Which Candidate’s Plan is More Fair?

*Many of us in the Hotchpot community have been affected by Hurricane Sandy this week, so we apologize for not being able to get additional installments of this series to you sooner.*

Welcome to the second installment of The Hotchpot’s review of the Presidential candidates’ tax proposals.  In this installment, we’ll look at the overriding policy concerns of each proposal – namely, how do determine what proposal is more “fair.”

What does fair mean?  The question of fairness cannot easily be answered, as it is has a different meaning to different taxpayers across all tax brackets.

President Obama believes that now is the time for the Bush-era tax cuts to come to an end and instead proposes the beginning of an era of “fair taxation.”  In his view, it is only fair to ask the wealthy, who, in his estimation, is anyone who makes more than $250,000 per annum, to pay more than they currently do in taxes.  To that end, he would raise the marginal rates of the two highest tax brackets to 36% and 39.6%, respectively,[1] and limit deductions to those families.  Obama also supports the Buffett Rule, named after the billionaire Warren Buffett, which proposes that no household earning over $1 million annually would pay a lower effective tax rate than a member of the middle class. This achieves what is known as vertical equity; those that can contribute more, do so.  But why should these taxpayers, many of whom have worked very hard for their money, give it up to support the rest of the country?

One obvious answer is that they can afford it.  In relative terms, the value of a dollar to taxpayers in the top two tax brackets is less than the value of a dollar to taxpayers in lower brackets.  In essence, a poor person might think that a dollar is worth 100 units of utility, while a higher income individual will find that same dollar to be worth only 10 units of utility.  Or to put it simply, $1,000 is a pretty big deal to a poor person, but might be a drop in the bucket to a wealthy person; the latter, if asked to pay that $1,000 dollars in taxes, might not even notice it missing.

But this talk of utility doesn’t distract Obama’s detractors from arguing that this proposal is unequitable.  They may argue that they studied hard, worked hard, and earned every penny of their wealth, and that taking from them to subsidize those who perhaps did not study hard and do not work hard is a disingenuous version of a Robin Hood scheme.  As a rather timely meme:

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Moreover, how does one determine the income at which one becomes “wealthy.”  Obama proposes that anyone with an income of over $250,000 is sufficiently capable of paying a touch more.  However, no reference is made to individual taxpayer circumstances, such as cost of living.  As any NYU Law School student can tell you, it is much more expensive to live in New York than in, for example, Billings, Montana.  That $250,000 will not get you nearly as far in the Big Apple than it would in Big Sky country.

Obama’s plan will somewhat dampen the effects of cost of living differentials by retaining a large number of tax incentives, such as deductions for mortgage interest paid and credits for qualified tuition and medical expenses.  This way, a taxpayer making $250,000 and living in New York with a $750,000 mortgage may be treated more like the taxpayer in Billings who makes the same and carries a $150,000 mortgage.  This notion that two taxpayers who are in the same economic position should be treated the same is commonly known as horizontal equity.  Horizontal equity is commonly demonstrated by comparing two taxpayers in the exact same situation (i.e. same salary, same city, same home, same number of children, etc), one of whom incurs a large medical bill after being in a car accident.  Horizontal equity requires that these two taxpayers still pay the same in taxes, which means that the medical expenses can be deducted from that taxpayer’s gross income.

In his efforts to create a fair system of taxation, Governor Romney intends to eliminate many of these tax incentives from the “tax base.”  The tax base is made up of all income that is taxable.  It does not include items that are expressly excluded from the definition of income, items that are deductible from gross income, and items which are credited back to the taxpayer.  Specific examples of items which are excluded from the definition of income are certain death benefits, gifts, inheritances, interest on state and local bonds, and amounts received under certain accident and health insurance plans.  However, Romney has been unclear as to which of these tax incentives he will eliminate.

Nevertheless, to balance the increase in the tax base, Romney proposes to reduce the tax rates for both individuals and corporations.  But more importantly, Romney would maintain low rates for capital gains.  Capital gains are earnings from investments, such as where a taxpayer saves his income by purchasing stock for long-term investment instead of using it for immediate consumption (food, clothes, toys, etc.).  For example, if the taxpayer purchased stock at a price of $X, and sells two years later for $X+100, that $100 earned is capital gain.

There are many policy advantages to low capital gains tax rates, most notably the incentive it creates for taxpayers to save for the future.  The capital gains tax is a tax on savings and thus any reduction in the rate will make saving more attractive.  Furthermore, the appreciation from a taxpayer’s investment may not keep pace with inflation over the years that he held the investment, and thus, upon sale of the investment, the taxpayer will investors pay tax on both the actual return on the investment as well as inflation.  A lower capital gains rate presumably helps to counteract that effect.

