It also raises the issue of when formal logic can capture the meaning of law, and when it cannot.

Cite as: Susan Morse, When the Life of the Law is Logic, JOTWELL (September 18, 2017) (reviewing Sarah B. Lawsky, Formalizing the Code, 70 Tax L. Rev. 377 (2017), available at SSRN), https://tax.jotwell.com/when-the-life-of-the-law-is-logic/.

The Most Significant Proposed Change in the History of U.S. Corporate Taxation

Alan Auerbach, Michael P. Devereux, Michael Keen & John Vella, Destination-Based Cash Flow Taxation (Oxford Ctr. for Bus. Tax'n, Working Paper No. 17/01, 2017).

The House Republican Blueprint for corporate tax reform would replace our century-old corporate income tax, which we all know and love (or hate), with a “destination-based cash flow tax” (DBCFT), which for many of us remains a mystery. The academic foundation upon which the House proposal is built is a working paper by Alan Auerbach (UC Berkeley), Michael Devereux (Oxford), Michael Keen (IMF), and John Vella (Oxford) (collectively “the authors”), entitled “Destination-Based Cash Flow Taxation.” Given the current turmoil in Washington, it seems unlikely that a DBCFT will be enacted any time soon. Problems with our current system for taxing business income with an international dimension, however, are unlikely to go away on their own. If you want to get up to speed on a radical solution with substantial academic and political support, this paper is an absolute must-read.

The DBCFT has two components: a cash flow tax, which alters the timing and sometimes the substance of includibility and deductibility, and the destination-based “border tax adjustments” that have already found their way (sometimes incoherently) into the popular press.

As to the first, the most obvious difference between cash flow and income taxation is that under a cash flow tax capital assets are expensed, not depreciated. As E. Cary Brown teaches us, expensing has the effect of taxing normal returns to capital at an effective rate of zero. Leverage can then drive effective rates of tax negative. See Theodore P. Seto, Federal Income Taxation: Cases, Problems And Materials 263-75 (2d ed. 2015). The authors do not view taxing returns to capital at an effective rate of zero as a disadvantage; consistent with optimal tax theory, they call it “neutrality.”

What happens next depends on whether the jurisdiction implements an R (real) or R+F (real plus financial) tax base. “Under the R base, transactions involving financial assets and liabilities are ignored – so, for example, interest receipts would not be taxed and interest expenses would not be deductible.” (P. 9.) “By contrast, under the R+F base, all cash inflows, including borrowing and the receipt of interest, would be taxable; all cash outflows, including lending, repaying borrowing and interest payments would be subtracted in calculating the tax base.” (P. 10.)

The House Republican Blueprint adopts a hybrid: interest is not deductible but borrowings are not includible. What this means, however, is that a taxpayer can zero out any tax liability, anytime, simply by borrowing (not includible) and using the proceeds to buy a capital asset (fully expensible). I understand that the most recent House implementation (not publicly available) attempts to limit this form of arbitrage by denying expensing for land and inventory, but can see many ways around this clearly inadequate bandaid.

The second part of a DBCFT, the so-called “border tax adjustments,” are not adjustments at all. The unfortunate label refers instead to the fact that a DBCFT is “based on sales of goods and services in the country less expenses incurred in the country.” (P. 14.) Revenues derived and expenses incurred outside the taxing jurisdiction are neither includible nor deductible. As a result, revenues from imports are taxed on a gross basis – no deductions are allowed for the offshore costs of production. And exports are heavily tax-subsidized – domestic costs of production are deductible but the resulting revenues are not includible.

You may be forgiven if your first reaction is that this sounds like the kind of import tariff/export subsidy system that many believe helped trigger the Great Depression. The authors postulate that currency markets would respond by making the dollar more valuable, exactly offsetting the tariff/subsidy-type effects of the tax. The net effect, they argue, would be trade neutrality. If so, this would represent a significant improvement over the current U.S. system, which penalizes domestic production by exempting foreign production profits from current taxation.

Overall, the authors assert, “[t]he DBCFT has several highly attractive properties: it does not distort the scale and location of investment, assures neutral treatment of debt and equity as sources of finance, is robust against avoidance through inter-company transactions, and provides long term stability due to its incentive compatibility and its resistance to tax competition among states. The DBCFT thus addresses many of the ailments afflicting current tax systems in both purely domestic and international settings.” (P. 7.)

Among the tasks the authors do not purport to undertake is to explore either the legal difficulties of implementing a DBCFT in particular jurisdictions or many of the collateral economic consequences of the transition to such a tax, particularly by the United States.

With regard to the first, it is unclear whether the House Republican implementation would apply to partnerships as well as corporations. Choice of entity has always been a significant part of U.S. tax planning because of small but consequential differences between corporate and individual taxation. Regardless of how the partnership issue is resolved, any implementation would have to deal with the massive arbitrage possibilities created by the much greater differences between income and cash flow taxation. What will prevent a taxpayer from borrowing through an entity subject to the income tax and spending through an entity subject to the DBCFT? How will we determine whether allocations have substantial economic effect if a partnership has both corporate and individual partners? The possibilities boggle the mind.

As to the second, one of the projected consequences of U.S. adoption of the tax would be a sharp rise in the dollar vis-à-vis other currencies. This, the authors assure us, would offset its other effects on trade neutrality and would therefore be a plus. But what about the estimated $3 trillion of dollar-denominated debt owed by non-bank debtors in emerging economies? See Lisa Abramowicz, The Emerging Markets’ Dollar Problem (2016). Both these debtors’ net worths and their cash flows, as measured in their home currencies, would be devastated by the projected change in exchange rates. Expect many such debtors to default. Hope that their defaults do not tip us back into another Great Recession. And this is only one non-obvious possible consequence.

