Rebecca Kysar, who will join Fordham Law this fall as a full-time professor, spoke about the pitfalls of the new tax legislation’s international provisions in front of the U.S. Senate Committee on Finance on April 24. The hearing, titled “Early Impressions of the New Tax Law,” served as a platform for Democrats to voice their concerns following the release of the new tax bills.
“My main argument is that the old system wasn’t great but that the new law hasn’t done much to fix problems in the international regime,” said Kysar, who noted how the overhaul of the international tax system served as the driver to lower the corporate tax rate. She also spoke on the legislation more generally, noting how it would add to the deficit by $1.9 trillion—a low estimate, said Kysar, of the legislation’s long-term effects.
During the testimony, Kysar identified four problems created or unacknowledged by the new international provisions: first, that new international rules aimed at intangible income incentivize offshoring; second, that the new patent box regime will not likely increase innovation, causes WTO problems, and can be easily gamed; third, that the new inbound regime has too generous thresholds, which allow multinationals with significant revenues and assets to engage in a great deal of profit shifting; and fourth, that the new regime falls short of true international tax reform.
Kysar’s testimony is the latest installment of her public stance against the new tax legislation. Last December, Kysar co-wrote and published an article titled “The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation,” which identifies weaknesses in the tax legislation. The article amassed thousands of downloads and multiple media citations within its first week online; Democrats are currently using it to help shape new bill proposals.
Kysar noted how Democrats are working on several new bills, one of which is called the “No Tax Breaks for Outsourcing Act,” which would equalize taxing income domestically and abroad. Kysar called the bill ambitious and suggested that Democrats will more likely attempt to make incremental changes, which would be implemented following midterm elections if they regain control of Congress. Democrats have asked Kysar to help them formulate the new proposed legislation.
In addition to advising governmental officials and promoting more effective tax reform, Kysar is also planning for her role as a full-time Fordham Law professor. Already she is organizing a symposium with the Fordham Journal of Corporate and Financial Law, scheduled for next fall. The symposium will feature expert opinions on tax reform.
Kysar also looks forward to sharing her expertise and enthusiasm with students.
“I hope to spark student interest in tax law,” she said. “It’s an exciting time to be a tax lawyer, and I hope to bring that excitement into the classroom.”