Weekly Top 5 Papers – December 25th, 2017

1. The Games They Will Play: An Update on the Conference Committee Tax Bill by Reuven S. Avi-Yonah (University of Michigan Law School), Lily L. Batchelder (New York University School of Law), J. Clifton Fleming Jr. (Brigham Young University – J. Reuben Clark Law School), David Gamage (Indiana University Maurer School of Law), Ari D. Glogower (Ohio State University (OSU) – Michael E. Moritz College of Law), Daniel Jacob Hemel (University of Chicago – Law School), David Kamin (New York University School of Law), Mitchell Kane (New York University (NYU)), Rebecca M. Kysar (Brooklyn Law School; Fordham University School of Law), David S. Miller (Proskauer Rose LLP), Darien Shanske (University of California, Davis – School of Law), Daniel Shaviro (New York University School of Law) and Manoj Viswanathan (University of California Hastings College of the Law)

We wrote the two reports as a reaction to the tax overhaul legislation as it was under consideration by Congress. The first report, released on December 7th, analyzed the two different bills approved by the House and Senate respectively before they were reconciled.  The second report, released on December 18th, updated and expanded on our original analysis based on the reconciled legislation approved by the conference committee and that was then enacted into law.  Our reports identify some of the key weaknesses in the new law. Specifically, the complex rules in the law will allow new tax games and planning opportunities for well-advised taxpayers, which will result in unanticipated consequences and costs. These costs may not currently be fully reflected in official estimates already showing the legislation adding over $1 trillion to the deficit in the coming decade. Other proposed changes will encounter legal roadblocks, like WTO violations, that will jeopardize critical elements of the legislation. Finally, in other cases, technical glitches in the legislation may improperly and haphazardly penalize or benefit individual and corporate taxpayers.  The reports do not address the large concerns a number of us have with regard to the broad policy motives behind this legislation (and which a number of us have written about elsewhere).  Instead, it’s focused on the consequences of the rushed and poor execution.
There are thirteen authors on these reports, and they represent a joint effort among tax experts from across the country warning of the very real dangers to the integrity of the tax system of the new tax law.  Looking ahead, we call for forward leaning executive action—that will require a reversal to the years of funding cuts to the IRS—to try to staunch the likely bleed of revenue, as well as an eventual repeal or fundamental reform of key elements in the legislation that are fatally flawed. – David Kamin

2. The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation by Reuven S. Avi-Yonah (University of Michigan Law School), Lily L. Batchelder (New York University School of Law), J. Clifton Fleming Jr. (Brigham Young University – J. Reuben Clark Law School), David Gamage (Indiana University Maurer School of Law), Ari D. Glogower (Ohio State University (OSU) – Michael E. Moritz College of Law), Daniel Jacob Hemel (University of Chicago – Law School), David Kamin (New York University School of Law), Mitchell Kane (New York University (NYU)), Rebecca M. Kysar (Brooklyn Law School; Fordham University School of Law), David S. Miller (Proskauer Rose LLP), Darien Shanske (University of California, Davis – School of Law), Daniel Shaviro (New York University School of Law) and Manoj Viswanathan (University of California Hastings College of the Law)

3. Network Neutrality, Broadband Discrimination by Tim Wu (Columbia University – Law School)

4. Blockchain Technology: Principles and Applications by Marc Pilkington (Université Bourgogne Franche Comté)

5. Should India Stay Away from the Fourth Revolution? by Gaurav Agrawal (Government of India)

The world stands at the cusp of another steam engine moment. Things and economic models as we know might totally change in next decades thanks to the revolution in Artificial Intelligence and other technologies. Many developing countries like India are resorting to banning these ostensibly to ‘protect jobs’. But what has history taught us? Every major technology change in past automated the jobs of thousand men and threatened to render them jobless. Still it ended up making the world a better place for everyone. In the paper we explore the why. We explain the mechanics of how Adam Smith’s invisible hand operates in such cases and ensures better jobs in the end. We also explore how no country can remain isolated due to global trade and capital flows. Adopting these technologies will only lead to transitory unemployment, banning these would make the country permanently poor. We explore what countries can do to reduce frictions which can make the transitory unemployment ‘sticky’.
A follow-up of these ideas would be to study under what conditions markets may reach a sub-optimal equilibrium rather than a full employment one or the transition process may become a painfully long one. – Gaurav Agrawal

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