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Price Discrimination in Income Taxation

Benjamin Alarie
Saturday, March 26, 2011

I have posted a draft of a new working paper on SSRN. It is entitled, "Price Discrimination in Income Taxation: Defending Half-Hearted Anti-Avoidance" and is available for download now. Here is the abstract:

Governments throughout the developed world worry incessantly about the implications of sophisticated tax planning for their tax revenues. And yet the same governments routinely stop short of doing all that they can legally do to combat tax avoidance. Why? One response is that a thick conception of the rule of law constrains governments to adopt only certain kinds of responses to tax avoidance. Another response is that inherent structural limitations in tax administrative capacity or features of the political economy environment constrain the available responses to a subset of those that are possible de jure. Even considered jointly, however, the rule of law and political economy explanations do not provide an adequate account of the observed behavior of governments in the context of anti-avoidance. The main inadequacy is that the accounts fail to provide an explanation of the circumstances that will give rise to aggressive measures countering tax avoidance.

Labour and the Future of the Egyptian Revolution

Mohammad Fadel
Tuesday, March 1, 2011

ForeignPolicy.com’s Middle East Channel published my latest thoughts on Egypt’s labor movement and its role in Egypt’s future democracy.  The essential argument is that if Egyptians want to establish a successful democracy, they must establish a social democracy along the lines of the Scandinavian countries.  After 20 years of structural adjustment in which the gains from liberalization of trade and privatization of state-owned enterprises were limited to a relatively narrow sector of the Egyptian elite and investments in public goods such as education and health steadily declined, democratic stability will require a strong commitment to redistributionist policies.  Recognition of the rights of independent labor unions in Egypt is an essential step toward achieving this necessary social transformation.

 

Political Strikes are Not Illegal Strikes

Brian Langille
Wednesday, February 16, 2011

Last week many newspapers reported on a new development in the protests that have been focussing the world's attention upon Egypt. As the New York Times headline put it, "Protest in Egypt Takes New Turn as Workers Go on Strike". Reporters described how workers in myriad work places had decided to join the protest movement by going on strike. Workers at the Suez Canal, in textile factories, in government departments downed tools, sat in, picketed and otherwise brought normal productive activity to a halt. They did so for the purpose of making common cause with others seeking fundamental political change in their country. 

The Demands of the Egyptian January 25th Youth Movement

Mohammad Fadel
Monday, February 7, 2011

One of the most unexpected features of the ongoing revolution in Egypt, a/k/a "the January 25th Youth Movement," is its leadership, or more precisely, its apparent lack of leadership. Accordingly, some have dubbed it the "Facebook" or "Twitter" or more generically, the "Social Media" revolution.  In my view, however, this is not so much a leaderless revolution as it is one with a diffuse leadership.  Certainly, social media and other internet tools of communication enabled this revolution to organize and to reach critical mass.  This structure has not been able, thus far, to transform itself into a formal political interest group capable of managing the transition to a new regime.  As a result, older, more established political groups in Egypt have been given responsibility to negotiate with the regime.  But, what are the political demands of the January 25th Youth Movement?  I was able to find a communique dated February 4 on YouTube in the name of this movement setting forth its political demands.  While I have no way of confirming its accuracy, it has the air of authenticity and is certainly an articulate formulation of what the demands of the movement are, especially in light of what other media has reported. I have set out a translation of this communication below:

Translation of the Communique of the January 25th Youth

The Arab Demonstrations, the Sub-Prime Mortgage Crisis, and "Black Swans"

Mohammad Fadel
Thursday, February 3, 2011

This commentary was first published on the Foreign Policy magazine website on Feb. 2, 2011.

The nationwide decline in housing prices that began in 2006 was supposed to be, we were told, impossible. Because its impact was limited initially to the sub-prime mortgage market, which was a relatively small part of the overall home-mortgage market, policy makers at the Department of the Treasury and the Federal Reserve assured us that its effects would be contained. That prediction, we now know, turned out to be horribly wrong.    

So, too, the revolutions in Tunisia and Egypt were said to be impossible. Even after the shocking events of Tunisia, pundits were quick to deny their relevance to Egypt. Egypt was a much larger country; its population was less educated, less politically savvy, and too habitually passive to become revolutionary; moreover, Egypt's security service was much larger and tougher than those of Tunisia, and in any event the Egyptian military could be relied upon to come quickly to the aid of the regime in the event of any crisis. Indeed, some pundits were quick to dismiss Tunisians entirely from the Arab world.

Faculty of Law to Host Magna Roundtable

Anita Anand
Monday, January 31, 2011

Magna Panel Discussion
Thursday, March 3 4:00-6:00 p.m.

The Faculty of law will be hosting a roundtable to discuss the collapse of Magna’s dual class share structure, one of the largest change-in-control transactions in Canadian history. Controlling shareholder Frank Stronach received consideration of roughly $1 billion in cash and stock for the sale of his Class B shares, which represented an unprecedented premium of approximately 1800%. The transaction attracted strong opposition from certain institutional shareholders, as well as from Staff of the Ontario Securities Commission (OSC). The OSC ordered the company to provide more disclosure for shareholders in June and, thereafter, the transaction was approved as a plan of arrangement by the Ontario Superior Court in August, 2010.

