In light of the Church’s recent policy statement banning some Church authorities from endorsing candidates, and the speculation that the Church’s political neutrality derives from its desire to stay tax-exempt,[fn1] I thought I’d present a brief primer on the tax exemption.[fn2] The Revenue Act of 1894 probably represents the birth of the modern federal income tax. An inauspicious birth, to be sure–it was struck down as unconstitutional in 1895–but the birth, nonetheless. True, it was enacted 19 years before the 16th Amendment permitted direct taxation (whatever that is), but it set the stage for the income tax to come. Including, it turns out, in the world of exempting public charities from tax. It provided that the income tax would not apply to “corporations, companies, or associations organized and conducted solely for charitable, religious, or educational purposes.” [fn3] Although the list of entities that aren’t taxed has expanded (among other things, the exemption now includes groups that foster amateur sports competition–read the NCAA–and that are organized to prevent cruelty to children or animals), the current law reads almost identically to the 1894 version. Why do we exempt some groups, including religious groups, from tax? Theories range from the historical to the idea that they relieve the government from providing some services to the idea that this subsidy for public charities permits tax payers to directly control some portion of government spending to the idea that they (specifically, in this case, religions)…
Category: Law
The Parable of the Talented Endowment Tax
Governments impose taxes in order to raise revenue that, in turn, funds government function and services.[fn1] In designing a tax system, tax theorists generally try to create provisions that will raise revenue without significantly altering taxpayers’ economic choices. That is, ideally, taxpayers will act in approximately the same way as they would have in a world without tax.[fn2] But we can’t hit the ideal. The income tax alters people’s actions, because it alters the price calculus. One way is in our work-leisure decisions. Assume with me that I earn $10 an hour. That said, I enjoy not working, too–my leisure is worth $8/hour to me. In the absence of an income tax, if I have a choice between work and leisure, I’ll choose work. Even with a 10% tax, I’ll choose work, because I’ll bring home $9 after taxes, while my leisure is still worth only $8/hour. However, if the income tax is at a 25% rate, I’ll only bring home $7.50 after taxes. Suddenly, an hour of leisure is worth more to me than an hour of work; the income tax has caused my to substitute less-valuable leisure for more-valuable work.[fn3] One way you could eliminate this problem, according to some economists and tax theorists, would be to replace our income tax with an endowment tax.[fn4] An endowment tax is, in broad strokes, a tax on potential income, rather than on actual income. An example (though not a rigorous…
Summer 2011 Syllabus
Part of my job as a law professor is to model to students what a transactional attorney does. As part of that, I include in my syllabus a list of things media that they ought to consume in order to understand the world a business lawyer functions in. The list is not exhaustive, by any means, nor should they necessarily read or listen to all of it, but it provides a slice of intelligent commentary on the world I’m teaching them how to enter. If you were preparing people to do what you do, what resources would you recommend? [fn1] And, if you do what I prepare my students to do, what necessary resources am I tragically leaving out? [fn2] Syllabus: Wall Street Journal. Depending on your politics, you may detest or you may embrace the Opinions section, but the Journal’s business reporting is superb. (Note that it has a paywall around most of its content; you either need to subscribe or hunt down hard copies.) Financial Times. The FT is making real inroads in the U.S. Unfortunately, it, too, has an annoying paywall—I believe you can look at 10 articles a month for free, if you register. New York Times business section [and, of course, the rest of the paper, too]. Of course, it, too, just instituted its paywall Marketplace. You can listen weeknights at 6:30 pm on WBEZ or you can download the podcast. I listen to the…
Times & Seasons Welcomes Sam Brunson
Times & Seasons is excited to introduce Sam Brunson as our latest guest blogger. Sam grew up in the suburbs of San Diego and served a Brazilian mission what seems like a millennium ago. He went to BYU as an undergrad and found that a freshman saxophone performance major made his eventual English major look like a practical choice. After toying with teaching critical theory or becoming an author, he did what all good English majors do and chose law school. At Columbia, he met his wife, got a degree, and got a job as a tax associate at a New York firm. Several years later, he managed to escape the clutches of big law and landed a job teaching tax and business law at Loyola University Chicago. While Sam, sadly, does not play much saxophone these days, he and his wife do have two beautiful girls with whom he loves to spend time when he’s not pondering important questions like whether the transactional net margin method of transfer pricing constitutes an arm’s length price within the interquartile range.
Polygamy, Natural Law, and Imperialism
I have been researching Reynolds v. United States (1879), the Supreme Court’s first polygamy case, on and off for several years. For those who are interested, my paper on the topic is now available for download at SSRN. Reynolds is an important case in American constitutional history, because was the first time the U.S. Supreme Court ever passed on the meaning of the First Amendment’s protections for freedom of religion. Historians have generally situated the case within the context of the post-Civil War politics of Reconstruction. The anti-polygamy crusade kicked off by Reynolds is seen as an extension of Reconstruction into the West. I offer a new interpretation.
