Part I briefly considers the taxation of bitcoin transactions to give the reader some sense of the constitutional Pandora’s box that was opened by South Dakota v. Wayfair. Part II then delves into one aspect of the Wayfair decision that has broad implications for the future. Specifically, when does technological change justify a departure from the Court's previous Commerce Clause decisions? Part III sketches a possible solution to the problem of horizontal precedent: the application of voting to questions of horizontal precedent, or Bayesian Stare Decisis. Part IV summarizes this proposal and concludes.
New technologies, such as blockchain, cryptocurrency (e.g., Bitcoin), and artificial intelligence are rapidly changing how transactions occur in the United States. While scholars have started to examine how a number of areas of law should adapt, very little work has been done on what these changes mean for taxation. Yet these developments could have a huge impact on tax revenues. For example, some approaches to taxing transactions using cryptocurrency could result in these transactions being conducted abroad, beyond the reach of the U.S. taxing authorities. And if robots replace large segments of the labor force, this could drastically shrink federal and state income tax bases.
The approach to taxing new technologies is a careful balance of capturing value and not disincentivizing growth. For example, if governments decide to levy a “robot tax” to replace revenues the income tax is no longer generating, they may accidentally stifle innovation in that jurisdiction.
At the same time, these new technologies also provide tools that governments can harness to levy taxes far more effectively than they currently do. For example, using blockchain technology to track the history of income and company shares allows for the potential of an integrated tax system, which combines the currently separate corporate and personal taxes into one unified taxation regime. The effects of this transition are a removal of many distortions and behavioral inefficiencies.
Just because technology can be used to levy taxes far more creatively does not mean that it should be. But given the rapid rate at which technological change is occurring, governments cannot afford to sit back and make these decisions by inertia. Rather, the main argument of this is that governments should: (i) recognize and adapt to shifting tax bases; and (ii) use technology such as blockchain to better target the populations and behaviors desired to be taxed. The paper recommends specific examples of how to better tax and use technologies, such as blockchain, to reform current taxation schemes.
There is also ample discussion of whether cryptocurrency will be regulated as a security (as per the Howey test and recent SEC enforcement actions), a discussion of foreign jurisdictions' approaches to cryptocurrency regulation and taxation, and recommendations to the SEC and IRS on how they should adjust their taxation of cryptocurrency.
Článek se zabývá možností uzavření smluv formou kódu (algoritmu) zapsaného v rámci blockchainové databáze. Tyto smlouvy jsou označovány jako smart contract, i když samotný pojem smart contract byl poprvé použit již v roce 1997 na začátku internetové éry před blockchainem pro smlouvy samostatně vykonávající smluvní závazek skrze hardware či software. Blockchainová technologie dokázala překlenout některé nedostatky tehdejšího řešení a je předvídáno možné masovější využití možnosti uzavírání smluv touto formou. Cílem článku je nalézt odpověď, zda lze v rámci českého právního prostředí uzavřít smlouvu formou kódu a nastínit možné výzvy, které z této technologické možnosti mohou vyplývat v perspektivě českého práva.
The terminology around blockchain technology is notoriously confusing, with disputes over whether a blockchain is the same as a distributed ledger, or whether an appcoin is the same as a protocol token. In this article, I examine the difficulties the rapidly shifting, contested vocabulary poses for regulators seeking to understand, govern, and potentially use blockchain technology, and offer suggestions for how to fight through the haze of unclear language.
In Part I, I provide examples of the fluctuating, contested language in the blockchain technology space, and describe the forces at play in shaping the language. In Part II, I lay out the problems the language raises for regulators, including challenges in identifying the facts about the technology, distinguishing among the many variations of the technology, and communicating clearly about the technology, as well as increasing the chances of regulatory capture, inconsistent regulation across jurisdictions and subject domains, and “perverse innovation.”
In Part III, I closely analyze the use of the term “immutable” in blockchain discourse, to illuminate the confusion a single term can cause for regulators (and the public at large). I argue that the widespread use of the term “immutable” as a defining feature of blockchain technology is misleading, given that (i) real world events have demonstrated that the unchangeable nature of a blockchain record is always limited by the decisions of its human governors to change it, and (ii) the source of a blockchain record’s “immutability” is disputed, meaning that it is unclear whether any particular variation of the technology may be fairly described as creating an “immutable” record. This is problematic as regulators have already begun to craft legislation describing the records created by blockchain technology as immutable, and are making decisions to use the technology in large part because of its “immutability.”
In Part IV, I suggest ways regulators can become better educated about blockchain technology, as is essential for them to responsibly govern or use the technology. I also recommend that regulators take a highly critical approach that (i) seeks to separate hype from reality; (ii) is sensitive to how incentives may shape the way blockchain technology is portrayed by industry and those sponsored by industry, and how misleading terminology appears in publications of the highest prestige levels; (iii) includes diverse perspectives from proponents and critics of the technology, multiple disciplines, and from across the gender, race, geographic, and economic development spectrums; (iv) takes nothing, including descriptions of the technology itself, at face value, but deeply interrogates and scrutinizes the technology and its stated capabilities; and (v) asks regulators to think for themselves about the technology and its benefits rather than succumbing to herd behavior.
