Poverty Law Prof Blog

Anne Alstott: Equal Opportunity and Inheritance Taxation

The newest issue of the Harvard Law Review features an article of interest: Anne Alstott, Equal Opportunity and Inheritance Taxation, 121 Harv. L. Rev. 469 (2007), full text here.  In the article, Alstott presents her views about what an inheritance scheme that maximized equality of opportunity would look like.   

• ABSTRACT:    

  Equality of opportunity is understood to be one of the bedrock principles supporting the taxation of inheritance. The familiar idea is that inherited wealth offers an unjustified head start for some individuals at the expense of others. In political theory, this principle is closely identified with the branch of liberalism known as resource equality. But the resource equality ideal has not been fully translated into the legal literature.The major legal writings on inheritance taxation use the term “equal opportunity” quite generally and often blend equal opportunity with goals that are distinct, like wealth equalization.

  This Article revisits the topic of inheritance taxation to see whether a single-minded focus on equality of opportunity, interpreted as resource equality, can shed new light on questions of legal design. I conclude that the present estate tax and major proposals for inheritance taxation only weakly track the equal opportunity principle. A system of inheritance aimed at equality of opportunity would look radically different from current law and from classic proposals for reform. It is an open question whether an inheritance tax structured along these lines could be made politically attractive, and in this Article, I do not attempt that task. Instead, my aim is to show the surprising gap between both current law and major reform proposals, on the one hand, and equal opportunity, rigorously interpreted, on the other.

  I draw out four implications of equal opportunity for the design of inheritance taxation. First, the equal opportunity principle supports inheritance taxation in combination with a social inheritance, meaning a government expenditure program that would pay a universal, public inheritance. Second, in an equal opportunity regime, gifts and inheritance received from close relatives would be taxed, while those received from peers, spouses, friends, and strangers would be exempt. This counterintuitive rule would reverse the standard result, which is to tax inheritance from parents, children, and other close relatives at rates equal to or lower than those at which inheritance from others is taxed.Third, the equal opportunity view implies no penalty on so-called “generation-skipping transfers,” which occur when a grandparent leaves her wealth to her grandchildren rather than to her children. Fourth and finally, equal opportunity suggests higher rates of taxation on gifts and bequests received by younger individuals than on those received by older individuals.

I look forward to reading the article and among other things seeing why generation-skipping transfers escape penalty. 
-E.R. erosser@wcl.american.edu

Charity Information and Rankings

Charity rankings and information dissemination got some attention from the N.Y. Times on Dec. 20, 2007 in an article profiling www.givewell.net (the article is "2 Young Hedge Fund Veterans Stir Up the World of Philanthropy" by Stephanie Strom).  There are a number of resources for evaluating charities:

• www.charitynavigator.org/
• www.guidestar.org/index.jsp (recently added an online donation mechanism)
• www.give.org/reports/index.asp (featuring reports on national charities from the BBB)
• www.givewell.net

Only loosely relatedly, Harvard's Hauser Center for Nonprofit Organizations has posted a lot of again loosely related research on their website. 

-E.R. erosser@wcl.american.edu
[NOTE: I'm going to be traveling to El Salvador for the holidays and will only be online periodically, so please excuse the silence -- somewhat normal this month considering postings were also minimal during my time in Ecuador and Peru during the last couple of weeks.]

Edward's "Two Americas" Time Article

Time Magazine recently featured the story, ""Two Americas" Enough for Edwards?" by Karen Tumulty.  It discusses Edwards' coming to focus on poverty issues and the power of his 2004 Two Americas speech. 

-E.R. erosser@wcl.american.edu

Query: procedural court losses based on not having a lawyer

A civil procedure professor emailed me requesting that I see if anybody has a good case or story in which someone loses a lawsuit on procedural grounds because they could not afford a lawyer to be included in a civil pro syllabus.  If you have particular ideas, email me and I will forward them on. 

-E.R. erosser@wcl.american.edu

Some interesting papers

Jonathan Barry Forman, "Promoting Economic Justice in the Face of Globalization," Available Here. 

