Three quick further things I’ll say about it:

1) I can be self-critical (more in my own head than publicly, of course), but at least at present I quite like the piece and feel that it turned out well (albeit, after consuming a lot of sweat equity).

2) I try to model being gracious about acknowledging my intellectual debts to others in the field, including some more junior to myself. Academics are not always as gracious about this as they ought to be.

3) It aims to be a bit “Graetzean,” which I mean as a compliment to Michael Graetz. That is, one nice aspect that I have noticed about Graetz’s work is his identifying what he felt were important points to emphasize publicly at a given point in time. In other words, his work isn’t just analytic, but also aims to steer public debate regarding, e.g., “what we ought to be thinking about / where we ought to be going right now.” I try to do that a bit in my new piece – although my effort in this direction, just like any such, may fail to resonate with people who don’t happen to share my sense of what the moment calls for. But I came to feel that, if one has some potential influence (however slight it might be, in truth), it’s part of one’s responsibility, insofar as one is wearing the public intellectual hat, to think about doing good, as one conceives of it. This is something that Graetz has always modeled well.

The abstract goes as follows: In recent decades, a number of fantastically successful, mainly American, multinational entities (MNEs) – led and epitomized by the “Four Horsemen,” Apple, Amazon, Facebook, and Google – have risen to global economic hyper-prominence. While their market capitalizations and profits are high, reflecting that they earn substantial rents or quasi-rents, their aggregate global taxes are generally quite low, reflecting their ability to create stateless income.

This is an illuminating paper that reviews and elucidates relevant literature, while also convincingly supporting a perhaps counter-intuitive conclusion, to the effect that, despite fervent denials by both Ronald Dworkin, as a proponent of “resource egalitarianism,” and prominent welfarists (such as Louis Kaplow) that Dworkin’s theory has much in common with egalitarian welfarist theories, in fact they substantially converge in their conclusions, even if reaching them by different means and based on different concerns.

The paper also discusses the longstanding tax literature sub-theme (which I may have helped launch in legal academic circles) regarding endowment taxation, the conundrum regarding “slavery of the talented” and the hypothetical beachcomber who could have been an investment banker, etc. Its conclusions in this area are certainly compatible with mine, although more thoroughly worked out.

Dworkin’s theory, which I have always found more of an impressive effort than actually persuasive, has the following main premises (quoting Lily’s paper): It aims to “treat[] all members of society with equal concern and respect, as determined from a position of equality. this has two components. First, everyone should begin their life with equal transferrable resources, as measured by the value of those resources to others. Second, the state should provide insurance against inequalities arising from non-transferrable resources, such as one’s talents and health. But it should only insure against the effects [of] brute luck – not option luck, which is the result of deliberate and calculated gambles.”

Egalitarian welfarism is the same as utilitarianism, except that it assigns greater social welfare weight to the utility of worse-off individuals. Both it and utilitarianism are sometimes viewed as compatible in theory with imposing an endowment or ability tax, such that the above beachcomber who could have been an investment banker is viewed as no worse-off (and hence, if you add a string of unrealistic assumptions, as rightly owing just as much tax) as her peer who actually went the investment banker route. But in the welfare framework what matters is utility – endowment only matters instrumentally since in a particular reasoning chain one might think (all else equal) that, the higher your potential earnings, the higher your total and marginal utility. We’re far from the world in which such assumptions would hold, in multiple dimensions.

There are a few main reasons why the two sets of theories converge to a degree. Both may support addressing brute luck, since as defined this isn’t the individual’s fault or responsibility (Dworkin) and in the absence of choice won’t have adverse incentive effects (welfare egalitarianism). In both one has to be leery of addressing option luck, in Dworkin as a matter of principle and in welfare egalitarianism merely insofar as incentive effects might lead to adverse efficiency consequences. And once Dworkin started pursuing in earnest his analysis of insurance against inequalities pertaining to non-transferrable resources, he inevitably found himself in territory where welfare-type considerations were going to matter (e.g., moral hazard et al would now affect the character of the insurance scheme people would hypothetically want).

Here are two quick thoughts I’d add regarding the underlying theories that the paper discusses:

1) I have always found the case for egalitarian welfarism to be a bit askew. That is, I’m sympathetic to the motivation, but find it peculiarly expressed. It’s a very odd set-up, and inconsistent with how one would think about distribution issues behind Harsanyi’s version of the veil of ignorance, in which one would want to maximize expected utility. In effect, the social planner who is making a social welfare assessment has declining marginal utility with regard to people’s utility – a very abstract set-up that lies in a land far beyond where our moral intuitions can reasonably take us, one way or the other.

What I see as motivating it is the judgment, which I share, that focusing just on the declining marginal utility of consumption and leisure to a particular individual falls far short of explaining fully why – to some of us, at least – inequality appears to be a bad thing. As I discussed in my recent paper, The Mapmaker’s Dilemma in Evaluating High-End Inequality, the standard economic assumption that people’s utility is solely a product of their consumption of market goods plus leisure, may work well enough in price theory, but not here.

