CALVIN H. JOHNSON, University of Texas at Austin School of Law
Email: cjohnson@law.utexas.edu

This piece traces the history of the capital gain concept, and then the policy arguments for a lower rate on capital gains, to argue for an express requirement that the lower rate for capital gains be available only if the gains are reinvested. Consumed capital gain, the Article argues, is not real capital gain within the original understanding or tax policy arguments. Indeed since capital gain is available for consumption, a viable alternative is to repeal the capital gain preference and engineer investment tax incentives to the front end of investment.

LAWRENCE ZELENAK, Duke University School of Law
Email: aclark@law.duke.edu

The federal income tax did not become a mass tax until World War II. Although some form of mass federal taxation was imperative for the financing of the war, a mass income tax was not inevitable. But for the determined opposition of the Roosevelt administration, Congress would almost certainly have enacted a federal retail sales tax during the war - perhaps in addition to the conversion of the income tax to a mass tax, but perhaps as the only form of mass taxation aimed at paying for the war. This article describes the wartime debates among proponents of different methods of federal mass taxation - conversion of the income tax to a mass tax, enactment of a federal retail sales tax, or both. Following that description, the article considers the continuing impact of the wartime choice of the income tax as the only instrument of mass taxation. The article concludes that the use of the mass income tax - rather than the combination of an elite income tax and a mass retail sales tax (or value-added tax) - has made a significant difference in several areas, including: the distribution of the benefits of postwar tax cuts and the burdens of postwar tax increases; public perceptions of the nature of the relationship between taxpayers and the federal government; the proliferation of tax subsidies targeted at particular categories of nonbusiness expenditures, ranging from long-term care to hybrid cars; income support for low-wage workers with dependent children; and federal policy toward homeownership.

FRANCINE J. LIPMAN, UC Hastings College of the Law, Chapman University - School of Law
Email: lipmanf@uchastings.edu

Sergeant Horvath: This time the mission IS a man.
Saving Private Ryan (1998)

Almost two million men and women serve the United States as enlisted personnel in the Army, Navy, Marines and Air Force. This essay will examine certain tax provisions unique to members of the armed forces and suggest a sweeping procedural change to save Private Ryan's tax refund. The proposed change is structured to better serve the unique demographics of the targeted taxpayers. A threshold issue when designing a tax benefit should be "Who is the targeted taxpayer?" Thus, the essay begins with a review of the demographics of this population to ascertain Private Ryan's typical tax profile. The essay concludes with a proposal to better serve those that serve.

AMNON LEHAVI, Interdisciplinary Center Herzliyah - Radzyner School of Law
Email: alehavi@idc.ac.il

Takings jurisprudence is engaged in a constant paradox. It is conventionally portrayed as chaotic and “muddy,� and yet attempts by the judiciary to create some sense of order in it by delineating this field into distinctive categories that apply to each a different set of rules are often criticized as analytically incoherent or normatively indefensible.

This Essay offers an innovative approach to the taxonomic enterprise in takings law, by examining what is probably its starkest and most entrenched division: that between taking and taxing. American courts have been nearly unanimous in refusing to scrutinize the power to tax, viewing this form of government action as falling outside the scope of the Takings Clause. Critics have argued that the presence of government coercion, loss of private value, and potential imbalances in burden sharing mandate that the two instances be conceptually synchronized and subject to similar doctrinal tests.

The main thesis of the Essay is that this dichotomy, and other types of legal line-drawing in property, should be assessed not on the basis of a “pointblank� analysis of allegedly-comparable specific instances, but rather on a broader view of the foundational principles of American property law and of the way in which takings taxonomies mesh with the broader social and jurisprudential understanding of what “property� is.

Identifying American property law as conforming to two fundamental principles-formalism of rights and strong market propensity-but at the same time as devoid of a constitutional undertaking to protect privately-held value against potential losses as a self-standing “strand� in the property bundle, the Essay explains why prevailing forms of taxation do seem to be disparate from other forms of governmental interventions with private property. Focusing attention on property taxation, the Essay shows why taxation is considered a “lesser evil� type of government coercion, how the taking/taxing dichotomy better addresses the public-private interplay in property law, and why taxation is often viewed as actually empowering property rights and private control of assets.