TAX, SOCIETY & CULTURE

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Today at McGill Law: Singer on Remission Orders

Published Oct 22, 2018 - Follow author Allison Christians: - Permalink

Today at McGill Law, Prof. Sam Singer of Thompson Rivers University will present his work in progress, entitled "Evaluating Canadian Tax Remission Orders: A Debt Relief Vehicle for Taxpayers," as part of the annual Spiegel Sohmer Tax Policy Colloquium at McGill Law.

Here is the abstract:

Remission orders, although rare, serve important functions in the Canadian tax system. This paper draws from a comprehensive study of federal tax remission orders issued between 1998 and 2017. It presents general findings about remission orders in that time period, including the number of remission orders issued, their reported costs, and the number of remission order applications. The paper identifies the five most common categories of reasons cited for granting remission orders. It then applies tax policy analysis to assess the two most frequent reasons for granting remission orders: to provide debt relief for financial hardship and/or extenuating circumstances, and to provide remedies for government errors and delays. This study also highlights concerns about the federal tax remission system, and provides recommendations for improving its fairness, transparency, and accountability.
For those not familiar with the practice of remission in tax, this is a regime under which the taxpayer can ask the tax authority to forgive their tax debts, manly due to hardship or extenuating circumstances. This was a new concept to me when I came to McGill in 2012 and learned about a rather generous remission order granted to Blackberry in what I assumed to be a last-ditch effort in the nature of industrial policy and national protectionism--but Prof. Singer's paper makes clear that the remission order is not only (or even primarily) for massive multinational companies. I am bothered by the idea that the tax authority has a more or less obscure power to forgive the tax debts of some taxpayers under unclear circumstances and using criteria that are not transparent or reviewable. This seems to me to be a tool which could create great distrust in the tax system, in terms of both procedural fairness for taxpayers who don't know about or get remission orders but also in terms of the opacity behind which some officials appear to have a tool to help selected individuals at their will. I look forward to the discussion of Prof. Singer's paper and the implications of this research for the big questions of tax governance.

The tax policy colloquium at McGill is supported by a grant made by the law firm Spiegel Sohmer, Inc., for the purpose of fostering an academic community in which learning and scholarship may flourish. The land on which we gather is the traditional territory of the Kanien’keha:ka (Mohawk), a place which has long served as a site of meeting and exchange amongst nations.

This fall the Colloquium will explore a range of contemporary tax topics across three disciplines--law, economics, and philosophy. The complete colloquium schedule is below and more information is available here. As always, the colloquium is free and open to all.

The Colloquium is convened by Allison Christians, H. Heward Stikeman Chair in Taxation Law.


Tagged as: colloquium McGill tax policy

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2018 Tax Policy Colloquium at Mcgill Law

Published Aug 29, 2018 - Follow author Allison Christians: - Permalink

I'm very happy to announce the 2018 McGill Tax Policy Colloquium, which will take an interdisciplinary approach to tax policy analysis. The colloquium is made possible by a grant from Spiegel Sohmer. The land on which we gather is the traditional territory of the Kanien’keha:ka (Mohawk), a place which has long served as a site of meeting and exchange amongst nations. The distinguished speakers who will contribute to this year’s colloquium include:

  • Oct 22: Sam Singer, Assistant Professor, Faculty of Law, Thompson Rivers University. Prof. Singer's research focuses on tax dispute resolution, the policy rationales underlying tax measures, and the regulation of charities and charitable giving.
  • Nov 12: Lindsay Tedds, Scientific Director of Fiscal and Economic Policy and Associate Professor, Department of Economics, University of Calgary. Dr. Tedds’ research focuses on tax policy and she has done extensive work with the Government of Canada in the areas of public economics and policy implementation.
  • Nov 19: Laurens van Apeldoorn, Assistant Professor of Philosophy, Leiden University. Prof. Van Apeldoorn’s research examines the nature and prospects of the sovereign state, with a special focus on the normative aspects of international taxation rules in relation to the global justice.
  • Nov 26: Frances Woolley, Full Professor, Department of Economics, Carleton University and President, Canadian Economics Association. Prof. Wooley’s expertise and research focus on economics of the family, gender and intra-house inequality, taxation and benefits for and of families, and feminist economics. 
  • Dec 3: Ruth Mason, Full Professor, School of Law, University of Virginia. Prof. Mason’s research focuses on international, comparative, and state taxation. Her work on tax non-discrimination laws’ effect on cross-border commerce has been cited extensively, including by the U.S. Supreme Court.
As always, colloquium presentations are open to all, and I will post more information closer to each date.


