Thursday, August 10, 2017

How the Panama Papers Changed Pakistani Politics

Why Tax Reform Is So Fiendishly Difficult Bloomberg. As we’ve said, every loophole has a constituency.

In 1926, Congress created the Joint Committee on Taxation (JCT) and its staff. This article explains how, partly by design but largely by happenstance, the JCT staff helped change the nature of the legislative process. By serving at or near the intersection of three great divides in government — those between the parties, the houses of Congress, and the legislative and executive branches — the staff demonstrated the value of unelected professionals assisting directly in the formation of legislation and led Congress to rely more on its own resources in the legislative process rather than those of the executive branch. 

Tax regulation authors habitually infuse regulations with explanatory examples. These examples are viewed favorably by both the government that encourages their drafting and the taxpayers who regularly rely on such examples to assist them in dealing with the notoriously complex tax rules. Despite the ubiquity of these examples, there is no published guidance for their drafting, their use, or their interpretation. The first original contribution of this Article is the exposition and classification of the advantages and deficiencies in the current use of examples in tax regulations. This Article is the first to question the rationale behind the ubiquitous use of examples in tax regulations. The Article uses data collected by original surveys of expert tax professionals and government employees involved in drafting tax regulations.

The Pakistani Supreme Court’s decision to dismiss Prime Minister Nawaz Sharif was based on corruption accusations stemming from the Panama Papers, a trove of leaked documents from the Panamanian law firm Mossack Fonseca.

The ruling is one of the most stunning outcomes of the documents’ release, which implicated dozens of politicians and powerful international figures in shady offshore business dealings. Mr. Sharif is the second world leader, along with Sigmundur David Gunnlaugsson, the former prime minister of Iceland, to resign as a result of the leak.

What did the Panama Papers reveal?

Mr. Sharif’s name never appears in the Panama Papers, but three of his six children – Maryam Nawaz Sharif, Hasan Nawaz Sharif and Hussain Nawaz Sharif – were determined to have purchased luxury properties in London using offshore holdings. His children have maintained that the companies were set up with legally obtained money, but critics claim otherwise.

According to detailed reports from the International Consortium for Investigative Journalists (ICIJ), who first released the Panama Papers in early 2016 after a yearlong investigation, Mr. Sharif’s three children headed companies that owned four luxury flats in London’s Park Lane neighborhood.

His daughter Maryam, once seen as his likely political successor, was listed as the owner of two British Virgin Islands-based shell companies – Nielsen Enterprises Limited and Nescoll Limited – which were set up in the early 1990s, just after her father’s first term as prime minister ended. She was underage at the time. The companies owned “a U.K. property each” for use by the family of the owners, according to the documents.

TaxVox, The Case of Oregon’s Bicycle Excise Tax:

Road trips are a staple of my family’s summer. We load up the van and head to the nearest state park, flash our Michigan Recreation Passport and off we go, hiking and biking. That “passport” is an annual $11 fee that we add to our license plate renewal payment. In exchange, we get unlimited access to all state parks, and the state uses the money, along with day-trippers’ fees, to maintain and improve the facilities.

Oregon, one of five states with no sales tax, just passed such a tax on bicycles to help fund trail maintenance and improvement. That decision generated a good bit of controversy, and as a bicycle-riding, trail-loving taxpayer, I wondered why a bicycle tax that supports bicycle trail use is so contentious.

Here are some details: Starting in October, Oregon will collect $15 on the purchase of every bicycle that retails for $200 or more. The state expects the excise tax to generate $1.2 million annually that will be used to “expand and improve commuter routes for non-motorized vehicles and pedestrians, including bicycle trails, footpaths and multi-use trails.”

Wei Cui (British Columbia), Destination-based Cash-Flow Taxation: A Critical Appraisal, 67 U. Tor. L.J. 301 (2017):

This article offers the first comprehensive scholarly response to proposals for destination-based, cash-flow taxation (DCFT). DCFT proposals have attracted heightened public attention in 2016 because of the incorporation of one version into the US House Republican blueprint for tax reform and Donald Trump’s subsequent election to the White House. They also continue to fascinate tax specialists by suggesting that corporate profit can be taxed not only in countries of ‘source’ or ‘residence’ but also (or even exclusively) in the countries where sales to final consumers occur. This article clarifies the logical structure of DCFT proposals and exposes substantial gaps between their rhetoric and technical details.