June 18, 2009

Research

Please note that my academic work is separate from my work for the Senate Finance Committee, and that my academic views may not reflect the views of the Senate or its staff.

 

About My Research

My research focuses on tax policy, deals, venture capital and private equity, higher education, and inequality.

My papers often use institutional detail to suggest new ways for policymakers, economists, and academics to think about tax policy.

My current research focuses on how the rich get richer. I show how and why inequality of human capital, not financial capital, drives the recent inequality trend. I explain why, in addition to labor income and capital income, we should measure a third category of income, which I call “alpha“-style income (compensation linked to the performance of a financial asset). Alpha income, not investment income, is responsible for the rise in income inequality in the U.S. Alpha income has good qualities, of course, and should not simply be taxed away; pay-for-performance can stimulate innovation, entrepreneurship, and accountability.

But the inequality that results from alpha income is justified only if economic opportunities are distributed broadly. Entrepreneurship has historically served as an engine of social mobility. It is critical to our system of entrepreneurial capitalism that entrepreneurship be linked to goals of economic freedom and social mobility and not just serve as a convenient justification for sheltering the rich from taxation.

My research approach is interdisciplinary, drawing on economics, finance, accounting, and history as well as law. My work often draws heavily on institutional economics and transaction cost economics, but it has more of a focus on law, regulation, and institutional detail than an economics paper would. I often use a deal, rather than a legal case, as the primary unit of analysis. When individuals act irrationally, I find that looking at how their behavior is shaped by institutions (the rules of the game) or organizational incentives is more fruitful than focusing on cognitive constraints or behavioral economics alone.

 

Book

The Alpha Dividend: Entrepreneurship, Human Capital, and the New Inequality (in progress)

 

Inequality

Measuring Alpha Income (in progress)

Alpha-Style Income: Human Capital and the New Inequality (in progress)

Taxing Alpha: Labor is the New Capital, Tax L. Rev. (forthcoming 2016)

Taxing Founders’ Stock, 59 UCLA L. Rev. 60-111 (2011).

Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 NYU L. Rev. 1-59 (2008).

 

Venture Capital, Private Equity, & Carried Interest

Two and Twenty Revisited: A Regulatory Approach to Taxing Carried Interest (in progress)

Alpha-Style Income: Human Capital and the New Inequality (in progress)

Taxing Alpha: Labor is the New Capital, Tax L. Rev. (forthcoming 2016)

The Supercharged IPO (with N. Staudt), 67 Vand. L. Rev. 307-373 (2014)

Taxing Founders’ Stock, 59 UCLA L. Rev. 60-111 (2011).

A Theory of Taxing Sovereign Wealth, 84 NYU L. Rev. 440-513 (2009).

Taxing Blackstone, 61 Tax L. Rev. 89-120 (2008).

Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 NYU L. Rev. 1-59 (2008).

The Missing Preferred Return, 31 J. Corp. L. 77-118 (2005).

The Rational Exuberance of Structuring Venture Capital Start-Ups, 57 Tax L. Rev. 137-186 (2004).

 

Tax Policy

Tax and the Boundaries of the Firm (in progress)

Bank Job: Designing a Tax on Financial Institutions (in progress)

Taxing Alpha: Labor is the New Capital, Tax L. Rev. (forthcoming 2016)

Curb Your Enthusiasm For Pigovian Taxes, 68 Vand. L. Rev. 1673-1713 (2015)

The Supercharged IPO (with N. Staudt), 67 Vand. L. Rev. 307-373 (2014)

Regulatory Arbitrage, 89 Texas L. Rev. 227-290 (2010).

Book/Tax Conformity and Equity Compensation (with D. Walker), 62 Tax L. Rev. 399-444 (2009).

A Theory of Taxing Sovereign Wealth, 84 NYU L. Rev. 440-513 (2009).

Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 NYU L. Rev. 1-59 (2008).

 

Deals & Institutions Research

The College Prospectus (in progress)

Measuring Alpha Income (in progress)

Alpha-Style Income: Human Capital and the New Inequality (in progress)

Curb Your Enthusiasm For Pigovian Taxes, 68 Vand. L. Rev. 1673-1713 (2015)

Regulatory Arbitrage, 89 Texas L. Rev. 227-290 (2010).

Brand New Deal: The Branding Effect of Corporate Deal Structures, 104 Mich. L. Rev. 1581-1638 (2006).

The Rational Exuberance of Structuring Venture Capital Start-Ups, 57 Tax L. Rev. 137-186 (2004).

 

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