It is impossible adequately to summarize a 98-page paper in a Jotwell review. The authors deal with many more issues, far more thoroughly, than I possibly could in the space available here. Read the paper.

Cite as: Theodore P. Seto, The Most Significant Proposed Change in the History of U.S. Corporate Taxation, JOTWELL (August 2, 2017) (reviewing Alan Auerbach, Michael P. Devereux, Michael Keen & John Vella, Destination-Based Cash Flow Taxation (Oxford Ctr. for Bus. Tax'n, Working Paper No. 17/01, 2017)), https://tax.jotwell.com/the-most-significant-proposed-change-in-the-history-of-u-s-corporate-taxation/.

What’s Up: BEPS and the New International Tax Order

Allison Christians, BEPS and the New International Tax Order, 6 BYU L. Rev. (forthcoming, 2017), available at SSRN.

It’s easy to underestimate the value of a good “what’s up” article. If you’ve been doing that, then you should take a look at “BEPS and the New International Tax Order” for a reminder of their value.

“What’s up” articles are the salve of the academy. They take a rapidly changing field of inquiry or policy space or legal doctrine and they encapsulate the state of play in a way that brings out and makes assessable the highlights.

This line of scholarly work is helpful to folks who have drifted from the area of inquiry and to those who are deeply lost in its weeds. Good what’s up scholarship should be evaluated on three criteria: (1) does the article provide an orienting matrix to the work in the particular area; (2) does it appropriately highlight the aspects of that rapidly changing area in ways that emphasizes what matters and de-emphasizes or ignores matters of little importance (put another way, does it respect the fact that not all developments are of equal importance); and (3) is it a pleasure to read.

“BEPS and the New International Tax Order” satisfies these criteria. Christians takes on the rapidly changing world of international tax as shaped by the Organisation for Economic Co-operation and Development (OECD). The OECD has served as the front player in shaping the policy space for governments responding to multinational company tax strategies that result in a reduction of tax bases and that shift profits from high to low-tax jurisdictions, hence the name of the OECD response – the “base erosion and profit shifting” (BEPS) project.

That project has been moving with support from the G20 over the last several years. The aim of Christians’s article is three-fold. She explains the role of the OECD as a “tax policy consensus-building network.” (P. 1609.) That claim builds on her earlier work, where she explores the role of the OECD as a policy-setter and the complexity of that role in the face of the OECD’s inability to regulate using formal (hard) law. In this part of the article, she reveals the complex interaction of legal instruments, model treaties and guidance, and peer review and monitoring as mechanisms for shifting the policy space in the international tax arena. Most interesting is her discussion of the peer review and monitoring process. The use of peer countries to assist as pressure-points for domestic legal and administrative change in the tax field is an under-explored area and Christians’s work should spur colleagues to develop research agendas that help us better understand the function of peer monitoring.

Christians’s second aim is to identify the OECD’s BEPS tax policy priorities. She identifies country-by-country reporting of how much tax is paid in each country in which the multinational operates, practices to reduce harmful tax competition, fixes for tax treaty abuse, and treaty-based dispute resolution as the four major priorities to which we should attend. For each of these priorities, Christians lays out the OECD’s minimum standards and speculates about the extent to which these standards are moving targets, likely to be adjusted in the near or medium-term.  There’s lots to be attentive to in this part of the paper: Is there any base-building advantage of the use of a nexus approach for allocating income from intellectual property? Will the exchange of tax rulings be helpful for tax administrations seeking to better enforce domestic law? How will peer monitoring effect the use of arbitration to resolve treaty disputes? How does the OECD plan to support capacity building for non-member states willing to sign on to its articulated priorities?

Finally, Christians’s third aim is to connect the priorities with implementation plans. The OECD has taken a multifaceted approach, with changes proposed to domestic legislation, new bilateral treaties, a new multilateral tax treaty, the adaptation and adoption of OECD models and guidance, and peer review.

By dividing the article in this way, Christians offers us hope for making sense of the voluminous materials produced out of the BEPS project. We can hang on to the four key priorities and make sense of how the OECD intends to advance those priorities, given its inability to enact binding rules.

Even more fun, and stepping out from the benefits of what’s up scholarship, Christians carries on in her signature way about the interaction between the rich OECD countries and the “others” – those countries who have been excluded from the OECD’s international tax agenda setting. Perhaps less characteristic of Christians’s work is a hint of optimism in the conclusion: “The Inclusive Framework thus introduces a potential avenue for non-OECD countries to have a meaningful say in norm building exercises undertaken by the OECD, but with a great deal of agenda-setting directed mainly by OECD member states, the outcome is not yet certain.” (P. 1645.)

Cite as: Kim Brooks, What’s Up: BEPS and the New International Tax Order, JOTWELL (July 5, 2017) (reviewing Allison Christians, BEPS and the New International Tax Order, 6 BYU L. Rev. (forthcoming, 2017), available at SSRN), https://tax.jotwell.com/whats-up-beps-and-the-new-international-tax-order/.

Do Taxes Motivate Corporate Managers?

Lily Batchelder, Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing (Feb. 5, 2017), available at SSRN.

Tax scholarship is interdisciplinary. To evaluate tax policy it helps to know at least a little about economics, a little about philosophy, something about budget processes, and a lot about the dizzying creativity of the marketplace in exploiting loopholes and facilitating tax-advantaged transactions. In her recent article Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, Lily Batchelder shows us that we must add financial accounting and firm (and corporate managers’) behavioral considerations to the mix.

