Wealth, Inequality, and Taxes in the U.S.

Professor Goldburn P. Maynard Jr. of the Indiana University Kelley School of Business discusses the U.S. tax code’s effect on wealth inequality and how race has shaped the distribution of wealth.

Listen to more Tax Notes Talk episodes from our critical tax theory series:

• Feminism and the Tax Code
• Taxes and the LGBTQ Community
• Addressing Racial Inequity in State and Local Tax Policy
• The Tax Code and Economic Justice in America
• How Racial Diversity Shaped U.S. International Tax Policy

Follow us on Twitter:

• Joe Thorndike: @JThorndike
• David Stewart: @TaxStew
• Tax Notes: @TaxNotes

Sources mentioned in the intro:

• Institute for Policy Studies analysis
• Brookings data

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This episode is sponsored by the UC Irvine School of Law’s Graduate Tax Program. For more information, visit https://ce.uci.edu/?utm_source=TNM&utm_medium=podcast&utm_campaign=2022taxnote.

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Credits
Host: David D. Stewart
Executive Producers: Jasper B. Smith, Paige Jones
Showrunner and Audio Engineer: Jordan Parrish
Guest Relations: Christa Goad

Transcript

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David D. Stewart 0:03

Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: wealth and inequality. The ever increasing wealth of millionaires and billionaires and how to tax it has dominated the national debate even more so since the pandemic. Since the stock market lows of March 2020, the wealth of U.S. billionaires has grown 70 percent. To put that in perspective, billionaires collectively hold two-thirds more wealth than the bottom 50 percent of all households in the United States, according to an analysis by the Institute for Policy Studies. And when you look closer at wealth inequality in the U.S., the extent of the racial wealth gap becomes clear. According to Brookings, the net worth of a typical white family was nearly 10 times greater than that of a black family in 2016. This week's episode is part of a series we've done examining how tax rules affect marginalized groups. We'll include links in our show notes to our previous episodes on the intersection of tax and racial inequality, LGBTQ rights, feminism, and diversity in international tax policy. Today, we're discussing the racial wealth gap and the role tax policy plays in this centuries old issue. Joining me now is Tax Notes contributing editor, Joseph Thorndike. Joe, welcome back to the podcast.

Joseph Thorndike 2:19

Hey thanks, Dave. It's always great to be here.

David D. Stewart 2:22

Now, I understand you recently spoke with someone about this issue. Could you tell us about your guest?

Joseph Thorndike 2:26

Yeah. I talked with Goldburn Maynard. He's a professor at the Kelley School of Business at Indiana University, where he teaches in the Department of Business Law and Ethics, but he's also taught at a number of law schools, including the University of Louisville, Florida State, and Washington University.

David D. Stewart 2:43

And could you give us a quick overview of what you discussed?

Joseph Thorndike 2:45

Yeah, so professor Maynard, he's written extensively about wealth and inequality, so we quite naturally centered our conversation around that issue, but we also focused on the ways in which race has shaped the distribution of wealth in America and the policies surrounding inequality, and how we try to deal with it and the scholarship around both those subjects. And this took us through discussions of professor Maynard's own important work, but also Dorothy Brown's recent blockbuster book, The Whiteness of Wealth.

David D. Stewart 3:12

All right, let's go to that interview.

Joseph Thorndike 3:17

Well, welcome to the podcast Goldburn. It's really great to have you join us here today.

Goldburn P. Maynard 3:21

Thank you for having me, it's a pleasure.

Joseph Thorndike 3:24

I'd like to start our discussion today in a place that makes room for all sorts of other interests on Twitter, which is where I first encountered you. And you go by the handle of @DeathnTaxesProf. That's a good username to describe your academic interests, but it's maybe a little misleading if you're looking for a sense of your Twitter presence, because on Twitter you engage a really wide range of topics, especially for a tax professor. Everything from the obvious, like tax policy, to pop culture, to sports, to the Royal family. But I've also seen you comment on the joys of teaching in a business school. So could you say a little bit more about that?