Whether lower capital gains rates actually stimulate the economy is still debatable.  However, the resulting tax system would be closer to that of a consumption tax, a system of taxation that has been successful in Europe and much of the industrialized world.  It is easy to assume that this system will benefit the wealthy the most, as they are the ones who can afford to save, and thus will allow the “rich to become richer.”  On the other hand, it can be argued that those investments provide funds loaned to individuals and small businesses, thus boosting the middle class.

Nothing posted on The Hotchpot constituted legal or tax advice, and no information on The Hotchpot should be relied on as such. Please review our Disclaimer here.


[1] A marginal rate of 39.6% for those taxpayers with income over $250,000 does not mean that every dollar earned will be taxed at that rate.  Instead, only the amount earned over $250,000 will be taxed at 39.6%.  This is an important feature of our progressive rate structure.

A simple way to think about the marginal rate feature of our progressive tax is to imagine a taxpayer taking a “walk through the brackets.”  In 2012, for his first $8,700 of income earned, he pays 10% tax thereupon.  For income earned between $8.700 and $35,350, he pays 15% tax thereupon.  For income earned between $35,350 and $85,650, he pays 25% tax thereupon.  For income earned between $85,650 and $178,650, he pays 28% tax thereupon.  For income earned between $178,650 and $388,350, he pays 33% tax thereupon.  And for income earned over $388,350, he pays 35%.

Didja Know? There’s An Election This November!

You might not be aware, but there is a pretty contested race for President of the United States going on right now.  On the one hand, we have the incumbent from Kenya, and on the other, the absurdly wealthy businessman from Mexico.  How can we possibly choose between two non-Americans?  Pick the one with mad basketball skills or the one with an incredibly coiffed head of hair?  It’s too much for me; I’ve decided to move to Canada.[1]

In all seriousness, many voters have become disenfranchised, figuratively for sure, with the course of politics in the last few years.  And it doesn’t help when the candidates seem to pander to their base and forget about the millions in the middle who want real solutions to real problems.  For these Americans, it’s not choosing the best candidate to represent them, but rather the least worst candidate who won’t embarrass them.  So, how do they decide who to vote for?

As this is a tax blog, we propose that we look to the candidates’ tax plans and analyze who will really prosper from each proposal.  How will Mitt and Barry raise enough revenue to reduce the deficit while stimulating economic growth?

In this installment, we will provide an overview of the candidates’ plans, and in the three weeks leading up to the election, we will delve further into some of the more controversial policies.[2]

Romney

Governor Romney’s tax plan will simplify the tax code and reduce the tax burden on the middle class by reducing marginal rates by 20% across the board and limiting tax preferences.  His theory, at its essence, is that lower taxes, especially for small businesses, stimulate entrepreneurship, job creation, and investment, all of which will lead the country to prosperity.

The current code, Romney argues, is too complicated and too narrow in its base.  Instead, he proposes to broaden, or “clean up,” the tax base, by eliminating certain tax preferences (i.e. credits, deductions), thus making more income subject to tax.  Romney, however, has not laid out exactly what tax preferences he would eliminate in order to clean up the tax base.[3]  Presumably, he would allow certain tax preferences that were enacted as part of the 2009 stimulus act to expire, including the American Opportunity Tax Credit, as well as the expansions of the Earned Income Tax Credit and the child credit.

Furthermore, Romney’s plan will permanently extend the Bush-era tax cuts on returns from saving (i.e. interest, dividends, and capital gains) for individual taxpayers with an adjusted gross income over $200,000 per year; for taxpayers who make less than that, he will completely eliminate taxes on returns from saving.  Romney also proposes eliminating the estate tax, repealing the alternative minimum tax, and rescinding the taxes enacted as a part of Obamacare.

With respect to corporations, Romney intends to reduce the corporate tax rate from 35% to 25% and make permanent the Research and Development Tax Credit.  Furthermore, in an effort to increase the competitiveness of domestic business, Romney proposes switching to a territorial system of collecting taxes.  This means that the US could impose taxes only on income that is sourced from within the US, as opposed to taxing all income that arises from US sources, disregarding where that income arose, as does our current world-wide tax system.

