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The Global Corporate Minimum Tax and MNE Home Countries
Get PDFThis Perspective explores the implications for the home countries of large MNEs of the agreement reached by over 140 countries in 2021 to enact a corporate minimum tax of 15%. It argues that the corporate minimum tax complements the trend to reduce the negative impact of unfettered globalization on labor, and it protects the ability of home countries to finance a robust social safety net. Home countries should adopt the corporate minimum tax, and that includes the US, which last year failed to adapt its Global Intangible Low-Taxed Income approach to the corporate minimum tax
Congress could soon spell the end of employment arbitration—but it’s not all good news for American workers.
Get PDFEmployment arbitration has become a dirty word on Capitol Hill. Congressman Hank Johnson claims that arbitration allows employers to stack the deck against the little guy for the 60 million employees bound by arbitration agreements. The Economic Policy Institute calls it an epidemic that is undermining decades of progress in labor rights
Gatekeeper Competition Policy
Get PDFAntitrust policy in the United States has always had special rules for dominant firms. As Justice Scalia once observed:
Where a defendant maintains substantial market power, his activities are examined through a special lens: Behavior that might otherwise not be of concern to the antitrust laws—or that might even be viewed as procompetitive—can take on exclusionary connotations when practiced by a monopolist
The Unfairness of Fair Machine Learning: Leveling Down and Strict Egalitarianism by Default
Get PDFIn recent years, fairness in machine learning (ML), artificial intelligence (AI), and algorithmic decision-making systems has emerged as a highly active area of research and development. To date, most measures and methods to mitigate bias and improve fairness in algorithmic systems have been built in isolation from policymaking and civil societal contexts and lack serious engagement with philosophical, political, legal, and economic theories of equality and distributive justice. Many current measures define “fairness” in simple terms to mean narrowing gaps in performance or outcomes between demographic groups while preserving as much of the original system’s accuracy as possible. This oversimplified translation of the complex socio-legal concept of equality into fairness measures is troubling. Many current fairness measures suffer from both fairness and performance degradation—or “leveling down”—where fairness is achieved by making every group worse off or by bringing better-performing groups down to the level of the worst off. Leveling down is a symptom of the decision to measure fairness solely in terms of equality, or disparity between groups in performance and outcomes, that ignores other relevant concerns of distributive justice (e.g., welfare or priority), which are more difficult to quantify and measure. When fairness can only be measured in terms of distribution of performance or outcomes, corrective actions can likewise only target how these goods are distributed between groups. We refer to this trend as “strict egalitarianism by default.”
Strict egalitarianism by default runs counter to both the stated objectives of fairness measures and the presumptive aim of the field: to improve outcomes for historically disadvantaged or marginalized groups. When fairness can only be achieved by making everyone worse off in material or relational terms–through injuries of stigma, loss of solidarity, unequal concern, and missed opportunities for substantive equality—something has gone wrong in translating the vague concept of “fairness” into practice. Leveling down should be rejected in fairML because it (1) unnecessarily and arbitrarily harms advantaged groups in cases where performance is intrinsically valuable, such as medical applications of AI; (2) demonstrates a lack of equal concern for affected groups, undermines social solidarity, and contributes to stigmatization; (3) fails to live up to the substantive aims of equality law and fairML and squanders the opportunity afforded by interest in algorithmic fairness to substantively address longstanding social inequalities; and (4) fails to meet the aims of many viable theories of distributive justice including pluralist egalitarian approaches, prioritarianism, sufficientarianism, and others.
This paper critically scrutinizes these initial observations to determine how fairML can move beyond mere leveling down and strict egalitarianism by default. We examine the causes and prevalence of leveling down across fairML and explore possible justifications and criticisms based on philosophical and legal theories of equality and distributive justice as well as equality-law jurisprudence. We find that fairML does not currently engage in the type of measurement, reporting, or analysis necessary to justify leveling down in practice. The types of decisions for which ML and AI are currently used, as well as inherent limitations on data collection and measurement, suggest leveling down is rarely justified in practice. We propose a first step toward substantive equality in fairML: “leveling up” systems by enforcing minimum acceptable harm thresholds, or “minimum rate constraints,” as fairness constraints at the design stage. We likewise propose an alternative harms-based framework to counter the oversimplified egalitarian framing currently dominant in the field and push future discussion more towards substantive equality opportunities and away from strict egalitarianism by default
Creditor Courts
No full textOne of the largest institutional creditors in the United States is perhaps the most unexpected: the criminal court system. Each year, creditor courts collect more than $15 billion in revenues from criminal defendants. These fees are the lifeblood of the modern criminal legal system.
In this Article, we shed new light on the legal and economic framework under which myriad stakeholders operate in these creditor courts. By analyzing new survey data from clerks of court and 102 contracts with debt collection agencies in Florida, we provide general insights how creditor courts distort incentives and teem with conflicts of interest. These inefficiencies regularly disrupt the financial stability of the judiciary as well as the lives of the largely indigent criminal defendants who remain indebted to this system.
