New Article: Francine J. Lipman, Tax Audits, Economics, and Racism, Oxford Research Economics and Finance (2022 Forthcoming). Abstract:
The Internal Revenue Service (IRS) is the federal agency charged with tax revenue collection. In fiscal year 2020, the IRS collected $3.5 trillion in taxes, which represented about 96 percent of aggregate annual federal funding (IRS, 2020). In its mission statement the IRS states that its primary role is to enforce tax laws. The IRS’ website announces that it is responsible “to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share,” among similar duties. Nevertheless, the IRS’ most recent official estimate of the “tax gap” or the amount of net taxes owed by taxpayers who did not “pay their fair share” even after IRS enforcement efforts was $1.143 trillion for the three-year period 2011-2013 or $381 billion average annually. This amount is more than all the income taxes paid by 90 percent of all taxpayers (Rossotti & Forman, 2020). Assuming constant compliance rates, the Treasury has estimated that the tax gap in 2019 was $584 billion, $7 billion over the decade, or 15 percent of annual tax liabilities (IRS, 2019). Economists have estimated that the tax gap was at least $630 billion in 2020 (Sarin & Summers, 2019).
Despite these titanic uncollected tax obligations and the IRS’ patent failure to accomplish its charge and stated goal every year, Congress has significantly cut the IRS budget since 2010. Budget cuts have occurred even though Congress has been requiring broader and deeper IRS engagement in tax reform, health care, and economic stimulus payments. The IRS has responded to these budget cuts and additional work with meaningful decreases in its enforcement activities even with increasing annual tax gaps. Most notably, the audit rates of corporations and high-income individuals have dropped precipitously. Audits on millionaires have plummeted 71 percent (Center on Budget and Policy Priorities, 2021) and on large corporations they have dropped 51 percent (Huang, 2020). As a result, voluntary compliance rates likely have not stayed constant, but more likely have declined.
Past IRS Commissioners and notable economists have found that the IRS’ reported estimate of the tax gap significantly understates sophisticated tax evasion among wealthy taxpayers and large corporations (Guyton et al., 2021; Debacker et al., 2020; Alstadsaeter et al., 2019; Johns & Slemrod, 2010). IRS Commissioner Charles Rettig in testimony before Congress estimated that the tax gap could be as high as $1 trillion a year or almost 30 percent of gross revenues (Davidson, 2021). Unless systemic changes are made, Americans can expect to lose 3 percent of gross domestic product or $7.5 trillion in tax liabilities due and payable under current tax law over the next decade (Rossotti et al., 2020; Sarin, 2021).
The IRS, economists, scholars, and policy experts generally agree on an effective remedy. The tax gap could be reduced by increased funding for targeted IRS enforcement that would more than pay for itself severalfold (U.S. Department of the Treasury, 2021; Holtzblatt, 2021, Huang, 2020). Despite this obvious and lucrative remedy, Congress has done the opposite while certain representatives simultaneously complain about increasing federal deficits. Why has Congress defunded the IRS when the annual tax gap has soared? Why has the IRS decreased audits of the highest income taxpayers and largest corporations when economists have estimated they are responsible for more than 70 percent of the tax gap? This article will attempt to provide a critical tax framework with which to analyze this enigma.
New Article: Rachel F. Moran, The Pocketbook Next Time: From Civil Rights To Market Power In The Latinx Community, 73 Am. L. Rev. 579 (2022). Abstract below:
The United States is undergoing a demographic transformation. Nearly one in five Americans already is Latinx, and the United States Census Bureau projects that by 2060, nearly one in three will be. Latinx will substantially outnumber every other historically underrepresented racial and ethnic minority group, and non-Hispanic whites no longer will be a majority. Those changes have unsettled traditional approaches to full inclusion.
Civil rights activists have suffered numerous setbacks, and the burgeoning Latinx population is searching for other paths to belonging. Some leaders have turned to growing Latinx market power to demand recognition and equal opportunity. These efforts rely heavily on aggregate contributions that Latinx make to the labor force, consumption of goods and services, and entrepreneurship. Advocates use these statistics to show that Latinx are vital to continued prosperity for all Americans.
Aggregate statistics do not grapple with the internal heterogeneity of the Latinx population, particularly along lines of class and immigration status. Nor do the numbers address the ways in which the law itself constrains market participation. Earlier movements to promote economic empowerment are instructive. Marcus Garvey’s Universal Negro Improvement Association (UNIA), though not a Latinx movement, mobilized working-class Black Americans to advance race pride and an enterprising spirit. That initiative foundered in the face of two implacable forces: opposition from middle-class Black leaders committed to a civil rights agenda and a capitalist system that made little room for entrepreneurship by poor people. Cesar Chavez’s labor organizing for the United Farm Workers (UFW) is the most famous mobilization to advance Latinx economic interests, and his movement continues to influence activists to this day. The UFW’s rise and fall reveal how disputes over the treatment of the undocumented and legal battles over union tactics divided the membership and drained precious resources.
