Faculty Scholarship Digest
Stephanie R. Hoffer, Redirecting Direct Democracy: Non-Essential Spending as Political Speech, 95 MARQ. L. REV. 563 (2012).
Finding the optimal level of local taxation to provide nonessential but valued local services can be a challenge for representative democracy for a number of reasons including imperfect information and agency problems between representatives and voters. One response, direct democracy, which allows voters to limit such spending, either by refusing to support levies or through ballot initiatives that place permanent limits on such taxes or spending. The democratic input of direct democracy is important, but its usual tools are so crude that direct democracy is also likely to leave the level of taxing and spending too high or, more likely, too low. After reviewing the literature on this dilemma, Stephanie offers a highly original proposal to address the problem, drawn from her earlier research on the German church tax: individuals would be able to “opt out” of paying taxes for non-essential local services. This method, she argues, would allow the continued conversation between voters and their representatives about appropriate spending levels on nonessential services (the benefit of direct democracy) and come closer to setting optimal levels of such spending than the all-or-nothing approach of levies and ballot initiatives.
The article draws out the proposal in significant detail and directly confronts the objections to such a novel approach. Perhaps the most obvious objection is the free-rider problem: who would choose to pay a tax when one could “opt out” and have others pay for you? In the German experience, however, two-thirds do not opt out, and Stephanie explores the reasons why and whether those reasons would likely translate to a secular, local context in the United States. In addition, the article explores in detail some of the administrative challenges of the proposal (for example, what counts as “non-essential” spending and who decides). Ultimately, Stephanie argues, the proposal will have the advantage of creating a dialogue between voters and representatives, confer legitimacy on resulting spending, and produce closer-to-optimal spending levels in a manner better in each sense than the existing problematic poles of abolishing direct democracy or relying on its current forms.
Stephanie Hoffer & Christopher J. Walker, Is the Chief Justice a Tax Lawyer?, 2015 Pepp. L. Rev. 33 (2015).
In this contribution to a tax-tinged symposium on King v. Burwell, the second Obama administration apparent Supreme Court victory regarding the Affordable Care Act, Stephanie and Chris combine their expertise to note two particularly salient features of Chief Justice Roberts’ opinion and, by considering them from a tax perspective, develop insights about the potential meaning of the decision going forward.
First, Stephanie and Chris note that Chief Justice Roberts’ “move in King v. Burwell from text or formality to context or substance” tracks an “ever-present feature of tax law”: the difference between written words and the reality of life that drives tax law’s “substance-over-form” doctrine. Under this doctrine, it is not the taxpayer’s characterization of a transaction that matters, but rather the transaction’s economic effect. Suggesting that “the Chief’s spirit animal is, indeed, a tax lawyer,” the authors note other interpretive approaches from tax law in the opinion and suggest the Chief and other jurists “interested in replacing textualism with contextualism” ought to continue to look to tax law, which has long experience in such interpretations.
Second, in King, Chief Justice Roberts remarkably did not follow the obvious path to finding for the government, which would have been deferring to the agency’s interpretation of the statute under Chevron. Instead, the Court ruled that Chevron deference does not apply to “questions . . . of ‘deep economic and political significance’” and interpreted the statute de novo. This approach could signal a deep and enduring shift in power from the executive to the judicial branch—as many commentators have praised or condemned. But Stephanie and Chris are not so sure. They suggest that this aspect of the opinion may “be good only for tax” and that “tax exceptionalism”—“the perception that tax is so different from the rest of the regulatory state that general administrative law does not apply” (a phenomenon the authors have elsewhere approvingly detailed as a dying one)—may still be operating here, citing in particular Chief Justice Roberts’ emphasis on the lack of IRS expertise in health insurance policy and his “repeated use of the term ‘IRS Rule’ to describe the agency regulation under review.”
Stephanie Renee Hoffer (w/Peter Postlewaite), International Taxation, Corporate and Individual (6th Ed.) (Car. Acad. Press 2011).
The latest edition of this handsome, leading two-volume treatise in a constantly evolving field maintains its currency as well as the other features that have made it a go-to resource in the area: clear and comprehensible writing, thoughtful, accurate and complete coverage, and valuable footnotes to deeper treatments of particular issues.
Stephanie Renee Hoffer (w/Philip Frederick Postlewaite), INTERNATIONAL TAXATION, CORPORATE AND INDIVIDUAL (Carolina Academic Press 5th ed. 2010).
Stephanie joins the latest edition of this leading two-volume treatise on international taxation. This book covers the taxation by the United States of U.S. entities for their income arising outside of the U.S. (Volume I) and the taxation by the United States of foreign entities for their income arising inside the U.S. (Volume II). The treatise is designed both to explain this field to the international tax novice and to serve as a useful reference to the experienced reader. These dual objectives are achieved by wonderfully clear exposition that is both accessible and comprehensive. Relentless globalization heightens the importance of this work and adds to the challenge of keeping it current. In this latest edition, Stephanie and her co-author rise to that challenge admirably.
Stephanie Renee Hoffer (w/Peter Postlewaite), INTERNATIONAL TAXATION, CORPORATE AND INDIVIDUAL (7th Ed.) (Car. Acad. Press 2011).
The latest edition of this handsome, leading two-volume treatise in a constantly evolving field maintains its currency as well as the other features that have made it a go-to resource in the area: clear and comprehensible writing, thoughtful, accurate and complete coverage, and valuable footnotes to deeper treatments of particular issues. The volumes cover both the taxation by the United States of U.S individuals and entities on their income outside the U.S. and the taxation by the United States of foreign individuals and entities on both their U.S. and “foreign source” income.