Tax Chats

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Scott and Jeff chat with Jay Zagorsky from the Questrom School of Business at Boston University about his experience trying to pay his tax bill with cash. We discuss the complexities of paying with cash, and the costs that might be incurred if one does not have access to the traditional banking system. Jay wrote about his article here:

Can you pay your taxes with cash? One economist did | Fortune

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Starbucks is piloting a reward program called Odyssey in which members get rewarded with NFTs. We discuss the possible tax consequences to Starbucks and its customers. We also discuss the issues surrounding taxation of NFTs in general.

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In "The Wealth of Nations",  Book V, Chapter ii, Adam Smith lays out some fundamental principles of taxation. We discuss some of those principles, and describe how they are still being applied today.

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Scott and Jeff chat with Sir Andrew Dilnot, currently serving of Warden of Nuffield College, Oxford, about his experience evaluating bias in the BBC's coverage of tax-related topics. We discuss the complications reporters face when covering complex economic issues. We review the findings of his recent report entitled "Review of the impartiality of BBC coverage of taxation, public spending, government borrowing and debt."

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Jeff asks ChatGPT a series of tax-related questions, and Scott evaluates the answers.

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We chat with James Wetzler about the time a legislative mistake accidentally abolished the corporate tax in 1975. This leads to other discussions, including when the New York State Tax Authorities tried to impose sales tax on a kids lemonade stand, the dilemma that arose when the tax authorities seized pornographic videos from a delinquent taxpayer, and the strange situation where an IRS auditor uncovered evidence of a murder.

Near the end, we also briefly discuss the deterrent effect of the new excise tax on share repurchases.

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Scott and Jeff chat with Evelyn Smith and Hadi Elzayn, two of the seven coauthors on a recent working paper entitled "Measuring and Mitigating Racial Disparities in Tax Audits."

We ask them details about the paper. We find that the unconditional audit disparity between (estimated) black tax payers and (estimated) non-black taxpayers  is about 5%. We ask about the conditional disparity. The authors explain that conditional on some factors the disparity remains. We discuss what constitutes an audit (a letter in this case). We ask whether the IRS should care about collecting the most amount of revenue, or whether the IRS should care about deterring non-compliance. 

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President Biden gave the State of the Union address last night. Scott and Jeff talk about the tax components of the address. They discuss large corporations which pay little in tax, billionaires who pay little in tax, and taxing share repurchases., and "apples and elephants comparisons."  

Also, Jeff explains why it is impossible for pretty much any taxpayer, let alone those making under $400K a year, to pay a penny more in taxes under any of President Biden's current or former tax proposals (IRC 985 and 6102 come into play!). 

Note: We base this episode off of the official script of the State of the Union  address (https://www.whitehouse.gov/state-of-the-union-2023/), which omits some fabulous adlibbing by President Biden.

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In this episode, Scott and Jeff speak with Ryan Gurule of the FACT Coalition about the types of things companies disclose about taxes in their public filings. We talk about what is good and not so good, and we discuss some of the possible changes that might be made. We recorded this episode on November 1, 2022. Later in the year, the Financial Accounting Standards Board (FASB) announce an update to its "Improvements to Tax Disclosures" project. The proposals are well aligned with what we discussed in the episode.

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Scott and Jeff chat with Bryen Alperin about tax credit markets. It is often the case that a company that might earn a tax credit can't use it because it has insufficient income. This creates an opportunity for multilateral tax planning, wherein institutions with large tax bills partner with entities that generate tax credits to take take advantage of tax savings.