This Is Our House! - The Tax Man Comes to College Sports

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Northwestern, O\u27Bannon and The Future: Cultivating a New Era for Taxing Qualified Scholarships

On March 26, 2014, the National Labor Relations Board (NLRB) ruled that Northwestern University’s scholarship football players were employees of the institution and could unionize and bargain collectively. From a federal income tax perspective, the significance of the NLRB decision—at that time—was that it could redefine the principle that select student-athletes are no longer unpaid amateurs receiving qualified scholarships, but instead are employees of their institutions, earning scholarship funds in exchange for services rendered as college athletes. Accordingly, a crucial question arising from the NLRB holding was whether the Internal Revenue Service could logically continue to treat qualified scholarships received by student-athletes as excludable from gross income. To analyze the potential effects of federal income tax on qualified scholarships in the future, this Article provides a brief judicial history of the pay-for-play model, analyzes the language of the Internal Revenue Code as it applies to qualified scholarships, evaluates the potential characterization of student-athletes as employees, and concludes that defining student-athletes as employees of their institutions could cultivate a new era in taxing qualified scholarships from a federal income tax perspective

The Environmentally Conscious Skies: Did the European Union’s Game of Brinksmanship Lead to a Viable Global Plan for Emissions Trading in Aviation?

Effective January 1, 2012, the European Union (EU) instituted the first emissions trading scheme (ETS) for aviation, which affected the domestic and international commercial airlines flying into and out of the EU. The EU established the ETS to counter the global aviation sector’s role in releasing greenhouse gas (GHG) emissions; however, such measures were met with heavy opposition by foreign countries, the International Civil Aviation Organization (ICAO), various commercial airlines and the Air Transport Association of America (ATA). This Article analyzes the legality of the EU’s unilateral ETS approach with respect to the commercial airline industry, examines the subsequent development of the ICAO’s global market based members (MBM) program, reviews strategic political strategies implemented by foreign nations to counter the EU’s unilateral action, evaluates the ICAO’s recent developments in instituting a global trading scheme to reduce GHG emissions, and analyzes policy issues with respect to the ICAO’s MGM program as it applies to the EU ETS

Applying Sustainability to Tax

This Article argues that sustainability can and should be applied to taxation to ameliorate the effects of industrialization on society and the planet. In making the case for a sustainability approach to taxation, we suggest that prior approaches to tax policy analysis have been insufficiently interdisciplinary and have failed to fully embrace challenging normative questions that underpin tax. Using sustainability literature from other disciplines, we show how sustainability can provide a superior approach. Specifically, sustainability requires an examination of foundational, normative questions, integration of interdisciplinary collaboration, embrace of long-term solutions, and adaptation to an ever-evolving technological society. Using these attributes as a guide, we introduce a series of questions to prompt tax scholars to consider how tax policy can support the society that we wish to sustain

Saving the Nonessential With Radical Tax Policy

Under the Internal Revenue Code of 1986, as amended, for-profit entities are distinguishable from tax-exempt entities in that they, among other factors, pursue profits, and enjoy unrestricted commercial activities. The COVID-19 lockdowns prevented commercial activity for numerous for-profit small businesses. For the first time in United States history, a distinction was made between essential and nonessential businesses. Such distinction is historically absent in both legal scholarship and tax law; instead, it is a product of governmental reaction to the COVID-19 pandemic. Via executive order, nonessential businesses were characterized as being trivial to the fabric of society, and thus shuttered, while essential businesses were permitted to remain operational with little, if any, interruption. Essential business’ profits have since amassed from such consolidation. To date, there have been no proposals at the state or federal levels that adequately address the monumental financial and social impact that mandated lockdowns have had on small businesses, which employ approximately 47.5% of the private workforce. This article suggests that restructuring and preserving those businesses most harmed by the pandemic serves an overriding public interest, and radical societal events require radical tax policy initiatives. As such, this Article proposes that nonessential businesses negatively impacted by pandemic closures should be granted temporary tax-exempt status and treated in a similar manner to non-profit organizations throughout their economic recovery period

Disrupting Venture Capital: Carrots, Sticks, and Artificial Intelligence

Despite the massive dollars invested each year by Venture Capital (VC) firms, more than two-thirds of the companies they fund will provide zero return. More problematic, less than 3% of VC funds go to female-led startup teams, and less than 1% to racially diverse founders. While many argue that this underrepresentation will work itself out over time, in reality, these numbers have remained stagnant for over 30 years. This is especially perverse given that diverse startups, when funded, appreciably outperform male-only founding teams. The VC industry operates under an antiquated model of investing in founders with demographics reflecting those of VC partners (white men control 93% of VC funds, and only 0.2% of VC partners are Black or Latina women). While antidiscrimination law intended to create a level playing field for all, the VC field operates outside this regulatory scheme. In addition to its lack of diversity, ironically it also has a technology problem. Despite the incredible advances in artificial intelligence (AI), and the industry’s focus on tech startups, many VC firms fail to incorporate data analytics and machine learning to guide their decision- making, relying instead on “gut instinct.” This is the first article to comprehensively explore the current state of the VC industry through the lens of behavioral law and economic theory, revealing the field\u27s intransigence and the heuristics and biases infecting its decision-making. Using insights gained from this analysis, this Article suggests that disruption is possible through a combination of policy and legal initiatives as well as leveraging advances in technology. The Article concludes by offering a novel multipronged solution comprised of a combination of carrots (incentives), sticks (penalties), and AI to motivate behavioral change within the VC industry and stimulate a true meritocracy where gender and racially diverse startups are equitably funded, and innovation flourishes