The Tax Treatment of Advance Receipts

Under the present income tax, some advance receipts are neither taxable on receipt nor deductible on repayment, while others are taxable when received and deductible when repaid or paid for. From a purely theoretical perspective, it remains unclear why different sets of rules apply in different cases. For example, if the fact of unrestricted control over the payment compels the conclusion that it is income, then most advance receipts, including loan proceeds, should be included in income immediately. Conversely, if the presence of an offsetting liability compels the conclusion that the payment is not (yet) income, then most advance receipts, including amounts received for future services, should not be taxed unless and until they are secured to the taxpayer without obligation. This paper argues that confusion in this area stems from a misunderstanding of the role that the income concept plays and should play in guiding the proper rules for advance receipts, and from an inapposite application of consumption and wealth tax concepts in the income tax context. If practical questions of tax administration were not salient, advance payments under the income tax would be included as and when secured to the taxpayer without offsetting obligation, without regard to the time of receipt of the funds. By contrast, under a consumption tax the focus would be on the control and use of funds for personal or non-personal reasons. Control and use, however, do not play a significant role under the income tax. The actual rules under the income tax sometimes diverge from those that would apply under a theoretically correct income tax. In most cases, the divergences reflect an appropriate attempt to accommodate the effort to tax true income to the practicalities of tax administration. If it is unlikely the amounts will become true economic income, a general presumption of non-taxation on receipt and non-deduction on return is appropriate, subject to adjustment if the presumption turns out to be false. If it is likely the amounts will become true economic income, the opposite presumption may be appropriate, again subject to adjustment if proved incorrect. Intermediate cases present problems of judgment that must be addressed from the perspective of effective administration of the tax law

Legal Transitions and the Problem of Reliance

This Article analyzes the literature on legal transitions. The principal focus is taxation, but the analysis generalizes to other areas. I argue that the theoretical apparatus developed by scholars active in the legal transitions area suffers from significant conceptual shortcomings. These shortcomings include the unwarranted assimilation of legal to factual change, the naturalization of conventional arrangements, and the disregard of the distinction between making law and finding it. As a consequence, the recent literature offers an analysis that is unable either to explain actual transitions or to provide an adequate theory of how legal change should take place. In the end, the older view of legal transitions is more capable than the newer one of providing an adequate normative and positive framework for understanding legal transitions

The Ambiguous Basis of Judicial Deference to Administrative Rules

Much of the commentary on the Supreme Court\u27s decision in Chevron U.S.A, Inc. v. Natural Resources Defense Council, Inc. has focused on the nature of power that agencies exercise when they promulgate rules that merit judicial deference under Chevron. Some scholars view Chevron as reading into statutes an implied delegation from Congress to agencies of legislative power to fill statutory gaps and interpret statutory ambiguities. Other scholars understand Chevron as, in effect, a delegation of interpretive power from the courts to agencies. This Article argues that neither view of Chevron is correct

Legal Transitions and the Problem of Reliance

This Article analyzes the literature on legal transitions. The principal focus is taxation, but the analysis generalizes to other areas. I argue that the theoretical apparatus developed by scholars active in the legal transitions area suffers from significant conceptual shortcomings. These shortcomings include the unwarranted assimilation of legal to factual change, the naturalization of conventional arrangements, and the disregard of the distinction between making law and finding it. As a consequence, the recent literature offers an analysis that is unable either to explain actual transitions or to provide an adequate theory of how legal change should take place. In the end, the older view of legal transitions is more capable than the newer one of providing an adequate normative and positive framework for understanding legal transitions

Tax Neutrality and Tax Amenities

Neutrality has been a dominant theme in scholarly and policy debates on international taxation for fifty years. This paper questions whether the concept of tax neutrality is adequately specified for analyzing the efficiency properties of international tax systems. As distinct from the closed economy setting, in the open economy setting, tax incentive effects include the redirection of both capital and tax revenues from one jurisdiction to another. Because tax revenues finance infrastructure and other productivity-enhancing goods – so-called “tax amenities” – and because capital burdens infrastructure, one consequence of the reallocation of tax revenues and assets is the adjustment of non-tax-affected rates of return in both home and host jurisdictions. As a result, what are viewed as tax incentive effects, or distortions, improve productivity in some cases. Neutrality as a value, however, rests on the idea that tax incentive effects reduce efficiency by causing resources to be allocated away from some optimum non-tax-affected baseline; this idea is what justifies referring to tax-influenced allocations as distortions. The implication of the argument is that the baseline is normatively arbitrary in the open-economy setting. The paper suggests that in light of these considerations, an analysis focusing on the allocative, distributive and competitive properties of international taxrules would be more helpful than one focused on their neutrality properties. In this spirit, a simple model relating tax revenue and population to productivity is offered

