When cash is received for services, it typically will constitute gross income to the recipient. But what if the payments are made in a noncommercial setting such as the payment by a parent to a child for mowing the lawn or performing household chores? As discussed later in this Essay, there are reasons to conclude that such payments do not constitute income. The problem of how to treat receipts from a noncommercial activity frequently arises in the context of an exchange of services. A similar problem arises when services are provided by several persons pursuant to a pooling of labor to accomplish a common noncommercial goal.The regulations state that if a taxpayer receives services from another as payment for services rendered by the taxpayer, each party will realize gross income equal to the value of the services received from the other. If services were received as full or partial payment for property, the value of the services received would be included in the amount realized on the sale of the property. The tax problems that arise in connection with the receipt of services mostly occur when services are exchanged, and this Essay addresses that situation and will deal only incidentally with a payment of cash or other property for services.
{"title":"Exclusion from Income of Compensation for Services and Pooling of Labor Occurring in a Noncommercial Setting","authors":"Douglas A. Kahn","doi":"10.5744/ftr.2011.1082","DOIUrl":"https://doi.org/10.5744/ftr.2011.1082","url":null,"abstract":"When cash is received for services, it typically will constitute gross income to the recipient. But what if the payments are made in a noncommercial setting such as the payment by a parent to a child for mowing the lawn or performing household chores? As discussed later in this Essay, there are reasons to conclude that such payments do not constitute income. The problem of how to treat receipts from a noncommercial activity frequently arises in the context of an exchange of services. A similar problem arises when services are provided by several persons pursuant to a pooling of labor to accomplish a common noncommercial goal.The regulations state that if a taxpayer receives services from another as payment for services rendered by the taxpayer, each party will realize gross income equal to the value of the services received from the other. If services were received as full or partial payment for property, the value of the services received would be included in the amount realized on the sale of the property. The tax problems that arise in connection with the receipt of services mostly occur when services are exchanged, and this Essay addresses that situation and will deal only incidentally with a payment of cash or other property for services.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122901873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a holistic approach to balance sheet management to show how banks can meet both regulatory capital (proposed under Basel III) and shareholders’ wealth simultaneously. Using the consolidated balance sheet, this work outlines a methodology for mapping between targeted credit risks based capital ratio and economic value added by which banks can predict their optimal balance sheet. The results of this study are as follows. First, using an ex-ante approach, we predict the optimized balance sheet in each year from the previous year's data. By imposing the restriction of a maximum of 5% possible changes in the balance sheet items compared to the real changes, we could make an optimized balance sheet in which we predict more EVA with the same capital ratio compared to the real performance in each year. Second, in the ex-post approach, we use the optimized balance sheet items predicted by the ex-ante approach and assume that if this optimized balance sheet is used by the bank in practice, how much more EVA will be gained. The results show that in this approach (the ex-post approach), we could generate more EVA. It means that if the bank had used this optimized balance sheet in practice, it could have made more EVA. Robustness tests also support our main results when we impose more restrictions on the analysis.
{"title":"A Comprehensive Approach to the Capital Requirements Based on EVA","authors":"A. Golbabaei, M. Botshekan","doi":"10.2139/ssrn.3803317","DOIUrl":"https://doi.org/10.2139/ssrn.3803317","url":null,"abstract":"We propose a holistic approach to balance sheet management to show how banks can meet both regulatory capital (proposed under Basel III) and shareholders’ wealth simultaneously. Using the consolidated balance sheet, this work outlines a methodology for mapping between targeted credit risks based capital ratio and economic value added by which banks can predict their optimal balance sheet. The results of this study are as follows. First, using an ex-ante approach, we predict the optimized balance sheet in each year from the previous year's data. By imposing the restriction of a maximum of 5% possible changes in the balance sheet items compared to the real changes, we could make an optimized balance sheet in which we predict more EVA with the same capital ratio compared to the real performance in each year. Second, in the ex-post approach, we use the optimized balance sheet items predicted by the ex-ante approach and assume that if this optimized balance sheet is used by the bank in practice, how much more EVA will be gained. The results show that in this approach (the ex-post approach), we could generate more EVA. It means that if the bank had used this optimized balance sheet in practice, it could have made more EVA. Robustness tests also support our main results when we impose more restrictions on the analysis.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124951192","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A recent NY Times headline summarizes one of the biggest economic impacts of the current pandemic: “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” At a time when most American citizens and businesses suffer catastrophic economic damage from the Coronavirus Recession, some corporations such as Amazon, 3M, Gilead, and Zoom see their profits rise dramatically because of the pandemic. Given that most corporations are losing money but some are now earning excess profits due to the crisis, it is time to revive the wartime excess profits taxes that the US deployed in WW1 and WW2 to prevent the winners from achieving this form of opportunistic unjust enrichment. In what follows, I will first briefly summarize the WW2 historical experience (part 2) and then propose how it could be implemented today (part 3). Part 4 concludes.