I am hopeful that these recommendations, coupled with awareness that blockchain vocabulary is treacherous, can help regulators to discover the facts about blockchain technology and respond to them appropriately.
This Note will undertake to analyze bitcoin under the Uniform Commercial Code (UCC) and the Internal Revenue Code (IRC)—two important sources of commercial law—to see whether any existing asset categories adequately protect bitcoin’s commercial viability. This Note will demonstrate that although commercial law dictates that bitcoin should—nay must—be regulated as a currency in order to sustain its existence, the very definition of currency seems to preclude that from happening. Therefore, this Note will recommend that we experiment with a new type of asset that receives currency-like treatment, specifically designed for cryptocurrencies, under which bitcoin can be categorized in order to preserve its commercial feasibility and to give legal regulatory clarity.
In equal protection jurisprudence, courts adhere to a three-tiered system of review to determine the constitutionality of laws that rely on classifications of people. Strict scrutiny is the most searching inquiry, followed by intermediate scrutiny, and then rational basis. Rational basis review is the default. The two heightened levels of scrutiny apply to only a handful of already-identified groups. As a general principle, courts are deferential to the other branches of government. However, there is a departure to that principle when it comes to individual rights. That is, rational basis review is exceptionally deferential to the government. When individual rights are at stake, courts typically require the government to prove that its action is constitutional in nature and justified in fact. But under rational basis review, courts require the challenger of a law to disprove every conceivable, possible rationale for a law, regardless of whether it was actually a motivating factor behind the legislation. This standard has been interpreted to mean that even if a judge can imagine any reason why a rationale could — even hypothetically — justify a law, then the law stands as constitutional. Often governments do not even assert a rationale for their actions. Rather challengers must disprove even the wildest, most speculative and hypothetical justifications, which could include those introduced by the judge herself.This Article begins by revealing several of the inherent shortcomings of the current rational basis standard. That standard undermines principles of adversarial adjudication, destabilizes other individual rights doctrines, leaves the rights of certain citizens with virtually no protection, and legitimizes discriminatory animus. In effect, rational basis review preserves a discriminatory status quo, meaning that as society’s values evolve, the Equal Protection Clause becomes less capable of protecting those values. Those troubling consequences need not persist. This Article proposes an alternative and improved in standard of review for the least intrusive level of judicial scrutiny in the tiered equal protection framework. This standard, which I call “rationale review,” shifts the burden of proof onto the government to show a reasonable, fact-based justification for laws that classify people. This standard would only marginally increase the burden on governments defending laws that involve classification of people, but it would require those governments to proffer at least an iota of evidence of a constitutionally permissible justification. Rationale review would not dramatically alter the current tiered equal protection framework. Those groups currently afforded heightened scrutiny would continue to receive such a standard of review. And laws concerning all other groups would continue to receive the least intrusive judicial inquiry under the tiered framework. Under rationale review, however, the government would bear the burden of proof in justifying as constitutional — with facts — those laws that make classifications of people.
This chapter critiques environmental agencies' use of cost-benefit analysis (CBA) in the context of a concrete case study: the U.S. Environmental Protection Agency's (EPA's) recent regulation of mercury emissions from coal-fired utilities under the Air Mercury Rule (CAMR). It identifies seven issues for regulatory impact analysis (RIA) that the CAMR brings to the fore. Rather than informing the decisionmaking process, the CAMR RIA served to obscure the range and contours of the regulatory options on the table. Rather than providing a neutral tally of are obviously and of the rule, the CAMR RIA enlisted value judgments to assign the impacts of mercury contamination to one side of the ledger or the other. Rather than permitting a complete accounting of these impacts, the CAMR RIA provided an accounting that was partial - in both senses of the term. Rather than laying bare the answer to the question what is at stake, for whom?, the CAMR RIA assessed only those impacts that had been monetized. Its bottom line, moreover, told us nothing about how the costs and benefits would be distributed. Rather than affording enhanced oversight by elected officials and the public, the CAMR RIA dazzled with detail but often obfuscated the considerations relevant to EPA's decision. Finally, rather than helping EPA satisfy its legal mandates, the CAMR RIA provided information that was unconnected to the relevant Clean Air Act provisions, treaties with the fishing tribes, and other legal obligations that constrained EPA's decision. Having identified these shortcomings, the chapter closes with recommendations for reforming regulatory impact analysis - suggestions that echo other recent efforts to envision a more pragmatic orientation for analysis of health, safety, and environmental regulations.