Obama

President Obama similarly champions middle class tax relief.  He proposes to maintain the Bush-era rate cuts for taxpayers who make less than $250,000 per year, while raising the marginal tax rate for those taxpayers who make more than $250,000 per year, thus returning rates to the Clinton-era maximum marginal rate of 39.6% for those taxpayers.

Like Romney, Obama also sees the benefit of reducing the tax on returns to saving, and he thus proposes to tax long-term capital gains at a 20% rate as opposed to ordinary income rates.  However, he would tax qualified dividends at the ordinary rates.

In addition, Obama proposes extending certain tax preferences such as the American Opportunity Tax Credit and Earned Income Tax Credit, and expand the child and dependent care tax credit.  He would also restore the estate tax.

With respect to corporations, Obama proposes to provide incentives to businesses who expand their manufacturing and insource jobs in the US.  He would provide other incentives to small businesses such additional credits to small businesses who hire veterans.

Ryan

No summary of tax proposals could be complete without a mention of Vice Presidential Candidate Paul Ryan’s proposed plan.  In his proposal entitled “A Roadmap for America’s Future Act of 2010,” Ryan advocated broadening the tax base, like Romney, but eliminating all current deductions and credits, exempting from tax all returns on saving, and taxing flow-through businesses (i.e. partnerships, sole proprietorships, etc.) only to the extent that their adjusted gross income represents wages (anything above that would be considered dividend).  He would repeal the exclusion for employer provided health insurance and instead offer a refundable tax credit to individual taxpayers.  Finally, he proposed entirely replacing the corporate tax system with a “business consumption tax,” similar to a VAT (value-added tax), on all businesses no matter what form they are organized.  The businesses could immediately expense all investment, but nothing else.

***

Stay tuned for our next few posts discussing various items in these proposals in greater depth.

Nothing posted on The Hotchpot constituted legal or tax advice, and no information on The Hotchpot should be relied on as such. Please review our Disclaimer here.


[1] Thanks, JetBlue, for the free flight!

[2] Unless otherwise noted, all information has come from the candidates’ web sites, presidential debates, and the Tax Policy Center website.

[3] I note that, in the second presidential debate, Romney referenced a “bucket of deductions” policy, whereby each individual taxpayer would be allowed to take up to $25,000 of deductions or credits, and they could pick and choose which preferences they would like to take.  This “bucket” idea has not been fully fleshed out.

One Small Step for Congress, One Giant Leap for Surviving Spouses: Further Updates to Estate and Gift Tax Spousal Exemption Portability and Additional Policy Concerns – Part 1 of 2

Neil Armstrong’s first words from the moon were heard all over Earth: “That’s one small step for man, one giant leap for mankind.” Most today know these words from memory. There is no phrase or moment more memorable or significant in space exploration.

In the field of estate and gift taxation, there may be no single number of greater significance than the unified credit or exemption amount, the amount a taxpayer may pass at death free of estate or gift tax. And when it comes to estate planning, utilizing and planning with this credit/exemption amount is arguably the most common technique to reduce ultimate tax burden. Last fall, Nelson Hunt posted on a recent considerable change in the wealth transfer tax arena, the portability of this exemption amount between spouses. Portability has been described as a small step for Congress, but a giant leap for surviving spouses whose spouse died without properly utilizing the exemption amount.

This past summer, the Treasury and IRS through temporary regulations clarified many of the issues under the current portability regime in the Code and beyond. This is a two part post that piggybacks off Nelson Hunt’s two posts last fall (see http://thehotchpot.wordpress.com/tag/portability/). Please reference Hunt’s posts for an exceptional description of what is portability, how portability works, and some of the basic policy concerns. This two part post examines some of the major updates to portability that happened this past summer and considers some additional policy concerns.

Tax Relief Act of 2010 modified Code section 2010 to include a provision for portability of the amount of the unused federal estate tax exemption at the death of the first spouse, the Deceased Spousal Unused Exclusion (DSUE) amount. The DSUE amount is defined in section 2010(c)(4) as

“the lesser of—

(A) the basic exclusion amount, or

(B) the excess of—

(i) the basic exclusion amount of the last such deceased spouse of such surviving spouse, over

(ii) the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.”