{"title":"Taxes in the Time of Coronavirus: Is It Time to Revive the Excess Profits Tax?","authors":"R. Avi-Yonah","doi":"10.2139/ssrn.3560806","DOIUrl":"https://doi.org/10.2139/ssrn.3560806","url":null,"abstract":"A recent NY Times headline summarizes one of the biggest economic impacts of the current pandemic: “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” At a time when most American citizens and businesses suffer catastrophic economic damage from the Coronavirus Recession, some corporations such as Amazon, 3M, Gilead, and Zoom see their profits rise dramatically because of the pandemic. \u0000 \u0000Given that most corporations are losing money but some are now earning excess profits due to the crisis, it is time to revive the wartime excess profits taxes that the US deployed in WW1 and WW2 to prevent the winners from achieving this form of opportunistic unjust enrichment. In what follows, I will first briefly summarize the WW2 historical experience (part 2) and then propose how it could be implemented today (part 3). Part 4 concludes.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125601797","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Since the 1990s, the US tax treaty network has expanded to include most large developing countries. However, there remains a glaring exception: The US only has two tax treaties in Latin America (Mexico and Venezuela), and one pending tax treaty (Chile). The traditional explanation for why the US has no treaty with, for example, Argentina or Brazil is the US refusal since 1957 to grant tax sparing credits to developing countries. Before the Tax Cuts and Jobs Act of 2017 (TCJA), this explanation was wrong, because the combination of deferral and cross-crediting meant that tax holidays in a source country would not lead to a shift in revenues to a residence country even without tax sparing. This traditional view needs however to be updated given TCJA. On the one hand, there is now an exemption for direct dividends, so that the traditional rationale for not entering into treaties is gone. On the other hand, GILTI means that deferral is abolished and to the extent the income of a CFC exceeds the GILTI threshold there can in fact be a transfer of revenue to the US. Nevertheless, I believe that Latin American countries should enter into treaties with the US, for three reasons. First, cross-crediting still means that even with GILTI there may not be a revenue shift. Second, there are good reasons to enter into treaties even with a revenue shift, such as attracting FDI and limiting tax evasion. Third, Latin American countries are increasingly capital exporters, and the absence of a treaty hurts their multinationals. Finally, now is an opportunity, because the entire US treaty network needs to be updated to take account of TCJA.
{"title":"If Not Now, When? US Tax Treaties with Latin America after TCJA","authors":"R. Avi-Yonah","doi":"10.2139/SSRN.3382208","DOIUrl":"https://doi.org/10.2139/SSRN.3382208","url":null,"abstract":"Since the 1990s, the US tax treaty network has expanded to include most large developing countries. However, there remains a glaring exception: The US only has two tax treaties in Latin America (Mexico and Venezuela), and one pending tax treaty (Chile). The traditional explanation for why the US has no treaty with, for example, Argentina or Brazil is the US refusal since 1957 to grant tax sparing credits to developing countries. Before the Tax Cuts and Jobs Act of 2017 (TCJA), this explanation was wrong, because the combination of deferral and cross-crediting meant that tax holidays in a source country would not lead to a shift in revenues to a residence country even without tax sparing. This traditional view needs however to be updated given TCJA. On the one hand, there is now an exemption for direct dividends, so that the traditional rationale for not entering into treaties is gone. On the other hand, GILTI means that deferral is abolished and to the extent the income of a CFC exceeds the GILTI threshold there can in fact be a transfer of revenue to the US. Nevertheless, I believe that Latin American countries should enter into treaties with the US, for three reasons. First, cross-crediting still means that even with GILTI there may not be a revenue shift. Second, there are good reasons to enter into treaties even with a revenue shift, such as attracting FDI and limiting tax evasion. Third, Latin American countries are increasingly capital exporters, and the absence of a treaty hurts their multinationals. Finally, now is an opportunity, because the entire US treaty network needs to be updated to take account of TCJA.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116874806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Madagascar is a country in Sub-Saharan Africa. With an area of 592,800 square kilometres, it is the world’s 46th largest country and the fourth largest island. The country has many natural resources which are unique. Despite on the fact that Madagascar has abundant natural resources which are a fundamental point for its development, it is among of the poorest countries in Africa and the world: more than 60% of the population live on less than $2 a day. Many factors could be advanced to explain the origins of the poverty of this country, but one of them is the low access of the population to Financial Services. As Dr Muhammad Yunus said, “the system causes poverty; if we can change the system, we can change people’s life.” In Madagascar, the Mobile Money and the Microcredit plays a grand role in the promotion of Financial Inclusion. The success of Mobile Money in Madagascar will depend on the partnerships between the Mobile Network Operators and the Financial Institutions like Bank and Micro Finance Institutions.