These lessons of history reveal the limits of both market aggregation and traditional civil rights strategies in addressing contemporary Latinx labor force participation, political consumerism, and entrepreneurship. Aggregation conceals distinct challenges that Latinx face depending on whether they are working-class or middle-class, undocumented or legally present. For working- class and undocumented Latinx, the most essential reforms depart from a civil rights framework, requiring structural investments in human capital and comprehensive immigration reform. For middle-class and legally present Latinx, civil rights can be a useful tool in fighting discrimination on the job and in lending markets. However, new approaches will be needed to address exclusionary social networks, which create barriers to advancement at work and limit access to capital. To leverage growing numbers, Latinx therefore must forge innovative strategies that recognize the intricate interdependency of the civic square and the marketplace.
New Article: Tressie McMillan, America Turned the Greatest Vehicle of Social Mobility Into a Debt Machine, N.Y. Times (May 21, 2022). Excerpt below:
If it weren’t for all of the Black women students milling about, Bennett College in Greensboro, N.C., would be the picture of Hollywood’s idea of a small liberal arts college. The red-brick architecture anchors a manicured quad. Wide footpaths crisscross the small but tidy commons.
And then a brick wall announces a boundary not quite breached by the surrounding area’s racial segregation and economic precarity. But it is a half wall, one on which you can sit and stare outside the bubble toward the reality from which students arrive. As metaphors go, it is a strong one: Black colleges like Bennett cannot afford to build a wall so high that the world does not intrude.
New Article: Martha M. Ertman, Reparations for Racial Wealth Disparity as Remedy for Social Contract Breach, Law and Contemporary Problems, Forthcoming. Abstract below:
Acute crises such as the COVID-19 pandemic and the 2008 financial meltdown exposed and exacerbated chronic racial wealth disparities. Those disparities accumulated over time as government and private actions—often involving contracts—systemically benefitted White Americans and institutions at the expense of African-Americans. This essay focuses on a private law mechanism—loan contracts—as one important contributor to systemic racial wealth disparities, labels particular lending contracts and related government action as breaches of the social contract, and proposes a restitution-based form of reparations as a remedy for that breach.
New Article: Lia Epperson, Are We Still Not Saved? Race, Democracy, and Educational Inequality, 100 Ore. L. Rev. 89 (2021). Abstract below:
Thirty-four years ago, in his seminal book, “And We Are Not Saved: The Elusive Quest for Racial Justice,” Derrick Bell provided a critical view of American history and constitutional jurisprudence to illustrate the challenges the United States faces in reaching true equality. In his enlightened observations about the structure of our republic, Bell refers to “the American contradiction.” To see true progress toward meaningful equality, he contends, we must reckon with the challenging truth of our history—that we are a nation founded on this “constitutional contradiction”… In his work, Professor Bell argued that this American contradiction, “shrouded by myth,” serves as a perpetual impediment to addressing historic and persistent forms of racial injustice. This, he says, is “the root reason for the inability of black people to gain legitimacy.” This reality of racial inequality is part of our culture and common history. It is the contradiction embedded in the ideology that formed our republic.
New Article: Gregory E. Louis, Bridging the Two Cultures: Toward Transactional Poverty Lawyering, 28 Clinical L. Rev. 411 (2022). The article is here: Louis – Bridging the Two Cultures. Abstract below:
As U.S. society emerges from the COVID-19 pandemic that decimated Black and Brown communities and law schools reexamine their curricula after the summer of 2020, a moment of interest convergence has emerged: the need for legal education to matter for Black and Brown livelihoods. This Article proposes a concrete measure for meeting this moment. Informed by CUNY School of Law’s lawyering seminar and building upon scholarship long calling for a paradigm shift toward a transactional understanding of social justice – especially Professor Susan R. Jones’s work – this Article calls upon law schools to leverage their positions and resources toward Black and Brown economic recovery. Specifically, the Article proposes that law schools do so by requiring their students to enroll in a transactional poverty law seminar and clinic instructing students toward assisting socially and economically disadvantaged small businesses with applications for capitalization and finance. With such a course, law schools can become centers of what Professor Jones terms “action research,” assisting the flow of assets to populations historically locked out of capital, most recently with the pandemic economic stimulus programs. It also would serve to enlighten privileged law students on the stark exclusions within the U.S. market economy and initiate socially and economically disadvantaged law students into transactional practice. Through advancing mutual benefit about this principle of double discovery, the course would serve to bridge the gap between the two Americas as well as the silos of litigation and transactional lawyering.
New Article: Yael Cannon, Closing the Health Justice Gap: Access to Justice in Furtherance of Health Equity, 53 Colum. Hum. Rts. L. Rev. 517 (2022). Abstract below:
A massive civil “justice gap” plagues the United States. Every day, low-income Americans—and disproportionately people of color—go without the legal information and representation they need to enforce their rights. This can cost them their homes, jobs, food security, or children. But unmet civil legal needs in housing, employment, and public benefits, for example, are not simply injustices—they are well-documented drivers of poor health, or social determinants of health. Those marginalized by virtue of both race and socioeconomic status are particularly harmed by inaccessibility to justice and also by chronic health conditions and lower life expectancy. When a tenant walks into court alone for an eviction hearing and faces an experienced landlord’s attorney, the tenant is unlikely to prevail, and her eviction can lead to myriad poor health outcomes.
