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Abstract:
This article is a response to some of the politically aggressive rhetoric contained in a recent symposium issue on tax rates, progressivity, and budget processes published by the Boston College Law Review. The article identifies possible sources of personal and political bias in tax policy scholarship and suggests that scholars should seek neutral, noninflammatory means to analyze the rights and duties of wealthy taxpayers under the Internal Revenue Code.

tax, tax policy, IRC

Abstract:
The I.R.C. contains numerous dollar limitations that categorize taxpayers for dispensation of a wide variety of tax benefits and burdens. These limitations, haphazardly evolved over many years, include the dividing lines for rate brackets and scores of economic markets that indirectly define poverty, affluence, and wealth while determining eligibility for a host of exclusions, deductions, and credits pertaining to income assistance, retirement savings, small business relief, education, capital formation, and other national concerns.

Unfortunately, no unifying policy for the setting of dollar limitations exists. An arbitrary mishmash of tax-determining standards hinders compliance and planning efforts. Additionally, inconsistent dollar limitations complicate political debate and weaken the socializing effects of taxpayer categorizations while lessening fairness in the Code necessary to support voluntary reporting.

One way to remedy the failure to create cohesive standards for setting dollar limitations would involve setting rate brackets through statistical or other objective criteria, then converting bracket limits into a universal dollar limitation that, with some room for variations, would replace most of the uncoordinated limitations now in the Code. This article explores how to develop a universal limitation and why it could sharpen political debate, promote social cohesiveness, and place the burden of revenue effects adjustments on more appropriate Code features like rate determinations.

tax, tax policy, tax code, internal revenue code

Abstract:
Property transfers create a variety of valuation problems that complicate tax planning and compliance efforts. For decades, valuation issues have been addressed under a vague "willing buyer and seller standard" that has caused a great deal of audit activity, litigation, and uncertainty.

The American Jobs Creation Act of 2004 very modestly moved away from this vague valuation standard in the context of charitable contribution deductions for vehicles and intellectual properties. This new legislation effectively creates precisional substitutions for true economic value using hindsight based on subsequent uses, dispositions, or income realizations involving the designated donated properties.

This approach is part of a long tradition of precisional substitutions that have worked well to add workability and certainty for a variety of tax analyses involving determinations as disparate as depreciation allowances, applicable interest rates, split-interest gifts, and business expense deductions. Precisional substitutions create artificial systems that take the place of actual economic determinations too complicated and contentious for efficient tax administration.

Using many examples and setting forth several technical ideas, this article argues that the precisional substitution concept should be extended to a whole range of valuation issues that now inordinately complicate tax administration and planning throughout the Internal Revenue Code.

tax, IRS