{"title":"The Promotion of Financial Inclusion in Madagascar Through Mobile Money and Microfinance","authors":"Andriamirado Rakoto","doi":"10.2139/ssrn.3173606","DOIUrl":"https://doi.org/10.2139/ssrn.3173606","url":null,"abstract":"Madagascar is a country in Sub-Saharan Africa. With an area of 592,800 square kilometres, it is the world’s 46th largest country and the fourth largest island. The country has many natural resources which are unique. Despite on the fact that Madagascar has abundant natural resources which are a fundamental point for its development, it is among of the poorest countries in Africa and the world: more than 60% of the population live on less than $2 a day. Many factors could be advanced to explain the origins of the poverty of this country, but one of them is the low access of the population to Financial Services. As Dr Muhammad Yunus said, “the system causes poverty; if we can change the system, we can change people’s life.” In Madagascar, the Mobile Money and the Microcredit plays a grand role in the promotion of Financial Inclusion. The success of Mobile Money in Madagascar will depend on the partnerships between the Mobile Network Operators and the Financial Institutions like Bank and Micro Finance Institutions.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130070617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a country that is only 240 years old, trusts that can last for as many as 1000 years or even forever, typically for the benefit of the settlor’s descendants living from time to time, now and in the future, are all the rage in banking and estate-planning circles. Before 1986, when Congress passed the federal generation-skipping transfer tax (GST tax), settlors had little incentive and probably little desire to establish perpetual trusts, even though they were permitted to do so under the law of Wisconsin, South Dakota, or Idaho. The GST tax created an artificial incentive for the wealthy to establish such trusts. The origin of the perpetual-trust movement is the GST exemption, which is part of the GST tax. When Congress granted the GST exemption, it did not impose a durational limit on trusts that qualify for the exemption, but instead relied on state perpetuity laws to supply that limit. The reliance on state perpetuity laws was badly misplaced. At the instigation of state banking groups and estate-planning attorneys, states began to pass legislation allowing trust settlors to create perpetual trusts — trusts that can last for several centuries or even forever. With state perpetuity laws out of the way, the wealthy began creating perpetual trusts in significant numbers. This essay questions whether the state legislators who vote to authorize perpetual trusts and the wealthy who create them are thinking through what they are allowing or putting in place. The essay shows the folly of such trusts, primarily by producing a table projecting how, with each step down the generational ladder, the number of beneficiaries will proliferate and the settlor’s genetic connection with the beneficiaries will decline. The essay then points out that the primary responsibility for the perpetual-trust movement rests not with the state legislators or the wealthy, but with Congress. The primary responsibility for curtailing it also rests with Congress, but so far Congress has been decidedly uninterested in fixing what it instigated.