The article evaluates which of three policies, adopted on a revenue neutral basis to replace our current regime of accelerated depreciation, would cause the largest increase in new investment by the corporate sector. The three policies are: expensing of new investments combined with higher statutory corporate rates; lower statutory rates combined with more gradual and economically accurate economic depreciation; and an investment tax credit combined with economic depreciation.

The conventional wisdom is that the first of these options, allowing for current expensing of new investment, will have the biggest bang-for-the-buck. But the analysis that yields this conclusion assumes that corporate managers choose investments to maximize the after-tax net present value of the investment returns. If that were true, managers would care about the marginal rate applicable to the investment, which is zero (at least as to the normal returns) if the investment is equity financed and the cost of the investment is expensed. The key insight that Batchelder shares is that managers don’t look at the marginal rate. The financial accounting literature shows that they make their decisions based on either the statutory rate or their “book” tax rate, because these are what affect income for financial reporting purposes. Neither rate reflects the value of tax deferral, so managers tend not to incorporate the benefits of tax deferral when making investment decisions. The best of the three policies is instead to eliminate accelerated depreciation and use the revenue to finance a statutory rate cut.

This paper makes two significant contributions. The first is to bring evidence on the tax variables that affect managers’ decisions to a live debate about how to increase investment. Batchelder not only canvasses relevant accounting theory and empirics, but also corroborates the incentives created by financial accounting standards by talking with corporate managers. The care with which she buttresses this important premise of her argument makes her conclusions about the ineffectiveness of expensing that much more credible. The second contribution is her argument that the optimal investment policy—at least in terms of maximizing the increase in new investment—is one that minimizes the capital-weighted relevant rate on new investment.

It doesn’t make sense to lower the marginal rate on new investment if the benefit is entirely inframarginal and generates no new investment. Different firms rely on different rates, and if we knew which rate each firm focused on, we might lower just that rate, for just that firm. Since that’s impracticable, Batchelder’s solution is to calculate the average target rate across all firms, weighted by the firms’ capital, and minimize that average. Note that this average rate isn’t the rate that is targeted by any one firm. To conclude that the optimal policy is the one that minimizes that average rate, Batchelder must assume that the elasticity of investment responses to changes in this rate are constant across firms, regardless of which rate they focus on. This assumption is worthy of further investigation. Presumably there is some reason that some firms focus on the statutory rate while others focus on the marginal rate. It could well be that the same managerial preferences, incentives, or constraints that cause some firms to focus on statutory rates also influence their investment behavior. If this were true, it could imply that a mix of policies, including investment tax credit, selectively available expensing, and lower statutory rates, might be the best approach.

Moreover, if deferral generally doesn’t matter to corporate managers, then we should also ask why we don’t provide for even slower depreciation or perhaps delay basis recovery at disposition in exchange for lower headline rates. Batchelder rightly notes that this would mean that firms will carry a lot of assets with built-in losses that could lead to asset churning, but this worry is in tension with the premise that there are very few firms that care about the timing of tax income and losses to begin with. If that’s the case, then we shouldn’t expect much churning after all.

Finally, a comprehensive analysis of these policy options would require some understanding of the tax sensitivities of non-corporate entities. Since the benefits of deferral accrue directly to investors in such entities, then we might expect that they would be more attuned to, and force managers to be more responsive to, the benefits of expensing. Batchelder’s data don’t allow her to calibrate her estimates by including these entities, but incorporating them would make for an important extension.

Understanding how policy interventions affect taxpayer behavior requires knowing the objectives of those taxpayers and the constraints that they face. Research in behavioral economics, particularly the literature on tax salience, has revealed some of the ways that individuals may not respond rationally to taxes. However, much less work has been done on the possibility that the assumption of economic profit maximization may fail in the case of firms. This paper is an important contribution in remedying this deficit in the scholarship.

In some sense, the marriage of accounting and tax law should be a natural one. Tax lawyers are accustomed to thinking about the pernicious consequences that flow when substance and form are allowed to come apart. They are sensitive to how taxpayers respond to labels such as “debt” and “equity,” or “employee” and “independent contractor” even when the underlying economic reality is the same. Accountants are engaged in a similar enterprise. It would seem that tax lawyers and accountants have a lot to talk about, and Lily Batchelder’s paper is a wonderful illustration of the important insights that can be generated from that conversation.

Cite as: Andrew Hayashi, Do Taxes Motivate Corporate Managers?, JOTWELL (June 2, 2017) (reviewing Lily Batchelder, Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing (Feb. 5, 2017), available at SSRN), https://tax.jotwell.com/do-taxes-motivate-corporate-managers/.

Are Tax-Time Financial Products Good for the Poor?

Andrew T. Hayashi, The Effects of Refund Anticipation Loans On the Use of Paid Preparers and EITC Take-up,Virginia Law and Economics Research Paper No. 2016-9 (2016), available at SSRN.

The conventional wisdom about refund anticipation loans, at least among many academics, is that they are predatory lending products that benefit big businesses at the expense of the poor. Andrew Hayashi turns this notion on its head in his insightful paper, The Effects of Refund Anticipation Loans on the Use of Paid Preparers and EITC Take-up. 

Hayashi’s piece makes two important contributions to our understanding of tax-time financial products. First, he undertakes an empirical study that shows that curtailing refund anticipation loans (RALs) resulted in a decline in the use of tax return preparers, which in turn may have led to a drop in tax return filing and earned income tax credit (EITC) claims. Second, Hayashi discusses the welfare implications of RALs — an analysis that has been largely absent from the literature — and highlights the possibility that, on balance, they benefit taxpayers. Both of these insights have important implications for future policy, particularly for how we might regulate current and future tax-time products like refund anticipation checks.

