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A New Governance Framework in Cross-Border Tax Policymaking
Full text linkThe first tax treaty can probably be traced to the end of the 19th century: the treaty between the Swiss Federal Council (on behalf of the Canton of Vaud) and Great Britain. However, most tax scholars refer to the period following World War I, including the work of the League of Nations, as the formative period in which the international tax regime was founded. In the 1920s, the League of Nations formed a committee of four renowned economists that was asked to formulate a set of rules that would assist states in allocating taxing rights of cross-border income and gains among themselves, reducing double taxation. The committee presented its report in 1923, which proposed a compromise between capital-exporting countries and capital-importing countries (the closest equivalent of developing and developed countries). Following World War II, international tax policy was highly influenced by the OEEC, the predecessor of the OECD (made up of 38 rich member states), leaving behind the U.N., which mainly served as a voice for developing countries. In the 21st century, the international tax framework is still influenced by the OECD and the G20. For instance, in the early 2010s, the G20 was an important driver in the OECD’s BEPS project. Over the past decade, some scholars have alleged that international tax policy decisions are no longer made by a few dozen OECD member states. Instead, these scholars argue that international tax policy is influenced by over 140 countries from all regions and levels of development through the “Inclusive Framework,” with all countries on an equal footing. However, recent literature identifies obstacles that lead to the unequal participation of developing countries in practice. Our Article explores the relations between developed and developing countries, examines different organizations’ impact in shaping international tax policymaking, and proposes that a new World Tax Authority (“WTA”) could replace the existing governmental framework. Alternatively, global tax policy could be handed over to a more politically balanced international organization such as the WTO or the World Bank, neither of which is bound by decision-making arrangements that require achieving consensual support of all its member states. Furthermore, irrespective of the formation of a WTA, the rise of bilateral tax treaties as the foundation of the existing international tax system—together with intensifying global mobility of businesses, investments, and trade, as well as human migration—has undoubtedly increased potential cross-border tax conflicts. Currently, cross border tax conflicts are adjudicated by thousands of tax tribunals around the world and tens of thousands—if not hundreds of thousands—of tax judges and arbitrators that interpret cross-border tax treaties and disputes. This complex structure maintains tribunals’ domestic fiscal revenues, which creates competing and overlapping claims to tax cross-border income and gains, promoting uncertainty in the application and interpretation of the tax rules that govern cross-border transactions. We therefore propose forming an international World Tax Court (“WTC”) whose justices would be appointed in a manner that would represent high- and low-income countries. This novel tax court would serve as the supreme judicial authority, and its rulings would ideally be binding on national judges from all over the world. Nevertheless, to the extent that it would be difficult for countries to waive their independence in interpreting tax treaties, we propose that the court’s rulings could have declaratory (non-binding) status. The non-binding status would still assist national judges from all over the world in interpreting tax treaties in a more consistent and conforming manner
A Long Road Ahead: Examining the Constitutionality of New York City’s Congestion Pricing Plan
Full text linkNew York City attempted to implement New York’s first congestion pricing scheme, the Central Business District Tolling Program (CBDTP). The CBDTP was paused by Governor Kathy Hochul amidst concerns that the scheme will have negative impacts on families who have not financially recovered from the pandemic. The CBDTP sought to charge drivers a fee each time they entered the Central Business District (CBD), an area below 60th Street in Manhattan. The purpose of this plan was to raise funds for the Metropolitan Transit Authority (MTA) to improve mass transit while simultaneously decreasing pollution and traffic congestion in New York City. The effect of this plan is that all travelers originating outside the CBD would be required to pay a fee to enter, whereas individuals who reside in the CBD can drive around freely, as long as they do not pass the CBD’s demarcation line. The CBDTP raises constitutional issues because of the dormant Commerce Clause, which proscribes state legislation if it discriminates against interstate commerce. This Note argues that the CBDTP is unconstitutional under the dormant Commerce Clause because it discriminates against out-of-state interests. Additionally, even if a court was to find that the law was not discriminatory, its burdens outweigh its benefits, as evidenced by a similar congestion pricing plan implemented in London, which ultimately did not decrease pollution or congestion over time. This Note suggests implementing an area pricing charge, as opposed to the previously proposed cordon charge, which would require all individuals driving in the CBD to pay a fee. This plan is less discriminatory than the cordon charge because it does not favor in-state interests such as allowing those who reside in the CBD to drive around the CBD without paying the toll. Courts will often defer to legislatures when there is a legitimate state interest in enacting a law, but a recent Supreme Court case National Pork Producers implores courts to exercise caution when deferring to legislatures when the democratic process cannot fully protect all of the interests involved, both in-state and out-of-state. This principle is key to understanding why a reviewing court should not defer to the New York State legislature: because it is inadequate to protect the interests of out-of-state actors who had no say in shaping New York policy as they have no representation in the New York State legislature. Thus, the CBDTP is unconstitutional and should be struck down if it was to be reinstated
