I have been meaning for some time to write an appreciative note here concerning the late Edward Kleinbard’s outstanding new book – completed by him last year, just in time from a medical standpoint – What’s Luck Got To Do With It?

The book is an important contribution, laser-focused on a key aspect of America’s greatest current ills, involving the demise of anything approaching equal opportunity, as runaway high-end wealth inequality raises the ladders to be ever more distant from the ground floor.

Shock fact that the book mentions: the government does more to subsidize college education by children from rich families than poor or middle class ones (!). Only in America. This comes on top of the rich families’ spending ever more in comparative as well as absolute terms than those below them in the economic scale.

The book follows up on Ed’s previous book, We Are Better Than This: How Government Should Spend Our Money in pivoting from a primary tax focus to one of looking at the fiscal system as a whole, with emphasis on expanding opportunity by recognizing how superior peer countries’ fiscal policies typically are to ours, with their greater provision of healthcare, education, and other basics.

One key topic of emphasis in the new book is how the ideology that Ed called market triumphalism, and I have similarly labeled as “market meritocracy,” poisons the well by creating the false belief that both success and failure in one’s career and economic enterprises are wholly deserved. Even if we falsely believed that people had reasonably equal starting points, the new book adduces powerful evidence regarding the dominant role of luck in determining who succeeds or fails, even with unequal “ability” levels on top of seemingly equal starting points.

The book convincingly ties the false downplaying of luck’s role to underlying psychological factors. But – I suspect, out of diplomacy, because Ed was seeking to persuade, not alienate, American readers and especially those with potential policy influence – it does not place as much emphasis on how American ideology makes this an especially toxic line of  thinking in our popular culture and politics. This is a topic that I address in my as yet unplaced book manuscript, Bonfires of the American Dream (a kind of follow-up to Literature and Inequality).

One especially interesting aspect of What’s Luck Got To Do With It? is its philosophical focus. At a USC Law School Zoom book talk yesterday – the video from which may soon be posted – this topic came up, especially in remarks by Ed’s USC colleague Gregory Keating. In general, Ed’s philosophical alignment in the new book has some common ground with that of “liberal egalitarianism,” as espoused most prominently by Ronald Dworkin. Yet it is to the “right” of Dworkin in one sense, and to the “left” in another sense. (I put the terms “right” and “left” in scare quotes to clarify that I do not mean to link this too closely to the debased state of current U.S. politics, on the increasingly fascist right especially.)

The book is seemingly to the “right” of Dworkin in positing that people should be deemed to have a right to retain the “brute luck” associated with innate ability differences as a matter of birth, and that only brute luck differences from differential environments are fair game for redistribution.

But it is both seemingly and actually to the “left” of Dworkin in positing that option luck differences – from the playout of deliberate choices that we make – should be on the redistributive table as well.

I would disagree with Ed on the first of these two points – considering differences in innate ability an aspect of brute luck that is fair game for redistributive attention – if I were convinced that he were asserting it as a foundational moral principle. But I think the book makes it clear that he is offering this as a concession to win wider acceptance. For example, it describes as “unfair” the fact that taller people have higher average earnings than shorter ones, although it disclaims any effort to address this disparity. The view appears to be that, even with innate ability differences taken off the table – a move that not only comports with some intuitions that we all have, but that may help to encourage people to view themselves as responsible to do the best they can – there is still plenty of scope to make our society vastly more just than it currently is.

By contrast, the sense in which the book is to the “left” of Dworkin is critically important. Dworkin’s framework can be used, whether or not he would have done so himself, to justify radically unequal outcomes that reflect, for example, Jeff Bezos’ or Mark Zuckerberg’s having won winner-take-all contests with huge payoffs, in part because they were simply a bit luckier than their rival contestants. With luck being as important to people’s outcomes as the book shows that it is, meaningful egalitarianism of the scope that it had for Ed requires addressing ex post inequality (albeit, still with an eye to incentives) without allowing it to be ruled out of bounds simply because some won and others lost in competitive markets where they all deliberately played.

I recently used  one of those services where you send a saliva sample to a lab somewhere for DNA analysis. A part of the study just came back, telling me that I am 99.5% Ashkenazi Jewish, with perhaps a solitary Egyptian (!) ancestor 5 to 8 generations back. (Some tell me, however, that such very low % estimates are not very reliable.)

Mentioning this to friends on Facebook, I found that a whole lot of Jewish people in my age range who grew up in the US Northeast also did tests of this kind, and likewise were repeatedly found to be 98% or more Ashkenazi Jewish.

This suggests a truly striking degree of genetic isolation over many centuries, which of course is now perhaps trending way downwards. It pertains not just to marriage but also to anything else that might have led to children who had children. Given the centuries-long oppression of European Jews, one might have expected more forcible violations of Jews’ genetic isolation. But perhaps any such children didn’t fare as well for social / cultural reasons.

I also gather that all living Ashkenazi Jews are thought to be the survivors of a population bottleneck, descended from just a few hundred people (at most) who lived in late medieval times. (Were all the other European Jews from the diaspora murdered?) But there is controversy about their Middle Eastern as opposed to European ancestry, with possible gender differences. (Y chromosomes, obviously, pass only through the male line, while mitochondrial DNA passes only through the female line.)

Still waiting for the report on my degree of Neanderthal ancestry. You know the old joke (actually, I think it’s mine): “Why am I 98% genetically the same as a chimp, but only 50% the same as my parents, siblings, and children?”