Transcript: Session 1: One Symptom of a Serious Problem: \u3cem\u3eCaperton v. Massey\u3c/em\u3e

Consider this extraordinary narrative: A resident of a small town brings a tort action against a big corporation and wins a multi-million-dollar jury trial award. While the judgment is pending on appeal to the state supreme court, one of the liberal justices known to often side with tort plaintiffs is up for judicial re-election. To ensure the election of a new justice more sympathetic to corporate defendants, the corporation’s CEO pumps in an extraordinary amount of campaign money, both as candidate contributions and as independent political action committee advertising expenditures. Predictably, the newly elected justice casts the tie-breaking vote in favor of the corporation and reverses the jury trial victory. If this sounds like a narrative from a John Grisham novel, that is because it actually is. I have summarized the plot of The Appeal, Grisham’s 2008 bestseller. When Grisham was interviewed on NBC’s Today Show during his promotional tour, the host, Matt Lauer, asked whether such a chain of events could ever realistically occur. “It’s already happened,” Grisham answered. “It happened a few years ago in West Virginia. A guy who owned a coal company got tired of getting sued, and he elected his own man to the state supreme court.” Reality is, indeed, stranger than fiction. The amazing case to which Grisham referred is, of course, the subject of this panel’s discussion—Caperton v. A.T. Massey Coal

Comparison of high versus low frequency cerebral physiology for cerebrovascular reactivity assessment in traumatic brain injury: a multi-center pilot study

Current accepted cerebrovascular reactivity indices suffer from the need of high frequency data capture and export for post-acquisition processing. The role for minute-by-minute data in cerebrovascular reactivity monitoring remains uncertain. The goal was to explore the statistical time-series relationships between intra-cranial pressure (ICP), mean arterial pressure (MAP) and pressure reactivity index (PRx) using both 10-s and minute data update frequency in TBI. Prospective data from 31 patients from 3 centers with moderate/severe TBI and high-frequency archived physiology were reviewed. Both 10-s by 10-s and minute-by-minute mean values were derived for ICP and MAP for each patient. Similarly, PRx was derived using 30 consecutive 10-s data points, updated every minute. While long-PRx (L-PRx) was derived via similar methodology using minute-by-minute data, with L-PRx derived using various window lengths (5, 10, 20, 30, 40, and 60 min; denoted L-PRx_5, etc.). Time-series autoregressive integrative moving average (ARIMA) and vector autoregressive integrative moving average (VARIMA) models were created to analyze the relationship of these parameters over time. ARIMA modelling, Granger causality testing and VARIMA impulse response function (IRF) plotting demonstrated that similar information is carried in minute mean ICP and MAP data, compared to 10-s mean slow-wave ICP and MAP data. Shorter window L-PRx variants, such as L-PRx_5, appear to have a similar ARIMA structure, have a linear association with PRx and display moderate-to-strong correlations (r ~ 0.700, p Peer reviewe

The GC-Rich Mitochondrial and Plastid Genomes of the Green Alga Coccomyxa Give Insight into the Evolution of Organelle DNA Nucleotide Landscape

Most of the available mitochondrial and plastid genome sequences are biased towards adenine and thymine (AT) over guanine and cytosine (GC). Examples of GC-rich organelle DNAs are limited to a small but eclectic list of species, including certain green algae. Here, to gain insight in the evolution of organelle nucleotide landscape, we present the GC-rich mitochondrial and plastid DNAs from the trebouxiophyte green alga Coccomyxa sp. C-169. We compare these sequences with other GC-rich organelle DNAs and argue that the forces biasing them towards G and C are nonadaptive and linked to the metabolic and/or life history features of this species. The Coccomyxa organelle genomes are also used for phylogenetic analyses, which highlight the complexities in trying to resolve the interrelationships among the core chlorophyte green algae, but ultimately favour a sister relationship between the Ulvophyceae and Chlorophyceae, with the Trebouxiophyceae branching at the base of the chlorophyte crown