This Article explores, and ultimately embraces, a new exception to the complete diversity rule in removal cases: the doctrine of procedural misjoinder. We argue that the doctrine offers federal courts a vital tool with which to police joinder gamesmanship. Absent this power, plaintiffs may preclude defendant access to federal courts by the relatively simple expedient of joining in state court largely unrelated claims against or on behalf of non-diverse parties. The resulting lawsuit thus fails the complete diversity test, rendering such cases removal-proof. Like fraudulent joinder, the long-standing practice of ignoring non-diverse parties against whom no valid claim may be asserted, the doctrine of procedural misjoinder would permit federal courts to disregard any diversity-destroying parties who have been improperly added to the state lawsuit. Because access to federal courts is at stake, we believe federal courts should adopt this new doctrine, applying federal joinder standards to test the legitimacy of plaintiffs’ party alignments before denying removal jurisdiction.
In the 2004 presidential election, the United States came much closer to electoral meltdown, violence in the streets, and constitutional crisis than most people realize. Less than a 2% swing among Ohio voters toward Democratic candidate for President John Kerry and away from incumbent Republican President George W. Bush would have placed the Ohio - and national - election for president well within the margin of litigation, and it would have gotten ugly very quickly. Allegations of voter fraud and voter suppression were rampant on both sides, and even though Kerry conceded the election on the day after Election Day, public confidence in the U.S. system of American administration is now quite low. Previously unpublished data demonstrate that there is a growing partisan divide over views of the fairness of the election process.The bad news from the story of Election 2004 is that things likely won't get better in 2008. As Part I details, the extreme partisanship and close division of the American electorate, coupled with the Electoral College system, make the possibility of another razor-close presidential election in one or more battleground states fairly likely. Add to that mix election administration incompetence and a widely decentralized system of election administration with a patchwork of inconsistent rules. What's worse, since Bush v. Gore, losing candidates have become more willing to resort to election law as part of a political strategy: the number of election-law related cases in the lower courts has risen dramatically compared to the period before the case. It all adds up to a recipe for electoral meltdown.In Part II of this Article, I argue for three reforms that could significantly lower the risk of electoral meltdown. First, I advocate registration reform, in particular universal voter registration conducted by the government coupled with a voter identification program. There has been a wide partisan divide in the election administration debate between Democrats who have expressed concern about voter suppression and Republicans who have expressed concern about voter fraud. The registration reform I advocate can alleviate both of those concerns, minimize the potential for and political rhetoric regarding voter fraud, and eliminate a great majority of potential litigation surrounding presidential election administrationSecond, I advocate a transition to nonpartisan election administration. The nonpartisan solution aims to create both the actuality and appearance of neutrality in election administration, thereby bolstering the public's faith in the process. Australia and Canada serve as good models for reform in this regard, though not necessarily their nationalization of election administration. I consider how to assure that U.S. election administrators are truly nonpartisan, and contrast arguments for nonpartisan election administration with calls for nonpartisan redistricting commissions and campaign finance enforcement.Third, I discuss the role of the courts in minimizing electoral meltdown. The key here is to encourage courts to be more willing to entertain pre-election litigation and much more chary of entertaining post-election litigation. To the extent election administration problems can be recognized in advance, pre-election judicial review prevents future harm from occurring, rather than putting courts in the position of trying to undo the bad effects of a past harm. The costs of post-election review are large: the pressure put on courts to decide arcane election law questions when the outcome of an election - especially a presidential election - is huge, and the appearance of partisan decisionmaking is inevitable.
In Inside Appellate Courts: The Impact of Court Organization on Judicial Decision Making in The United States Courts of Appeals (Michigan 2002), Jonathan Matthew Cohen, a sociologist and practicing attorney, asks a question that has received scant attention in the academic commentary on appellate judging: If we accept the dominant conception of appellate court judging as a process of atomistic contemplation, how do federal circuit court judges continue to maintain high quality opinions in the face of pervasively growing judicial dockets? Cohen advances the provocative thesis that increasing workloads have not prevented appellate judges from producing high quality outputs, but rather, that the dominant image of appellate judging as an isolated contemplative task is conceptually flawed. A better approach, Cohen argues, is to compare the task of appellate court judging to production within a multi-divisional private firm. While Cohen recognizes the inherent limits of his analogy, and in particular, that unlike private firms, circuit courts lack a central coordinating authority, he nonetheless contends that it is more fruitful to consider the judges in the manner of workers in a complex organization than as autonomous actors reflecting in isolation on the legal issues presented on appeal. In this review essay, Stearns considers three complementary methodologies for analyzing appellate courts that yield insights of particular interest to lawyers and legal scholars. Such questions include how appellate courts transform preferences into doctrine; the nature of cases that are likely susceptible to further appellate process through en banc, mini-en banc, or Supreme Court review; and how best to evaluate appellate court opinions. While organizational theory provides a useful starting point, Stearns contends that insights drawn from other methodologies, including economics (demonstrating how decentralized informational processes can provide more meaningful data), probability analysis (demonstrating the quality of data drawn from subsets of a larger group), and social choice (demonstrating the nature and limits of group decision making), might prove more fruitful in evaluating at least some of these questions. Stearns concludes that a comprehensive understanding of federal appellate judging requires not only an understanding of the circuit courts' internal organizational structure, but also an analysis of the edifice of circuit court decision making from inside and out.