The bad reputation of RALs is not entirely undeserved. Indeed, these loans were typically peddled by tax return preparers to their low-income clientele, and generally required repayment from the taxpayer’s refund at a high rate of interest plus fees, in some cases equivalent to as much as 700% on an annual percentage rate basis. A number of consumer advocate groups pushed for the elimination of RALs and, in 2010, a regulatory change virtually eliminated the RAL market (but for a small number of exceptions).

Hayashi’s empirical study focuses on this moment of regulatory change to examine the collateral effects of eliminating RALs in 2010. Using IRS data, he studied trends in the use of tax-time lending products, tax return preparers, and EITC claims in 2011, the year immediately following the elimination of RALs. He found that 80 percent of taxpayers formerly using RALs simply replaced them with another tax-time product: the refund anticipation check (RAC). Although RACs do not immediately accelerate the taxpayer’s refund like a RAL, they allow unbanked taxpayers to receive a direct deposit of their refund in a temporary bank account, and they also allow taxpayers to borrow their tax preparation fee (to be repaid from their refund with interest and fees).

Hayashi’s study also revealed that 10 percent of former RAL users switched from using preparers to self-preparation in 2011. Additionally, approximately 5 percent of former RAL users stopped claiming the EITC. Although the decline in EITC claims could potentially have come from those taxpayers who continued to use a preparer, it’s plausible that the shift away from preparer assistance may also have led to the decline in EITC claims. As Hayashi notes, other studies have demonstrated a positive correlation between tax preparation assistance and EITC take up.

Looking at the bigger picture, then, it appears RALs may have encouraged the use of tax preparation assistance. And, it appears that tax preparation assistance encourages taxpayers to file returns and claim the EITC. Thus, an important collateral consequence of curtailing RALs may be that we have deterred some taxpayers from filing and claiming vital benefits to which they are entitled. As Hayashi argues, these collateral consequences should not be overlooked by policymakers. Potential non-filing and failure to take-up government benefits like the EITC are a serious cost that must be weighed against the benefits of regulating tax-time lending products.

Hayashi’s paper makes another important contribution to the debate over RALs and RACs. It carefully discusses the costs and benefits of these products and points out that taxpayer preferences for them may not be irrational, notwithstanding high interest rates and fees. One important reason taxpayers take out RALs and RACs is that these products allow them to borrow their tax preparation fees when they cannot otherwise come up with the funds for tax assistance. Taxpayers might rationally prefer tax assistance because they lack Internet access and/or because of the time and complexity involved in self-preparation. Both products also help taxpayers access their refunds more quickly (although the timing advantage with a RAC is less immediate). Quicker access to refunds, in turn, may help taxpayers pay down debt sooner, which could be vital for individuals who are behind on payment of necessities like rent and utilities.

Thus, as Hayashi points out, some taxpayers may rationally prefer RALs and have been made worse off from a welfare standpoint as a result of their elimination. Other taxpayers, however, may be exhibiting some form of cognitive bias – present bias, for example – in their preferences for RALs. These taxpayers may be better off either self-preparing or paying out of pocket for tax preparation assistance, yet may have been tempted to take out a RAL because they wanted their funds sooner. In that case, regulation of RALs may be beneficial. The problem, Hayashi rightly notes, is that we don’t have data on the proportion of taxpayers that are acting rationally and irrationally.

This means that the answer to the question of whether tax-time products are bad for taxpayers overall is “we don’t know,” which is notably different than “yes” (the answer which I admittedly would have given before I read Hayashi’s piece). What’s perhaps most telling from Hayashi’s study is that a large majority of former RAL users still exhibit preferences for tax-time financial products, now in the form of a RAC, which is their only option at present for financing tax preparation fees. The welfare effects of switching from a RAL to RAC are also uncertain, Hayashi notes. Taxpayers who rationally chose RALs over RACs will be made worse off, while others (those whose bias led them to choose a RAL) may be made better off with a RAC.

Hayashi cautions regulators to think carefully before regulating RACs out of existence. Although charging low-income taxpayers fees that are deducted from an EITC refund certainly appears distasteful, this may be a vital mechanism to keep some individuals engaged in the tax system. If we don’t like this mechanism, it may be time to revisit the larger issue of how and when we deliver benefits like the EITC to the poor.

Cite as: Kathleen DeLaney Thomas, Are Tax-Time Financial Products Good for the Poor?, JOTWELL (May 4, 2017) (reviewing Andrew T. Hayashi, The Effects of Refund Anticipation Loans On the Use of Paid Preparers and EITC Take-up,Virginia Law and Economics Research Paper No. 2016-9 (2016), available at SSRN), https://tax.jotwell.com/are-tax-time-financial-products-good-for-the-poor/.

Is Tax Transparency A Panacea for Popular Discontent with the Tax System?

Joshua D. Blank, The Timing of Tax Transparency, 90 S. Cal. L. Rev. __ (forthcoming, 2017).

Tax transparency is all the rage these days. The brouhaha around the disclosure (or, in one instance, the non-disclosure) of presidential candidates’ tax returns during the 2016 presidential campaign brought the matter of tax transparency to the front and center of public discourse in the United States. Around the world, recent revelations that multinational corporations dramatically reduced their tax bills by securing secretive rulings from tax authorities, and that billionaires are able to use intricate offshore shell structures to evade taxation, are causing major popular uproar and a demand for increased transparency on tax matters. The demand is heard by intergovernmental as well as national bodies. For example, the Organisation for Economic Co-operation and Development (OECD) recently adopted country-by-country reporting standards, which would require multinational corporations to disclose to tax authorities their activities and tax payments in each country in which they operate. Remarkably, some countries have announced they are considering making the reports public. Another example is Luxembourg, which—responding to international criticism—recently announced it will start publishing redacted versions of advance tax agreements with taxpayers. This represents a dramatic shift in Luxembourg’s usual secretive tax stance.