{"title":"From Here to Eternity: The Folly of Perpetual Trusts","authors":"Lawrence W. Waggoner","doi":"10.2139/SSRN.1975117","DOIUrl":"https://doi.org/10.2139/SSRN.1975117","url":null,"abstract":"In a country that is only 240 years old, trusts that can last for as many as 1000 years or even forever, typically for the benefit of the settlor’s descendants living from time to time, now and in the future, are all the rage in banking and estate-planning circles. Before 1986, when Congress passed the federal generation-skipping transfer tax (GST tax), settlors had little incentive and probably little desire to establish perpetual trusts, even though they were permitted to do so under the law of Wisconsin, South Dakota, or Idaho. The GST tax created an artificial incentive for the wealthy to establish such trusts. The origin of the perpetual-trust movement is the GST exemption, which is part of the GST tax. When Congress granted the GST exemption, it did not impose a durational limit on trusts that qualify for the exemption, but instead relied on state perpetuity laws to supply that limit. The reliance on state perpetuity laws was badly misplaced. At the instigation of state banking groups and estate-planning attorneys, states began to pass legislation allowing trust settlors to create perpetual trusts — trusts that can last for several centuries or even forever. With state perpetuity laws out of the way, the wealthy began creating perpetual trusts in significant numbers. This essay questions whether the state legislators who vote to authorize perpetual trusts and the wealthy who create them are thinking through what they are allowing or putting in place. The essay shows the folly of such trusts, primarily by producing a table projecting how, with each step down the generational ladder, the number of beneficiaries will proliferate and the settlor’s genetic connection with the beneficiaries will decline. The essay then points out that the primary responsibility for the perpetual-trust movement rests not with the state legislators or the wealthy, but with Congress. The primary responsibility for curtailing it also rests with Congress, but so far Congress has been decidedly uninterested in fixing what it instigated.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115929841","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Professor Brian Galle recently argued that the growing consensus that ex post regulation is superior to ex ante regulation on efficiency grounds has been overstated by scholars, including me, and that ex ante regulation has advantages that have been ignored or underemphasized. In this Response, I explain that ex post regulation does have advantages in certain settings and that the optimal regulatory response to many market failures will entail the use of both ex post and ex ante policy instruments. I also explain how an ex post incentive-based regulation, such as tort law or workers' compensation law, gets converted into a form of ex ante regulation through liability insurance and how liability insurance premiums produce a sort of "clustered" externality pricing that Galle suggests might be superior to both unitary Pigovian taxes or individualized tort sanctions.
Brian Galle教授最近认为，从效率的角度来看，事后监管优于事前监管这一日益增长的共识被包括我在内的学者夸大了，而事前监管具有被忽视或低估的优势。在本回应中，我解释了事后监管在某些情况下确实有优势，对许多市场失灵的最佳监管反应将需要同时使用事后和事前政策工具。我还解释了基于事后激励的监管，如侵权法或工人赔偿法，如何通过责任保险转化为一种事前监管形式，以及责任保险保费如何产生一种“集群”外部性定价，加勒认为这种定价可能优于单一的庇古税或个体化的侵权制裁。
{"title":"In Praise of (Some) Ex Post Regulation: A Response to Professor Galle","authors":"Kyle D. Logue","doi":"10.2139/SSRN.2754174","DOIUrl":"https://doi.org/10.2139/SSRN.2754174","url":null,"abstract":"Professor Brian Galle recently argued that the growing consensus that ex post regulation is superior to ex ante regulation on efficiency grounds has been overstated by scholars, including me, and that ex ante regulation has advantages that have been ignored or underemphasized. In this Response, I explain that ex post regulation does have advantages in certain settings and that the optimal regulatory response to many market failures will entail the use of both ex post and ex ante policy instruments. I also explain how an ex post incentive-based regulation, such as tort law or workers' compensation law, gets converted into a form of ex ante regulation through liability insurance and how liability insurance premiums produce a sort of \"clustered\" externality pricing that Galle suggests might be superior to both unitary Pigovian taxes or individualized tort sanctions.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"81 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116214671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article explores the role of insurance as substitute for direct regulation of risks posed by severe weather. In pricing the risk of human activity along the predicted path of storms, insurance can provide incentives for efficient location decisions as well as for cost-justified mitigation effort in building construction and infrastructure. Currently, however, much insurance for severe weather risks is provided and heavily subsidized by the government. The Article demonstrates two primary distortions arising from the government’s dominance in these insurance markets. First, the subsidies are allocated differentially across households, resulting in a significant regressive redistribution, favoring affluent homeowners in coastal communities. The Article provides some empirical measures of this effect. Second, the subsidies induce excessive development (and redevelopment) of storm-stricken and erosion-prone areas. While political efforts to scale down the insurance subsidies have so far failed, by exposing the unintended costs of government-subsidized insurance this Article contributes to reevaluation of the social regulation of weather risk.
