Monday, May 16, 2016

The President's Authority To Unilaterally Raise Taxes Doesn't Stop At Carried Interest

From the TaxProf blog:
Following up on Monday's post, Taxing Carried Interest As Ordinary Income Through Executive Action:
Daniel Hemel (Chicago), The President’s Power To Tax Doesn’t Stop at Carried Interest:
No one can predict with complete confidence whether a court would uphold as-yet-unwritten Treasury regulations addressing carried interest, but I agree with Morgenson (and with the tax experts she cites) that such regulations — if written carefully and finalized after notice and comment — quite likely would pass judicial muster. What Morgenson doesn’t mention, though, is that when it comes to tax reform measures that the Obama administration could implement on its own, carried interest is just the tip of the iceberg. President Obama might not be able to make much of a dent in income inequality without legislative action, but he could raise billions of dollars in revenue while addressing some of the most objectionable tax avoidance strategies employed by U.S. corporations and high-net-worth individuals.
In a forthcoming Cornell Law Review article, The President’s Power To Tax, I set out a list of tax reform measures that the Obama administration could accomplish without an act of Congress.
 All the items on the list are measures that the Obama administration has included in past “Greenbooks.” (The Greenbook is a compilation of legislative proposals on tax-related matters that the President sends to Congress each year.) These are, in other words, reforms that the President has asked Congress to pass, even though his administration already has all the authority it needs. ...
So why is the Obama administration waiting around for a do-nothing Congress to act? The Cornell article runs through several potential explanations. One such explanation focuses on the political cost/benefit structure of revenue-raising. ... Another factor at play is PAYGO, the rule that tax cuts and entitlement expansions must be “revenue neutral.”...MORE
 "NYT Says The President Can Unilaterally End The Carried Interest Loophole".