Against this background, Joshua Blank’s article—The Timing of Tax Transparency—is both perfectly timed and profoundly instructive. Policy choices about whether to disclose tax return information as well as tax administrators’ enforcement actions to increase public scrutiny have generally been viewed as a balancing act between competing values. Increased transparency may improve tax authorities’ accountability and encourage taxpayers to avoid aggressive planning for fear of public backlash. On the other hand, increased transparency hurts taxpayers’ privacy and may provide aggressive taxpayers a clear picture of tax authorities’ inner workings, which in turn may impede tax authorities’ enforcement efforts. The main innovation in Blank’s paper is his abandonment this binary approach towards tax transparency (increased tax transparency: yes or no) in favor of a time-dependent approach (increased tax transparency: when?). Blank argues that the balancing act between the competing values involved plays out differently depending on when—during the administrative tax process—disclosure is made.

Blank suggests that we separately consider ex-post and ex-ante tax enforcement actions. Ex-post enforcement happens “after taxpayers have pursued transactions and claimed tax positions, such as by conducting audits or settlements.” Ex-ante enforcement refers to tax authorities’ engagement with a taxpayer, before that taxpayer takes a legal position in a tax return, for example, by “issuing advance tax rulings [and other] advance agreements with specific taxpayers.”

Blanks then turns to consider the pros and cons of disclosure of ex-post versus ex-ante administrative tax actions. He makes a strong case against mandatory disclosure of tax return information, which would include information about tax authorities’ ex-post enforcement action. Such disclosure, he argues, would impair tax authorities’ ability to strategically publicize their enforcement strengths and to positively influence public perception and compliance behavior by doing so. In addition, ex-post publicity may encourage aggressive tax behavior. For example, activist corporate shareholders may pressure corporate management to engage in aggressive behavior adopted by other corporations (a process Blank refers to as “benchmarking”). Finally, ex-post disclosure also enables aggressive tax planners to reverse-engineer tax authorities’ enforcement decisions (such as, which returns to audit), and thus engage in strategic behavior.

On the other hand, Blanks proposes that the disclosure of tax authorities’ ex-ante actions is justified. Ex-ante actions, in effect, “bless” taxpayers’ positions in advance. Tax rulings done in secret may hurt the social legitimacy of tax authorities. The public may perceive that the tax authority creates “secret” tax law for a select group of taxpayers, and treats taxpayer inequitably. The public may question the integrity of such process (as indeed happened in the recent Luxleaks scandal, where advance tax agreement were popularly referred to as “tax deals”). Ex-ante disclosure is also efficient according to Blank, since it encourages taxpayers to seek tax rulings, which in turn increases legal certainty of the tax treatment of proposed transactions. Blank also suggests that ex-ante disclosure does not suffer from the same ails of ex-post disclosure. Since advance tax rulings are generally non-binding outside the scope of the specific transaction to which they apply, it is unlikely that they serve as benchmark instruments for strategic behavior by other taxpayers. Moreover, it is unlikely that a ruling will be granted for a particularly aggressive plan, and thus no roadmap for bad behavior will be provided.

After presenting the theoretical case, Blank turns the explore some of its practical applications, which is where, in my mind, the article is most revealing. Blank’s theoretical framework offers a strong case for the disclosure of ex-ante actions that are currently not disclosed. For example, most advance rulings published by tax authorities are favorable to taxpayers. When a tax authority indicates that it will rule against the taxpayer, the ruling submission is usually withdrawn and as such never disclosed. Blank suggests that information on withdrawals of advance ruling applications should be disclosed. Without information on instances in which tax authorities declined to rule on a transaction, taxpayers may lack complete understanding of a tax authority’s ex-ante legal interpretation, which may reintroduce the problem of “secret tax law”. Another example is advanced pricing agreements (APAs) that determine the pricing (for tax purposes) of transactions between affiliated entities. APAs are currently undisclosed, in the United States (as well as in other countries), which may create suspicion that that tax authorities use them to facilitate tax avoidance by multinationals. Indeed, the European Commission has recently determined that certain APAs granted by tax authorities in Europe to multinationals violated European law. While the issue is hotly contested, few will disagree that these APAs would look the same if tax authorities and multinationals knew they would be publicized.

On the other hand, Blank’s framework offers some counterintuitive results for ex-post disclosure. For example, Blank’s framework seems to significantly weaken the case for public country-by-country reporting (which some see as a dramatic and positive achievement by the OECD). This is a counter-intuitive outcomes. I have my doubts about such outcome, but Blank’s paper will certainly cause me to revisit my perception of ex-post tax disclosure.

In any case, even if one were to reject some (or all) of Blank’s practical applications, Blank’s article offers an important contribution to the literature on tax transparency. It shifts the debate away from its seemingly binary nature, and offers a completely original approach to evaluating tax transparency. In doing so, Blank challenges us to think about tax transparency in an original and a more nuanced way, which generates counter-intuitive outcomes that demand further research.