From the statute and beyond, the defined terms of “applicable exclusion amount,” “basic exclusion amount,” and “last deceased spouse” are central to the existing portability regime, specifically in the application. This past summer the Treasury and IRS issued Temporary and Proposed Regulations §§ 20.2001-2T, 20.2010-1T, 20.2010-2T, 20.2010-3T, 25.2505-1T, 25.2505-2T. The regulations clarified and defined these terms to mean:

  • Applicable exclusion amount: the sum of the basic exclusion amount, and in the case of a surviving spouse, the DSUE amount.
  • Basic exclusion amount: the amount of taxable transfers that is exempted from estate or gift taxation, as the case may be, through application of the unified credit. The amount is determined in the year of the death of the decedent whose DSUE amount is being computed.  In 2011 and 2012, this amount is $5 million, with an inflation adjustment which will be ignored in this post.
  • Last deceased spouse: the most recently deceased individual who was married to the surviving spouse at that individual’s death. Neither remarriage nor divorce from a subsequent spouse will sever a last deceased spouse relationship.

These long awaited regulations also clarified several other aspects portability that had been left wide open since enactment of portability in December 2010, including:

  • How to utilize portability
  • How to make the election
  • When to make the election
  • Who must make the election
  • How to opt out of portability

Let’s consider two issues, arguably the most controversial, from the regulation’s guidance. Both issues involve remarriage and the potential issue of using multiple spousal exemption amounts.

Portability in Action – The Joint Committee on Taxation (JCT) Technical Explanation

The JCT technical explanation, which was published in December 2010, provides three examples of how portability works. The first and second examples are straightforward applications. But the third example, now clarified with reinforcing regulations, provides a quirk when applying the current statutory language under section 2010 as drafted.

Example 2: Husband 1 dies in 2011 having made taxable transfers of $3 million and elects to permit Wife to use his DSUE amount of $2 million. Wife subsequently marries Husband 2 who also predeceases Wife. Husband 2’s estate makes an election to permit Wife to use his DSUE amount of $1 million. Is Wife allowed to a combined $3 million DSUE amount or limited to Husband 2’s $1 million DSUE amount?

The JCT states the available DSUE amount is the lesser of the basic exclusion amount or the unused exclusion amount of the last deceased spouse of the surviving spouse, here Husband 2. Wife is left with an applicable exclusion amount of $6 million, thereby losing a net $1 million DSUE amount as a consequence of her marriage to Husband 2. However, if Husband 2’s DSUE amount had been greater than Husband 1’s, Wife would have increased her applicable exclusion amount.

Example 3: The facts are the same as in Example 2, except Wife predeceases Husband 2. Wife has a taxable estate of $3 million. Wife’s executor elects to permit Husband 2 to use her DSUE amount, which is calculated at $4 million.

The JCT states as a result, Husband 2’s applicable exclusion amount is $9 million. Consequently, Husband 2 benefited from Husband 1’s DSUE amount because Husband 1’s election increased Wife’s applicable exclusion amount by $2 million to $7 million.

But is Example 3 supported by the Code under section 2010? The Tax Relief Act of 2010 expressly rejects this “aggregate” definition. Recall from above that the Code in section 2010(c)(4) defines the DSUE amount as the “lesser of the basic exclusion amount, or the excess of the basic exclusion amount of the last such deceased spouse of such surviving spouse” over the amount with respect to which the section 2001(b)(1) tentative tax is determined.

Whereas the results of the JCT’s interpretation in Example 3 permit the stacking of the DSUE amount by calculating it from Wife’s applicable exclusion amount, the Tax Relief Act of 2010—reflected in the current statutory language of section 2010(c)(4)—leads to different results. This statutory language limits the surviving spouse to a maximum DSUE amount of the basic exclusion amount of the last deceased spouse, not the applicable exclusion amount. Considering the terms defined earlier in this article, applicable exclusion amount and basic exclusion amount, the distinction in these terms is critical to see that the result differs. Under the statute, if Husband 1 ported a $2 million exclusion amount to Wife, her applicable exclusion amount would be $7 million. If Wife married Husband 2 and then died with a taxable estate of $3 million, there would be $4 million of credit remaining.

Put another way, the JCT’s application in Example 3 allows porting the full $4 million amount to Husband 2. The current statutory language, however, limits the ported amount to $2 million. The current statutory language ignores Wife’s DSUE amount (derived from Husband 1) when calculating Husband 2’s applicable exclusion amount because the tentative tax is applied to the basic exclusion amount of Wife, rather than her applicable exclusion amount. Thus it appears that the statute does not support the JCT’s result in Example 3.

The JCT in March 2003, just a few months after publishing example 3, stated that the reference in section 2010(c)(4)(B) to the “basic exclusion amount” is an error:

The provision adds new section 2010(c)(4), which generally defines [DSUE] amount of a surviving spouse as the lesser of (a) the basic exclusion amount, or (b) the excess of (i) the basic exclusion amount of the last deceased spouse of such surviving spouse, over (ii) the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse. A technical correction may be necessary to replace the reference to the basic exclusion amount of the last deceased spouse of the surviving spouse with a reference to the applicable exclusion amount of such last deceased spouse, so that the statute reflects intent.

