Issue 3

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.”

The Right to Education in Juvenile Detention Under State Constitutions

The importance of education to succeed in today’s society is well documented and recognized by courts, but is not adequately provided to the over 96,000 juveniles who are confined each year in the name of rehabilitation. This Note argues that children in juvenile detention have a right to an adequate education based on state constitutional guarantees of education. This right can be used to challenge the inadequacy of the current educational services provided in juvenile detention facilities. The argument proceeds in three parts. Part I provides background on the juvenile justice system, explains the importance of education in juvenile detention, and surveys the applicable federal statutes and corresponding litigation. Part II briefly discusses potential federal constitutional challenges based on the Equal Protection Clause and the Due Process Clause, but concludes that these challenges are unlikely to be successful. Part III argues that state constitutional guarantees of education are applicable to students in juvenile detention facilities. First, it analyzes the contours of the state rights to education as interpreted in school finance litigation. Second, it responds to the main objection that children in juvenile detention have sacrificed their right to education by arguing that (1) the purpose of confinement is rehabilitation, which is consistent with the right to education, and (2) even if the purpose of confinement is punishment, it does not follow that juveniles have sacrificed their right to education. Third, it analyzes specific challenges that could be raised by children in juvenile detention. Part IV concludes that given the acceptance of the adequacy conception of the right to education, the time is ripe to challenge the inadequacy of education currently provided in juvenile detention.

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.

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