The Doctrine of Revelatory Justiciability
A good friend, while studying constitutional law for the bar exam this summer, emailed me some thoughts he scribbled down when he should have been hacking away at a few more MBE questions on judicial review. Instead, however, he hammered out a constitutional analysis on the justiciability of prayers. You see, in case you weren’t aware, in order to receive an answer to a prayer, one’s prayer must involve a “case or controversy” that is fit for review. So, without further adieu, allow me to present the doctrine of revelatory justiciability (a.k.a., what studying for the bar does to your brain).
The Evolution of Excommunication
I recently went through every version of the Church Handbook of Instructions, looking at what they have to say about the operation of church courts and how it has changed over time.
Explaining the Puzzle of Cross-State Differences in Bankruptcy Rates
Bankruptcy rates vary alot across states. With a fairly simple statistical model, Lars Lefgren and I explain about 70% of these differences in a paper just published in the Journal of Law and Economics. For cross sectional work using survey data, where you are looking across states at a point in time, explaining 70% is pretty darn impressive.
Are Gated Communities Moral?
When my wife and I talked with our missionary son recently, he said he was glad to be in Carson City, Nevada, instead of Las Vegas. When I asked why, he said: Gated Communities.
Bye-bye, Bybee?
A week ago, the New York Times joined the growing chorus of commenters calling for Judge Jay Bybee’s impeachment. Is impeachment really going to happen? And what should we think about the issue?
Mormons as Minorities
Today I gave a presentation to the William & Mary chapter of the J. Reuben Clark Society on “Mormons as Minorities” in which I discuss some of my research on Mormon legal and political history (and other stuff). If you are interested, you can listen to the presentation here.
Conscience in the Obama Era
I linked yesterday on the sidebar to Stanley Fish’s latest editorial in the New York Times, which takes as its occasion the possibility that President Obama will revoke the “conscience clause” allowing health care providers the right to refuse to provide certain services. I thought I’d add a few thoughts here.*
Contemplating Missionary Work in Cuba
The Obama administration announced yesterday that it is easing a handful of restrictions imposed by the U.S. embargo against Cuba. Among other things, Cuban-Americans will now be allowed to travel to Cuba as much as they like and will be free to send money and gifts to friends and relatives without securing travel or export licenses from the Treasury or the Commerce Department.
What I Learned about Mormon Courts (and the Writing of Mormon History)
For those who are interested in Mormon legal history, my article “Preaching to the Court House and Judging in the Temple” was just published in the most recent issue of the BYU Law Review. (You can download a copy of the article here.) This article provides my own take on the rise and fall of civil cases in church courts in the nineteenth-century. Of course the story of how nineteenth-century Mormons took lawsuits over broken contracts, wandering cows, disputed property lines, and the like to their local bishops has been told before, most elaborately in Ed Firmage and Collin Mangrum’s book Zion in the Courts, which was published about twenty-years ago. Here is where my take differs from previous interpretations.
The Double-Minded Essence of Mormonism
A while ago I was reading some sermons from the 1880s in the Journal of Discourses. The 1880s, of course, is the decade when the anti-polygamy crusades were at their most intense. Thousands of Mormons were incarcerated, the Brethren were in hiding from the law much of the time, and every time you turned around there was a new law confiscating Mormon property or disenfranchising Mormon voters. Hence, I was surprised to come across a sermon in which George Q. Cannon spoke unironically of his admiration for George Edmunds. Edmunds was a Republican Senator from Vermont, and the chief proponent of harsher anti-Mormon legislation in Congress. Cannon noted that he disagreed with Edmunds and thought him mistaken. Nevertheless, he said in effect that he thought Edmunds an admirable man of principle. Cannon’s remarks reveal a deep double-mindedness in nineteenth-century Mormonism, a double-mindedness whose preservation surely counts as one of the triumphs of the modern Church.
When is Sin Tax a Sin?
The new tobacco tax in the United States took effect yesterday, which tripled the amount of tax collected on each pack of cigarrettes, and probably raising the cost of a pack to as much as $9. The tax is the single largest increase in tobacco taxes in history. For an LDS audience, this probably seems all fine and good. You aren’t likely to complain about a sin tax if you aren’t committing that sin. And, to be honest, its hard to imagine a sin tax that LDS Church members would be particularly vulnerable to (perhaps ice cream?) But even if we aren’t vulnerable, isn’t there a limit to sin taxes?
Garment Rights?