Goldburn P. Maynard 4:02

Yeah , so I don't think that I'd ever intended to work at a business school. I always saw myself as a law professor at a law school. However, at a point in my career where I was ready to consider going somewhere else, the Kelley School of Business at Indiana University found me. So they were doing a search and I think that they wanted to have an open pool. And so they tried to look outside of the usual places they would look. And so the chair of the committee reached out to me to see if I was interested and I spoke to mentors. I wasn't sure, I thought it could be a trap. Right? That I would be going to a business school where I would be treated horribly, but mentors signed off. I then went and met the people in the department, etc. And my heart was set at ease and I decided to come.

Joseph Thorndike 5:03

And what do you teach there ? Like what's your day to day?

Goldburn P. Maynard 5:06

So I have changed from teaching courses in taxation and wills and trusts, and now teaching a course on business ethics. So currently that is all I'm teaching. I'm teaching three sections of a business ethics course, which I find fascinating and I love.

Joseph Thorndike 5:24

That sounds great. That really does sound terrific. All right, well, speaking of your Twitter feed, which I just, I mean, honestly, I love it, so that's why I keep talking about it. But I saw that just recently you tweeted that you'd finished and submitted an essay on racial equity. Can you tell us more about that essay?

Goldburn P. Maynard 5:43

Yes . So it's an essay that I've been working on all summer for the Yale Law Review forum , their online publication, and they solicited a number of essays on the Biden stimulus. And I decided to write one on racial equity because the Biden administration, right at the beginning, they set out this executive order saying that they were going to be advancing racial equity. So I wanted to see what efforts in that stimulus bill could be seen as racial equity efforts, and then to analyze those. And then to also analyze the pushback that some of those efforts have already received from federal courts.

Joseph Thorndike 6:31

What sort of pushback has that been so far?

Goldburn P. Maynard 6:34

Well, some of the most promising programs on the racial equity front, like the loan forgiveness for disadvantaged farmers, has been halted by federal courts . So several federal courts have issued injunctions. There have been very well-organized conservative groups who have challenge these parts of the stimulus bill and judges, conservative judges, right, that were appointed by Republican presidents have found that yes, in order to protect the rights of white men, they have decided to put a halt to these programs.

Joseph Thorndike 7:15

All right. Well, that sounds fascinating. And sounds like a good start for our conversation about inequality and about say the racial wealth gap in particular. In recent months, I think we've all been bowled over by Dorothy Brown's blockbuster of a tax book, which is really more than a textbook, The Whiteness of Wealth. And I want to throw out an idea to you and then see what you think about it. And it's my idea about why I think the book has made such a splash, and you tell me if you agree. And I think, so for the non- tax people of the world, I think they had no idea that the tax law was injecting itself into so many aspects of American life and perpetuating the inequalities and racist hierarchies in American society. They just didn't know what tax was doing. And for them, taxes were something altogether simpler, more straightforward and probably very irritating. But for tax people, I think the book was also a revelation because these tax people knew all about these tax law provisions that Brown writes about, but she asked people to look beyond the surface of these provisions and to look beyond their apparent neutrality, to see how they actually operated. And I think that was a revelation in some ways, for tax people who thought they knew a lot about the way the tax system worked, but weren't thinking about it in racially sensitive terms. What do you think of that? Does that capture why you think the book made a difference? Or you tell me.

Goldburn P. Maynard 8:45

So I think that you are kinder than I am and so I think I agree with your assessment of why it made that kind of impact on the public. Because yes, ultimately the intricacies of tax law and their effects, other than kind of the immediate effects on your own tax bill, don't really play into the minds of people that much. Other than kind of on the broad level of, well, the rich should be taxed more. I don't agree with the assessment on the scholarly community, at least in terms of the tax law scholarly community, because that's a different story. That's a story of Dorothy Brown coming in more than two decades ago and saying some of the same things and it being not only ignored, but kind of furiously fought against and rejected and marginalized. And so it wasn't, it shouldn't have been a revelation in that sense, in that Dorothy had been writing this kind of thing for many years. And as she tells the story herself, she in some ways had to leave the tax world and even law academia to find sympathetic ears . So it's fascinating because yes, it's in this sense of having to leave your home to be loved, and then for those at home to respect you and that's kind of what's happening now. It's coming around full circle where people who rejected her work, and of course there's been a generation of scholars since then. Right? There are also newer scholars who accept her work, but they're also older scholars who are now accepting some of her work because people outside of tax have accepted it .

