Generalized 3G theorem and application to relativistic stable process on non-smooth open sets

Let G(x,y) and G_D(x,y) be the Green functions of rotationally invariant symmetric \alpha-stable process in R^d and in an open set D respectively, where 0<\alpha < 2. The inequality G_D(x,y)G_D(y,z)/G_D(x,z) \le c(G(x,y)+G(y,z)) is a very useful tool in studying (local) Schrodinger operators. When the above inequality is true with a constant c=c(D)>0, then we say that the 3G theorem holds in D. In this paper, we establish a generalized version of 3G theorem when D is a bounded \kappa-fat open set, which includes a bounded John domain. The 3G we consider is of the form G_D(x,y)G_D(z,w)/G_D(x,w), where y may be different from z. When y=z, we recover the usual 3G. The 3G form G_D(x,y)G_D(z,w)/G_D(x,w) appears in non-local Schrodinger operator theory. Using our generalized 3G theorem, we give a concrete class of functions belonging to the non-local Kato class, introduced by Chen and Song, on \kappa-fat open sets. As an application, we discuss relativistic \alpha-stable processes (relativistic Hamiltonian when \alpha=1) in \kappa-fat open sets. We identify the Martin boundary and the minimal Martin boundary with the Euclidean boundary for relativistic \alpha-stable processes in \kappa-fat open sets. Furthermore, we show that relative Fatou type theorem is true for relativistic stable processes in \kappa-fat open sets. The main results of this paper hold for a large class of symmetric Markov processes, as are illustrated in the last section of this paper. We also discuss the generalized 3G theorem for a large class of symmetric stable Levy processes.Comment: 32 page

Engineering Pass-Throughs in International Tax: The Case of Private Equity Funds

Fund investment, or indirect investment, does not entail entity-level taxation domestically, so investors enjoy “tax neutrality” between direct and indirect investments made within a country. In contrast, when investments are made across borders, tax neutrality cannot be guaranteed because current international tax regimes are built upon bilateral tax treaties and lack pass-through tax rules for multinational fund investment schemes. This may put investors in a worse tax position than had they invested directly.In response, investors have created many strategies to reduce tax liabilities internationally when investing indirectly. Sometimes those strategies enable investors to pay even less taxes than they would with a tax-neutral benchmark. Recognizing that systematic pass-through taxation more likely would achieve tax neutrality goals, the OECD, through its limited rule-making power, developed several proposals for pass-through treatment. Unfortunately, none of them have been effective, either because of too narrow implementation or because they supply bilateral solutions to a multilateral problem.As an alternative, this Article proposes an innovative multilateral approach in which both the source country and the residence country may look-through certain fund vehicles in intermediary countries and will collect tax as if the investment was made directly from the residence country to the source country. This Article further develops the proposal by demonstrating its feasibility for private equity funds (PEFs). PEFs offer unique opportunities to reform international pass-through taxation because they tend to have only a handful of high-profile investors who rarely change during the fund’s lifetime. Although information about PEF investors notoriously has been less available to tax authorities, new public and private databases as well as a newly enhanced system for the exchange of tax information make such information now more accessible to governments. Tax authorities will be able to obtain information on the considerably small and manageable number of investors behind PEFs and implement pass-through taxation to realize robust tax neutrality goals

Digital Services Tax: A Cross-Border Variation of the Consumption Tax Debate

The rise of highly digitalized businesses, such as Google and Amazon, has strained the traditional income tax rules on nexus and profit allocation. Traditionally, profit is allocated to market countries where consumers are located only if the business has a physical presence. However, in the digital economy, profits can be easily generated in market countries without a physical presence, resulting in tax revenue loss for market countries. In response, market countries have started imposing a new tax, called the digital services tax (DST), on certain digital business models, which has ignited heated debate across the globe. Supporters defend the DST, designed as a turnover style consumption tax, as an effective measure to make up the foregone revenue in the digital economy because it is not bound by the traditional rules of income taxation. Opponents criticize DSTs as “ring-fencing” or segregating certain digital business models, discriminating against American tech giants, and arguably imposing a disguised income tax. The debate has been focused on the imminent impact, such as who is the immediate winner and loser, but the discussion lacks efforts to understand the fundamentals of DSTs, especially with regard to the consumption tax aspect.This Article is the first academic paper that highlights DSTs as a consumption tax and provides normative implications for policy makers deliberating a DST. It argues that a DST, with certain modifications, can be a good solution for the tax challenges of the digital economy. First, the Article offers an in-depth analysis of DSTs’ economic impact in multisided digital platforms. Second, it offers the advantages of DSTs over other types of consumption tax, such as value added tax and cash-flow tax. Finally, it illustrates how the recent Supreme Court case of South Dakota v. Wayfair, Inc., which discusses a sales tax imposed on certain remote sellers, and the subsequent Netflix Tax may shed light on ways to overcome the ring-fencing problem of the DST

