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In this special episode, we compile several recordings that we have made over the past year related to the proposed alternative minimum tax on financial accounting earnings. The recordings are very much related to two op-ed articles Scott published in the Wall Street Journal, found here:

Don’t Let Warren Politicize Accounting - WSJ
Elizabeth Warren’s War on Accounting - WSJ

Jeff has also written on the topic, including this letter to congress and an accompanying WSJ article that goes along with it:

Letter to Congress
Accounting Experts Ask Congress to Change Proposal on Minimum Corporate Tax - WSJ

This episode is longer than usual, but we believe the information is worth consuming.

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Scott and Jeff discuss "carried interest" with Vic Fleischer, Professor of Law at UC Irvine. Carried interest is a special type of income that is taxed at favored capital gains tax rates, and is often associated with high earning individuals who manage private equity partnerships. One prominent example of someone who had significant income from carried interest was former presidential candidate Mitt Romney. 

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Scott and Jeff learn from Ashley Jackson how the Taliban create a tax. We discuss how the tax system evolved initially to generate revenue to fund the Taliban objectives, until it became a symbol of its legitimacy. We talk about how the tax system evolved from a system of forced extractions to the point where customer support numbers became available to report mistreatment.

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Scott and Jeff discuss the creation of schedule M3 with Lillian Mills, Dean of the McCombs School of Business at the University of Texas at Austin. Lil was instrumental in the creation of schedule M-3, which is form filed with the IRS that reconciles taxable income to financial accounting income.  We talk about the opportunities that exist for academics, policymakers, and regulators to work together, and the unique environment that led to the creation of the M3. We also discuss some recent policy proposals that would impose tax on financial accounting income.

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Scott and Jeff discuss some of the prominent arguments against progressive taxation.

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Scott and Jeff discuss the tax status of churches in the U.S. with Lloyd Mayer, Professor of Law at Notre Dame University.  We discuss the basics of tax law as it pertains to Churches. We also discuss special tax benefits that apply to ministers and other church employees. We consider the tradeoffs that exist between providing churches with tax benefits and relying on them to provide certain types of public goods and services vs taxing churches and relying on the government to provide those goods and services.

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Scott and Jeff ask Andy Grewal to describe administrative law, and why it is so important for taxes. We discuss how significant portions of tax laws are left to interpretation by the IRS or Treasury, and how these interpretations can have a material effect on the experience of taxpayers.

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Scott and Jeff discuss income shifting by multinational corporations with Jennifer Blouin. We talk about Jennifer's research that suggests some estimates of the amount of tax revenue the U.S. loses to income shifting are as much as ten times too large. These estimates are important because they drive policy discussions, including debates in the U.S. about tax reform, and abroad, through the OECD and other organizations. The conversation builds on some of Jennifer's recent work related to income shifting, including a paper entitled "Double Counting Accounting: How Much Profit of Multinational Enterprises Is Really in Tax Havens?" available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3491451.

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Scott and Jeff discuss the effects the tax rate has on how much taxes are raised with Professor Arthur Laffer,  for whom the Laffer Curve is named. The Laffer Curve shows the likely relationship between tax rates and tax revenue. We hear the famous story of drawing the curve on a napkin. We ask  Professor Laffer about the Laffer Curve, and we get his opinion on the revenue maximizing tax rate.

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Scott and Jeff are joined by Rita de la Feria @delaFeriaR to discuss her new paper (co-authored with Maria Amparo Grau Ruiz) called "Taxing Robots".  The abstract of her paper reads in part: 

"In recent years, the idea of taxing robots has been progressively gaining momentum. The potential impact of automation on employment, and consequently on income tax revenues, has led many to defend the introduction of a tax on robots, or on the use of robots, to either compensate for the potential revenue loss, or to slow down the process of automation. This paper argues that whilst automation presents significant challenges to tax systems, the introduction of a new tax on robots –or on their use– is not an effective mechanism through which to address these challenges."
 
We discuss the idea of taxing robots, whether the tax is different from a tax on other types of capital investment, the behavioral motivations for a desire to tax robots, and other issues.