DeJoyful Noise: Reimagining Title VII Religious Accommodations in the Wake of Groff v. DeJoy
Full text linkThe prominence of religion in everyday life has dwindled in recent decades. The number of Americans who attend weekly religious services continues to decline, and wide swaths of the population now profess irreligion altogether. Despite this trend, constitutional mandates such as the Free Exercise and Establishment Clauses remind society that throughout history and into the present day, the relationship between religion and state has been and always will be ripe for discussion. The 2023 Supreme Court decision Groff v. DeJoy exemplifies this characterization. Prior to Groff, the Court primarily relied on a 1977 case, Trans World Airlines, Inc. v. Hardison, for the proposition that under Title VII, employers need not provide their employees with religious accommodations in the workplace if doing so would cause “undue hardship.” Under Hardison, any cost to an employer that was more than “de minimis” would impose an “undue hardship.” While several disgruntled plaintiffs challenged this unpopular interpretation of Title VII, none succeeded at appearing before the highest court until Gerald Groff, a postal worker for USPS, alleged that his employer could have accommodated his religious practices without taking on “undue hardship.” Disavowing decades of precedent, the Court announced in Groff that employers must now prove that the burden of granting a religious accommodation would result in “substantial increased costs” in order to demonstrate “undue hardship.” On the one hand, this new standard likely helps religious minorities, whose requests for religious accommodations are routinely denied under the “de minimis” standard, better access these accommodations. Conversely, the “substantial increased costs” standard may allow powerful religious groups to construct workplaces in their image by proselytizing employees, misgendering coworkers, or praying openly to the discomfort of others. Further, Groff’s relationship with the Establishment Clause, in light of the Court’s recent decision in Kennedy v. Bremerton School District, remains unsettled. This Note therefore calls for the EEOC to issue updated regulations to provide guidance for employers and to reflect the Court’s decision in Groff. This Note also advocates for the creation of a dedicated task force—the Task Force for Fair Religious Practices—to combat religious discrimination, both for people seeking accommodations and for those who may be negatively impacted by those aiming to take advantage of the new standard
Equity for Intermediaries: The Resolution of Financial Firms in Bankruptcy and Bank Resolution
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The Major Questions Doctrine’s Domain
Full text linkIn West Virginia v. EPA, the Supreme Court elevated the major questions doctrine to new heights by reframing it as a substantive canon and clear statement rule rooted in the separation of powers. The academic response has missed two unanswered questions that will determine the extent of the doctrine’s domain. First, how will the Court apply the doctrine to a range of different regulatory schemes? The doctrine has so far only been applied to nationwide legislative rules that are both (1) economically or politically significant and (2) transformative. It is unclear whether the doctrine applies to alternative modes of regulation like judicial enforcement actions (agencies’ attempts to enforce the law case by case in federal court), Second, may the major questions doctrine oust or require reconsideration of judicial precedents? These problems will arise when agencies or courts reach “major” results or decisions by applying flexible judicial standards. These are not idle questions. Both will impact a range of agencies. To pick a pressing example, both questions are implicated by arguments that the judiciary should apply the major questions doctrine to the Securities and Exchange Commission’s efforts to claim jurisdiction over crypto assets. For years, the SEC has brought enforcement actions on the premise that crypto assets are “securities.” This trend continues a typical pattern. Since the 1940s, the SEC has avoided defining “investment contract”—one type of asset that statutes deem securities—through rulemaking, instead relying on the Supreme Court’s test from SEC v. W.J. Howey Co. For decades, the SEC and the judiciary have decided whether contracts are investment contracts based on the lines established by Howey. Despite the tenure of this mode of regulation, some have asserted that the SEC’s enforcement actions flout the major questions doctrine. To exemplify the boundaries of the major questions doctrine, this article shows that calls for the courts to apply it against the SEC here are ill-conceived. The SEC’s critics are exploiting the major questions doctrine’s hazy edges in a move that we call “doctrinal drift.” This article shows that the doctrine (1) is inapplicable to judicial enforcement actions brought before Article III courts and (2) cannot displace or constrain prior judicial precedent like Howey. The major questions doctrine is inapplicable because the SEC is not doing anything “extraordinary” in its enforcement actions and the alternatives highlighted by the SEC’s antagonists would be more “major.” By holding that the major questions doctrine is inapplicable along these lines, the courts can stem calls for doctrinal drift and maintain the heartland of the major questions doctrine’s domain
Plea Bargains, Prosecutorial Breach, and the Curious Right to Cure