{"title":"The Perverse Effects of Subsidized Weather Insurance","authors":"O. Ben‐Shahar, Kyle D. Logue","doi":"10.2139/SSRN.2549320","DOIUrl":"https://doi.org/10.2139/SSRN.2549320","url":null,"abstract":"This Article explores the role of insurance as substitute for direct regulation of risks posed by severe weather. In pricing the risk of human activity along the predicted path of storms, insurance can provide incentives for efficient location decisions as well as for cost-justified mitigation effort in building construction and infrastructure. Currently, however, much insurance for severe weather risks is provided and heavily subsidized by the government. The Article demonstrates two primary distortions arising from the government’s dominance in these insurance markets. First, the subsidies are allocated differentially across households, resulting in a significant regressive redistribution, favoring affluent homeowners in coastal communities. The Article provides some empirical measures of this effect. Second, the subsidies induce excessive development (and redevelopment) of storm-stricken and erosion-prone areas. While political efforts to scale down the insurance subsidies have so far failed, by exposing the unintended costs of government-subsidized insurance this Article contributes to reevaluation of the social regulation of weather risk.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117063653","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One consequence of having graduated income tax rates is that it becomes advantageous to shift income from a high bracket taxpayer to a person in a lower tax bracket. A number of different vehicles have been tried to shift the incidence of the income tax to another person, and the courts and Congress have adopted a number of rules to prevent that from occurring. As early as 1930, the Supreme Court adopted the anticipatory assignment of income doctrine to prevent a person who anticipates earning income from his services from shifting that income to another person in a lower tax bracket. Income is taxed to the person whose services produced it rather than to the person who has the beneficial right to possess the income once it is earned. This article discusses the tax treatment of an employee whose services create income for his employer. The anticipatory assignment of income doctrine does not apply in these circumstances under the so-called agency exception. This article explains the policy justification of the agency exception and uses examples to help illustrate when and when not the agency exception should apply.
{"title":"The Agency Exception to the Anticipatory Assignment Doctrine","authors":"Douglas A. Kahn, J. Kahn","doi":"10.2139/SSRN.2575915","DOIUrl":"https://doi.org/10.2139/SSRN.2575915","url":null,"abstract":"One consequence of having graduated income tax rates is that it becomes advantageous to shift income from a high bracket taxpayer to a person in a lower tax bracket. A number of different vehicles have been tried to shift the incidence of the income tax to another person, and the courts and Congress have adopted a number of rules to prevent that from occurring. As early as 1930, the Supreme Court adopted the anticipatory assignment of income doctrine to prevent a person who anticipates earning income from his services from shifting that income to another person in a lower tax bracket. Income is taxed to the person whose services produced it rather than to the person who has the beneficial right to possess the income once it is earned. This article discusses the tax treatment of an employee whose services create income for his employer. The anticipatory assignment of income doctrine does not apply in these circumstances under the so-called agency exception. This article explains the policy justification of the agency exception and uses examples to help illustrate when and when not the agency exception should apply.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116014954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This essay responds to Omri Ben-Shahar’s review of my book, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law (Princeton 2013). Ben-Shahar’s review (available at: http://ssrn.com/abstract=2255161) unfortunately does not convey the nature of this book to possible readers. His preconceptions – reflecting primarily what I call “old-school Chicago”--apparently caused him to believe that some strong version of “autonomy” was the focus of my book. Instead, the book’s purpose is to gather together a broad range of ideas relevant to boilerplate, in order to encourage readers to consider opportunities for improving our theory and practice. It makes detailed suggestions for improving our treatment of boilerplate, including chapters on how judges could improve on unconscionability and public policy decisions, how market initiatives might be harnessed to cabin boilerplate excesses, and how bad boilerplate might be regulated by tort law rather than contract law. Boilerplate does investigate the disjuncture between contract theories’ various commitments to voluntariness and the realities of contemporary practice with respect to mass-market boilerplate; but it does so as backdrop to its main purpose.
{"title":"What Boilerplate Said: A Response to Omri Ben-Shahar (and a Diagnosis)","authors":"M. Radin","doi":"10.2139/SSRN.2401720","DOIUrl":"https://doi.org/10.2139/SSRN.2401720","url":null,"abstract":"This essay responds to Omri Ben-Shahar’s review of my book, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law (Princeton 2013). Ben-Shahar’s review (available at: http://ssrn.com/abstract=2255161) unfortunately does not convey the nature of this book to possible readers. His preconceptions – reflecting primarily what I call “old-school Chicago”--apparently caused him to believe that some strong version of “autonomy” was the focus of my book. Instead, the book’s purpose is to gather together a broad range of ideas relevant to boilerplate, in order to encourage readers to consider opportunities for improving our theory and practice. It makes detailed suggestions for improving our treatment of boilerplate, including chapters on how judges could improve on unconscionability and public policy decisions, how market initiatives might be harnessed to cabin boilerplate excesses, and how bad boilerplate might be regulated by tort law rather than contract law. Boilerplate does investigate the disjuncture between contract theories’ various commitments to voluntariness and the realities of contemporary practice with respect to mass-market boilerplate; but it does so as backdrop to its main purpose.","PeriodicalId":415088,"journal":{"name":"Michigan Law & Economics: Law Faculty Papers (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131537111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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