Cite as: Omri Marian, Is Tax Transparency A Panacea for Popular Discontent with the Tax System?, JOTWELL (April 11, 2017) (reviewing Joshua D. Blank, The Timing of Tax Transparency, 90 S. Cal. L. Rev. __ (forthcoming, 2017)), https://tax.jotwell.com/is-tax-transparency-a-panacea-for-popular-discontent-with-the-tax-system/.

The Tax Court: “Insubordinate” or “Prescient” on Auer/Seminole Rock Deference?

Steve R. Johnson, Seminole Rock in Tax Cases, Yale J. Reg. Notice & Comment (2016).

Auer/Seminole Rock or “ASR” deference is a hot topic right now in administrative law. ASR gives agencies deference when agencies interpret their own regulations, such as in litigation briefs or in guidance. If you want to know how ASR deference works in the tax context, and in particular in the Tax Court, read Steve Johnson’s work. This includes his 2013 article and his entry in the Yale Journal of Regulation’s recent online symposium on ASR deference.

The Chevron doctrine often serves as the starting point for deference to agency action. Chevron offers judicial deference to agency interpretations in final regulations and other actions with the “force of law” articulated in Mead. When the Supreme Court confirmed in its 2011 Mayo decision that Chevron applies to tax regulations, it helped to usher in a growing awareness of administrative law doctrine in tax cases.

Agency action without force of law, including an agency interpretation of its own regulations, does not get Chevron deference. But it might get ASR deference. So what does that mean?

In the Tax Court, ASR historically doesn’t mean very much, as Johnson explains in his 2013 article. ASR claims may succeed at a rate of 91% at the Supreme Court and at a rate of 76% at federal circuit and district courts, but such claims, if they are made at all, are less likely to succeed in the Tax Court. Johnson sets forth six doctrinal exceptions that a court might rely on as support for not granting ASR deference. These include that agency’s action might be “plainly erroneous or inconsistent with the regulation” (Auer), that the regulation is unambiguous, that the agency’s position is unsettled, that the regulation “parrots” the statute, that regulated parties have not had fair notice of the interpretation, and that the agency’s interpretation “does not reflect the agency’s fair and considered judgment on the matter in question” (Auer).

Johnson shows how these exceptions can be made big enough to drive a truck through, if a court is so inclined. In his 2013 article, he catalogues the Tax Court cases that have refused deference to the Treasury’s interpretation of its own regulations between 1980 and 2011. In his online symposium contribution, he reviews more recent case law developments. In many cases, Johnson reports, the government does not even bother to argue ASR deference.

Johnson also tells of a 2014 case in which the government argued before the Tax Court that ASR deference applied. In that case, the Tax Court nimbly dodged the issue. It wrote, “The regulations are silent on the issue before us, and [the government’s] position on brief is at least arguably inconsistent with the statute.” This makes little sense. The fact that the regulations are silent should not block the government from offering an ASR-protected interpretation as to how the regulations should apply. But the Tax Court refused to defer.

Reasons for the Tax Court’s approach may include its status as an expert court. The Tax Court’s authorizing statute directs the court to determine the “correct” amount of tax and might be interpreted as a particularly broad mandate for review of agency action. But the Tax Court’s reluctance to embrace ASR deference could also indicate that the ASR doctrine in general is overbroad. Auer and Seminole Rock can be read to suggest that ASR gives as much deference to informal agency guidance as Chevron gives to final notice-and-comment regulations. Should this be the law? As others have suggested, perhaps the Supreme Court should clarify that ASR gives less deference to an agency’s interpretation of its regulations than Chevron gives to the regulations themselves.

There are three takeaways from Johnson’s work on ASR deference. First, tax law’s awkward relationship with administrative law is a work in progress. Second, sweeping language in a Supreme Court case doesn’t automatically translate to sweeping deference in practice. Third, tax law can influence administrative law, as well as the other way around.  For purposes of the debate about the proper scope of ASR, the Tax Court’s reluctance to grant ASR deference might prove, as Johnson suggests, “less insubordinate than prescient.”

Cite as: Susan Morse, The Tax Court: “Insubordinate” or “Prescient” on Auer/Seminole Rock Deference?, JOTWELL (March 10, 2017) (reviewing Steve R. Johnson, Seminole Rock in Tax Cases, Yale J. Reg. Notice & Comment (2016)), https://tax.jotwell.com/the-tax-court-insubordinate-or-prescient-on-auerseminole-rock-deference/.

How Pigouvian Taxes Work on Sellers, and Why We Should Care

Kyle Rozema, Supply Side Incidence of Consumption Taxes (Oct. 5, 2016), available at SSRN.

Empirical testing of the tax laws, and in particular testing the incidence of the tax laws, may sound boring. But virtually any modern public policy goal that could be implemented through tax policy ultimately turns precisely on this question. For example: Should the United States adopt a tax on sugary drinks? Is a high cigarette tax effective in preventing smoking deaths? Would a carbon tax help to reduce global warming? Ultimately, the answers to these questions turns on who, in fact, ends up bearing the burden of these taxes.

Such proposals often represent forms of so-called Pigouvian taxes. Proponents of Pigouvian taxes support them by contending that they can be used to reduce inefficient behavior by forcing consumers to internalize the full costs of such activities. Opponents of Pigouvian taxes often point to the regressive effect of such taxes on consumers, because they increase the cost of goods by a fixed amount of taxes, which disproportionately harms those consumers least able to afford such taxes. A fair amount of literature has arisen to resolve this question, primarily focusing on the empirical question of whether increasing the price of certain goods through higher taxes in fact reduces the amount of consumption and who bears the costs of such taxes. Virtually none of the literature in this area asks a related, but equally important, question: how do Pigouvian taxes impact different types of sellers of such goods?

