5 1/2 Problems with Legal Positivism and Tax Law

Essay by: Bret N. Bogenschneider

2017 PEPP. L. REV. 1 (2017)

This essay is a reply to the famous paper by John Gardner, Legal Positivism: 5 1⁄2 Myths, and the more recent paper by John Prebble, Kelsen, the Principle of Exclusion of Contradictions, and General Anti-Avoidance Rules. The reply is developed from the perspective of tax law where the respective issues are of major significance. The “5 1⁄2 problems” correspond to Gardner’s arguments and are as follows: (#1) Legal Positivism centers on determining whether a tax law is legally valid based on its source (e.g., the legislature enacted a valid law applying tax at the rate of 25%). However, in the tax context, a second-stage assessment is nearly always necessary to determine whether the scope of the tax law extends to the particular fac- tual situation at issue (e.g., the tax base includes xyz). The second-stage assessment means deciding a case on the merits and encompasses the vast majority of legal inquiry relevant to domestic and international tax practice; (#2) Logical Positivism is often endorsed by Legal Positivists as a method of legal interpretation in the tax context; (#3) Legal Positivism is not normatively inert where it is applied as a method of legal interpretation; further- more, tax and legal practitioners are not committed to normative modes of legal analysis in evaluating cases on the merits; (#4) Legal Positivism has been applied to challenge the validity of General Anti-Avoidance Rules (GAARs) on the grounds that formalistic tax avoidance planning by multinational firms is justified by the rule of law; (#5) Legal Positivism has been applied to reach a “double non-taxation” outcome based on an overly-broad view of the valid scope of tax treaties; and (#5 1⁄2) legal philosophy of- ten lacks practical validity.

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A Practical Solution to the Marriage Penalty

Article by: Margaret Ryznar

44 PEPP. L. REV. 647 (2017)

In the federal income tax code, there is a marriage penalty resulting from tax brackets that do not double upon marriage.  This marriage penalty persists despite universal condemnation of it,  penalizing a significant portion of married women who work and many same-sex couples.

This Article proposes a novel way to deal with this marriage penalty by creating a filing status for dual income couples that earn an amount within a particular percentage of each other.  This filing status would be the same as the current married filing status, except it would double the rates of single filers by accommodating two incomes.

This approach represents a break from the status quo of only separating single taxpayers from married ones, which fails to consider that in reality there are two types of married couples: one- and two-income.  This proposed solution differs from previous ones that require married couples to file as single individuals and that ignore marital status.  Adding another filing status for two-income married couples is a practical solution to the marriage penalty that causes the least upheaval to the general legal framework because it continues to treat spouses as a single economic unit.


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Embracing Airbnb: How Cities Can Champion Private Property Rights Without Compromising the Health and Welfare of the Community

Comment by: Emily M. Speier

44 PEPP. L. REV. 387 (2017)

Peer-to-peer services offer participants considerable advantages whether they are a provider of such services or a user of them.  The Airbnb phenomenon is an example of how technological advancement has transformed the rental industry and has signaled a societal acceptance of a sharing economy.  However, the question now is to what extent cities should regulate this influx of short-term rentals while still preserving the property rights of homeowners.

Much of the answer to this question depends on each city’s individual interpretation of specific areas of the law.  Some legal issues raised by regulation and explored by this article include the property rights of homeowners, zoning restrictions on short-term rentals, and taxation responsibilities.

Thus far, there have been several city-specific approaches to regulating Airbnb.  This Comment contrasts San Francisco’s use of a permitting system with New York’s adherence to its Multiple Dwelling Law and analyzes the benefits and ramifications of each.  Then, it turns to Portland’s Shared City initiative, which provides a more-balanced approach by combining the benefits of the permitting system with an enforcement mechanism to allow the city to realize the full benefits of the law.  It concludes by urging more cities to follow Portland’s lead because it provides an ideal middle ground between preserving an owner’s right to engage in short-term rentals and protecting the nature of the city for all residents and visitors alike.

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