The JCT’s response makes clear the need to replace “basic exclusion amount” under section 2010(c)(4)(B)(i) with “applicable exclusion amount.” For over a year, since March 2003, many practitioners were boggled by the JCT’s response and did not know which position to take.

This past summer, the Treasury and Service finally shed light on this very controversial example of portability application in the regulations. They agree with the JCT’s March 2011 response to Example 3 in the JCT’s technical explanation rather than the Code’s application to Example 3 in the JCT’s technical explanation. Temporary Regulation § 20.2010-2T(c)(1)(ii)(A) makes clear that basic exclusion amount under section 2010(c)(4)(B)(i) should be replaced with applicable exclusion amount. The Treasury and Service carefully considered this issue and provided their reasoning:

Construing the language of section 2010(c)(4)(B)(i) as referring to the same number described in section 2010(c)(4)(A) would lead to an illogical result because it would effectively render the use of “basic exclusion amount” in section 2010(c)(4)(A) meaningless. Specifically, the basic exclusion amount (the amount referenced in section 2010(c)(4)(A)) cannot be less than that same number reduced by another number (the amount referenced in section 2010(c)(4)(B)). Under such an interpretation, the basic exclusion amount referenced in section 2010(c)(4)(A) could not limit or impact the DSUE amount, and thus it would serve no purpose as written. Based on the principle that a statute should not be construed in a manner that renders a provision of that statute superfluous and consistent with the indicia of legislative intent reflected . . . Treasury and the IRS have determined that the reference in section 2010(c)(4)(B)(i) to the basic exclusion amount is properly interpreted to mean the applicable exclusion amount.

It took a while, but it seems this issue has been finally clarified.  However, the result leads to further policy concerns which will be considered in the next part of this post.

Application of Portability to the Gift Tax

The Tax Relief Act of 2010 modified section 2505(a) to include “the applicable credit amount in effect under section 2010(c), which would apply if the donor died by the end of the calendar year.” Thus, the surviving spouse is permitted to use the DSUE amount of his or her predeceased spouse as a credit against lifetime taxable transfers (gifts).

There are certain special rules created to modify or clarify issues in the general rules of portability for application to lifetime transfers. For example, the “last deceased spouse” definition, which is defined above in this post, creates issues when remarriage is involved and lifetime transfers are made by the surviving spouse between the death of the first spouse and death of the next spouse. The first question to consider: If a surviving spouse makes lifetime transfers after the death of a spouse and elects portability, should the predeceased spouse’s DSUE amount apply to lifetime transfers before the surviving spouse uses his or her own basic exclusion amount?

A special “ordering” rule applies if a surviving spouse has multiple predeceased spouses and applies the DSUE amount of any predeceased spouse to lifetime transfers made by the surviving spouse before the surviving spouse’s own basic exclusion amount. Therefore, there is no recapture of previously gifted amounts made by using the DSUE amount of a prior last deceased spouse, and when the surviving spouse makes a gift; the DSUE amount of the last deceased spouse is applied before the surviving spouse’s own exclusion amount. Thus, the DSUE amount available to a surviving spouse (or a surviving spouse’s estate) includes both (1) the DSUE amount of the surviving spouse’s last deceased spouse and (2) any DSUE amount actually applied to taxable gifts made by the surviving spouse during the surviving spouse’s life to the extent the DSUE amount so applied was from a decedent who is no longer the last deceased spouse. This taxpayer-favorable ordering rule makes it possible for a surviving spouse to take advantage of the DSUE amount of the last deceased spouse as long as the DSUE amount was received from the surviving spouse’s last deceased spouse at the time of the transfer.

In other words, a surviving spouse may use the DSUE amount of a predeceased spouse against gift tax liability, as long as the DSUE amount is from the surviving spouse’s last deceased spouse as determined at the time of the transfer. There is no corrective adjustment or increase in gift or estate tax liability for gifts made by the surviving spouse using the last deceased spouse’s DSUE amount, even if the surviving spouse remarries and survives a subsequent spouse (who would then become the last deceased spouse of the surviving spouse).  Consider an example:

In 2002, having made no prior taxable gifts, Husband 1 makes a taxable gift valued at $1 million and reports the gift on a timely-filed gift tax return. Because the amount of the gift is equal to the applicable exclusion amount for that year ($1 million), and Husband 1 utilizes this exclusion amount, the gift tax liability is zero. Husband 1 dies on January 15, 2011, survived by Wife. Husband 1’s taxable estate is $1 million. Husband 1’s executor properly elects portability of Husband 1’s DSUE amount. The executor of Husband 1’s estate computes Husband 1’s DSUE amount to be $3 million—the lesser of the [$5 million] basic exclusion amount in 2011, or the excess of Husband 1’s [$5 million] applicable exclusion amount over the sum of the [$1 million] taxable estate and the [$1 million] amount of adjusted taxable gifts.