ABSTRACT: This paper offers recommendations about how we can promote economic justice in the face of globalization. At the outset this paper discusses the dramatic increase in earnings and income inequality since the 1970s, about the time when globalization took off. Next, this paper considers the government's role in countering the free market's tendency to push us toward greater and greater economic inequality. Finally, this paper offer a few recommendations about how our government can promote economic justice in the face of globalization. More specifically, we should fix the tax system, reform the welfare system, restructure the Social Security system, move to a mandatory universal pension system, provide universal health care coverage, and move to full employment.

James J. Fishman, "Regulating the Poor and Encouraging Charity in Times of Crisis: The Poor Laws and the Statute of Charitable Uses," Available Here. 

ABSTRACT: National crises such as September 11th and Hurricane Katrina resulted in an unprecedented outpouring of charitable generosity by Americans, which was encouraged by the government through tax incentives. This paper examines an earlier period of crisis, Tudor England (1485-1603), where the state encouraged philanthropy as a tool of social and political policy. Certain charitable activities were favored and others disadvantaged to spur private sector resources to resolve public problems.

The article discusses the evolution of the laws regulating the poor, which culminated in the Poor Law Legislation of 1601, a process that developed attitudes toward the poor and concepts of need and relief that remain with us today. The article focuses on the Statute of Charitable Uses, which was a part of the poor law legislative package that attempted to solve the problem of poverty. The Statute’s primary purpose was to provide a mechanism to make trustees accountable for the appropriate administration of charitable assets. The Statute’s subsequently far more famous Preamble, which created parameters for the definition of charitable, reflects the law of unintended consequences. A number of questions concerning the Statute are explored: why were some things included and others equally charitable, such as hospitals, not? Why does the wording of the Preamble paraphrase a part of the fourteenth century epic poem, The Vision of Piers Plowman? How did the Statute fit within the broader state effort to control the poor? What was the impact of the Statute on improving charitable accountability? Did the Statute encourage increased giving? Finally, is there anything we can glean from the Tudor experience of dealing with an economic and social crisis to apply to disaster relief assistance and philanthropic giving today?

-E.R. erosser@wcl.american.edu

David Brooks, Dictatorship of Talent (China - USA?)

David Brooks' recent editorial "The Dictatorship of Talent," N.Y. Times, Dec. 4, 2007, discusses in an interesting way the rise an unforgiving, high-stakes testing based, meritocracy in China.  It is worth reading for its own sake, but I will admit being struck by some of the similarities with the US (an obsession with talent, over reliance on high stakes tests, and somewhat at odds with Brooks' perspective, the coming together of business and government elites into a corpocracy to use Brooks' language).

-E.R. erosser@wcl.american.edu

Economic Costs of Inequality - Richard H. McAdams

Paper/Chapter of interest posted to SSRN:  Richard H. McAdams, "Economic Costs of Inequality" (November 2007). U of Chicago Law & Economics, Olin Working Paper No. 370 Available at SSRN: http://ssrn.com/abstract=1028874.  Abstract:

This brief chapter surveys some of the economic literature concerning the instrumental costs of material inequality. Economic theory predicts, and econometric evidence finds, that inequality increases crime and political corruption and, in certain circumstances, constrains growth.

-E.R. erosser@wcl.american.edu (Courtesy of the Faculty Blog of the Univ. of Chicago)

AALS Poverty Related Sessions

There are lots of Association American Law Schools Annual Meeting sessions that touch on poverty law so I am going to list them by date but the details are available through the links.  The Poverty Law Section's panel is on Saturday.