Joseph Thorndike 10:39

I guess that's really the issue is maybe what I was doing was conflating all these different academics into one community when they really aren't one community. Right? So I would guess you would probably think like the critical tax community, which has existed for a while now, I don't even really know how long, but my sense is that they've been pretty supportive of this sort of an approach for some time, but that's been a sort of marginalized group within the tax academy itself. Right? That that group has not exactly been in the mainstream of the tax academy, even though it's been around for, I don't know , probably 20 years now. So you're right. I think you're right to say that I'm being too nice there. And that probably, honestly, that may reflect the fact that I'm not actually a member of the tax legal community. You know, I'm sort of, I sort of pretend to be, but I'm a historian. So for me, like the critical tax world always had a foot in the history world. Right? And Dorothy's book is very historically rooted much of it. And so it's very easy for me to look at tax and my head goes to the history part and the history part is always contextualized in these social issues. But you're absolutely right, I think, that the mainstream tax legal community didn't traditionally look at tax in those terms. And so that makes perfect sense to me that what you say about how it was marginalized for so long. So what changed it? Like in your view? What came around that brought it inside that made her get a better reception, because she does seem to be getting a better reception now? Yeah?

Goldburn P. Maynard 12:08

Yes. For sure. So several things, I think she did go outside of the tax world, and the law world even, to get some validation and realize that there were scholars in the academy who very much were receptive to her work. She also now has a record of excellent publication that is able to back her up. And so this work came at a perfect time. She'd set up her scholarly reputation and then she was wise in realizing that instead of pushing this just from a scholarly perspective, that she needed to reach out to the public at large and explain the story to them in a way that was more relatable. And so I think that that along with there being a new generation of scholars who are a lot more open to these ideas and also world events and right protests , George Floyd, etc, have all led us to a moment where people are more receptive to her work. I don't know if this moment lasts, but we do have a moment now.

Joseph Thorndike 13:20

That makes sense to me that the world has really, there has been an opening these last couple of years. I will come back to that too, because I've seen you make comments like that in your own writing. I just have to say that that her book certainly opened my eyes to some things that I had not really contemplated either. For instance, she added a discussion of horizontal equity that I found pretty compelling, where she made a case for why horizontal equity doesn't work so well when you add race to the equation and that two families with equal incomes , one black and one white, are not equally situated. And she makes that a very compelling argument for why that's true. I have always been somewhat suspicious of the concept of horizontal equity, but for other reasons, and a variety of other reasons, but I thought that was such a great point to make and one that I thought was sort of long overdue in tax policy circles. So to me, again, living sort of on the periphery of the tax legal academy, dipping my toe in once in a while, that to me was wonderful because it problematized what is supposed to be a neutral concept and showed that that neutrality is actually loaded with all sorts of non-neutral assumptions. So that was eye- opening and the whole book was very welcome for me. Brown offers a few proposals for changing the tax system, especially in her last chapter, she has like three very broad proposals to help close the racial wealth gap. And then she has a lot of smaller, more specific ones, about say penalties for 401k, premature withdrawals, and the deductibility of student loan interest. But her big ones are to publish tax data by race to return the tax system to a simpler time, as she puts it, when there were no exclusions, or at least to bring it to a point where there would be no exclusions, no deductions, no preferential rates. And then her last, to establish a credit to compensate for historical legal racism that has driven so much of the modern, current-day inequality. What are your thoughts about those proposals? And do you have others like them ?

Goldburn P. Maynard 15:59

So I think the first starting point is to connect it to a previous discussion that I was having about the stimulus bill and that's the place of the courts and all of this. And so the way that the Constitution has been interpreted is that it would be extremely difficult to show that the tax system is discriminating on the basis of race and is unconstitutional because you would have to show some very specific evidence, etc. So at least, right, getting some data on race would at least go towards us getting some more specific data on the ways in which the tax system harms black people in America. Having said that, right, there's still this huge missing piece that you would have to show that there was intent on the part of legislators to discriminate against African-Americans. So that'd be virtually impossible to do. On the other hand, if you were to try to ameliorate some of these disparities through the tax system by explicitly using race, that would definitely, almost surely, be found to be unconstitutional because the bar on using race in any kind of program is just that high. And so the starting point there is that Dorothy is first accepting that she has to reach out for a second best solution because you cannot use race because of the courts and the way that they're interpreting the Constitution. And so that in itself is bothersome that you have to start from a secondary standpoint, but once we get past that, I think that her ideas are definitely worthwhile, the stripping of the preferences would definitely help to give us a baseline to work from. And then this kind of wealth-based credit would definitely, since those on the lower end of the income scale tend to also disproportionately be the black, Latino etc, this would end up helping those individuals as well. So no, they sound like good proposals, but I don't think that our problem is a proposal problem, but we have a political will problem.

