New York Times, A Swiss Banker Helped Americans Dodge Taxes. Was It a Crime?:
Diane Butrus, a business executive from St. Louis, wandered the streets of Zurich, looking for a bank that would help her keep $1.5 million hidden from America tax collectors.
One bank after another turned her down on that afternoon in 2009. They were worried about a United States crackdown on tax evasion and were no longer willing to shelter American money.
Finally, across the street from a city park, up a discreet elevator, seated in a luxurious conference room, Ms. Butrus found a banker ready to help. His name was Stefan Buck.
Mr. Buck said that his employer, Bank Frey, would be happy to take Ms. Butrus’s money, according to court documents and interviews with Mr. Buck and Ms. Butrus. He instructed her to wire the $1.5 million to Bank Frey. He told her that her name wouldn’t be attached to the new account. It would be known internally as Cardinal, an alias she chose in a nod to her favorite baseball team.
After that, Ms. Butrus contacted Mr. Buck via prepaid cellphones she picked up at a Walgreens drugstore. Every six months or so, she flew to Zurich to withdraw money directly from Mr. Buck. She would return to the United States secretly carrying just under $10,000 in cash — the cutoff for having to make a customs declaration.
The setup allowed Ms. Butrus to avoid paying tens of thousands of dollars in income taxes. And it wouldn’t have been possible without Mr. Buck and Bank Frey.
As much as chocolate and watches, Switzerland is known for bank secrecy. That made the country a destination for money that the wealthy wanted to hide. Last decade, it also made Swiss banks targets for an assault by the United States government, which was tired of Americans escaping taxes on money in offshore accounts.
Many banks came clean, divulging their clients to American authorities. Many Americans, including Ms. Butrus, searched for new places to park their money.
Bank Frey was among the very few to defy the legal onslaught. And Mr. Buck, a clean-cut and self-confident 28-year-old at the time he met Ms. Butrus, was the bank’s public face, responsible for landing and then managing American accounts.
Cause of Action Institute (“CoA Institute”) today released a groundbreaking investigative report, Evading Oversight: The Origins and Implications of the IRS Claim that its Rules Do Not Have an Economic Impact, that reveals how the IRS has developed a series of self-bestowed exemptions allowing the agency to evade several legally required oversight mechanisms. The report outlines in detail how the IRS created this exemption to exempt itself from three critical reviews intended to provide our elected branches and the public an opportunity to assess the economic impact of rules before they are finalized.
Read about the report in today’s Wall Street Journal [The IRS Evades Accountability—And Its Excuse Is Ridiculous], including suggestions for how the White House and Congress can work together to end this harmful practice.
Sami Ahmed (J.D. 2017, Yale), Cryptocurrency & Robots: How to Tax and Pay Tax on Them, 68 S.C. L. Rev. ___ (2018):
New technologies, such as blockchain, cryptocurrency (e.g., Bitcoin), and artificial intelligence are rapidly changing how transactions occur in the United States. While scholars have started to examine how a number of areas of law should adapt, very little work has been done on what these changes mean for taxation. Yet these developments could have a huge impact on tax revenues. For example, some approaches to taxing transactions using cryptocurrency could result in these transactions being conducted abroad, beyond the reach of the U.S. taxing authorities. And if robots replace large segments of the labor force, this could drastically shrink federal and state income tax bases.
Rory Van Loo (Boston University), Consumer Law As Tax Alternative:
The law and economics paradigm has traditionally emphasized tax and transfer as the best way to achieve distributional goals. This Article explores an alternative. Well-designed consumer laws—defined as the set of consumer protection, antitrust, and entry barrier laws that govern consumer transactions—can make markets more efficient and lessen inequality.
It has been about a month since Craig Avedisian was declared an almost-genius, a finalist in a “genius challenge” contest with a $1 million prize. Whatever else is going on in the right and left hemispheres of his brain, the designation has not sunk in yet, he said.
“Here’s a guy, a solo lawyer, who thought he had an idea, and I got this far,” he said. “It was David versus Goliath, and David got heard. That’s the essence of it.”
Mr. Avedisian, 54, is not one of those a disheveled-looking Nobel Prize types who has tramped around an Ivy League campus the way Albert Einstein or John F. Nash Jr., of “A Beautiful Mind,” did. He is tallish and looks trim in a dark suit, a crisp white shirt and a carefully knotted tie. A commercial litigator, he lives on the Upper East Side of Manhattan. ...
Other measures of exceptionalness? He said he did not know his I.Q. He said he had a B average in law school.
But then, he is only an almost-genius. For now. Maybe he will win the contest and become a full-fledged genius.
He reached his current status because of an idea he submitted when the Metropolitan Transportation Authority announced the “genius challenge” last summer, a few days after Gov. Andrew M. Cuomo declared a state of emergency for the city’s failing subway system. By the agency’s count, Mr. Avedisian’s was one of 438 entries from 23 countries. ...
Mr. Avedisian ... said his idea could expand capacity on subway trains by 40 percent on average and by 65 percent on some trains. He called it “simple” and “user-friendly.” ...
Fairness in the tax system seems unachievable when the well-advised free-ride on the many benefits of an organized global economy paid for by tax revenues extracted from others. While those publicly accused of ‘tax-dodging’ point to their full compliance with all applicable laws, they are substantially less forth-coming about their efforts to influence the shape of the law to their own benefit. All too often, tax policy appears to respond primarily to those with the resources to influence the policy-makers. As the system becomes increasingly unresponsive to legitimate policy goals and increasingly out of touch with justice — perceived and actual — public perceptions about the system understandably trend toward the cynical.
Wall Street Journal: A Cure for Our Fixation on Metrics, by Jerry Z. Muller (Catholic University; author, The Tyranny of Metrics(Princeton University Press 2018)):
Measuring results is all the rage in organizations, but it is often wrongheaded and counterproductive.
In recent decades, what I call “metric fixation” has engulfed an ever-widening range of institutions: businesses, government, health care, K-12 education, colleges and universities, and nonprofit organizations. It comes with its own vocabulary and master terms. It affects the way that people talk and think about the world and how they act in it. And it is often profoundly wrongheaded and counterproductive.
Metric fixation consists of a set of interconnected beliefs. The first is that it is possible and desirable to replace judgment with numerical indicators of comparative performance based on standardized data. The second is that making such metrics public (transparency) assures that institutions are actually carrying out their purposes (accountability). Finally, there is the belief that people are best motivated by attaching rewards and penalties to their measured performance, rewards that are either monetary (pay for performance) or reputational (rankings).
But not everything that is important is measurable, and much that is measurable is unimportant. Most organizations have multiple purposes, and that which is measured and rewarded tends to become the focus of attention, at the expense of other essential goals.