Kyle Rozema provides one of the first attempts to address precisely this question in his article Supply Side Incidence of Consumption Taxes. More specifically, Rozema asks: How does a cigarette tax affect sellers of goods, as opposed to buyers of goods? The question matters because if the purpose of the cigarette tax was to serve as a Pigouvian tax, it would work only if it actually increased the price of cigarettes to consumers. Ultimately, however, the behavior of both buyers and sellers determines the equilibrium price of the goods. As an initial matter, this seems like an obvious question. After all, a Pigouvian tax works by charging more for a good which, in turn, should reduce demand (depending on the shape of the demand curve). But what if sellers don’t, in fact, raise prices in response to the tax? Even worse, what if some do and some don’t? As becomes readily apparent, taxes that are not fully passed on through retail prices would be less effective at reducing consumption, thereby undermining the purpose of a Pigouvian tax in the first place.

For example, if the government were to charge a tax on sales of sugary drinks of $.05 but the retailer does not increase the price of the drink, was the Piguovian tax effective? The tax did make it more expensive for the retailer to sell the drink, but it did not make it more expensive for the consumer to buy the drink. Is this the intended result? In determining whether to adopt a Pigouvian tax in the first place, should it matter whether the tax would ultimately be borne by the buyer or seller? There is little hard evidence to answer these questions. In particular, empirically testing the effects of Piguovian-type taxes on the supply side of the analysis has proven particularly difficult due in part to a lack of sufficiently fine-grained data. The result is often the adoption of Piguovian taxes based on little more than intuition about the incidence or resorting to one’s normative priors.

Rozema’s primary contribution is to challenge the assumption that all sellers bear an equal burden of such taxes by compiling a unique dataset of actual sales by different retailers of cigarettes based on data compiled by actual scans of UPC codes at the register. In this manner, Rozema can obtain a glimpse not only of the macro-level effects of total consumption of cigarettes but also on the more micro-level effect of whether and to what extent the tax decreased sales at the register for different types of retailers and the amount of profits on such sales. By utilizing more precise data, Rozema unveils a more complex and nuanced picture of Pigouvian taxes. His analysis finds that a rise in the cigarette tax can result in different consequences for different types of retailers. In particular, he finds the effect of broad-based cigarette taxes on actual registered sales was to increase the price at most large drug and grocery stores but not to do so at convenience stores and other small retailers.

Why would this result be so important? Return to the sugary drink hypothetical above. Assume the goal of a tax on sugary drinks is to reduce the consumption of sugar in society. Now assume that Rozema’s findings apply equally to sugary drink taxes as to cigarette taxes. This could mean that people would buy fewer sugary drinks at gas stations and convenience stores, but this reduction would be offset by greater sales of sugary drinks at grocery stores or warehouse stores (for example, where bulk discounts are available). Alternatively, Rozema’s results could mean that gas stations and convenience stores would not increase retail prices but instead such sellers would absorb the cost of the tax, resulting in little to no reduction in consumption of sugary drinks at such retailers. Either way, what results is a distributional distortion among retailers rather than the desired Pigouvian effect of reducing consumption. Even worse, Rozema proposes that not only is there a distributional effect, when one was not anticipated, but that the effect could in fact prove regressive to the extent it tends to hurt smaller retailers over the larger retailers.

Rozema’s results are striking. Not only do they provide new insights in an area where many may have thought empirical analysis would be impractical, but they also potentially challenge many of the theoretical foundations underlying the use of Piguovian taxes. Rozema’s paper represents some of the best of what empirical tax research can and should do. It looks to an important area of tax and public policy, finds a significant gap in the micro-foundations for such policy, and uses a creative and novel data to begin to address that gap. Rozema attempts to shed light on the issue and clarify the trade-offs inherent in adopting Pigouvian taxes not only from a consumption side but also from a supply side.

While this review might still not have convinced many readers that empirical analysis of the incidence of taxes is not boring, keep these results in mind the next time you find yourself at a cocktail party debating whether the government should adopt an additional tax on liquor or wine. Maybe then empirical tax studies won’t seem so boring after all.

Cite as: Adam Rosenzweig, How Pigouvian Taxes Work on Sellers, and Why We Should Care, JOTWELL (February 9, 2017) (reviewing Kyle Rozema, Supply Side Incidence of Consumption Taxes (Oct. 5, 2016), available at SSRN), https://tax.jotwell.com/how-pigouvian-taxes-work-on-sellers-and-why-we-should-care/.

Thoughts On Statutory Interpretation—For Tax Specialists, Too

Tax specialists are no strangers to the exercise of statutory interpretation. The Internal Revenue Code is an enormously complex statute, with all of the overlapping provisions, competing goals, and specificity interspersed with ambiguity that one would expect to accompany that complexity. And mastering the tax policy aspects of the Code is hard enough that tax specialists might be forgiven for reducing the exercise of statutory interpretation to short statements about considering the Code’s text, history, and purpose, or the “spirit” of the tax laws. A recent exchange between two prominent federal judges—Chief Judge Robert Katzmann of the Second Circuit and Judge Brett Kavanaugh of the D.C. Circuit—and the lengthier books highlighted within their exchange offer a highly readable reminder of the parallel complexity of statutory interpretation theory and jurisprudence. Tax specialists interested in seeing their policy preferences succeed in the real world would do well to take note.