Thursday Jan. 3, 2008

• Section on Socio-Economics
  • 9:00 - 10:00 a.m. Deans’ Forum on ? and Economic Justice
  • 10:10 - 11:10 a.m.
    • Corporate Governance, Fiduciary Duties, and Social Responsibility
    • Socio-Economic Dimensions of Academic Freedom In Katrina’s Wake
    • Telecommunications and the Internet, Race, Ethnicity, Language, and Socio-Economics
    • How White-Collar Criminologists Are Falsifying The Conventional Economic Wisdom and Building Socio-Economic Theory
  • 11:20 a.m - 12:20 p.m.
               Social Entrepreneurship and Socio-Economics
                            Speakers: William Drayton, Ashoka, Arlington, Virginia
  • 2:10 - 3:10 p.m.
    • Binary Economics and the History of Economic Thought
    • Law and Economics: Under Cover of Science
    • Theology and Socio-Economics
  • 3:20 - 4:20 p.m.
                Black Reparations, Binary Economics, and Interest Convergence

• Gender and Class: Voices from the Collective
  • 9:00 - 10:30 a.m.
                Section on Women in Legal Education Opening Plenary Session
  • 10:40 a.m. - 12:00 p.m.
    • Children
    • Work and Institutions
    • Work and Care
    • Criminalization
  • 1:40 - 3:00 p.m.
    • The State
    • National Security
    • Globalization
    • Family

• 2:00 - 5:00 p.m. The Legacy of Brown v. Board of Education and the Future of Race and the American Legal Profession

Friday Jan 4, 2008

• 8:30 - 10:15 a.m. Global Conceptions of Access to Justice
• 8:30 - 10:15 a.m. Community, Diversity, and Equal Protection: The Louisville and Seattle School Cases
• 8:30 - 10:15 a.m. Interdisciplinary Reasons to Recalibrate the Equity/Efficiency Balance in Tax Analysis
• 2:15 - 4:00 p.m. The Seattle/Louisville Ruling: Constriction or Expansion of Race-Based Policies?
• 4:00 - 5:45 p.m. The Total Package: Utilizing Public Service to Bring Legal Practice into the Doctrinal Classroom

Saturday Jan 5, 2008

• 8:30 - 10:15 a.m. Rights, Religion, Revolution: Theories of Advocacy for the Poor (Given this blog's focus, below are the details)
  

  •         Moderator: Juliet M. Brodie, Stanford Law School
              Speakers: Sameer Ashar, City University of New York School of Law at Queens College
        Marie A. Failinger, Hamline University School of Law
        Saru Jayaraman, Executive Director, Restaurant Opportunities Center of New York, New York, New York
        Julie A. Nice, University of Denver College of Law

          

    The Section’s program will take a comprehensive view of contemporary approaches to poverty law advocacy. With leading voices from three different conceptions, the conversation will address questions such as: What are the competing salient theories of advocating for the poor in the current legal climate? Is the “rights” revolution really over? Is it worth reviving? Do religious traditions offer theories of justice that can re-animate legal strategies for solving the problems of poverty and its devastating consequences? If there is a new “revolutionary” spirit embodied in community organizing strategies and campaigns, what does it offer advocates as a cohesive approach to social and economic justice? What do these three traditions have in common, and how might they coalesce into a revitalized American anti-poverty legal movement?

• 10:30 a.m.- 12:15 p.m. The Subprime Lending Crisis: Causes and Consequences
• 10:30 a.m.- 12:15 p.m. The Participation of Nonprofits in Democracy
• 3:30 - 5:15 p.m. Labor and Employment Laws in Indian Country
• 3:30 - 5:15 p.m. Economic Analysis of Labor and Employment Law in the New Economy

Sunday Jan 6, 2008

• 9:00 - 10:45 a.m. Roundtable on Nonprofit and Philanthropy Law Scholarship

-E.R. erosser@wcl.american.edu

Food Banks facing shortages

The New York Times is reporting that food banks are "reporting critical shortages that have forced them to ration supplies, distribute staples usually reserved for disaster relief and in some instances close."  The article is: Katie Zezima, "Food Banks, in a Squeeze, Tighten Belts," Nov. 30, 2007. 

For more info on food banks and ways to get involved, check out America's Second Harvest: The Nation's Food Bank Network. 

-E.R. erosser@wcl.american.edu