Tagged as: colloquium McGill scholarship tax policy

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Burgers & Mosquera on Corporate Tax, BEPS, and Developing Countries

Published Sep 06, 2017 - Follow author Allison Christians: - Permalink

Irene Burgers (University of Groningen - Faculty of Economics and Business) and  Irma Mosquera Valderrama (IBFD) recently posted Corporate Taxation and BEPS: A Fair Slice for Developing Countries?, which explores the link between perceptions of fairness in the allocation of international tax revenues and buy-in to the BEPS framework by developing countries. Here is the abstract:
The aim of this article is to examine the differences in perception of ‘fairness’ between developing and developed countries, which influence developing countries’ willingness to embrace the Base Erosion and Profit Shifting (BEPS) proposals and to recommend as to how to overcome these differences. The article provides an introduction to the background of the OECD’s BEPS initiatives (Action Plan, Low Income Countries Report, Multilateral Framework, Inclusive Framework) and the concerns of developing countries about their ability to implement BEPS (Section 1); a non-exhaustive overview of the shortcomings of the BEPS Project and its Action Plan in respect of developing countries (Section 2); arguments on why developing countries might perceive fairness in relation to corporate income taxes differently from developed countries (Section 3); and recommendations for international organisations, governments and academic researchers on where fairness in respect of developing countries should be more properly addressed (Section 4). 
This is an important analysis because it is clear that the meaningful participation of non-OECD countries in the development of international tax norms going forward is both difficult and imperative in terms of both legitimacy and effectiveness of the evolving international tax order.

Tagged as: BEPS development fairness scholarship tax competition tax policy

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Cockfield: Big Data and Tax Haven Secrecy

Published Oct 14, 2015 - Follow author Allison Christians: - Permalink

Art Cockfield has posted a new paper on SSRN, Big Data and Tax Haven Secrecy, forthcoming Florida Tax Review. The article sets out research he did with the International Consortium of Investigative Journalists (ICIJ) and is of interest. Here is the abstract:

While there is now a significant literature in law, politics, economics, and other disciplines that examines tax havens, there is little information on what tax haven intermediaries — so-called offshore service providers — actually do to facilitate offshore evasion, international money laundering and the financing of global terrorism. To provide insight into this secret world of tax havens, this Article relies on the author’s study of big data derived from the financial data leak obtained by the International Consortium for Investigative Journalists (ICIJ). A hypothetical involving Breaking Bad’s Walter White is used to explain how offshore service providers facilitate global financial crimes. The Article deploys a transaction cost perspective to assist in understanding the information and incentive problems revealed by the ICIJ data leak, including how tax haven secrecy enables elites in non-democratic countries to transfer their monies for ultimate investment in stable democratic countries. The approach also emphasizes how, even in a world of perfect information, political incentives persist that thwart cooperative efforts to inhibit global financial crimes.

Tagged as: evasion information scholarship tax policy

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Spiegel Sohmer Tax Policy Colloquium at McGill Law

Published Sep 28, 2015 - Follow author Allison Christians: - Permalink

McGill Law's annual Speigel Sohmer Tax Policy Colloquium kicks off today with a presentation by Roseanne Altshuler on the viability of a switch from worldwide to territorial corporate taxation in the United States. This year's colloquium will focus on the fundamentals of corporate tax policy by critically examining issues in national and international tax policy. Today's talk will take place from 14:30-17:30pm in Room 202 of New Chancellor Day Hall, 3644 Peel Ave, Montreal. Students, faculty and the McGill community in Montreal are welcome to attend.

Here is the colloquium line-up for the fall:

Monday, September 28: Rosanne Altshuler

Rosanne Altshuler is Dean of Social and Behavioral Science and a Professor of Economics at Rutgers University. She was the Chair of the Department of Economics at Rutgers from 2011 to 2015. She has written widely on federal tax policy, including her most recent article “Lessons the United States Can Learn from Other Countries’ Territorial Systems for Taxing Income of Multinational Corporations.”

Monday, October 5: Steven Dean

Steven Dean is a Professor at Brooklyn Law School and a specialist in tax law. His research addresses a range of tax and budgetary issues, including unconventional solutions to problems such as tax havens, regulatory complexity and tax shelters. His recent article, “Tax Deregulation,” considered the surprising implications of enhancing taxpayer autonomy.

Monday, November 2: Richard Murphy

Richard Murphy is a chartered accountant and economist. He is the founder of the Tax Justice Network and the director of Tax Research LLP, which undertakes work on tax policy, advocacy and research. Mr. Murphy is the co-author of several publications on tax policy, including his most recent book, “Over Here and Undertaxed: Multinationals, Tax Avoidance and You.”