On December 31, 2011, Wife makes taxable gifts to her children valued at $2 million. Wife reports the gifts on a timely-filed gift tax return. At the time of the gift, under the ordering rule in Temporary Regulation § 25.2505-2T(b), Wife is considered to have applied $2 million of Husband 1’s DSUE amount to the 2011 taxable gifts before her own exclusion amount; therefore, under Temporary Regulation § 25.2505-2T(c), Wife owes no gift tax. Wife is considered to have an applicable exclusion amount remaining in the amount of $6 million—$1 million of Husband 1’s remaining DSUE amount plus Wife’s own $5 million basic exclusion amount.

After the death of Husband 1, Wife marries Husband 2. Husband 2 dies on June 30, 2012, and Husband 2’s executor properly elects portability of Husband 2’s DSUE amount, which is properly computed on Husband 2’s estate tax return to be $2 million. The DSUE amount to be included in determining the applicable exclusion amount available to Wife for gifts during the second half of 2012 is $4 million, determined by adding the $2 million DSUE amount of Husband 2 and the $2 million DSUE amount of Husband 1 that was applied by Wife to Wife’s 2011 taxable gifts. Thus, Wife’s applicable exclusion amount during the balance of 2012 is $9 million—$5 million from her basic exclusion amount, plus the $4 million DSUE amount. Further, if Wife dies in October 2012 and makes no gifts in 2012, Wife’s applicable exclusion amount for estate tax purposes is the same $9 million.

The result of this ordering rule has caused much concern.  These policy concerns will be considered in the next part of this post.

Conclusion 

After considering these specific issues, it is easy to question the goal of simplicity intended by Congress and others when enacting portability. While the portability provisions are complex, the mechanics and application of portability in the Code have proved even more difficult. The next part of this post will consider some additional policy concerns that these issues [and others] raise. For a more in depth discussion of these issues and for the citations to all statements made, see my article The Portability Pill: Examining the Trial Stages of Federal Estate and Gift Tax Spousal Portability, will be published in the ABA Real Property, Trust and Estate Law Journal, volume 47, issue two, in November.

Nothing posted on The Hotchpot constituted legal or tax advice, and no information on The Hotchpot should be relied on as such. Please review our Disclaimer here.

New Authors and Outside-the-Box Posts on the Horizon

Readers –

I am excited to say that the blog activity will be picking up over the next few weeks.  I am delighted that a group of current NYU, Georgetown, and UF LL.M. students have expressed an interest in becoming authors on the blog, and are already planning out some posts to contribute. And while most of the topics will continue to follow the “hot” topics in tax, some of them will incorporate some “tax humor” and outside-the-box ideas.  For the month of October be on the lookout for a post on some great Halloween costumes that incorporate tax themes for your next party (or maybe just your corporate tax class!).

- Nate Wadlinger

Changing of the Guards: The Hotchpot’s New Editor-in-Chief

Readers –

I have accepted a position in the public sector. Because of the nature of the position, I am no longer able edit The Hotchpot or contribute to it. Thank you all for your support and interest along the way. It was an exciting year!

It is with great pleasure, however, that I introduce to you The Hotchpot’s new Editor-in-Chief, Nate Wadlinger!

Nate is an interesting mix of a tax-enthusiast and Gator fan. Nate is currently enrolled in the LL.M. in Tax program at NYU.  He is a “triple Gator”:  He received his B.S. in Accounting, Master of Accounting, and J.D. from the University of Florida.

Nate is interested in a variety of areas tax.  Over the past year, he has been keeping up with the issue of the portability of spousal estate and gift tax exemption amount for federal estate and gift tax purposes.  His article, The Portability Pill: Examining the Trial Stages of Federal Estate and Gift Tax Spousal Portability, will be published this September in the ABA Real Property, Trust and Estate Law Journal, volume 47, issue two.

We are very grateful and excited to have Nate on board!

- Cat Karayan