Risky Returns: Accounting for Risk in the Federal Budget

There has been a growing consensus among academics, analysts, and policymakers that the official federal budget estimates should reflect the “cost of risk”—the amount that the private market would demand to bear risk. The result would be to add tens, if not hundreds, of billions of dollars in annual costs to the federal budget and, in combination with the budget enforcement laws now in place, make it much more difficult for the federal government to create or expand programs that involve risk—ranging from student lending to home mortgage guarantees to, potentially, broad social insurance programs like unemployment insurance. This Article is the first academic analysis to reject this consensus and argue that including the cost of risk would improperly skew budget estimates. In addressing this issue, this Article explores the purpose of budgeting and concludes that official budget measures are best used as a gauge of the federal government’s fiscal position and not as a means of capturing broader social effects. Including the cost of risk in the official budget estimates confuses cost-benefit analysis with budgeting and would generate incoherence in the official budget measures that would leave them doing little well at all

The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the 2017 Tax Legislation

The 2017 tax legislation brought sweeping changes to the rules for taxing individuals and business, the deductibility of state and local taxes, and the international tax regime. The complex legislation was drafted and passed through a rushed and secretive process intended to limit public comment on one of the most consequential pieces of domestic policy enacted in recent history. This Article is an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage and describes key problem areas in the new legislation. Many of the new changes fundamentally undermine the integrity of the tax code and allow well-advised taxpayers to game the new rules through strategic planning. These gaming opportunities are likely to worsen the bill’s distributional and budgetary costs beyond those expected in the official estimates. Other changes will encounter legal roadblocks, while drafting glitches could lead to uncertainty and haphazard increases or decreases in taxes. This Article also describes reform options for policymakers who will inevitably be tasked with enacting further changes to the tax law in order to undo the legislation’s harmful effects on the fiscal system

Hamilton-Waterloo problem with triangle and C9 factors

The Hamilton-Waterloo problem and its spouse-avoiding variant for uniform cycle sizes asks if Kv, where v is odd (or Kv - F, if v is even), can be decomposed into 2-factors in which each factor is made either entirely of m-cycles or entirely of n-cycles. This thesis examines the case in which r of the factors are made up of cycles of length 3 and s of the factors are made up of cycles of length 9, for any r and s. We also discuss a constructive solution to the general (m,n) case which fixes r and s

Tree-oriented interactive processing with an application to theorem-proving, appendix E

The concept of unstructured structure editing and ted, an editor for unstructured trees, is described. Ted is used to manipulate hierarchies of information in an unrestricted manner. The tool was implemented and applied to the problem of organizing formal proofs. As a proof management tool, it maintains the validity of a proof and its constituent lemmas independently from the methods used to validate the proof. It includes an adaptable interface which may be used to invoke theorem provers and other aids to proof construction. Using ted, a user may construct, maintain, and verify formal proofs using a variety of theorem provers, proof checkers, and formatters

The False Promise of Presidential Indexation

The Trump Administration faces mounting pressure from conservative thinkers and activists—including calls from its own National Economic Council director—to promulgate a U.S. Treasury Department regulation that indexes capital gains for inflation. Proponents of such a move—which is sometimes called “presidential indexation”—make three principal arguments in favor of the proposal: (1) that inflation indexing would be an economic boon; (2) that the President and his Treasury Department have legal authority to implement inflation indexing without further congressional authorization; and (3) that in any event, it is unlikely that anyone would have standing to challenge such an action in court. This Article evaluates the proponents’ three arguments and concludes that all are faulty. First, whatever the merits of comprehensive legislation that adjusts the taxation of capital gains and various other elements of the Internal Revenue Code for inflation, rifle-shot regulatory action that targets only the capital gains tax would be costly and regressive, would open a number of large loopholes that allow for rampant tax arbitrage, and would be unlikely to significantly enhance growth. Second, the legal authority for presidential indexation simply does not exist. The Justice Department under the first President Bush reached the conclusion in 1992 that the Executive Branch cannot implement inflation indexing unilaterally, and doctrinal developments in the last quarter century have—if anything—strengthened that conclusion. Third, a number of potential plaintiffs—including a Democrat-controlled House of Representatives, certain states, brokers subject to statutory basis reporting requirements, and investment funds whose tax liability could rise as a result of the regulation—would likely have standing to challenge presidential indexation in federal court. In sum, the promise of presidential indexation turns out too hollow, and calls for unilateral action should be spurned

Basing Budget Baselines

Measuring the cost of legislation or even projecting the course of the federal budget requires defining a budget baseline—a starting point capturing the current state of the budget. Budget baselines underlie most measures employed in federal budget debates and enforcement rules. Yet, despite their widespread use, budget baselines engender considerable confusion and abuse. For instance, when legislators enact temporary tax breaks, the breaks are officially estimated to cost far less than they likely will because of a loophole in federal budget baseline rules. Then, later efforts to extend the tax cuts are counted as increasing deficits when, in fact, by more reasonable metrics, they do nothing of the sort and might even reduce deficits. In response to such problems and the relative lack of scholarly attention, this Article seeks to ground budget baselines in a theoretical framework and then apply this framework to some of the leading debates involving baselines. For example, after presenting this new framework for understanding budget baselines, the Article proposes a way to fix the official baseline so that temporary tax cuts no longer appear less expensive than they really are and extensions no longer appear more expensive. This Article also uses this framework to describe why the long-term fiscal shortfall is smaller than often depicted and why a long-term budget metric now under consideration should be rejected. By arriving at a better understanding of budget baselines, this Article helps to inform a number of key fiscal debates and makes recommendations for how to improve budget measures going forward