Although tax specialists often like to think of the tax laws as unique, judges in tax cases routinely rely upon and debate about the same tools of statutory construction that they apply and discuss in interpreting other statutes. Consider just one particularly expansive example. In Rand v. Comm’r, 141 T.C. 376 (2013), deciding that refundable credits like the earned income tax credit reduce “the amount shown as the tax by the taxpayer on his return” when computing the underpayment penalty under § 6662 and 6664, Judge Ronald Buch discussed the consistent usage canon, the expressio unius canon, the surplusage canon, and the rule of lenity, in addition to the Chevron and Auer standards of review. Judge David Gustafson in dissent maintained that proper application of the rule of lenity supported the opposite conclusion. Judge Richard Morrison, dissenting separately, criticized Judge Buch’s opinion for relying too heavily on the consistent usage canon and ignoring relevant legislative history. (Congress subsequently amended § 6664 to clarify its intent.) Also, Carpenter Family Investments, LLC v. Comm’r, 136 T.C. 373 (2011)—one of the cases leading up to the Supreme Court’s decision in United States v. Home Concrete that basis overstatements are not omissions of an amount from gross income under §§ 6229(c)(2) and 6501(e)(1)(A)—includes an interesting exchange between Judge Robert Wherry for the majority and Judges James Halpern and Mark Homes in concurrence over whether unique attributes of the tax legislative process are relevant when considering legislative history in tax cases. And in Yari v. Comm’r, 143 T.C. 157 (2014), in interpreting the phrase “tax shown on the return” in connection with the § 6707A reportable transaction penalty, Judge Robert Wherry referenced several canons, discussed at some length which documents were relevant as legislative history, and observed further that “the process of divining the legislative intent underlying a statute’s language and structure, while subject to canons of construction and well-established methodologies, is hardly an exact science.”

In a sense, Katzmann’s and Kavanaugh’s conversation about statutory interpretation theory and jurisprudence started when Katzmann published the well-received Judging Statutes in 2014. For that matter, although not styled precisely as such, Katzmann’s book could be read as responding to the also-acclaimed Reading Law: The Interpretation of Legal Texts, published by the late Justice Antonin Scalia and Professor Bryan Garner in 2012. As good textualists, Scalia and Garner rejected legislative history and emphasized semantic canons like the whole act rule and substantive canons like the rule of lenity. By comparison, Katzmann offered a robust and scholarly defense of legislative history as instructive in discerning congressional intent. As a key part of his argument, Katzmann contended that courts (and the rest of us) need to understand better how Congress operates in order to use legislative history appropriately.

In his review of Judging Statutes, Kavanaugh accepts the proposition that legislative history may be useful in resolving textual ambiguity. But he objects to relying on legislative history to override clear statutory text in the vein of Church of the Holy Trinity v. United States, 143 U.S. 457 (1892), and he criticizes Katzmann for failing to make that distinction. Kavanaugh observes further that many canons of statutory construction (including the “canon” of relying on legislative history to clarify textual ambiguity) “depend on an initial evaluation of whether statutory text is clear or ambiguous,” and he describes at some length why it is often difficult to determine where textual clarity ends and textual ambiguity begins. He suggests, therefore, that courts should reduce their reliance on those canons that turn on a threshold finding of textual ambiguity and instead “seek the best reading of the statute.” Kavanaugh offers ways in which several traditional tools of statutory construction that turn on the clarity/ambiguity distinction—from the application of legislative history to the Chevron standard—might be reframed to better facilitate the search for congressional intent. Other canons, like anti-consistency and consistent usage, he suggests using cautiously. Ejusdem generis, he suggests tossing outright.

In his response to Kavanaugh’s review, Katzmann first clarifies that he did not intend to suggest a return to Holy Trinity’s reliance on legislative history to override clear statutory text, but rather merely “to highlight the challenges of the interpretive task and approaches to addressing that challenge.” Katzmann also lauds Kavanaugh’s efforts to explore “how canons can be better employed as interpretive rules of the road . . . freed from an inquiry into ‘ambiguity.’” But Katzmann then poses a series of questions suggesting, for example, that seeking the best reading of a statute is what judges already do, and also that debates over clarity versus ambiguity and disagreements over best reading are both legitimate and inevitable whenever the words of a statute are not explicit.

In the end, Katzmann and Kavanaugh agree on critical starting points. Both start from the premise that the role of a judge (and, thus, anyone trying to read a statute) is to discern and comply with congressional intent. Both begin the interpretive process with statutory text. To quote Justice Kagan, as Kavanaugh does in his review, “we’re all textualists now.” Both Katzmann and Kavanaugh agree, though to substantially different degrees, that legislative history has a role to play in discerning congressional intent. But they disagree significantly over many of the details, wherein of course lies the devil.

This sophisticated conversation between Katzmann and Kavanaugh is a must-read for tax specialists for a couple of reasons. As sitting federal appellate court judges, Katzmann and Kavanaugh together offer a bird’s eye view into real-world judicial decisionmaking.  Yet Katzmann’s book, Kavanaugh’s review, and Katzmann’s response not only offer examples from case law, but also draw extensively from the latest scholarship on statutory interpretation. Nevertheless, maybe because they are judges rather than scholars, Katzmann and Kavanaugh have made their conversation clear and easy to read, and thus accessible for audiences who are not so interested in a deep dive into that scholarly literature. Highly recommended for busy tax specialists who appreciate that they need to think more about statutory interpretation but want to get back to debating tax policy!

Cite as: Kristin Hickman, Thoughts On Statutory Interpretation—For Tax Specialists, Too, JOTWELL (January 4, 2017) (reviewing Brett M. Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118 (2016) and Robert A. Katzmann, Response to Judge Kavanaugh’s Review of Judging Statutes, 129 Harv. L. Rev. F. 388 (2016).), https://tax.jotwell.com/?p=2019.