I’ve just completed a new article draft, entitled “What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?” It addresses, among other topics:

(1) the purposive, technical, and semantic contours of what the term “minimum tax” is generally used to mean, along with the reasons why these matter – relating, for example, to the creation of clientele effects and discontinuous marginal incentives,

(2 the lessons to be learned from the rise and fall of the alternative minimum tax (AMT),

(3) the Biden versus Warren design question of whether, if one gave tax consequences to highly profitable companies’ financial statement accounting income, this should involve the use of a minimum tax structure or a standalone structure,

(4) the relationship between avowed minimum taxes and provisions, such as loss nonrefundability and applying foreign tax credit limitations, that set a zero percent floor on a particular tax rate,

(5) the issues posed by global minimum taxes, including GILTI in U.S. law and the OECD’s recent GloBE minimum tax proposal.

In general I am quite skeptical about minimum taxes, although there may at times be optical or political economy reasons for preferring them to a given, limited set of realistically available alternatives.

I’ll post it on SSRN soon, but probably not until I get some feedback from presenting it. The problem with posting too soon is that some of one’s readership looks at it too early, before it’s been improved. Barring travel restrictions from the coronavirus, I’ll be presenting it at the Critical Tax Conference in Gainesville, FL, on April 3 or 4, and then at the Maurer Law School’s 2020 Tax Policy Colloquium (in Bloomington, IN) on April 9. Also possibly in Oxford this summer, if international travel is feasible.

Last night, I was a panelist at the Columbia Business School’s Richman Center for a discussion of the 2017 U.S. tax act. The moderator was Jesse Green, and the other panelists were Stephan Eilers and Joseph Stiglitz.

The Richman Center will shortly be posting the session on video, and I have posted an approximate version of my remarks here.

I made the transition to Kindle long ago, a format that many whom I know have resisted. I still read physical books too, but I find the Kindle format (on an iPad) reasonably manageable. Plus:

(1) books that interest me go on sale periodically on Kindle (reflecting the zero marginal cost to the seller), so if you’re patient then pounce it can work well,

(2) I don’t have to further crowd the shelves of my home library (I have an old school aversion to throwing books out),

(3) I can stand reading it on my iPhone in the subway, and

(4) it’s nice to be able to go on vacation and have dozens of choices at hand without cramming one’s suitcase.

But I hadn’t tried audiobooks, until the last few days, when I’ve started using Audible. The draws were:

(1) it’s free for a month, and I can ditch it after that if it isn’t working for me,

(2) you get two free books when you start, then I think one a month. So I can get things that I’ve had on my patient-then-pounce list for months or years, and

(3) when I’m at the health club, it can be hard finding music that I want to listen to right at that moment. (I’m an album person, reflecting the technology of my youth, so I don’t go much for letting Spotify choose.)

But I don’t know yet if Audible will work for me. I’ve started on Jon Clinch’s quite delightful novel, Marley. But I miss small things in the narrative, and seem reluctant to go back 30 seconds, as it lets you do. I’ve always known what’s generally happening, but the details of his often flashy (in a good way) writing sometimes speed by me unapprehended.

Being at a noisy health club with headphones, and peddling away on a mechanical device while giant TV screens loom in front of one’s eyes, admittedly isn’t the ideal way to focus on a book. It might work better to listen while driving long distances, but as a New Yorker I don’t do that. Perhaps while walking? (This being something that New Yorkers, myself included, do a lot.) But it’s under 10 minutes to work (not to complain), and the last couple of days have simply been too cold anyway.

One rather obvious thing about reading is that, if you like, you can actually read every single word. Indeed, if you want to and the book is well-written, you can even pause every now and then to savor things. Audible is not well-suited for that. But then again, it can potentially expand my reading horizons by a few hours a week, as well perhaps as making health club visits feel shorter.

Will I stay or will I go; don’t know yet.

The cover art for my forthcoming (April 1) Anthem Press book, Literature and Inequality, is now set. It’s a public domain image of a caricature of Charles T. Yerkes (aka Frank Cowperwood in Dreiser’s The Financier and The Titan) that was drawn in 1905 by Max Beerbohm. You can see it here.

I had been intrigued by the idea of using, for the cover, the image you can see at the far right here, but couldn’t determine where the rights to it might reside.

I have posted on SSRN a revised, and pretty close to final, version of my paper, Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location Specific Rents. Available here. I’ll be submitting it shortly to the Singapore Journal of Legal Studies for expected publication there, in keeping with the lecture on the topic that I gave at NUS Law on January 14.

The main change this time around was simply to fill in the footnotes (with the help of my research assistant).

My forthcoming book, Literature and Inequality, is now listed here on Amazon, and available for pre-ordering.

There will also be an e-version of the book, as noted by Anthem Press at its website here.

As discussed in prior posts, last Friday I participated in a panel at the ABA Tax Section Annual Meeting in Boca Raton, FL, along with co-panelists Roger Royse, Linda Beale, and Richard Prisinzano. The panel discussed the rising U.S. wealth gap between the very rich and everyone else, and sought to lay out, in a reasonably neutral and balanced way, various options for responding, such as via enactment of a wealth tax.

As we divided up the issues among the panelists, my comments (and share of the slides) focused on Ed Kleinbard’s dual BEIT proposal, and on recent talk of raising income tax and/or estate and gift tax rates at the top.

Not a whole lot of brand-new or startling content here, but in particular because I offered a well-deserved shout-out for, and brief summary of, the dual BEIT, I am attaching my portion of the session slides here.