Joseph Thorndike 18:21

That makes sense to me. And I actually, to me also, some of it is a sort of dynamics problem too, because let's just say it is a proposals problem. Let's say that it is return the tax system to a simpler time, for instance. I'm wonder how you make that stick? Like, let's imagine you had the will to do that. How do you keep the will to do that? That's the historian in me that looks at it and is like, how do you freeze it in time once you do something like that? Because to me, the reappearance of exclusions and deductions and preferential rates or whatever, and the forces behind that, the lobbying forces, the entrenched hierarchies, and power structures that want those things are still going to be there. Right? Looking for all those things to come back. So that's my problem with proposals, actually, most tax reform proposals, is that I don't see how you protect them from subsequent undoing when it's the hierarchies behind them that don't change, the dynamics don't change, the politics don't change, which is sort of, I think the same point you were making that there's a political will issue. There are broader political issues that make those all difficult. Right?

Goldburn P. Maynard 19:33

I think you're exactly right about that in that, and this is difficult to do because it complicates scholarship quite a bit, in that it's hard to think about the future as this dynamic future. Right? It's easier to write scholarship that says, "well, this is a proposal that needs to be passed and once that proposal is passed, we will move into a better world," but we all know that's not what happens. Right away, as soon as that proposal gets passed, then there are alternative proposals and there's a fight against that proposal and people change their behavior. And so, yes, it is quite complicated to, even if you get one of those moments, to then defend that moment. And so someone like Cornell West would talk about how you have kind of these moments of social change and then the kind of larger or broader, longer lasting periods of time are kind of defensive periods where a lot of the work that you're doing is to try to defend some of what you were able to accomplish during those moments.

Joseph Thorndike 20:43

This is starting to sound sort of depressing because it reminds me of a line you had in your, you had a recent article on a different non-tax topic. It's "Black Queers in Everyday Life," that was recently published in the Tulane Journal of Law and Sexuality. And you had this line in there that really resonated and said that, "the persistence and durability of the American caste system continues to amaze and horrify me." And I was like, wow, that's depressing. And not that in any sense wrong really, but just depressing. And you also say that there are moments of encouragement you've had in the last couple of years, but it's a little hard to see, like what's the way forward? Do you have a way forward? Given those that persistence and that durability, do you see a way forward?

Goldburn P. Maynard 21:29

So I think that ultimately I'm still a black scholar and I come out of a tradition that is used to dealing with some pessimism and impossible odds. So it is not that I necessarily carry my work forward because I feel like tomorrow, next year, or even in a decade, these things are necessarily going to change. I just try to make a contribution and hope that other people will pick up some of this work and some of the work will happen later. So in terms of ways forward, I don't think by any means everything is lost, right? There are many policy making levers, and so for example, the executive is still very much committed to trying to do some things on their end in terms of changing rules, changing the ways that they sign contracts, etc, to ensure that there is more racial equity. And so I don't think, yes, the courts very much are standing in the way and you have 60 votes in Congress stand in the way, and yes, there are many voting shenanigans happening right now that are bothersome. But on the other hand, there is tons of energy and there is a more robust discussion happening right now about wealth inequality, and fight in wealth inequality than there has been in my lifetime. So there's still some hope there beneath at all.