To quote that paper:“We are an intensely social species, and often a rivalrous one, prone to measuring ourselves in terms of others, and often directly against others. People thus “have deep-seated psychological responses to inequality and social hierarchy,’ creating the potential for extreme wealth differences to “invoke[] feelings of superiority and inferiority, dominance and subordination” that powerfully “affect[] the way we relate to and treat each other.”

Case in point, the Wilkinson-Pickett data suggesting that inequality “does not just reduce happiness for all groups—the rich as well as the poor—but even has measurable adverse effects on social trust, economic mobility, life expectancy, infant mortality, children’s educational performance, teenage births, homicides and other violence, imprisonment rates, mental illness, drug and alcohol addiction, and obesity.”

Anyway, back to the weighted welfarists. My thought is that perhaps their recognizing intuitively the inadequacy of the standard story in which it’s all DMU and nothing else (based on the radically impoverished utility function that was used for reasons of tractability), and that inequality was also bad for reasons not included in the model, led to the ad hoc solution of weighting towards the bottom, based on the observer’s arbitrarily posited inequality aversion. But however one thinks otherwise about utilitarianism’s adequacy as a moral theory (given all the standard challenges and conundra it raises), I would say that is not really the best response to this particular problem. Rather, one should broaden the relevant inputs to posited utility, however indeterminate that makes the analysis, keeping in mind that determinacy within the boundaries of a little toy model doesn’t really do or mean much anyway.

2) Turning to Dworkin, and recognizing that there’s a rich literature here that I don’t know well, I’ve always been troubled by his use of the brute luck versus option luck distinction, despite its being related to issues of definite interest. The distinction between bad outcomes that don’t versus do reflect choice matters, even purely in a welfare framework, because (a) the individual’s choice may shed light on her underlying preferences or utility function, and (b) the less chosen, the less we have to worry about incentive issues. But I don’t join Dworkin in wanting to moralize the distinction to the degree that he does, because I’ve long found beneficence to be a more attractive principle than desert, “you’ve made your bed now lie in it,” etcetera. I also wonder about such problems as (a) the brute luck of being a bad chooser with respect to option luck, and (b) the brute luck aspect of having been handed particular choices on which to exercise option luck. E.g., assuming a counter-party I can bet as I like, and as high or low as I like, on tonight’s US Open matches. But when I choose a profession, activity, etc., I didn’t choose the payoff set that I have. Maybe I’d have preferred to have had different and better choices and payoffs. And I suspect this causes difficulties for the distinction that others must have explored.

This has reflected my (for different reasons) (1) not wanting to address the political madness of the current era, which only makes one seem (and feel) angry and shrill, and (2) not always being focused on the minutiae of admittedly important day-to-day stuff in the tax system.

E.g., new regs come out in an area that I know something about. With finite time, especially as one’s summer all too rapidly ebbs away, I’ve wanted to continue focusing on the more general sets of issues that interest me more intellectually, and on which I feel I have distinctive ideas to contribute. There are a lot of smart people out there who do excellent jobs, close to the ground, in areas where I haven’t felt driven to focus my attention.

Academically speaking, I did three main things this summer. The first was push my literature and inequality book towards publication, which I hope will actually be taking place in early 2020. One thing I did in this respect, although not required by the prospective publisher, was to shorten the book by about 10% – taking out material that I had personally found interesting but that wasn’t sufficiently connected to the book’s main themes. This results, I hope, in a sharper and tighter manuscript. In the broader context, the stuff I removed seemed self-indulgent and unnecessary.

Second, I began work on a follow-up (but much shorter) book on international tax policy, reflecting the extensive legal and intellectual developments that have transpired since I published Fixing in 2014. But I put this aside for a bit to write a new article that I felt would sharpen my discussion of source concepts in this still-planned new book.

Third, I wrote Digital Service Taxes and the Broader Shift from Determining the Source of Income to Taxing Location-Specific Rents. This should be publicly available shortly, both on SSRN and at the NYU Tax Policy Colloquium website, as I’ll be presenting it there on October 1. I’ll eventually give a talk based on it in Singapore in mid-January 2020, after which it will appear in a Singapore law review. I’m also game to discuss it elsewhere, e.g., in North America or the EU as well as in Asia, Australia, Africa, and Central and South America. (I enjoy travel, and benefit intellectually from getting to meet & discuss things with different groups of people.)

Now that the NYU Tax Policy Colloquium is starting (tomorrow!), I will be posting weekly commentaries on the papers that are presented there. These will not discuss the sessions themselves, as we feel it’s best to keep these off the record, a rule I would violate if I did not confine my reactions to my thoughts about and in relation to the papers.