Tuesday, November 10: Daniel N. Shaviro

Daniel Shaviro is a Professor of Taxation at the New York University School of Law. Professor Shaviro has written several books examining tax policy, budget policy and entitlements issues. His most recent book, “Fixing US International Taxation,” offers an analytical framework for international tax policy that sidesteps the standard worldwide taxation vs. territorial taxation framework.

Monday, November 23: Kim Brooks

Kim Brooks is Dean and Weldon Professor of Law at the Schulich School of Law, Dalhousie University. Dean Brooks’ research focuses on corporate and international tax law and policy. She focuses on using a discrete area of tax law to understand a larger tax concept, and using the tax system to promote international economic justice. Dean Brooks has written widely on tax treaties and international taxation, including her recent chapter, “The Troubling Role of Tax Treaties” in the volume 51 of “Tax Design Issues Worldwide: A Series on International Taxation.”

Monday, November 30: Albert Baker

Albert Baker is the Global Leader in Tax Policy at Deloitte & Touche LLP, where he specializes in international tax, including mergers and acquisitions, corporate financing and corporate reorganizations. His recent research focuses on base erosion & profit shifting, a project to address concerns that current international tax frameworks result in double non-taxation, or stateless income, or reducing the tax base in high tax countries.

The Spiegel Sohmer Tax Policy Colloquium has been made possible by a generous grant from the law firm Spiegel Sohmer, Inc., Montreal, for the purpose of fostering an academic community in which learning and scholarship may flourish. I am delighted to welcome these distinguished guests and look forward to today's discussion.

Tagged as: colloquium corporate tax McGill scholarship tax policy

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Today at McGill Law: Joseph Heath on Taxation as Collective Consumption

Published Oct 20, 2014 - Follow author Allison Christians: - Permalink

Professor Joseph Heath, Professor of Philosophy, University of Toronto, joins us today as the second speaker in the McGill University Speigel Sohmer Tax Policy Colloquium. Professor Heath is drawing from his book, Filthy Lucre: Economics for People Who Hate Capitalism, (released in the US as "Economics without Illusions: Debunking the Myths of Modern Capitalism"), where he writes about viewing taxation as a "club good":

Individuals express a surprisingly pervasive error that I refer to as the “government as consumer” fallacy. The picture underlying this fallacy is relatively straightforward. Government services, such as health care, education, national defense, and so on, “cost” us as a society. We are able to pay for them only because of all the wealth that we generate in the private sector, which we transfer to the government in the form of taxes. A government that taxes the economy too heavily stands accused of “killing the goose that lays the golden eggs” by disrupting the mechanism that generates the wealth that it itself relies upon in order to provides its services. Thus the government gets treated as a consumer of wealth, while the private sector is regarded as a producer. This is totally confused. The state in fact produces exactly the same amount of wealth as the market, which is to say, it produces none at all. People produce wealth, and people consume wealth. Institutions, such as the state or the market, neither produce nor consume anything. They simply constitute mechanisms through which people coordinate their production and consumption of wealth.
Heath has also pointed us to Todd Sandler's work on "Buchanan clubs."

 The presentation will take place in the Seminar Room of the Institute for Health and Social Policy, Charles Meredith House, 1130 Pine Ave., Montreal, beginning at 2:35 pm.

As always, the colloquium is open to all: students, faculty and the general public are welcome.

Tagged as: McGill philosophy scholarship tax policy

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Monday at McGill: Diane Ring on Sovereign Harmony, Domestic Discord

Published Nov 24, 2013 - Follow author Allison Christians: - Permalink

The 4th Annual Tax Policy Colloquium at McGill Law concludes Monday with a presentation by Professor Diane Ring of Boston College on her paper, Sovereign Harmony, Domestic Discord: Democracy and the Gap Between International Tax Cooperation and Domestic Politics (draft not yet available). Professor Ring explores how to understand the interplay between domestic tax politics and the need for nations to speak with one voice on the international stage. She argues that the more fractured internal politics, the less hope there seems to be for the kind of international cooperation that would make the tax system more coherent both nationally and internationally. Here is the Abstract:

The challenges of the international tax system have become ubiquitous. Newspapers recount the tax exploits of multinational corporations that are household names and announce the jail sentences of the latest Swiss bankers and U.S. taxpayers to fall in the ongoing attack on tax evasion. The twin pressures on effective income taxation captured by these stories are those of tax evasion (typically engaged in by individual taxpayers) and tax avoidance (typically characterized by the planning and structuring undertaken by multinational corporations). In both cases cooperation between and among states plays a pivotal policy and enforcement role. That is not to say that cooperation (in its various iterations) is a universal or achieved objective. Rather, the question of whether states can identify a shared goal and move cooperatively toward that goal is an important focus of international tax policy discussions. With respect to the problem of tax evasion there have been some notable steps of cooperation through information sharing measures (including Tax Information Exchange Agreements) as well as domestic changes designed to increase transparency. Less agreement and coordination has been evident for the problem of tax avoidance. The current context in which these questions are being explored communally is the Organization for Economic Cooperation and Development (OECD) project on “Base Erosion and Profit Shifting” (the “BEPS” project). 
But regardless of the degree of current cooperation, agreement, and coordination achieved on these international tax issues, the focus on the status of state-to-state relations can obscure another critical factor in the international tax system: domestic politics. Even if and when states reach a shared understanding of a dimension of the evasion or avoidance problems, a resulting agreement by states is not the end game. Although states must act and negotiate as monoliths in their state-to-state interactions, there remains the ever-present constraint of democracy at home and the possibility that a deal struck on the global stage is undone in the domestic sphere. This dynamic between international relations and domestic “politics” is neither new nor limited to taxation. But the serious attention to and heightened expectations from cooperation among nations regarding major issues of international tax policy requires that comparable attention be directed at the domestic side of cooperation. 
The task of this paper is to explore how domestic politics can impact the heart of the international tax system – agreements among states on important issues of tax policy design and practice. Through a better understanding of the intersection of domestic politics with international debates and agreements, we can consider how and under what circumstances states might diminish the likelihood that domestic discord will ultimately undermine sovereign harmony (i.e. international agreement). Part I outlines three recent examples of international agreement or cooperation that risked rejection or at least significant undermining on the domestic front. Part II reviews the literature regarding international cooperation to develop a framework for approaching the case studies on domestic politics in international tax. Part III draws upon the theoretical work reviewed in Part II to develop a framework for understanding the intersection of international tax and domestic politics. In light of the increasing role that global cooperation and coordination plays in the development of successful international tax policy and practice, the Conclusion considers further research that could illuminate the domestic side of international agreements.
The McGill Tax Policy Colloquium features distinguished visiting academics and offers a forum for students, professors, and local practitioners to discuss issues of tax policy and theory, along with related issues of economics and social justice. Professor Ring's talk will commence at 2:30 pm tomorrow; members of the public are warmly welcomed.

Location: McGill Faculty of Law, 3644 Peel Street, New Chancellor Day Hall, Room 203.

Date and Time: Monday, 25 November, 14:30–16:30.

Tagged as: McGill scholarship tax policy

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Tomorrow at McGill: Tillotson on the historical use of morality in tax policy

Published Nov 10, 2013 - Follow author Allison Christians: - Permalink

The 4th Annual Tax Policy Colloquium at McGill Law continues Monday with a presentation by Professor Shirley Tillotson of Dalhousie University on her paper, The moral worlds of fair taxation: a perspective from 20th century Canadian history (draft not yet available). Professor Tillotson examines the use of political rhetoric to advance tax reform. Marco Garofalo posted some thoughts on the topic earlier today.

The McGill Tax Policy Colloquium features distinguished visiting academics and offers a forum for students, professors, and local practitioners to discuss issues of tax policy and theory, along with related issues of economics and social justice.

Professor Tillotson's talk is scheduled to commence at 2:30 pm tomorrow; members of the public are warmly welcomed.

 Location: McGill Faculty of Law, 3644 Peel Street, New Chancellor Day Hall, Room 203.
 Date and Time: Monday, 11 November, 14:30–16:30.

Tagged as: McGill scholarship tax policy

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Tomorrow at McGill Law: Sagit Leviner presents on the Three Goals of Taxation

Published Oct 27, 2013 - Follow author Allison Christians: - Permalink

The 4th Annual Tax Policy Colloquium at McGill Law continues Monday with a presentation by Professor Sagit Leviner of Ono Academic College, Israel, on her paper, co-authored with Tali Nir, Contemplating on the Meaning & Attainment of the Three Goals of Taxation, forthcoming in Honoring Arie Lapidot (Hebrew University Press, 2014). Here is the abstract:

Why do we need a tax system? Do we want the tax system to only finance public goods and services or do we also intend it to redistribute wealth and regulate human behavior?  What are the different means available to advance each goal and the likely (as well as unlikely) tension that might built up when utilizing these means and pursuing  the different goals? This chapter seeks to address these questions in order to present the building-blocks for a clear and accessible analysis of the goals of taxation. Specifically, the chapter addresses these goals in the context of the Israeli tax system while placing the analysis in a broader theoretical and empirical setting.
In connection with the above, Professor Leviner will discuss her 2003 Tannenwald prize-winning paper, From Deontology to Practical Application: the Vision of a Good Society and the Tax System, 24 Va. Tax Rev. 406 (2006) [draft here]. That paper laid out Leviner's vision for thinking abut tax policy from the perspective of a community-rather than individual-oriented view of society, "drawn from an analysis of the role that individual and collective rights and responsibilities ought to play in contemporary tax policy-making." This innovative work laid the groundwork for her current research and should make for a lively discussion.