Joseph Thorndike 23:12

I mean, that makes perfect sense to me because I do think that it's very easy to get overwhelmed. And when you look at current politics and think, "ah, nothing ever changes." Right? And yet we do lose sight of how much things change. And it seems to me, to just go back to that inequality issue that you raised and this sort of new focus on inequality that we do have now, and it seems to me that that focus is at least 20 years old and that it has been building over those 20 years. It does seem to me that some of your work that you've done on the estate tax for instance, or on wealth building, does sort of point a way forward, or what might be a way forward. So I'm thinking particularly, let's say your article on perpetuating inequality by taxing wealth, that article from 2016, and you look at the estate tax and try to explain why it's proven such an easy target for those who want to appeal it. And also why it's proven to be so unpopular with voters, or at least apparently unpopular if you put stock in pull data, which I think we should actually, it shouldn't be so unpopular, right? I mean, why do you think it is? Like, how do you make sense of that?

Goldburn P. Maynard 24:22

So I think there are a couple of factors going on on there. And so there is the story that works against it. That is, the American dream and having wealth, etc, and then having the government at death, come in and take some of your wealth that you are going to pass onto your family. It just doesn't play as a good story, but it can't just be story because yes, stories are important, but there's more to it than that. And so along with the stories, there was also a very organized effort against the estate tax. Right? Millions of dollars went into advertising and to frame the estate tax as a death tax. And to also make people concerned that the estate tax could be something that could affect their lives , even though it only affects the lives of 0.01 percent of families in the United States, etc. And so work was put into that as well. I think the third thing that goes into it as well is politization and polarization in the United States. And so you can throw in the least controversial issue, but once you throw it into the grind of politics, it suddenly becomes something that turns into a 50/50 or a 60/40 issue. And thus it becomes that much more difficult to try to overcome that kind of a log jam there. And so I think several things have worked against the estate tax, despite the facts seemingly being in the favor of the estate tax.

Joseph Thorndike 26:14

Do you think it's salvageable? I mean, it's probably not going to disappear, right? Or it doesn't appear to be on the verge of disappearing. So I guess like, to frame it a little bit differently, is it an important tool for dealing with inequality and if not, could it be made one? I mean, what role for do you see going forward and how do you get it there?

Goldburn P. Maynard 26:32

I think that it remains important in several ways. One, because it's constitutionally sound. Any new wealth tax, regardless of how clever are they're designed , right, we can look to there being some kind of constitutional challenge and we can't just rely on precedent. The court today looks very different than it once did before. So it could be that a wealth tax would be deemed unconstitutional. We already know the estate tax works. We also have over a century of the IRS dealing with efforts to escape the estate tax and to evade the estate tax. And so all of that experience can be used to shore up the estate tax. So while I don't think that it's playing a major role right now, I think it could easily be made to play a better role and that there are tons of proposals to help it play a better role. I think that we could save it for example, by having a more concerted campaign on the other side, to show that the estate tax doesn't hit very much people and that we have made provisions for farmers, small businesses, etc. But I think part of the problem is that Democrats haven't showed much of a willingness to fight very hard for making it a better tax. They've shown some fight for keeping it around, but not necessarily for making it a better tax. And I don't think that scholars have worked very hard on keeping around the estate tax. That is, I think right now it's a lot more sexy to talk about a wealth tax or some other kind of tax.

Joseph Thorndike 28:25

I think that's true. It's striking to me that so many people ignored the estate tax for so many decades, and just took it for granted that it was there and it would be fine. And they didn't adjust the exemption for instance, for ever, for decades and decades. And I think it really ultimately left the tax sort of vulnerable to attack when the time came, when the forces against it were ready, it was in a sort of weakened state. And it was a pretty easy target. But what you say is right, it's not a very, it doesn't have the cachet of a wealth tax, even though, as you also point out, the wealth tax is going to have a pretty rough time in the courts by almost any account. Like there are people out there arguing that it's constitutional, and they may well be right, but it's hard to imagine that this Supreme Court is going to believe that it's constitutional, whether or not you could make a plausible case for it being constitutional. I just, as a matter of politics and of legal politics, it's just, it's a little hard for me to imagine. In your article, you talk a lot about the power of storytelling and how it interacts with existing hierarchies and power structures. And you do sort of suggest that fans of estate tax need to come up with their own stories to tell, do you think that that could actually be helpful? I mean, I'm interested in this more generally in the way that people make arguments in politics, especially around tax . Do you think that it's possible to talk differently about the estate tax and tell a different set of stories? Because as you say, the facts don't always carry the day, or maybe don't even usually carry the day, it's something else right? What do you think?