As we show, legislators, clerks of court, and the judiciary writ large subject criminal defendants to unconstrained coercion through the use of so-called “user fees.” Leveraging campaign finance data and publicly available litigation material, we also find suggestive evidence of possible quid pro quo rewards between collection agencies assigned to collect debt on behalf of courts and the clerks of court tasked with administering them. We argue that state constitutional reforms that eliminate creditor courts and mandate courts be funded from general state revenues are the only meaningful ways to permanently redress the social costs generated by criminal monetary sanctions
Sexual Assault Victims Face a Penalty for Adjacent Consent
No full textSexual assault is pervasively underreported, and victims are often blamed and stigmatized. We highlight an important but overlooked factor that may contribute to these outcomes: adjacent consent. Even when a rape is objected to verbally and physically, and accomplished only through violent force, respondents see the victim as less virtuous and deserving of support if she previously consented to something sexual with her perpetrator (e.g., kissing, foreplay, sex on a prior occasion). Our findings are striking in an age of “no means no” and “affirmative consent”—and notably hold among even young and politically progressive respondents who do not otherwise disapprove of casual sexual activity. These results thus shed light on the psychological barriers to justice for sexual assault victims
Pillar 2 and the United States: What\u27s Next
No full textJanuary 1 marked the official effective date of the 15 percent global corporate minimum tax imposed by pillar 2 as part of the G-20/OECD/ inclusive framework base erosion and profitshifting 2.0 project. Pillar 2 went into effect in Australia, Canada, the EU, Japan, Norway, South Korea, and the United Kingdom, with more countries expected to adopt it soon, including low-tax countries like Barbados, Ireland, Luxembourg, the Netherlands, and Switzerland. Critics have argued that pillar 2 violates tax treaties, customary international law, or bilateral investment treaties. But it seems unlikely that legal challenges against it will succeed. Most of the countries that have adopted pillar 2 can override tax treaties by domestic legislation (such as Australia, Canada, and the United Kingdom) directive (the EU), or referendum (Switzerland). The existence of customary international tax law is disputed, and it would be a brave national court that relied on it to invalidate a reform endorsed by over 140 countries (after all, if enough countries adopt a rule, they can effect a change in customary international law). A bilateral investment treaty arbitration challenge by an investor is more plausible, but if a losing country refunds the tax it collected, this could trigger additional tax liability in another country the multinational operates in, so it\u27s unclear what the multinational would gain
What is the Best Candidate for a Post-Moore Constitutional Challenge?
No full textOn December 5, 2023, the Supreme Court heard oral arguments in Moore, the case challenging the constitutionality of the mandatory repatriation tax enacted in 2017 (section 965). Most of the justices\u27 questions focused on the potential collateral consequences from requiring realization as a constitutional matter, and the majority seemed inclined to avoid the constitutional issue by focusing on the fact that the income in Moore was realized and that section 965 simply followed a long list of precedents by attributing this corporate income to shareholders in a closely held corporation
Channeling a Federal Right to Education through State Constitutions and Courts
No full textProfessor Black attributes the ubiquitous adoption of education clauses in state constitutions in the immediate pre- and especially post-Reconstruction era to a “constitutional compromise” struck by Congress and the states. The State Citizenship commitment was designed to enhance the republican nature of both levels of governance by ensuring broader access to political participation through voting and broader access to public education to inform and support democratic deliberation. The education component of this commitment was uniquely secured, argues Black, through a state-federal compromise using two complementary mechanisms: first, by mandating states to embrace a state constitutional obligation to provide basic educational services, and second, by superimposing a relatively thin federal constitutional obligation. Professor Black completes his argument by fleshing out the federal mechanism side of the compromise, ultimately prescribing a process-based federal right to education that requires states to support their education systems with stable funding and to avoid causing or permitting any systemic group deprivations.
We believe that Professor Black’s constitutional compromise thesis invites a novel rethinking of the traditional assumption of independent state constitutionalism. We argue in this Article that the states’ side of the State Citizenship Clause compromise—which we hereafter call the states’ “compromise commitment”—should also influence how state courts interpret the right to education within their states as a matter of state law. Specifically, state courts should effectuate the Fourteenth Amendment compromise commitment by adding into their mix of interpretive methods (alongside text, state-specific history and purposes, and constitutional structure) a healthy respect for an additional fundamental purpose: to provide adequate and equitable public education as a means of securing the federal constitutional objective of supporting democratic self-governance as a birthright of citizenship.
Part I briefly describes the so-far failed efforts to secure a federal right to education and the resulting shift to state constitutional litigation that has produced mixed and limited results. Part II describes Professor Black’s proposed federal right to education secured through the State Citizenship Clause. Part III explores our new federalism model by which federal constitutional commitments should influence the proper interpretation of state constitutional provisions and then explains how our model applies to state educational guarantees. Respecting Professor Black’s compromise commitment should inspire more state courts to interpret their education clauses to guarantee at least some minimum level of adequacy and equity
Should Ireland Have Taxed Apple?
No full textOn September 10 the EU’s Court of Justice issued its long-awaited decision in the Apple state aid case. Surprisingly, it reversed the EU’s General Court decision and held that the European Commission was correct in finding that Ireland had provided prohibited state aid to Apple, and therefore Apple must pay Ireland the €13 billion in taxes that it would have paid but for the illegal subsidy. This state aid case, the largest in the EU’s history, highlights significant issues about the legal governance of corporate tax. This article examines the notable features of the Court ruling, then outlines why we believe the Court erred in its ruling. Next, it outlines Apple’s post-stateless structure via Ireland and considers how the current Irish regime is affected by pillar 2. The final section discusses some implications for the EU and corporate tax