The health justice movement leverages law and policy to advance health equity. In recent years, it has gained tremendous traction, especially due to the COVID-19 pandemic’s spotlight on health disparities. In tandem, the access to justice movement is progressing with the advancement of major federal, state, and local legislation and initiatives. However, the movements have been running on parallel tracks, and their connections have been under-examined. This Article puts the two movements and bodies of scholarship squarely in dialogue with one another.
New Article: Diane Klein, Teaching Critical Tax: What, Why, And How, Pittsburgh Tax Review, Forthcoming. Abstract below:
“Critical tax” is an approach to the analysis of tax law and policy that takes race, gender, sexual orientation, disability, citizenship/immigrant status, and other historically marginalized statuses into account, and does so in a way that is centrally focused on the role of tax law in creating and perpetuating persistent economic inequality and disadvantage. This descendant of Critical Legal Studies and Critical Race Theory has been around for more than twenty years. And yet, critical tax is almost entirely absent from the casebooks and syllabi used for the teaching of the core tax courses. This can and should change, and this Article is a practical guide to both why and how teachers of tax law should integrate critical tax perspectives into their courses.
Part I explores a basic question: what is “critical tax”? Part II advocates for the addition of critical tax perspectives to the teaching of tax law by describing some of the intellectual, pedagogical, and professional benefits associated with it. Finally, Part III shows tax teachers how to add these perspectives relatively seamlessly into traditional tax courses, by providing an annotated bibliography of readily available readings that can be added to Syllabi for the basic Federal Income Tax course. This bibliography is intended to provide some points of access to the critical tax literature; it is only a starting point, of course, and is neither comprehensive nor exhaustive.
The recommendation to include critical tax perspectives has precursors. In 2010, Professor Dorothy Brown published an essay called “Teaching Civil Rights Through the Basic Tax Course” in the St. Louis Law Review. Professor Brown at that point framed her approach as “how to incorporate race and class into the basic tax course,” which she paraphrases in her title as “civil rights.” She was not, at that stage, arguing for the inclusion of distinctively critical tax perspectives; it was challenging enough at that time simply to advocate that race (and class, and in some cases, gender) be taken into account at all. Similarly, while Anthony Infanti and Bridget Crawford’s 2009 anthology, CRITICAL TAX THEORY: AN INTRODUCTION, collects many important early works of feminist, queer, and other “outsider” tax scholarship, it too is now more than a decade old, a decade during which the editors and many others have made numerous very substantive contributions to the literature. The legal academic and pedagogical landscape has also changed in the past decade, and Critical Race Theory is currently on everyone’s radar. This Article, and particularly Part III, the critical tax bibliography, is intended to reflect this.
New Article: Ederlina Co, Abortion Privilege, 74 Rutgers L. Rev. 1 (2021). Abstract below:
This Article launches a critical dialogue about the abortion privilege. On the one hand, most abortion patients are low income or live below the poverty line and are disproportionately women of color. Many of these patients encounter multiple restrictions on abortion and must travel lengthy distances to abortion care facilities. These patients take center stage in abortion rights cases and in abortion rights discourse. On the other hand, there is a smaller but not insignificant group of abortion patients for whom abortion care is paid for by private or public health insurance or available out-of-pocket funds. Many of these patients live in states where abortion is unrestricted, and abortion care facilities are accessible often in the county in which they live. These patients experience abortion as a form of ordinary health care and rarely show up in abortion rights cases and abortion rights discourse. They have the abortion privilege.
This Article reveals the abortion privilege and contends that its recognition and thoughtful incorporation into abortion rights law and discourse could help redistribute the oppressive load women without the same privilege carry in connection with the right and help shore up the abortion right. First, demonstrating widespread reliance on abortion, including by women with the abortion privilege, is crucial to the stare decisis argument to uphold Roe v. Wade. Demonstrating widespread reliance on abortion would also help reduce the abortion stigma, which is both harmful to women and makes demonstrating widespread reliance on abortion so difficult in the first place. Second, the abortion debate and abortion itself has changed, but women’s experience with abortion as a form of ordinary health care has not surfaced as part of the public narrative about abortion. Such a narrative demonstrates that abortion is like other medical procedures and confirms that women have the knowledge to decide the outcome of their pregnancies without state intervention. Although not everyone may be willing to see abortion as ordinary health care today, they may be open to seeing it that way in the future if we begin to tell that story. Finally, as equality re-emerges as a prominent theme in legal and political arguments in support of the abortion right, to advance that argument with integrity and to coalesce a base of support around it, there must be concerted efforts within the abortion rights movement to acknowledge and reckon with the inequalities among women who make the abortion decision. The abortion privilege framework is designed to recognize these inequalities and prompt efforts to equalize them. In addition, the framework is designed to preempt the deprioritization of women without the same privilege and make clear to privilege holders that the abortion privilege perpetuates their inequality, too.