Goldburn P. Maynard 31:09

So that's difficult. Not that it's difficult to come up with alternative stories. What I think is difficult is that I think that you can win the fight on story and still lose the legislative fight. That is that I think that the left has been quite successful at leveraging this idea that the rich are getting away with not paying enough taxes. And I think that it generally polls well, and yet the 2017 tax cuts were still passed despite that kind of public sentiment. And so it's not that I don't think that the story of the estate tax couldn't be changed, is that as we were talking about earlier, there are other dynamics and other hierarchies and other interests that very much are playing a part and will continue to play a part , even if something changed about the estate tax.

Joseph Thorndike 32:12

Yeah. So it's not all, we shouldn't exaggerate the importance of democratic pressure on the formulation of tax policy, I guess, small D democratic pressure, right? That a lot of that gets determined, voters be damned. Right?

Goldburn P. Maynard 32:26

Exactly. Because I'm not a political scientist, but, right, there's a sense in which there are kind of those really salient issues. And then a lot of tax policy issues get lost in the wash.

Joseph Thorndike 32:40

Yes, no, I think that's right. Voters just don't engage in a lot of these tax policies in that level of detail. It's also though striking to me, just to back it up a little bit, that taxing the rich polls very well. The estate tax polls very poorly. I don't really feel like Democrats and supporters of the estate tax more generally, because we shouldn't conflate those two, there are a fair number of Democrats who don't like the estate tax, there's a fair number of pivotal Democrats who don't like the estate tax, but defenders of the estate tax haven't really wrestled that to the ground yet. That they sort of take for granted, and this is again, sort of like focusing on the facts thing, overt focusing on the facts. They're like, "well, you people like taxing the rich, why don't you like the estate tax?" And I feel like a lot of estate tax supporters can never get beyond that conundrum. Right? They just say like, they get puzzled by that, "I don't understand why this tax is unpopular when it doesn't affect any of you and why it's only the rich people." And it's sort of like, to me, progressives are sort of missing the point, they're missing something and they need to figure out what that is. And again, as you point out, that even if they figure it out and they figure out how to appeal to voters, it may not matter. Much of the tax policy formulation is going to go on anyway, regardless of what the voters think. But it's also true that you can't lose the voters all the time on these issues and that it doesn't strike me, that they've ever figured out how to win the voters on this particular issue, at least on the estate tax.

Goldburn P. Maynard 34:07

Agreed on them never figuring it out, it never being enough of a priority. In some sense, sometimes that's the problem with the estate tax because yes , you look at even historically at no point has the estate tax accounted for more than 2 percent of government revenue. So there's a sense in which you say both, "well, why are people spending so much time fighting about this tax because it's so small." And then on the other hand, you say, "well, let's not spend any time on this." And I think sometimes Democrats are guilty of the latter of just saying like, "let's not spend so much time on this because there are other parts of the tax system that bring in a lot more money in and are a lot more important."

Joseph Thorndike 34:52

Yeah. I mean, I think honestly the last democratic politician to really take it seriously was probably Franklin Roosevelt. I'm not kidding, like the last person to really put it front and center for at least a little while. And even he, it was like a little flash in the pan. It wasn't even, for him , it wasn't, it didn't last very long. So maybe that's just the way it is. All right, so when it comes to addressing wealth disparities and racial wealth disparities in particular, do you have any proposals in particular that you would advance, that you think might be helpful?

Goldburn P. Maynard 35:20

So right there, there are of course dreams and...

Joseph Thorndike 35:26

No, yeah, think big. Don't be constrained too much by political realities here.

Goldburn P. Maynard 35:30

And so on the one hand, there are kind of just justice claims and those have to with reparations and slavery and Jim Crow, etc. But I think that those are specifically justice claims. And regardless of whether there was wealth inequality or not, those justice claims should be taken care of. In terms of wealth inequality , I'm not necessarily tied to any one proposal. I think there are many good ones out there. The economists right now have been pushing for something that they've been calling "baby bonds," and it's something similar to what I have proposed as well. Right, some kind of account or investment vehicle for every child, and so that we're building wealth for them from the get go . I think you'd both want to think about the leveling down of wealth . So we need to do more on the wealth taxation side, whether, and this has already been stripped from the Democrats bill, whether it is taxing capital gains at death or something else, we need to do more of that. And then we also need to do more on the leveling up of wealth. That is helping communities build more wealth. And so I was hoping that we would see more investment in minority communities, etc, through the Biden administration's racial equity programs. And I think their attempting to do that is just that they also have to deal with the courts. And so I think they're being careful in how they approach that.