Carried Interest and Beyond: The Nature of Private Equity Investment and Its International Tax Implications

Private equity funds (PEFs) eliminate entity-level taxation by using pass-through entities. They further minimize their investors’ tax liability by taking the position that profits distributed to both general partners (GPs) and limited partners (LPs) are passive portfolio investment income and taxed preferentially. The taxation of carried interest at low capital gains rates is likely the most infamous loophole. This article challenges such tax position and instead argues that the nature of PEF investment is active. PEFs seek to influence their portfolio companies to increase their value so that they actively manage the companies by acquiring at least 10% of their stock, which does not conceptually accord with portfolio investments. The proposed theory that PEFs are active is further supported by recent proposals on carried interest as well as cases and rulings holding that PEFs are involved in a “trade or business.” This article also considers international tax implications of the new theory: it switches the primary tax jurisdiction to levy tax on PEFs’ crossborder income. This change may be justified for GPs who erode the tax base of a source country, but less justified for LPs because of their genuinely passive involvement, notwithstanding that LPs’ tax-exempt or nonresident status enables GPs’ abusive activities. Finally, determining the true nature of PEF investment and reforming PEF tax accordingly would increase worldwide revenue without significantly reducing the revenue of traditional residence countries, because the traditional residence countries, such as the United States, are also major source countries in the PEF industry

Taxing Teleworkers

Since COVID-19 has forced many governments to restrict travel and impose quarantine requirements, telework has become a way of life. The shift towards teleworking is raising tax concerns for workers who work for employers located in another state than where they live. Most source states where these employers are located could not have taxed income of out-of-state teleworkers under the pre-pandemic tax rules. However, several source states have unilaterally extended their sourcing rule on these teleworkers, resulting in unwarranted risk of double taxation — once by the residence state and again by the source state. At this time, there is no uniform guideline by state or federal governments. Recently, New Hampshire, supported by fourteen other states, asked the U.S. Supreme Court to exercise its original jurisdiction challenging Massachusetts’ telecommuting taxes of nonresident teleworkers. Tax commentators believed this case would be one of the most significant tax decisions in recent years, but the Supreme Court declined to hear it. New Jersey also opposes New York’s long-standing telecommuting taxes under the “convenience of the employer” rule. This Article examines the constitutional challenges of maintaining pre-pandemic work arrangements for tax purposes, arguing that a source state’s extraterritorial assertion to tax nonresident teleworkers’ income likely violates the Dormant Commerce and Due Process Clauses. Also, this Article finds the Supreme Court’s decision not to exercise original jurisdiction dissatisfying in light of the substantial increase in remote work. The problem of taxing teleworkers is not temporary because the pandemic drastically reshaped where and how people work. Recognizing the need for a uniform long-term solution, this Article argues Congress should enact federal law to preempt conflicting state law positions and enforce the primacy of residence-based taxation on teleworkers’ income. This proposal would reduce the impact various source states’ tax laws have on interstate commerce, preserve due process, and bolster policy rationales, such as taxpayers’ choice in where they reside and pay taxes as their social obligation to the community

Blockchain Initiatives for Tax Administration

A thriving body of literature discusses various legal issues related to blockchain, but often it mixes the discussion about blockchain with cryptocurrency. However, blockchain is not the same as cryptocurrency. Defined as a decentralized, immutable, peer-to-leer ledger technology, blockchain is a newly emerging data management system. The private sector—including the financial industry and supply chains—and the public sector—property records, public health, voting, and compliance, have all begun to utilize blockchain. Since more data is processed remotely, and thus digitally, the evolution of blockchain is gaining stronger momentum. While scholarship on blockchain is growing, none of the scholarship has considered the impact of blockchain on the tax sector. This Article extends the study of blockchain to tax administration, evaluates the feasibility of incorporating blockchain within existing tax administrations, and provides policymakers with criteria to consider and some recommended designs for blockchain. Blockchain can enhance the efficiency and transparency of tax administration through its ability to deliver reliable, real-time information from many sources to a large audience. Further, a well-designed private consortium blockchain, evolved from the classic public blockchain, may effectively protect taxpayers\u27 information. Potential areas that blockchain could enhance are payroll taxes, withholding taxes, value added taxes, transfer pricing, the sharing of information between federal, state, and local governments as well as countries. This Article offers normative considerations for policymakers deliberating blockchain initiatives for tax administration, such as timeline, standardization, its integration with other systems, its limitations, and the accompanying legislation to regulate the government and the taxpayer’s rights and privacy. Those implications may resonate with a broader audience beyond tax policymakers

