Level the Playing Field: Consider State Taxes when Developing Salary Caps in the Major Sports

by John Michael Ekblad November 30 2009, 07:25
States and cities tax professional athletes in multiple ways. A traditional method, which applies to athletes and non-athletes alike, is income taxation by the state in which an individual resides. A second method, utilized by twenty states, is to tax athletes when they participate in games other than in the state they reside. [1] This second method is commonly referred to as the “jock tax.” Since the inception of the jock tax, inequality from state to state has been a prevalent issue. The combination of the jock tax and differences between how states tax its residents may make some cities in the United States and in Canada more attractive than others. At the same time, but for a few adjustments that are made to a team’s salary cap, the teams in the major sports are limited to the same payroll as the other teams in the sport. Given the salary cap, teams in hockey, football, baseball, and basketball may find it difficult to compete with teams with more attractive tax situations. To further increase parity in the major sports, changes should be made to salary caps in the major sports based on the different tax situations created by different states. [More]


Sports | Tax

Jurisdictional Competition in a Developing Economy: Law and Policy Issues of the Offshore Structure Use in Russia

by Maria Kuzmina November 30 2009, 01:47
Someone might view the economic crisis times as the best period to broaden one’s business horizons and invest into a new market. The fast growing markets such as China, Brazil, India and to some extent Russia are waiting for new investors. Russia, having more than 140 million inhabitants, i.e. potential consumers, and abundant natural resources remains mostly neglected by investors in many business fields. For decades Russian market was viewed as not a place for those faint-of-heart. Now the growth of political stability and positive developments in legislation make the investment less risky and more attractive. Nevertheless, the still existing differences between local and internationally recognized legislative frameworks and court practices make investors wonder if there is any possibility to opt out of the Russian legal rules.
This article will explore the reasons behind Russian corporate norms that explain the inflexibility of current legislation and court practice and discuss views on future development of the corporate law system of the country. Part II introduces an overview of the policy issues behind the corporate law created specifically for Russia as a developing economy. Part III analyzes the legislation and its drawbacks, provides advice for investors who for various reasons want to opt out of Russian law. Part IV discusses the reasons for the government amending the corporate law, gives a forecast of future developments and provides a general conclusion. [More]

Free Trade versus Protectionism: A Taxing Debate

by Yuejiao Hou October 12 2009, 09:40
President Obama’s September 11th decision to restrict imports of Chinese tires has sparked a taxing debate both domestically and abroad. On top of the preexisting four percent tariff on all tire imports, the president determined to impose additional duties of 35-30-25 percent ad valorem tapered down over three years, specifically upon certain passenger vehicle and light truck tires from China. [1] China responded within days by raising a World Trade Organization ("WTO") challenge to the safeguard, alleging that Obama’s actions are inconsistent with existing international laws. [2] Meanwhile, the proclamation has incited both criticism and praise from a variety of domestic and foreign interests. This article will assess the legality, consequences, and judiciousness of implementing such a tariff and conclude with a word on the free trade versus protectionism debate. [More]

Statistical Sampling: Weighing Costs versus Precision in Providing Taxpayer Guidance

by John Michael Ekblad October 12 2009, 07:42
In the months preceding elections in the United States it is difficult to avoid statistical sampling, as polling projections are everywhere. Only a sample is used to make these projections because it would take too much time and be too expensive to determine how every voter will vote. [1] Statistical sampling has many others uses as well, including being used as evidence in a trial [2] or being used to estimate how much a taxpayer owes the government on their tax return. [3] As with elections, to determine the exact result for a tax return, every item in the population would need to be investigated. As a population gets larger, this gets more time consuming and more expensive, especially when the information is collected by experts, lawyers, and accountants. Furthermore, each additional item of the population collected will not result in a proportionate change in the precision of the estimate, because the precision of an estimate varies inversely with the square root of the sample size. [4] Tax deductions and credits may be difficult to calculate, but rather than render them worthless to taxpayers or get rid of them completely, statistical sampling should be encouraged when calculations would otherwise be too difficult to calculate. [More]



The Skinny on Taxing Fatty Foods

by Henry Young September 21 2009, 14:29
I. Introduction

In case you have not read a newspaper, surfed the internet, or been outside your home recently, there is an obesity epidemic in the United States.[1] Search Google News for “’obesity epidemic’” and one will find about seven hundred stories in the last month.[2] Not to dwell on the prevalence of obesity, but according to the Centers for Disease Control and Prevention (CDC) in 2005-2006 “more than one-third of adults, or seventy-two million people [in the United States] were obese;” a number which had “doubled among adults from 1980 to 2004” and which has not decreased since.[3] [More]



