This Article attempts to provide the first comprehensive rationale for defending the current corporate income tax. It argues that the usual reasons given for the tax (primarily as an indirect way of taxing shareholders, or alternatively as a form of benefit tax) are inadequate. It then explains what the original rationale to adopt this tax was in 1909, namely to regulate managerial power, and that this rationale stems from the “real” view of the corporation, which was the dominant view throughout the many transformations underwent by the corporate form from Roman times to the present. Turning to normative argument, the Article then argues that the regulatory rationale given for taxing corporations in 1909 is still valid, since similar social conditions continue to exist, and in fact is strengthened by the rise of multinational enterprises. Finally, the Article argues that this rationale is necessary from a normative perspective to support the fight against the two crucial current threats to the corporate tax posed by the corporate tax shelter and tax competition phenomena.
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Exclusion and Property Rules in the Law of Nuisance
This Article offers a theory of nuisance law based on information costs. Like trespass, much of the law of nuisance relies on a strategy of exclusion in which rights are defined using low-cost signals like boundary crossings that are only indirectly tied to particular uses. Nuisance law also supplements and fine-tunes this Blackstonian package of entitlements by means of a governance strategy, which relies on signals more directly tailored to particular uses. The information-cost advantage of strategies close to the exclusion end of the spectrum helps explain why, despite repeated calls for more balancing, nuisance law focuses on who caused invasions of whose land. Also consistent with an exclusion strategy are the staying power of traditional nonreciprocal notions of causation and the virtual nonexistence in nuisance of Rule 4 liability rules, under which plaintiffs would be permitted to invoke the law to force the polluter either to abate or shut down upon payment of the polluter’s damages. Applying Hohfeldian analysis, the Article shows that the common law gives polluters at most a privilege to pollute and that Rule 4 does not refine the basic exclusion regime but rather undermines it. The general question becomes when to soften exclusion with governance and the Article concludes by arguing that, in situations such as oil and gas fields and Boomer-style pollution cases with numerous victims, only small judicial governance-style safety valves are necessary, especially if legislative and administrative solutions are forthcoming. More generally, the information-cost theory of nuisance brings the utilitarian and corrective justice approaches to nuisance closer together. Nuisance law is not a mess or mystery but does contain within it the inflection point between exclusion and governance.
Of Power and Responsibility: The Political Morality of Federal Systems
This Article addresses whether a level or unit of government in a federal system must act only on political self-interest or on an understanding of the needs of the system as a whole. To address this question, this Article compares the dominant U.S. “entitlements” approach, which looks only to political self-interest, with the dominant “fidelity” approach in the European Union and in Germany, which demands that institutional actors temper political self-interest by considering the well-being of the system as a whole.
This Article demonstrates that the fidelity approach actually comes in two significantly different versions: (1) a “conservative” fidelity approach, which undermines democratic federalism by seeking to align the diverse interests throughout the federal system, and (2) a “liberal” fidelity approach, which promotes democratic federalism by preserving constructive democratic intergovernmental engagement throughout the system. This Article concludes that the former should be rejected, but that the latter warrants our attention in the United States as a promising and hitherto neglected alternative to the dominant U.S. approach based on institutional “entitlements.”