Digital Services Tax: A Cross-Border Variation of the Consumption Tax Debate

The rise of highly digitalized businesses, such as Google and Amazon, has strained the traditional income tax rules on nexus and profit allocation. Traditionally, profit is allocated to market countries where consumers are located only if the business has physical presence. However, in the digital economy, profits can be easily generated in market countries without a physical presence, resulting in tax revenue loss for market countries. In response, market countries have started imposing a new tax, called the digital services tax (“DST”), on certain digital business models, which has ignited heated debate across the globe. Supporters defend the DST, designed as a turnover style consumption tax, as an effective measure to make up the foregone revenue in the digital economy because it is not bound by the traditional rules of income taxation. Opponents criticize DST as “ring-fencing” or segregating certain digital business models, discriminating against American tech giants, and arguably imposing a disguised income tax. The debate has been focused on the imminent impact, such as who is the immediate winner and loser, but the discussion lacks efforts to understand the fundamentals of DST, especially with regard to the consumption tax aspect.This Article is the first academic paper that highlights DST as a consumption tax and provides normative implications for policy makers deliberating a DST. It argues that a DST, with certain modifications, can be a good solution for the tax challenges of the digital economy. First, the Article offers an in-depth analysis of DST’s economic impact in multi-sided digital platforms. Second, it offers the advantages of DST over other types of consumption tax, such as value added tax and destination-based cash flow tax. Finally, it illustrates how the recent Supreme Court case of South Dakota v. Wayfair, Inc., which discusses sales tax imposed on certain remote sellers, and the subsequent Netflix Tax, may shed light on ways to overcome the ring-fencing problem of the DST

Effect of diabetes index on periodontal disease in Korean adults

Background: It is known that diabetes can cause complications in various organs and affect oral health. The purpose of this study was to investigate the relationship between oral health and diabetes mellitus among Korean adults. Materials and methods: The study was conducted by the National Institute of Health and Nutrition Examination Survey (2015), produced by the Korea Centers for Disease Prevention and Control. A total of 4,780 patients took part in the survey of which 554 were diabetic patients. Descriptive statistics were used to identify the periodontal disease status of non-diabetics and people with diabetes mellitus, and multiple regression analysis was performed to analyze the effect of diabetes index on periodontal disease status. Results: Normal people showed better periodontal disease and oral care status than diabetic patients. However, all three diabetic factors (glycated hemoglobin, fasting blood sugar, insulin) had no statistically significant influence on periodontal disease. Conclusions: The increase in the diabetic index may have a negative effect on various periodontal diseases, which may ultimately lead to poor oral hygiene and cause disease. Therefore, diverse studies on the diabetic index and periodontal disease are needed, and it is necessary to address the dental hygiene health of Korean adults through early education and campaigns to improve oral health. [Ethiop.J. Health Dev. 2020;34(Special issue-3):78-83] Keywords: Diabetes index, periodontal disease, oral health, Korean adult

Considering Citizenship Taxation : In Defense of FATCA

Inspired by Ruth Mason’s recent article, Citizenship Taxation, which reaches a general conclusion against citizenship taxation, this Article also questions citizen taxation under the same normative framework, but with a particular focus on efficiency and administrability, and takes a much less critical stance towards the merits of citizenship taxation. First, neither citizenship taxation nor residence-based taxation can completely account for the differences between residents’ and nonresidents’ ability to pay taxes under the fairness argument. Second, the efficiency argument, that citizenship taxation may distort both Americans’ and non-Americans’ citizenship decisions, is not convincing. The American citizenship renunciation rate is not particularly serious compared to other countries, and it is U.S. immigration law, not U.S. tax law, that should be blamed for obstructing highly skilled and educated immigrants. Third, despite enforcement difficulties abroad under the administrative argument, determining residence by considering all facts and circumstances in residence-based taxation would be worse than the bright-line citizenship criterion in citizenship taxation. After discussing the competing normative arguments on citizenship taxation, this Article aims to defend the administrability of citizenship taxation in conjunction with new reporting obligations. Individual taxpayers’ obligations to file Foreign Bank Account Reports (FBAR) or report under the Foreign Account Tax Compliance Act (FATCA) are not seriously onerous. The fact that citizenship taxation along with FBAR and FATCA enhances global transparency further supports the case for citizenship taxation