Essay
Judicial Sincerity
Although the idea that judges have a duty to be sincere or candid in their legal opinions is widely shared, critics have argued that a strong presumption in favor of candor threatens judicial legitimacy, deters positive strategic action on multi-member courts, reduces the clarity and coherence of doctrine, erodes collegiality, and promotes the proliferation of fractured opinions. Against these and other objections, I defend the view that judges have a duty to give sincere public justifications for their legal decisions. After distinguishing the concepts of sincerity and candor, I argue that the values of legal justification and publicity support a principle of judicial sincerity. This principle imposes weaker constraints than a general duty of judicial candor. But while candor may be desirable, judges who provide sincere justifications for their decisions satisfy the demands of legitimate adjudication.
The Taxation of Carried Interests in Private Equity
This Essay analyzes the tax treatment of carried interests in private equity. It argues that there are two competing analogies: service income and investment income. Standard approaches are not able to resolve which of the competing analogies is better and often fail even to recognize that there are competing analogies. The best method for determining the proper treatment of carried interests is through direct examination of the effects of each of the possible treatments, known as the theory of line drawing in the tax law. Using this approach, it is clear that the better treatment of holders of carried interests is as investors. Key pieces of evidence include the longstanding policy premises behind partnership taxation and the complexity and avoidance problems with attempts to tax carried interests as service income. In particular, the longstanding policy behind partnership taxation is to tax partners as if they engaged in partnership activity directly. Current law, which gives carried interests holders capital gain follows this approach, and changing the law to tax carried interests as service income would require rejection of this historical trend. Because such an approach would mean taxing carried interests differently than if the partners engaged in the activity directly, it would be easily avoidable. Moreover, attempts to tax carried interest as service income will have to be able to distinguish service income from other types of income, a task which has proven to be difficult, complex, and avoidable.