Full text linkWhen the prosecutor breaches a plea bargain—e.g., by recommending prison instead of the agreed-upon probation—the defendant is entitled to a remedy: either sentencing in front of a different judge or plea withdrawal. However, if defense counsel objects to the breach, the prosecutor may halfheartedly change the recommendation to probation. Most courts have held that to be an effective “cure”—even when the judge then sentences the defendant to prison, as the prosecutor originally recommended. The right to cure, which was intended for commercial sales contracts, fails miserably in the plea-bargain context. In the above example, the attempted cure is too late, it fails to unring the bell of the earlier prison recommendation, and it violates the defendant’s reasonable expectations under the plea deal. Further, when the judge dutifully sends the defendant to prison as the prosecutor originally recommended, it reeks of collusion and destroys the appearance of fairness. Most significantly, the cure doctrine creates a dilemma for the defense lawyer. If defense counsel does not object to the breach, the prosecutor will not be able to cure; therefore, if the judge sentences the defendant to prison, the defendant will receive a remedy on appeal—thanks to defense counsel’s “ineffectiveness” in not objecting. Conversely, if defense counsel objects and the prosecutor “cures,” the judge may still sentence the defendant to prison; however, the defendant will not receive a remedy—paradoxically, thanks to defense counsel’s “effectiveness” in objecting. This raises the question: Is ineffective the new effective? Perhaps, but intentional ineffectiveness carries risks for both defense counsel and the client. Therefore, this article develops an alternative response to prosecutorial breach that protects both the defense lawyer and the defendant, is highly efficient, and is undeniably fair—even to the breaching party that created the problem in the first place
Addressing the Root Cause of COVID-19 Hate Crimes Against the AAPI Community: Shifting from Reactive Policies to Preventative Solutions
Full text linkWhile the COVID-19 Pandemic affected health, social interaction, and politics on a global scale, Asian Americans in the United States faced the added hardship of racism and xenophobia. Unfortunately, anti-Asian sentiment in the U.S. is not unprecedented and has historical roots dating back to at least the nineteenth century. However, with right-wing leaders using condescending labels like “Chinese virus” and “Kung Flu” to describe the deadly infection, Asian hate has escalated to astronomical levels. Within one year of the onset of the Pandemic, more than 9,000 reports of Asian hate were filed, and this exponential surge led to the adoption of the COVID-19 Hate Crimes Act. This act, while promising in theory, fails to address the root cause of Asian hate crimes: racism. Rather, it employs reactive measures that intend to punish aggressors after a racially motivated crime has already occurred. This Note explores how hate crime legislation in the U.S. traditionally functions and contrasts the COVID-19 Hate Crimes Act to existing hate crime laws. It highlights the shortcomings of the vague, unactionable statutory language, the failure to address cultural considerations, and the necessity of compulsory reporting. This Note offers a two-fold solution that considers both systemic and legal principles to combat racism as the source of hate crimes and to clarify existing hate crime laws to make reporting them and prosecuting perpetrators more workable
The Use of Procedural Rules to Silence Minority Party Dissent in the Tennessee State Legislature and Its Racially Discriminatory Roots
Full text linkThe expulsion of two young Black legislators, Justin Jones and Justin J. Pearson, from the Tennessee General Assembly in April 2023 was not an aberration. This Note argues that the expulsions follow a historical pattern of systematic marginalization of Black representative power in the South. This Note connects the history of minority exclusion in state legislatures, beginning with Black legislators barred from taking their elected seats in the Georgia House, through to the present day. Specifically, it focuses on the use of procedural rules, particularly expulsions, as tools to limit the speech and representative power of Black legislators. It discusses the post-Civil Rights realignment of political parties in the South and the rise of Republican partisanship the Tennessee legislature. The Note further examines how the ascent of Republican supermajorities in Tennessee has enabled the use of hyper-partisanship to silence political adversaries. The Note argues that the expulsions occurred because of the structural conditions of the assembly, an institution built and reinforced to keep out Black voices, where legislators acted within a social network of individual motivations and biases reinforced by hyper-partisan legislative leadership. Finally, the Note emphasizes the necessity of democratic engagement and neutral legislative oversight to foster a pluralistic democracy and prevent procedural tools from becoming weapons to silence minority-party legislators
The Section 1031 Exchange Requirement
Full text linkSection 1031 is the most widely used transactional tax-planning tool in federal income tax law. It allows owners of real property to transfer their property and acquire like-kind real property without recognizing taxable gain. Yet one of its most fundamental elements—the exchange requirement—remains under-analyzed and widely misunderstood, with costly consequences to untold numbers of taxpayers every year. Inaccurate information regarding the exchange requirement is disseminated to property owners by advisors and exchange professionals, causing property owners to forego business and transactional opportunities. Other property owners pay for costly transactional planning at the urging of advisors who misunderstand the exchange requirement. Thus, the section 1031 exchange requirement is in desperate need of in-depth analysis and clarification. This Article applies in-depth analysis to demystify the exchange requirement. The resulting clarity will relieve property owners of costs resulting from lost opportunities and expensive transactional planning. The costly pressure points related to the exchange requirement are most pronounced with exchanges that commonly occur (or would occur more commonly with a clear understanding of the exchange requirement) in proximity to tax-free business transactions (i.e., contributions to and distributions from entities). This Article draws from legislation, legislative history, case law, IRS guidance, and tax policy to show that the exchange requirement attracts a form-driven analysis, which deviates from the standard substance-over-form analyses that apply to most federal income tax issues. The Article shows that courts deliberately adopt the form-driven analysis and shun substance-over-form analyses because the latter fail to provide clarity, and it shows how that analytical framework applies to exchanges that occur in proximity to business transactions. This novel analysis and understanding of the section 1031 exchange requirement provides newfound clarity to judges, advisors, property owners, scholars, and commentators. In doing so, it will free property owners to engage in business transactions confidently, forego costly transactional structures, and thereby increase general economic activity