Joseph Thorndike 37:06

It is certainly seems true that some of the most dramatic proposals in the current pending legislation, especially from the leveling down side of things, have also been have been non-starters. And I guess that's not surprising, but it is striking. Right? That a lot of the like stepped up basis proposals and such have had such a hard go of it on Capitol Hill.

Goldburn P. Maynard 37:32

It also, the way that the political cycles work, it just makes you the thing that, "OK, so that's probably it until 2025." Because the way it's playing is just like the first year in the presidency that they can pull off something like this.

Joseph Thorndike 37:48

Yeah, no, no, it's it's not easy. And of course these are extremely narrow margins on the Hill right now, which probably made it a pretty heavy lift from the beginning, but it is going to be a hard sell. And I think as Dorothy Brown's book makes clear and as your own work makes clear, that these things are always going to be a hard sell because the structures supporting the existing hierarchies are powerful. Right? And so it's not ever going to be easy to disrupt them. And you know, that is the part where you say that you're struck by the persistence and the durability of these structures, and I am too. The historian in me says change happens just like continuity, right? They both happen, but the change can be very slow to come, especially it seems to me when it's money behind a lot of it, it can be really difficult to change. And I think if there's anything else that we've become acutely aware of, it's that a lot of the racism that has been a factor in American society since the beginning is not going to be overturned by legal changes. The great achievements of the civil rights movement left a lot of the basic attitudes and the racism untouched and that's I think become abundantly clear over the decades since. Anyway, it's been delightful to ask you all these questions. Do you have any, anything else you want to leave our Tax Notes listeners with?

Goldburn P. Maynard 39:15

I just appreciate the opportunity to be able to speak to the listeners. I just appreciate how much we are talking about wealth and equality right now, and I'm looking forward to see what else the Biden administration is able to come up with. They seem to have been pretty clever at trying to find ways around some of these very thin margins on the Capitol and also the federal court. So thank you so much for having me.

Joseph Thorndike 39:45

Well, thank you so much for joining us. We really appreciate it.

David D. Stewart 39:50

And now, coming attractions. Each week, we highlight new and interesting commentary in our magazines. Joining me now is Acquisitions and Engagement Editor in Chief Paige Jones. Paige, what will you have for us?

Paige Jones 40:00

Thanks, Dave. We are excited to announce the submissions period for the Christopher E. Bergin Award for Excellence in Writing is now open! This annual award recognizes superior student writing on unsettled questions in tax law or policy. Eligible students must be enrolled in an accredited undergraduate or graduate program during the academic year. Visit taxnotes.com/students for more details. Also, in Tax Notes Federal, Jesse Hubers argues that when co-owners hold property in a partnership, the drop-and-swap technique offers a viable means to facilitate a section 1031 exchange for some partners while allowing others to cash out of the investment and part ways. David Bernstein explores the economic feasibility and profitability of converting traditional retirement assets to Roth accounts at the beginning of retirement. In Tax Notes State, Nikki Dobay examines where local jurisdictions derive their authority to tax, focusing on how to determine whether a locality has the authority to impose the tax under the state’s Constitution or statutory provisions. George Salis explores why many states are still struggling to catch up to their pre-COVID-19 budget levels while others are staying ahead. In Tax Notes International, Massimo Antonini and Margherita Pittori address recent efforts to reform the Italian tax court judicial system and elaborate on proposed solutions to make it more efficient. Daniel Shaviro examines the recent calls for increased entity-level corporate income taxation of multinationals and details historical parallels. And finally, in Featured Analysis, Roxanne Bland examines state efforts to recover unpaid sales taxes from third-party sellers and the argument that while there may be little question that third-party sellers with inventory in a state have commerce clause nexus, whether they have due process nexus is not so clear.

David D. Stewart 42:08

That's it for this week. You can follow me online @TaxStew, that's S-T-E-W. And be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.