Honking and Swearing Never Work: An Examination of Urban Traffic Congestion Remedies

by Samuel Rosenberg March 18 2009, 10:27
For any urban dweller street congestion is a constant source of frustration and angst. While this pain has been universally felt amongst metropolitan areas, the handling of this problem has varied. Despite the recognition of the issue, American urban citizens lost 3.7 billion hours of time and wasted 2.3 billion gallons of fuel sitting in congested streets in 2003. [3] The approaches to alleviating congestion can be divided into two main schools of thought: 1) traditional, demand based responses, and 2) creative, alternative means of reducing congestion through innovation. This article will advocate and focus on the later by noting procedures that have been implemented with commercial vehicles, congestion pricing, and by discussing lessons for possible future policy implementation. [More]

Investing in China through a Hong Kong, SAR entity - Tax considerations for riding the next wave

by Maria Alejandra Maldonado-Adrian March 1 2009, 15:20

I. Introduction.

It is well known that the big movement of capital in the next decade is going to be to Eastern Asia, the People's Republic of China (PRC) and India being the two most preferred targets due to the size of their consumer martkets. This article will only focus on the PRC. As it will be further explained, although foreign capitals may be invested in the PRC directly, from a taxation view point it is recommendable to do so through a Hong Kong, SAR entity. Thus, the Hong Kong tax system is lower and simpler than the Chinese mainland's one, therefore, could be more beneficial for foreign investors. Hong Kong became a Special Administrative Region (SAR) of the PRC on July 1, 1997. It has a high degree of autonomy, except in the areas of defense and foreign policy, and retains its own currency, laws, and border controls. [More]

Grey Area Anatomy: Tax Exemptions for Nonprofit Hospitals

by Samuel Rosenberg February 22 2009, 14:34
I. Introduction

A key battle over America’s healthcare future is being fought in one of the most unlikeliest of places: Urbana, Illinois. Scheduled for argument in front of the Illinois Supreme Court in mid-2009, Provena Covenant Medical Center v. Department of Revenue is poised to set the bar regarding the tax exempt status of nonprofit hospitals.[1] Nonprofit hospitals, such as Provena, account for near sixty percent of the hospitals in the U.S., while the others are either for-profit or government-owned.[2] Oddly, these nonprofit hospitals are actually faring better than their for-profit counterparts. Seventy-seven percent of the 2033 U.S. nonprofit hospitals are “in the black”, while sixty-one percent of for-profit hospitals are profitable.[3] One of the reasons for such high success rates is the ability of non-profit hospitals to receive significant tax exemptions. The Congressional Budget Office reported in 2006 that nonprofit hospitals receive an estimated $12.6 billion in annual tax exemptions on top of the $32 billion in federal, state and local subsidies the hospital industry receives each year.[4] Given such figures, it is not surprising that many hospitals do not make up for the exemptions they receive with the charitable services they provide. This article delves into the federal income tax code applications for nonprofit hospitals and resulting litigation.



Real Estate | Tax

Undocumented Taxation: More Illegal Immigrants Likely to File Returns

by Dan Janes April 20 2007, 10:02
The historic case of James v. United States held that illegal gains constitute income that must be reported, despite any legal obligation which might arise to make restitution. [1] However, a whole different tax question arises for collecting legally earned income from residents illegally in the country. While the issue may not be clear to the millions of immigrants illegally residing in the country, the issue is clear to the Internal Revenue Service. “Everybody is a citizen for tax purposes,” remarks one Baltimore tax-preparer. [2] [More]



Anatomy of a Tax Protester

by Lucy Kalnes March 17 2007, 02:10
I. Introduction

To a certain extent, most everyone becomes a tax protestor of sorts come tax season. The goal in filling out one's tax return is to ensure that one receives every penny back that can possibly be justified -- not that one pays the appropriate amount of tax given one's circumstances. And yet, most of us do indeed pay. Among those that do not pay in full can be found at least two distinct categories of shirkers: the tax evader, and the tax protestor. The tax evader is content to freeride off of the compliance of the rest of society, choosing not to pay taxes but not without tacit reliance on a system that requires taxation. The tax protestor, on the other hand, eschews taxation as a matter of course, proclaiming his distaste for this or any system of taxation by not taking part therein. While the net effect for both the tax evader and the tax protester is the non-or-under-payment of tax, the tax protester feels doctrinally empowered where the tax evader just feels wily. This article is concerned with the tax protester, and will examine first three broad categories into which arguments for the non-payment of the federal income tax fall, and then it will discuss a few different methods through which the tax protester achieves his ends. [More]



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