These commentaries will of course be consistently quite diplomatic – I don’t like slagging people, especially at a stage when I’ve become more senior than most of the presenters. Slagging combines being genuinely unkind with being a bad  choice from the perspective of one’s own self-interest (and that of the colloquium). But consistently with all that, I will aim to be clear when I disagree with particular things that I see in the papers, since one can’t make mutual intellectual progress without exchanging points of view.

Once a few years ago, I expressed some degree of disagreement with a paper that was presented at the colloquium. The author disagreed sufficiently with me to revise the paper by adding several long footnotes that quoted and disagreed with what I had said. While I don’t recall the exact issue, I will say, in such author’s favor, that he had clearly spent a lot more time thinking about the issue than I had. (My response to a colloquium paper is the matter of a few days’ reflection at most – and I’m willing to opine more casually in blog entries than in traditionally published work.)

The author, being a gracious person himself and I think not actually too mad at me, showed me in advance his lengthy footnotes rebutting what I had said, and asked if I had any objection, etc. I said no, that’s fine, go ahead, and I also saw no reason to answer, even though it’s conceivable (but not certain) that upon fuller reflection I’d have at least partly stuck to my prior view.

There are also of course trolls out there, looking for ill-mannered fights, but that’s not my thing, and they tend to discredit themselves anyway.

The core problem is that inflation adjustments apply on both the plus side and the minus side of the ledger. If one excludes the inflationary component of gains while still allowing taxpayers e.g, to deduct the inflationary component of their interest costs, then pervasive tax arbitrages worsen income measurement and will induce pervasive game-playing by wealthy tax avoiders.

In the spirit of the capital gains plan’s idiocy, I was trying to think of what else would be logical by its dim lights. So here’s an idea: In traditional IRAs or other such tax-preferred savings vehicles, you deduct the contribution, but pay tax on the withdrawal. In Roth IRAs and other such alternative tax-preferred savings vehicles, you don’t deduct the contribution, but you exclude the withdrawal.

To a great mind like Steve Mnuchin’s, the lesson should be obvious. Why not combine the best features of each? Create a savings vehicle in which you can make unlimited deductible contributions (a la traditional), and then exclude the withdrawals (a la Roth)!

Better still, Mnuchin can decide to authorize this by Treasury fiat. What’s more, if there are no limits to taxpayer contributions, and no minimum timing periods before tax-free withdrawals are allowed (and why would we want to impede people’s economic planning?), then no one need ever pay income tax again!

Just think how this might hyper-charge our economy in the run-up to November 2020, even with a trade war and ever-rising tariffs on everything.

There’s only one tax paper at the conference, by my friend Yehonatan Givati of Hebrew University, entitled Theories of Tax Deductions: Income Measurement Versus Efficiency. I will be the commentator, and I will use, although I have not yet decided whether I will subsequently post, PowerPoint slides.

All sessions meet from 4 to 5:50 pm at NYU Law School, Vanderbilt 202. For papers by the co-convenors (Lily Batchelder on September 3, and mine on October 1), we’ll have NYU colleagues as guest commentators: Liam Murphy for her paper and Mitchell Kane for mine.

I’m not quite ready to post it on SSRN yet, but I’ll be discussing it: (1) at the NYU Tax Policy Colloquium on October 1, (2) at the University of Toronto Law School on October 16, (3) at the National Tax Association’s Annual Meeting in Tampa, exact date & time still TBD but November 21, 22, or 23, and (4) at the National University of Singapore on January 14 of next year.

This is a bit of a hot topic, although I’m taking a big-picture conceptual view rather than zeroing in on particular versions. (But I do use the recently announced UK DST as an illustrative example). It’s probably fair to say that I diverge from hyperventilating American quasi-orthodoxy about (i.e., against) the DST.

Subject to competing time demands, etc., I’d be happy to hit the road & discuss the piece and the underlying issues that it raises, be it inside or outside the U.S. (I’ll be on sabbatical in winter/spring 2020, hence with some scheduling flexibility.)

It’s rather an odd duck. One set piece after another, usually entertaining but without much forward momentum. Also, it feels incredibly tailored to his personal obsessions – e.g., his pro-old Hollywood, anti-hippie nostalgia, and his wanting to re-create what a pool party at a Playboy mansion in the late 1960s might have been like – without entirely making the sale to the audience that we should share them at least for the film’s duration. (Cf. Hitchcock, who specialized in effectively transmitting his dark personal obsessions to the audience.)

Brad Pitt was very charismatic in the classic old Hollywood manner. DiCaprio, interestingly, was deliberately made far less so, although as an actor he obviously has similar chops.

The ending, not to issue undue spoilers to any few of you out there who might not know it yet (but who still plan to see the film), drew power from the (altered) historical event’s having such a huge cultural resonance, at least to anyone old enough to know and care about it. So there was a point at which the tension rises because one is thinking, my gawd, here it comes. But I still was left with a sense of a bunch of different things thrown together because they’re all stuff from 1969 that the director wanted to play with