With generous support from the James Tory Fund for Studies in Business Law, the Roundtable will discuss both the corporate and securities law implications of the transaction. The panel discussion will be held on Thursday, March 3rd, 2011, at 4:00 p.m. in the Bennett Lecture Hall at the University of Toronto, Faculty of Law, located at 78 Queen’s Park. Panellists will include:

Introducing the Canadian Securities Law Portal

Anita Anand
Tuesday, January 25, 2011

For several decades, various expert panels have examined the possibility of creating a national securities regulator in Canada. On May 26, 2010, the Government of Canada tabled for information in Parliament the proposed Canadian Securities Act, which would establish a Canadian securities regulator. The Attorney General of Canada concurrently referred the Act to the Supreme Court of Canada, asking whether the proposed Act is within the legislative authority of the Parliament of Canada. This case is set to be heard in April, 2011.

The newly-formed Canadian Securities Law Portal will serve as a vital hub of information about this complex issue. The Portal will address numerous questions concerning the ongoing battle for jurisdiction to regulate the Canadian securities markets, including: Does the Parliament of Canada have legislative authority to enact the proposed Act? Why is a Canadian Securities Regulator necessary? What legal structure will ultimately govern issuers, intermediaries, self-regulatory organizations, investors and other capital market stakeholders? Would the structure proposed under the Act be effective if implemented? What are its strengths and weaknesses?

Copthorne Holdings Panel Discussion, Thursday, January 27 at 6 p.m.

Benjamin Alarie
Wednesday, January 19, 2011

The Supreme Court of Canada will be hearing Copthorne Holdings Ltd. v. Her Majesty the Queen this coming Friday, January 21 at 9:30 a.m.  The appeal is concerned with interpreting various elements of the "general anti-avoidance rule" ("GAAR") of section 245 of the Income Tax Act.  

To seize the moment presented by the Copthorne Holdings appeal, the Tax Law Society at the Faculty of Law has arranged for an expert panel discussion of the issues raised by the appeal and the implications of the case for the GAAR more generally. The panel discussion will be held on Thursday, January 27 at 6:00 p.m. in the Bennett Lecture Hall at the University of Toronto Faculty of Law, which is located at 78 Queen's Park.

I will introduce the panel and provide some introductory background about the transactions and the judgment at the Federal Court of Appeal giving rise to the appeal to the Supreme Court of Canada.  Following this backgrounder, the discussion will be turned over to the panel members, each of whom will be given 10 minutes to speak, after which there will be an opportunity for questions from the floor. The distinguished panelists include:

Waiting for Godot: Foreign Aid in Haiti

Mariana Mota Prado
Wednesday, January 12, 2011

Haiti is currently in the headlines again due to the ravages of a cholera epidemic that has hit citizens still reeling from a humanitarian disaster brought on by last year's earthquake, and has been compounded by hurricanes, floods, a problematic election and general unrest. Some Haitians have been pointing their fingers at the UN as the author of their latest misfortune, blaming foreign aid workers or peacekeepers for bringing cholera with them. At the same time, close to the scene, humanitarian workers, staff, doctors and nurses have been calling for more help from abroad as they survey the miserable conditions that Haitian citizens are forced to deal with after they have been "helped".

Frustration and anger are surely heightened by the fact that millions (or billions) of dollars of funding pledged in support of reconstruction is still sitting in the hands of foreign aid entities. One cannot help but think of the famous play by Beckett, Waiting for Godot. In the play, the two main characters try to entertain themselves while waiting for Godot, an acquaintance that never shows up. Despite agreeing at the end that they will no longer wait, neither of them leaves. Similarly, Haiti seems to be expectantly waiting for foreign aid, without knowing when and whether it will come.  

Systemic Fallacy

Jeffrey MacIntosh
Friday, December 10, 2010

The following first appeared in the National Post on November 23, 2010.

SYSTEMIC FALLACY

A national regulator wouldn’t have prevented the credit crisis

In its legal argument filed with the Quebec Court of Appeal, the federal government argues that securities regulation can and should address systemic (or economy-wide) risk — and that a national regulator would be better positioned to do this.

This hobgoblin is very much a latter-day addendum to the traditional apologia for securities regulation, which has always focused on investor protection and securities-market efficiency. What gave this new addition legs? Very simply, the credit crisis. The feds’ factum of legal argument states that “reducing systemic risk is an objective more informed by current experience.” Placing the blame for the economic downturn squarely on the shoulders of the securities regulators, the factum states that the crisis “illustrated a gap in regulatory oversight.” Moreover, “the dangers of systemic risk underscore the need for national, if not international regulation.” A national regulator, say the feds, would be better able to co-ordinate its activities with other federal institutions, such as the Bank of Canada and the Office of the Superintendent of Financial Institutions.

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