Do we have a right to wear garments? If we do, how far does that right go? What , kind of right is it? Is it a human right? Or a legal one that might disappear and reappear as we pass national boundaries?
A New Book for the Mormon Canon
There are a number of Mormon pamphlets and books that have achieved a kind of semi-canonical status within Mormon studies. Everyone agrees, for example, that Parley P. Pratt’s Key to the Science of Theology or John Taylor’s Mediation and Atonement are key texts for understanding nineteenth Mormon thought. If any evidence is needed, both texts, I believe, are still in print. At the very least both have produced modern reprints. I have a proposed addition to the canon, George Q. Cannon’s A Review of the Decision of the Supreme Court in the Case of Geo. Reynolds v. the United States.
Commentary on 1 Ne. 17, concluded
Continuing part 1 , part 2, and part 3. Nephi’s response to his brothers directly attacks their understanding of Moses’s significance.
The Gospel and Immigration
A High Priest I know is in crisis. He is an immigrant who, like many other Church members, came to the US without a visa, according to what I understand of the situation. After arriving here he joined the Church, and eventually fell in love and married a U.S. Citizen, a wonderful, faithful Church member. This situation would normally put him on track for a green card and U.S. citizenship. But this brother is facing deportation, and his ward and stake are praying for a miracle that will keep him here in the United States.
What Should Mormons Do?
The Associated Press reported yesterday that Mormon employees at the University of Phoenix benefited from discrimination based on religion, according to a lawsuit filed by the Equal Employment Opportunity Commission. The University settled the suit, paying $1.9 million to 52 employees (an average of more than $36,000 each!) and agreeing to a “zero-tolerance” policy to religious discrimination, but did not admit wrongdoing. What’s up with that?
Court Finds Mormonism is Not “Protestantism”
An appellate court in Arkansas last week refused to overturn a lower court ruling which found a woman’s ex-husband in contempt of court for [violating the couple’s custody agreement by] failing to raise their minor children “in the Protestant faith” after the ex-husband started promoting his Mormonism to their children. While many Mormons, and the Church itself even, would agree with the idea that Mormonism is not a Protestant faith, it seems to me that having courts making theological determinations about what denominations constitute “Protestant” is wading into some pretty murky territory. What if the custody agreement had stipulated that the kids were to be raised “in the Christian faith” and the wife similarly objected?
Morality, Legality and Alcohol
The church issued a statement about alcohol laws in Utah. The last paragraph reads: “The Church of Jesus Christ of Latter-day Saints believes that Utahns, including those who work in the hospitality industry, can come together as citizens, regardless of religion or politics, to support laws and regulations that allow individual freedom of choice while preserving Utah’s proven positive health and safety record on limiting the tragic consequences of overconsumption of alcohol.â€
Changing Conceptions of Zion
The Mormon conception of Zion has changed dramatically over the past century. Today’s members of the church are likely to define “Zion” as wherever the members of the church are: LDS homes, congregations, and stakes. While the conception of Zion in the 19th century may have included these elements, these Saints were determined to literally be Zion communities
Korihor and the United States Reports
Let’s read the Book of Mormon as a commentary on American constitutional law and vice versa. Alma 30:7-10 reads:
Prophecy vs. History
Not too long ago, I stumbled across the PBS presentation of Jared Diamond’s book Guns, Germs, and Steel (2d ed. 1999). It reminded me of dealing with the book at college and enjoying the ideas presented and the sweeping take of world history that it offered. But while watching the presentation and contemplating the message of the book itself, I was reminded about how much Diamond’s whole analysis depends solely on inference from extremely scant historical evidence.[1]
Someone’s got it in for me, they’re planting stories in the press
I see that Slate now puts the odds of Harriet Miers confirmation at 70%. Silly Slate, don’t they know that niche is taken? As I’ve mentioned before, the best bet, literally, is to follow the gamblers. And as of press time, they are betting that Miers has a 3 in 10 chance of making it to the Big Bench. Want a second opinion? It’s pretty much the same as the first.
Joseph Smith, Justice Frankfurter and the Great Writ
It is time for the post that you have all been waiting for, the one of the place of Mormonism in habeas corpus jurisprudence.
The English Nature of the Mormon Constitution
The Church has a certain amount of constitutional law, by which I mean norms and rules that govern and control its institutional structure. What is the nature of this constitutional law? I would submit that the Church ends up being more English than American. Priesthood quorums illustrate why this is so.
How Corporations Saved the United Order (kind of)
One of the great advantages of blogging is that you can ramble on regardless of whether or not what you are saying is of any interest to anyone else. Hence this post. I feel it is time that we had the discussion that you have all be waiting for: The one on real estate leases, corporate law, and the United Order.