The McGill Tax Policy Colloquium features distinguished visiting academics and offers a forum for students, professors, and local practitioners to discuss issues of tax policy and theory, along with related issues of economics and social justice.

Professor Leviner's talk is scheduled to commence at 2:30 pm tomorrow; members of the public are warmly welcomed.

 Location: McGill Faculty of Law, 3644 Peel Street, New Chancellor Day Hall, Room 203.
 Date and Time: Monday, 28 October, 14:30–16:30.

Tagged as: McGill scholarship tax policy

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Measuring Corporate Tax Incidence: Update from the Joint Committee on Tax

Published Oct 17, 2013 - Follow author Allison Christians: - Permalink

The JCT released a report yesterday laying out its new method for measuring corporate tax incidence, Modeling The Distribution Of Taxes On Business Income (JCX-14-13).  The paper begins with a nice summary of the literature to date, and lays out the JCT's decision to assume that in the short run the incidence of corporate tax is fully on capital owners but in the long run (assumed to be reached by the end of a ten year analysis period), owners can shift 25% of the tax to domestic labor. Current Treasury practice assumes an 82/18 split. JCT explains its methodology and provides "illustrative examples", so the report is worth reading in full, but here are a few excerpts of note:

The Joint Committee staff has refrained from estimating the distribution of changes to the taxation of corporate income.... Past decisions not to estimate the distribution of taxes on corporations and passthrough entities were the result both of uncertainties among economists regarding the appropriate incidence of business taxes and to data limitations which made it impractical to distribute such taxes in the timeframe necessary to fit the legislative schedule. However, the economic literature has continued to advance. The Joint Committee staff believes that public finance economists now have a better understanding of, and can more appropriately measure, the incidence of taxes on business income. ... In addition, more detailed data and faster computing speeds help make timely completion of such distributional effects more feasible. 
...The debate over the incidence of corporate income taxes is ongoing, with a range of estimates on the precise breakdown depending on the assumptions of underlying models. Nevertheless, the existing research has arrived on two clear points of consensus. One is that the burden of the corporate income tax falls largely on domestic individuals, and therefore the corporate income tax does impact the well-being of these individuals. The second is that the burden of corporate income taxes is not borne entirely by capital owners, and is instead shared between capital owners and labor with the share borne by each being the subject of ongoing debate. 
...In the very short run, the incidence of business tax changes should fall entirely on the holders of the existing capital stock and bond holders. ... [I]n the long run owners of domestic capital are more easily able to escape some of the burden of the tax so business taxes are at least partially passed on to labor. ... 
The new methods ... reflect the current understanding in the economics profession that domestic individuals ultimately bear the majority of the burden of these taxes. Given the general economic consensus that these taxes should be distributed to individuals, the Joint Committee staff believes that estimating the distribution is appropriate. In the short run the new method distributes 100 percent of both types of taxes to owners of capital. In the long run it distributes 75 percent of corporate income taxes and 95 percent of the taxes attributable to passthrough business income to owners of capital. 
A portion of capital’s share of the corporate tax burden is borne by international capital owners, so in both the short run and the long run the distribution of tax burdens borne by domestic owners of capital is less than the burden borne by all capital owners. The portion of the corporate income tax burden borne by foreign capital owners is not distributed to domestic individuals on tax distribution tables. The remainder of the tax burden that is not distributed to foreign and domestic capital owners is distributed to labor, reflecting the compensation adjustment that results from corporate income taxes reducing the after-tax revenue that each worker generates for his firm. 
Given no definitive economic literature on the duration of the short run, the Joint Committee staff generally assumes that the long run is reached by the end of the 10-year budget window. These distributions between capital and labor reflect the middle of the range of estimates for distributing business taxes in the economic literature. The Joint Committee staff will use the updated distribution methods in this report to estimate tax distributions for all future estimates of the distribution of Federal income taxes. The Joint Committee staff will continue to evaluate and refine this approach to be consistent with new research findings as they arise. 

Tagged as: corporate tax economics tax policy u.s.

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